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Fraudulent scholarships can take many forms. If you receive an offer that uses one of these tactics, be suspicious andprotect yourself from scholarship scams. If you believe the offer is a scam,reportit. Sometimes a scam persists for years before people catch on to it. Even when people realize they’ve been cheated, few are stubborn enough to try to take advantage of guarantees or to file a complaint. Learn more: Scholarship Scams: Watch for Red Flags
Scholarships that never materialize.Many scams encourage you to send them money up front but provide little or nothing in exchange. Usually victims write off the expense, thinking that they simply didn’t win the scholarship.
Scholarships for profit.This scam looks just like a real scholarship program but requires an application fee. The typical scam receives 5,000 to 10,000 applications and charges fees of $5 to $35. These scams can afford to pay out a $1,000 scholarship or two and still pocket a hefty profit, if they happen to award any scholarships at all. Your odds of winning a scholarship from such scams are less than your chances of striking it rich in the lottery.
The advance-fee loan.This scam offers you an unusually low-interest educational loan with the requirement that you pay a fee before you receive the loan. When you pay the money, the promised loan never materializes. Real educational loans deduct the fees from the disbursem*nt check. They never require an up-front fee when you submit the application. If the loan is not issued by a bank or other recognized lender, it is probably a scam. Show the offer to your local bank manager to get their advice.
The scholarship prize.This scam tells you that you’ve won a college scholarship worth thousands of dollars, but requires that you pay a “disbursem*nt” or “redemption” fee or the taxes before they can release your prize. If someone says you’ve won a prize and you don’t remember entering the contest or submitting an application, be suspicious.
In a common variation the sponsor sends the student a check for the scholarship but requires the recipient to send back a check for the taxes or some other fees. Or the sponsor sends a check for more than the scholarship amount and asks the recipient to send back a check for the difference. The scholarship check ultimately bounces, as it is a forgery, but by then the recipients’ funds are long gone.
The guaranteed scholarship search service.Beware of scholarship matching services that guarantee you’ll win a scholarship or they’ll refund your money. They may simply pocket your money and disappear, or if they do send you a report of matching scholarships, you’ll find it extremely difficult to qualify for a refund.
Investment required for Federal Loans. Insurance companies and brokerage firms sometimes offer free financial aid seminars that are actually sales pitches for insurance, annuity and investment products. When a sales pitch implies that purchasing such a product is a prerequisite to receiving federal student aid, it violates federal regulations and state insurance laws.
Free seminar. You may receive a letter advertising a free financial aid seminar or “interviews” for financial assistance. Sometimes the seminars do provide some useful information, but often they are cleverly disguised sales pitches for financial aid consulting services, investment products, scholarship matching services and overpriced student loans.
FAQs
[ ] Never pay anyone to fill out or process your FAFSA. That's probably a scam. [ ] Talk with a guidance counselor (if you're in high school) or the financial aid office (if you're in college) about your financial aid and scholarship options. [ ] Never pay at a seminar on how to get financial aid or scholarships.
Is finaid.org legit? ›
Finaid was established in the fall of 1994 as a public service. This award-winning site has grown into the most comprehensive source of student financial aid information, advice and tools — on or off the web.
What financial information should a scholarship website never ask for? ›
If a scholarship website you're using to find scholarship opportunities (we call these "scholarship clearinghouses") asks for sensitive personal information such as your Social Security number, a credit card number, or your mother's maiden name, do not use it.
What info should you never provide for a scholarship? ›
If an application asks for money, walk away. Don't give out bank or credit card information. Any financial data you provide should come from IRS or FAFSA data. Legitimate providers do not ask for bank information.
How common are scholarship scams? ›
Scholarship scams are less common than other scams, but the Federal Trade Commission still receives hundreds of consumer reports each year regarding illegitimate scholarships and educational grants, according to a 2023 report.
How do you secure a fully funded scholarship? ›
Share
- Introduction.
- Know where to look.
- Prepare in advance.
- Work hard and keep motivated.
- Make yourself stand out from other applicants.
- Read the application instructions carefully.
- Submit an exceptional scholarship essay or cover letter.
- Be realistic.
Signs of a Scholarship Scam
- Charging a fee. Most scholarship scams charge some kind of fee. ...
- Requesting unusual information. ...
- Asking for your bank account number. ...
- Telling you that you won a scholarship, but you never applied. ...
- Claiming to be a foundation or tax-exempt charity. ...
- Sends you a scholarship check.
Scammers use this to their advantage to target students and steal their money or personal information. Scammers act as government or university officials and offer students money for grants or scholarships they didn't even apply for.
Are there fake FAFSA sites? ›
In a typical FAFSA scam, a college student, applicant, or parent is targeted with ads from a “financial aid company” claiming it can help them get their financial aid for college. This can include grants, loans, work-study programs, and more.
Do scholarships ask for a social security number? ›
Asking for your Social Security number
Scholarship applications may ask for a lot of information depending on the type of award, but typically scholarship applications will not request your Social Security number (SSN).
Don't use words like “finally”, “in sum” or “in conclusion”. Don't repeat or sum up in any way. Don't start too many sentences with the word “I”. Don't tell the reader explicitly, “I am a unique and interesting person.” Instead, let the reader glean this from your unique and interesting essay.
What is a weakness of a scholarship? ›
Be genuine: When discussing your weaknesses, choose an actual area where you have struggled, but also demonstrate how you've been working to improve. Remember, everyone has weaknesses, and acknowledging them shows self-awareness and personal growth. Example: "One area I've found challenging is public speaking.
Can you pocket your scholarship money? ›
A majority of scholarships, particularly private scholarships from foundations and government grants, will indicate that scholarship funds must go directly toward tuition. Many awards that renew for each academic year are designated to cover this expense.
Do most legitimate scholarship programs charge a fee to apply? ›
With some exceptions, most programs do not require any up-front fees to submit with your application. Think about it - if a program is giving money away, wouldn't they have money to administer the program? It is against the law for nonprofit organizations that provide scholarships to charge an application fee.
How do you stop financial scams? ›
Your financial institution
Contact your bank or credit union immediately if you've sent money to a scammer. They may be able to close your account or stop a transaction. Make sure you call them using their official phone number, not the one in the scam message.
How do I stop student loan scams? ›
Contact your federal loan servicer to make sure no unwanted actions were taken on your loans. Contact your bank or credit card company to stop payments to the company that is scamming you. Submit a complaint to the Department of Education, the Federal Trade Commission, and/or the Consumer Financial Protection Bureau.
How do I secure my college financial aid? ›
The key to receiving a generous package rests largely on the Free Application for Federal Student Aid form, better known as the FAFSA. This is the document that schools use to determine federal aid, including Federal Direct Loans and Pell Grants.
