How to Spot a Scholarship Scam
It’s awesome to see those feel-good articles about a student winning $700,000 in scholarships for college or one finally triumphing after applying a bazillion times. What’s not so cool are those unscrupulous people who prey upon students who are desperate to find the money for college. As the cost of college increases, it seems as though more scholarship scams are popping up. Many are disguised as weekly drawings or sweepstakes, promising big rewards for little or no effort.
Don’t be fooled. If it seems too good to be true, it’s probably a scam. Not sure how to tell if the program you’re applying to is real or not? Here are the top five tell-tale signs that a scholarship may not be legit.
Identifying a Scholarship Scam
Pay to Play
Scholarships are often referred to as “free money” for college, and that’s exactly what they should be – free. If you’re ever asked to pay for a scholarship, run!
Scholarship scams may ask you to pay during the application process (as an application fee) or when you receive the scholarship (as a processing fee). But a legitimate scholarship program won’t charge you to receive an award.
This one should be a no-brainer, but many students still fall for it. Legitimate scholarship programs will never guarantee that you will win money. Scammers use this tactic to get your personal information to either sell or use in illegal ways.
Many often ask for a small processing fee in advance, which is another red flag that the scholarship is fake.
Requests for Financial Information
During the scholarship application process, it’s not unusual for you to provide your name, address and some additional details about your education (like your year in school, GPA, etc.). However, the application should never ask for your banking or credit card information.
Even if you are selected as a winner, there’s no need for this information. Most scholarship providers send the funds directly to your college’s business office for processing.
Unsolicited Award Notifications
Who doesn’t like to win free money? If you receive an award notification from a scholarship you never applied for though, it’s probably a scam.
To make sure it’s real, ask the representative to read part of your essay or share details from your application. If they can’t provide that information, don’t continue the conversation.
No Proof of Past Winners
An easy way to identify fraudulent scholarship programs is by their lack of post-program information. In other words, no winners are ever announced.
Scholarship providers who actually give out money are more than happy to put winners up on their websites for all to see. It’s not only great content for social media posts but also provides proof that the scholarship exists.
Reporting Scholarship Scams
If you ever find yourself in the unfortunate position of applying to a scholarship scam, be sure to help other students out by reporting it to the proper agencies. These include:
- Your State Attorney General (Bureau of Consumer Protection)
- The Federal Trade Commission (FTC). You can file online or call 1-877-382-4357
- S. Postal Service, Postal Crime Hotline 1-877-876-2455
- Better Business Bureau – File a complaint against the company/provider
You may also contact the National Fraud Information Center. They will then forward your complaint to the appropriate agency.
Although scholarship scams do exist, they shouldn’t keep you from searching and applying to legitimate programs. There are many companies, such as MoneySolver, that want to give back by offering scholarships to help students pay for college.
Be sure that you research any scholarship before completing your application. If there are any warning signs, don’t apply. It’s better to be safe than sorry.