Every year, millions of high school graduates enter college. The cost of a four-year college education has risen over 600 percent since 1969. Students and their families seek ways to finance the rising costs of a college education, at times falling prey to scholarship and financial aid scams. To help students and their families, on November 5, 2000, Congress passed the College Scholarship Fraud Prevention Act of 2000 (Act) to help federal agencies combat fraudulent scholarship and financial aid schemes, and to establish stricter sentencing guidelines for criminal financial aid fraud. The Department of Education (ED), working in conjunction with the Federal Trade Commission (FTC), is charged with implementing national awareness activities. The Act also requires that the Attorney General (DOJ), the Secretary of Education, and the FTC jointly submit to Congress each year a report on that year's incidence of fraud by businesses or individuals marketing financial aid assistance services to consumers. As of this inaugural report, the DOJ, ED and the FTC have implemented all provisions of the Act. In compliance with the Act, the ED created a web page and initiated other consumer education efforts, with reciprocal link to the FTC website for "Project Scholarscam," a law enforcement and consumer education effort to combat fraudulent financial aid schemes. The ED campaign targets students, parents, high school counselors and college financial aid administrators, providing information about scams and about the major federal student aid programs. The materials also remind students that there is no fee to submit the "Free Application for Federal Student Aid" and that free assistance with applying for aid is available from ED, high school counselors and college financial aid administrators. The FTC campaign includes a package of consumer education materials designed to help students, parents, educators and financial aid administrators identify and avoid scholarship scams. To ensure widespread distribution of the materials and reach the largest number of at-risk consumers, the FTC has developed partnerships with public and private organizations. In compliance with the Act's directive, the report contains an assessment of the nature and quantity of scholarship fraud incidents since the date of enactment. The Sentinel database contains complaints filed by consumers with the FTC and more than 200 law enforcement authorities that submit complaints into the database. An evaluation of Sentinel complaints indicates that the nature of the fraud appears to have changed over time. Although there are still complaints about telemarketing fraud by bogus scholarship search firms, more recent complaints focus on financial aid consulting firms that use direct mail solicitations and oral sales presentations to market their services. As a result of "Project Scholarscam," eleven companies and thirty individuals are now subject to federal court orders prohibiting future misrepresentations. A "Project Scholarscam" subject was criminally prosecuted by the Department of Justice, and the FTC continues to monitor the Consumer Sentinel database for new targets, while ED has also implemented procedures to monitor complaint activity. Scholarship fraud may be prosecuted under a variety of federal and state statutes. Results of a survey of the U.S. Attorneys' Offices in each federal district regarding the scholarship fraud cases prosecuted since November 2000 suggest that the type of cases that DOJ prosecutes involve consumers/students acting as accomplices or principals in fraud against the United States, rather than as victims of fraud against them as consumers. DOJ will continue to coordinate enforcement actions with the FTC and, in appropriate cases, will bring charges in cases involving consumers who are victimized. (Contains 18 endnotes.)