Common Scholarship Scams and How to Avoid Them

Higher education often comes at a hefty price tag. To combat these costs, students often apply for any and all scholarship and grant opportunities. However, as you are applying for aid, you should be aware of scholarship and financial aid scams that could deceive you. We've compiled a list of common scholarship scams and strategies to help you avoid them.

Types of scholarship scams

Scammers use many tactics to trick people into revealing their personal information. Being aware of these schemes can help you have a better chance of avoiding them. When a questionable scholarship appears on your screen, you should check to see if it has one or more of these shady characteristics: 

Fees and guarantees

A telltale sign of a scam is when a company guarantees you a scholarship or grant in exchange for some type of payment. These payments are commonly disguised as processing fees, application fees, or money-back guarantees. Applying for financial aid may take time and effort, but generally, shouldn’t cost you money.

However, it is true that some genuine companies may charge for lists of scholarships or scholarship-matching services. The difference that separates these paid services from scammers is that they will never promise scholarships or grants. Nobody representing a legitimate scholarship award will be able to guarantee that you’ll be a winner. 

Phishing

Phishing is a type of scam that involves tricking people into giving up their personal information. Scammers will send emails or text messages to collect sensitive data, including passwords, bank account information, or credit card details. Unfortunately, these fraudsters often use students seeking scholarship money for college as a target. 

Scholarship offers sent via email may contain links to fake scholarship websites and applications. Before you reply or click on any links, you should try to verify the sender's name. Researching the legitimacy of the company can help you separate fraudulent messages from the legitimate ones.

Unsolicited scholarship offers

If you receive an unsolicited scholarship letter, email, call, or message, it’s likely a scam. Unsolicited means that the scholarship provider reached out to you without you showing any prior interest in the opportunity. Conversely, legitimate scholarship providers are not likely to contact you first. These companies probably already have a large pool of applicants to choose from without singling students out. 

Additionally, be skeptical of official-sounding organization names or memberships. "Honor societies" that offer exclusive scholarships for membership fees may be fraudulent, especially if you’ve never heard of them before. Although the chance to win a prestigious scholarship may be tempting, it's better to be safe than sorry. Try to seek out free scholarship opportunities that may be more attainable.

High-pressure tactics

When searching for scholarships, be wary of scams that prey upon your FOMO (fear of missing out). If a scholarship provider is pressuring you to apply with language like "act fast" or "apply now before the opportunity is gone," think twice. While deadlines are important, if a scholarship is only accessible for a brief period or utilizes countdown timers, it may be a scam. 

Most legitimate scholarships have clear deadlines that can be found in the application guidelines. These real scholarship providers don’t need to pressure students to apply. They also genuinely want the applicants to have sufficient time to submit their application and essays.

Missing contact information

Another way to differentiate between legitimate and scam scholarship offers is to check for contact information. Genuine scholarship providers will always give their email, mailing address, or phone number for any questions or concerns. On the other hand, fraudulent scholarship websites or applications will not have any of these details.

Apart from verifying contact information, it's also essential to research the organization offering the scholarship. You can look up reviews or testimonials from previous recipients or reliable sources. If you find negative reviews or no reviews at all, it's possible that the scholarship is a scam.

Asking for sensitive information

It's important to guard your personal details when applying for scholarships. Legitimate scholarship providers will not ask for sensitive information, such as your social security number or financial details. If you come across these requests, it's best to leave the application process immediately, as the scholarship is likely a scam.

On the other hand, real scholarship providers will ask for your contact information, like your email address or phone number. They may also require your school's name, major, and expected graduation date to confirm your student status. Keep in mind that if you're chosen as a winner, you may have to provide further information. This is necessary to know where to send your scholarship check!

No eligibility requirements

Some scholarships don't demand essays or a minimum GPA. Yet, most reputable scholarship opportunities typically have some distinguishing factors. These could be based on the state you reside in, a club that you or your parents belong to, or the majors you're interested in. 

Every scholarship opportunity has eligibility requirements, which may be limited to specific grade levels or student status at accredited institutions. If the criteria appears too broad and accessible to everyone, it's possible that it's a scam. It's also worth checking if the scholarship's website lists previous recipients. If the testimonials seem fake, you should be wary of the opportunity.

Financial aid seminars

Scholarship workshops held at local hotels may seem like a great opportunity to learn about free grants and scholarships. However, you should be cautious. Many of these financial aid seminars turn out to be high-pressure sales pitches for a paid scholarship service. Once you sign up and pay in advance, the company may fail to follow through with their end of the bargain. You may be provided with a short list of scholarships to apply for on your own or not receive any scholarships at all.

If you attend a financial aid or scholarship seminar, it's important to wait a few days before making any decisions or payments. Don't fall for "limited time" offers or testimonials from individuals in the audience, as they may be actors. Make sure to do your research to check that the service is legitimate. 

How to avoid getting scammed

Now that you know the common types of scams, you’re ready to avoid them. Although most companies aim to provide a rewarding scholarship experience for students, there are a few who do not. Protect yourself from scams by keeping these valuable tips in mind:

Look up the scholarship or sponsor online

It's important to be cautious of scholarships that sound too good to be true. If you’re ever in doubt, you can look up the scholarship or sponsor online. Start by typing in the name of the scholarship paired with the word “scam” or “complaint” into a search engine. If you come across multiple complaints, it is likely a red flag.

Avoid paying for scholarship information

As a general rule, you shouldn’t have to pay to apply for a scholarship or to receive scholarship money. You can access scholarship information on the Federal Student Aid website at no cost. Another free resource to help you find scholarships is CollegeData’s Scholarship Finder.

Slow Down

Scammers want you to rush and make impulsive decisions, so they can easily steal your personal information. Take a moment to think before giving any information to an unknown or sketchy source. Slowing down during the scholarship application process can help you prevent identity theft and other future problems. 

Confide in trusted adult

Trusted individuals, such as your high school guidance counselor, parents, or college’s financial aid office, can help distinguish genuine scholarship opportunities from scams. Don't hesitate to ask for a second opinion on a scholarship opportunity. These trusted adults have the knowledge and resources to make sure you aren’t being deceived.

Reporting scholarship fraud

If you encounter a suspicious or fraudulent scholarship, it's important to report it right away. Sharing your experience can help other students from being scammed in the future. The following list are ways you can report shady scholarships:

• File a complaint with your State Attorney General’s office.
• Report the incident to the Federal Trade Commission.
• Report fake companies to the Better Business Bureau.

Winning a scholarship is an exciting achievement, but it's important to be careful. It can be disheartening to discover that the scholarship you worked so hard to apply for was actually a scam. By taking the time to verify the legitimacy of a scholarship opportunity, you can avoid falling victim to scholarship scams and increase your chances of securing real financial aid for college.