Avoiding Scholarship Scams

In your scholarship search you may find people just itching to take advantage of you. Be wary of the following statements:

  1. “This scholarship requires a handling fee.”
    • There are a few scholarships that ask for a small fee of $5 or less to cover the cost of processing and/or mailing application materials. Be extremely cautious if a program wants more. There are also some programs that request large application fees like $15.00. Imagine if 1,000,000 students (realistic given the large reach of the Internet) applied for a scholarship like this at $15.00 each. Even if the program gave out 100 scholarships of $50,000 each to cover four years of college, where’s does the rest of the money go? When large sums of money are involved and programs are asking for fees of $10 or more, make sure to double check with an outside resource like your counselor to make sure its legitimate. Please note that some art and talent competitions ask for larger application fees ($25 – $45) to cover judging and processing costs. Although many of these are legitimate, check it out with a counselor or the Federal Trade Commission if it sounds fishy.
  2. “We’ll do all the work for you.”
    • Almost all legitimate scholarship programs require some sort of application or essay. Marianne Ragins applied for many scholarships in her search and all of them required some type of work. When you hear or see comments like this, it really is too good to be true.
  3. “We need your credit card number or bank account number to hold this scholarship.”
    • Never give your credit card or bank number to hold a scholarship. Scholarships are free money to those who qualify and they shouldn’t cost you anything to hold them. If you have legitimately won a scholarship, it should be yours to claim based on your application and your meeting the requirements of the scholarship.
  4. “We guarantee we’ll find you at least 10 scholarships.”
    • This statement, or ones like it, are used by many shady scholarship search services. Many of these services merely send you a list of loans that are available for college. If you’re like Marianne and don’t consider a loan a scholarship, then be sure to ask plenty of questions before paying for these services. Winning Scholarships for College contains a list of questions you should ask scholarship search services before paying for their help.
  5. “You have been selected by a “National Foundation” to receive a scholarship or you have won a scholarship contest to which you never actually applied.
    • To win a scholarship from a program to which you have never applied nor entered is rare.
  6. “You are eligible to receive a free scholarship and financial aid package. Please call us to schedule your appointment at XYZ hotel to pick it up.”
    • Usually when you go to pick up your free package at the hotel, you and your parents are subjected to high pressure sales methods meant to make you spend hundreds or thousands of dollars to help you with your scholarship search. The help you receive is something you can usually get from a counselor or by reading a book.

If you get information from anyone using these statements contact the Federal Trade Commission, (877) FTC‐HELP, http://www.ftc.gov or the National Fraud Information Center (NFIC), (800) 876‐7060, http://www.fraud.org.