Scholarship Scams

Scholarship scams can be confusing for parents and students alike because legitimate scholarships offering money for college is hard to obtain. Learn about identifying these fraudulent scholarships before-hand below.

Updated by Avinash on 16th July 2019

Are you looking for scholarship opportunities to pay for college? If yes, then you must know the challenges that exist to find a legitimate scholarship. Every year, students fall into the trap of scholarship and financial aid scams and tend to lose thousands of dollars for the same.

There are a wide variety of scholarships available, yet according to the Federal Trade Commission (FTC), there have been around 725 consumer reports present on the problems associated with scholarships and educational grants in 2018. It's much lower compared to the previous 2 years in which the FTC have received around 972 consumer reports on the scholarship problems in 2016 and 770 reports in 2017.

This information is based on the consumer report of issues and therefore it doesn't nearly go near the original number of scams that take place. Hence, it is important to know the signs of the fraudulent actions which are given in the article below. 

There are tons of scholarships scams out there, hence, finding and identifying them can be pretty difficult. Things that you should consider and remember when looking into scholarship is that the legitimate ones never ask for any money or financial aid information to process the application or provide any scholarship.

All the legit scholarships are free to apply to, and the information about the scholarships are available on the internet widely. You can also find information on scholarships through our scholarship directory.

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Things to look out for in scholarships scams

Have you ever been sure whether you are dealing with a legitimate scholarship website or a representative who is a part of the scam? If you're wondering about that, then here are a few commonly used terms which you will hear if it is a scholarship scam and this can help you stay out of it while you encounter it.

Scholarship moneysource - pexels.com

Guaranteed win or money back

Any company cannot guarantee that you will be receiving a scholarship ever. The only person who can guarantee that will be a member of the scholarship committee.  That too, it will only be notified at the time that you have won it.

Many suspicious companies might promise you that they can get you the scholarship. It will be backed with signs like - It is impossible to meet them to collect the money refund, in the case of not receiving a scholarship. If someone is promising you that they will get you a scholarship then it's a warning signal.

You've been selected!

It's the magic words that you really want to hear when you are applying for a scholarship. But when you haven't applied for scholarship anywhere and yet you receive an email or letter stating that you have been selected for a scholarship, then it is definitely a scam. 

It's a warning sign which says that you are dealing with a scammer. These companies generally want to collect all your information - both financial and personal. 

Look for a legitimate scholarship to avoid any problems as such.

It will only cost a little

Scholarships are free of cost and it will never cost you money as we have already stated that the legitimate ones are free scholarships and they never charge you up. Some people might charge you money on helping you to do scholarship research while the information is freely available.

If people are trying to charge you on the information or to hold yours, then it's a scam.

We have exclusive access

To be clear, no one has any exclusive access to the information of scholarship. All the information regarding the scholarships is freely available and easy to access through the internet. If anyone states that they have exclusive access for information on an exchange of money, it's definitely a scam.

In general, they just take your money, never provide you any information and just run away.

We'll do all the work for you

No. Any company cannot do all the work on your behalf. In reality, all they can give you is the list of potential scholarship options for you, which you are required to apply for and are required to fill out the application and submit it.

These companies claim that they do all the work while it's just a scam trying to charge you money for searching for information on your behalf. 

You just need to attend our scholarship seminar

These scholarship seminars are a session where the representative will pressure you to buy their products such as scholarship search services or the resume formatting service which you don't need but they will still force you into it.

Under certain cases, they just push you to buy products which are not even relevant to the scholarship at all. This session would be full of high-pressure sales pushing you to the uncomfortable zone where you cannot leave without purchasing anything.

Act now!

There is no need to act unless you are submitting your application for the scholarship by the deadline. You don't need to act to get a scholarship. If you are selected for a specific scholarship then it's yours. 

The company who wants you or pushes you to indulge in an act such as giving money, then these are the companies who are trying to get a hold of your information.

Phone calls

People sometimes receive calls from a person who will greet you and share that they have great news that you have won a scholarship or been awarded a grant. Some people say that they are from the Department of Education and you have been selected to get an award of a grant that will take care of all your student loans.

They then ask for parent's or children's bank account details to process the amount and to further the process of scholarship fee. This is a scam.

There is no fee for processing the grant or scholarship and further The Department of Education never has a program where they can replace loans for a grant. The scammers simply take your money out of your bank accounts from the information that you provided them. They make a run and you never hear from them ever.

Never pay in front

An average of 41% of college students said that they were asked to pay when applying for a scholarship. The Student Loan Report conducted a survey on 1,000 college students where they were asked to give money for scholarships and 73% did it.

Never pay any kind of fee, no matter how reasonable it seems, in the case of applying for scholarships.

Scholarship application scamsource - pexels.com

Application fee of $3 might not look like a big amount but consider 100,000 applicants and the scholarship amount is around $180,000 the profit from these will exceed the scholarship amount.

The chance of awarding the scholarship might be very lower. These organizations don't need your social security numbers also. 


How to stop scholarship scams?

There are many people who are still encountering counterfeit scholarships in search of college aid. If you get into any of the scams or you think that it might be a scam, all you need to do is report the company to the agencies. You can report them to - 

  1. Federal Trade Commission

  2. Better Business Bureau

  3. State Attorney General's office

  4. State Bureau of Consumer Protection

  5. National Fraud Information Centre

  6. File a complaint with USDOE's Office of Inspector General

If you are not sure about the encounter whether its a scam of scholarship, contact and talk with the financial aid counselor or academic advisor at your school to get tips about it.


How to find legitimate scholarship opportunities

Finding legal scholarship opportunities is very easy. Well, there are many reputed websites which provide a database of all the available scholarships. You can search the websites by going through certain categories such as academics, religious and gender-based scholarships, and more, which can help you to find a scholarship according to your eligibility.

While going through the website try to determine the legitimacy by going through these questions.

  • Go for the about pages where it holds all the information on the company.

  • Look for information about how the scholarship information is gathered

  • Do they ask for your financial information or your personal one (they shouldn't)

  • Check whether the website is updated on a regular basis

  • Do they try to sell something (they shouldn't)

  • Contact and get in touch with the academic advisor or financial aid counselor.

Watch out for these

In addition to the facts provided above regarding the scams where it has certain warnings signs, we have some more facts here which can clearly state if someone is trying to scam you. Well, if the company is trying to pursue any of the options where it can relate to student aid or scholarship then it's clear that you are in a scam.

Fees

If they are asking for any processing, handling, origination fees or advanced fees then you should take precautions about it.

Pre-Approvals

On any time of occasion if someone tells you or your child that they have pre-approved the student financial aid or a scholarship, then it's totally a scam as it's not the process of scholarship. 

Purchases

Legitimate companies will never ask or require you to buy the product or even ask you to buy it. They may also tell you that it might process you to the student grant aid or scholarships.

Complicated process

These organizations say that it's a very complicated process to fill an application and only experts can fill it out for you in order to gain access and make sure you get a scholarship. Whereas it's totally easy and simple where you just need to fill in your basic details and other information to process the application.


How to protect yourself from scholarship scams

While looking into the scholarships, there are certain rules that you are required to follow where it can help you from getting into a scholarship scam.

Is it too good to be true?

If you feel that the offer on the scholarship seems to be too good to be true, then it might be a false offer. If something is just too good then a little more research on it will bring you the truth. 

Never pay money

You should never pay any money to the companies in front. For example, fees for application, service fees and for other reasons as such. Legal scholarships are free to apply and you don't need to pay any money in front to avail it.

Get in contact

If you get any scholarship offers which are asking you for money in front, then try to get in touch with the real person by personally contacting them. Try to get hold of them through phone or physical address. Clear the doubts that you want to ask and clear it out.

Legal companies will try to provide this information that you seek and the scam organization will hesitate to do that.

Go for references

Run some background checks on the company which provides you the scholarship, for example, look for their information as if anyone has been scammed, it will be available in the web search and you can be clear about it.


Important basics

  • Never share any financial or bank account related information to anyone.

  • Never pay for the information for applying for the scholarship or to receive one.

  • Don't give money for applying or receiving a scholarship.

  • Look into a reputed source for reference regarding the scholarship search.

  • Beware of the websites who trick you and get your financial and personal information.

  • All the information related to scholarships are available freely and no special permission is required to look into it. You can get all your information by yourself.


Conclusion

Scams are an annoyance and misleading in general, they target the students entering college. If you have a child and he/she is getting ready to enrol in a college, guide them and share this information with them so they can stay out of scams. Keeping all these points in view while applying for a scholarship can really help them in the future.

At the end of the day, the best advice is that a legitimate scholarship will take time to find. Research on it and find it accordingly as per your requirement and eligibility. At the same time, not all scholarships tend to follow up.