Beware of Scholarship Scams

Here’s how to keep your college money safe and not get conned.

March 05, 2014

When searching for scholarships, make sure to trust your gut instincts and ask for help when you need it.
Photo: Thinkstock

As you search for college scholarships, you’re bound to come across some organizations that seem suspicious. Maybe the claim is too good to be true. Or the website doesn’t look reliable. Or you’re unable to get anybody on the phone to answer questions. As with most things in life, if it sounds too good to be true, it probably is.

So given the large number of scholarships, and scholarship websites, out there, how do you find the ones that are legitimate? There are a few common traps to watch out for, and some guidelines you can follow. Read on before you submit a scholarship application that seems suspicious.

Most importantly, just remember to trust your gut instincts and ask for help when you need it. College money can be tough to come by, and you don’t want to lose your money to corrupt business and not be able to pay for college.

How to Spot Scholarship Scams

The Federal Trade Commission (FTC) is well aware of scams promising school scholarships, and has some tips to help you keep your money for college safe. The FTC warns that you should be suspicious of a scholarship program that uses any of the following phrases:

  • The scholarship is guaranteed or your money back (no scholarships for college are guaranteed; you have to apply for them)
  • You can’t get this information anywhere else (scholarship information is public)
  • I just need your credit card/bank account number to hold this scholarship (school scholarships are awarded based on need or merit, not on financial information)
  • We’ll do all the work (unfortunately, students pursuing college financial aid do most of the work in the pursuit of university scholarships)
  • The scholarship will cost some money (college scholarships are gift aid toward the student’s college education; they don’t require payment by the student)
  • You’ve been selected by a foundation to receive a scholarship/You’re a finalist in a scholarship contest (if you haven’t reached out to an organization or entered a contest, it’s unlikely you would be randomly selected for their college scholarship)

Keep in mind, however, that now that the FTC has made this information public, scammers may utilize variations on these phrases and come up with new ways to try to scam the average college student. Don’t assume these are the only phrases to watch out for.

What to Do if You Suspect a Scholarship Scam

If a scholarship program seems suspicious, do additional research to make sure. First of all, check if they have a telephone number. And call it to see if they answer the phone and can answer your questions about college financial aid.

Also, check to see if they have a mailing address with a street address, and not just a P.O. Box number. If you’re looking at a website for an organization that claims to offer federal aid, check if the URL ends in .gov.

Finally, be aware of how they contact you. If they provide you with information on their scholarships in writing, by mail, they’re more likely to be a legitimate business than if they contact you by phone.

If you’re still unsure, show the documents or website to your guidance counselor. They have most likely seen scholarships scams before and are happy to review a student’s scholarships to help them steer clear of any shady organizations.

How to Protect Your Money for College

As you pursue your scholarships for college, you may be asked to provide a lot of different information, from your transcript and scores on standardized tests to essays, letters of recommendation and videos showing your special skills and talents.

People running scholarship scams are aware of this, and may try to use this to their advantage by requesting personal information or rushing you into acting in the hopes that you’ll act on impulse without investigating further.

Some key rules to remember:

  • Don’t give you financial information like your credit card number or bank account number.
  • Don’t be rushed. Scholarship applications usually have a deadline you need to follow, but don’t be fooled by scholarship scams that claim their scholarships are awarded on a first-come, first-served basis. This may simply be a tactic to encourage you to act quickly.
  • Ask for written proof of the school scholarship information you’re given.

Scholarship Scams Tips & Tactics

  • Take notes if a company seems suspicious. Record any information given in a phone conversation, and keep a file of all written documents you receive regarding that scholarship. If it does turn out to be a scholarship scam, you will be able to report it easily. And you should report any scams you encounter to the proper authorities to keep other students from getting conned.
  • How do you report scholarship scams? File a complaint or send a detailed letter about your experience along with copies of any documents you’ve received to an anti-fraud organization like the Federal Trade Commission, Better Business Bureau or National Consumer League’s Fraud Center.
  • Keep copies of all documents you send and receive when you’re applying for school scholarships, whether they’re legitimate or not. For legitimate students’ scholarships, you’ll be able to refer back to old scholarship applications when you’re filling out new ones, and for scholarship scams, you’ll have a record of any personal information you gave them in case it becomes an issue.

People Who Read This Article Also Read:

Scholarship Basics
Athletic Scholarships: The Basics
How to Find Scholarships
How to Apply for Scholarships

See All College Scholarships and Grants for Education Articles


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