How to avoid scholarship scams

How to avoid scholarship scams

    Con artists try to find angles in any and every niche possible. Sadly, one of those niches is financial aid for college students. The abundance of scholarship scams can sometimes detract from the truly outstanding and helpful scholarships available. This article teaches you how to know if a scholarship is legit  so that you only apply for scholarships not looking to rip you off.

    An up-front fee

    Specific requirements must always be met in order to obtain a scholarship. A certain GPA is usually a prerequisite. Other qualifying factors may include gender or ethnicity. For example, some scholarships are specifically for African American or Hispanic students.

    None of those factors should be the payment of any kind of fee, not even an application fee. Don’t be fooled by very low fees of just a few dollars, either. A scammer won’t necessarily charge a huge amount – that can get them caught more quickly. By charging just 2 or 3 dollars per application, they can still make a lot of money because more people will apply if the fee isn’t prohibitive.

    Most scholarships are listed for free on a number of databases. The most frequent scholarship scams involve paying real money up front to access information. They take your cash and provide lists of scholarships that are publicly available.

    These up-front fees also extend to scholarship search engines and databases designed to help you find a scholarship. Nancy Goodman, founder and executive director of College Money Matters, advises students to be particularly wary of these.

    “I can confidently say that there is no need to pay for such services. Most scholarships are listed for free on a number of databases. The most frequent scholarship scams involve paying real money up front to access information. They take your cash and provide lists of scholarships that are publicly available.”

    Promises to do the work

    Many scholarships require students to perform some sort of task in order to win them. This may be writing a scholarship essay, passing a test, participating in an academic competition, or just choosing a particular major or course of study.

    Legitimate scholarships require students to perform the work themselves to be eligible. If a program offers to write that essay, or do whatever else is necessary for a particular scholarship, this is a red flag.

    Legitimate scholarships require students to perform the work themselves to be eligible. If a program offers to write that essay, or do whatever else is necessary for a particular scholarship, this is a red flag. Allowing someone else to do the work could get you disqualified. Also, the work won’t be performed for free. There is usually a fee of some sort involved. Don’t fall for it.

    You’ve won a scholarship – that you never applied for

    As wonderful as it would be for someone to show up and simply hand you a scholarship, it just doesn’t happen that way. There is usually a robust scholarship application process, which may involve successfully passing a scholarship interview.

    Other scholarships are the result of contests that require actual entry. No scholarship magically materializes for anyone. If you receive correspondence saying you’ve won a scholarship and you simply need to claim it, you are likely the recipient of a fake scholarship letter.

    Claims of exclusivity

    Information for legitimate scholarships is freely available from schools, educational publications, and the internet. There are no secret scholarships that are only made available to a select group of people. Any scholarship program that claims their information is exclusive and unavailable anywhere else is running a scholarship scam. Save your money and stick with the free resources.

    We guarantee you a scholarship – or your money back

    Any scholarship search engine that guarantees you a full-ride scholarship if you sign up for their service is a sham. While full-ride scholarships do exist, no search engine can promise you success in advance. In fact, legit scholarship sites almost always have a disclaimer that they cannot guarantee a student will receive a scholarship. Look at the fine print.

    scholarship scam cheat sheet

    Scholarship scams that gather private information

    If a scholarship is asking for highly personal information straight off the bat, then it may be a ruse for extracting personal data. The obvious information is bank details or national insurance information – which may be used to access your finances or for identity theft. While need-based scholarships may ask about your current finances, be wary of revealing confidential information up front.

    Not all scams aim to extract such private information. Instead, they target details such as e-mail addresses, as Goodman explains:

    “There are fake scholarship sites to be sure, but rather than commit outright fraud, it makes more sense to offer a legitimate scholarship or two in return for a long list of e-mail addresses. I experimented with providing information to one such site and I have been inundated with emails from colleges urging me to apply. The frustrating part is that you can unsubscribe from a particular college’s e-blast, but not from the master list, which lives on forever!”

    Free scholarship seminar

    Some companies promise to show candidates how to find the best scholarships by offering a free seminar or webinar. There is usually nothing personalized about these events. They tend to be an elongated sales pitch aimed at selling you a scholarship engine service. These webinars are a colossal waste of time, which could be better spent researching and applying for legitimate scholarships.

    Enter our scholarship sweepstake

    It is common to see scholarship offers that involve sweepstakes. These usually have a pitch that includes the tempting offer of “no essay required”. When considering such sweepstakes, Goodman recommends asking yourself what kind of organization might offer a no-essay scholarship.

    “They are willing to give away money because they can sell your information to colleges and marketers; they can sell you services from their site; or they can have you view advertisements that they get paid for. Will this harm you? Maybe or maybe not, but you are providing private information to a broad group of organizations. By law, sweepstakes are obliged to show your estimated chances of winning. The “You Deserve It” site estimates your chances of success at 1 in 140,000. So, you are giving up a lot of personal information for a very long long-shot.”

    Other college financial aid scams to look out for

    Unfortunately, college financial aid scams are not limited to scholarship searches and applications. In the world of student loans, the worst examples are:

    • Sites that charge for helping you to fill out the FAFSA. You can get free help from many schools and local non-profit organizations, as well as the official federal student aid website.
    • Sites that offer to help you “get out of debt” or to get your student loans forgiven – and charge a fee to do so. There are many reputable organizations that help those with student debt for free.
    • While not a scam, there is a lot of advertising from private student lenders, which may cause students to borrow from them before they have used up their low- cost student loans from the federal government.

    Final thoughts on scholarships scams

    We have outlined several common scholarship scam warning signs, but our list is by no means exhaustive, and new scams are emerging all the time. If you’ve been the target of a scholarship scam, please get in touch, because we would like to hear about it.

    If you receive a scholarship offer you are unsure about – either via e-mail or regular mail – talk to a counselor at the educational institution you attend. They can look up the program that contacted you, and tell you whether it’s legitimate or not.

    Don’t be afraid to ask for help, or do a little research on your own. Financial aid scams are a concern, but reliable scholarship websites do exist – and if you’re successful, scholarships can be a great way to make college more affordable.

    FAQS about scholarship scams

    There are several red flags that indicate a scholarship may be a scam. The most obvious of these is if a scholarship asks you for money, which is something no legitimate scholarship will do. Opportunities that seem too good to be true are often just that. Legitimate scholarships usually involve a robust vetting procedure and application process.

    Do not provide financial information, credit card details, or social security numbers. Be very protective of this information during the application process. Legitimate scholarships may need financial details, but they can get this via FAFSA or the IRS.

    This is a difficult question as illegitimate scholarships can slip into reliable scholarship search engines. That said, Forbes has put together a list of 9 worthwhile scholarship sites that you might like to try.

    According to Federal Trade Commission Consumer Advice, students can report financial aid and scholarship scams on their website, or to the state attorney general.

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