10 Ways to Avoid Scholarship Scams
Never settle for the thought that you cannot afford to go to school. There are many scholarship programs in place that give opportunities to those who need it. If you are in financial distress, it’s worth searching for one.
Unfortunately, scholarship fraud is a growing epidemic. In fact, between 1996 and 2010, Americans lost $22 million to scholarship scams. This is why it’s so important for you to know exactly what to do to avoid these scams.
Here are 10 ways to avoid scholarship scams!
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Do not pay anything to get a scholarship.
Why would a scholarship grantor want money from you up-front?
This is one of the oldest tricks in the book, but sadly many aspiring students fall for it. Do not let your excitement blind you; if they make it sound great, but want money up-front, something is wrong!
There are many great scholarship opportunities; take the time to research any scholarship before applying for it -- especially when giving information online.
2) Avoid any guaranteed approval offers.
How could a scholarship program afford to accommodate every single applicant?
It can’t…
This type of scam is followed up by a lot of hoops you have to jump through. The end result could be you getting defrauded out of cash or even your identity getting stolen.
An even more obvious ‘guaranteed’ offer to avoid: advertisements and emails or letters claiming you ‘won’ a guaranteed scholarship award.
3) Stay away from any unsolicited offers.
“Hey, I just got a weird ringing in my ears like you were talking about getting an amazing scholarship to help you get through college. Funny enough, we have just that -- how about we help you out with a $5,000 scholarship to get you started?”
Yeah, right…
If you didn’t solicit the offer -- there’s no reason for a ‘scholarship program’ to even be aware of you. So, make sure you only go after scholarship opportunities that are legitimate and do your research before applying for any.
4) All that’s required is attending a seminar.
What benefit could they get out of you going to their seminar?
It is a trap.
Scholarships are given as a way to help out; if you need to attend a seminar, it’s likely because they want to sell you on something. This usually leads to expensive private student loan offers -- sometimes they will push a scholarship finding service as well.
Make sure the offer is legitimate before applying; usually you can find out more than enough about a scholarship by searching for information about it in Google.
5) Watch out for over-the-top claims.
“We guarantee you will get a scholarship if you apply!”
Seriously, there’s no way for any of these companies to guarantee anything. If they are making major claims like that, it’s probably a sign that something is wrong.
If you see these over-the-top statements then watch out -- it could very easily lead to a cash scam or even identity theft fraud.
6) Make sure it really is a scam.
If something sounds too good to be true -- is it?
Sometimes a company or organization will market a scholarship program in such a way that it sounds like a big scam. They talk about all the good of what they offer -- this usually includes extremely low interest rates.
However, there are some special opportunities out there and they could be masked with poor wording.
For example, a religious organization might promote an interest-free student loan to those within their church. This would be a legitimate opportunity -- in most cases, any claim of, "no interest," is a sign it's a scam.
7) Avoid paying any fees to apply.
Why would a company or organization offering a scholarship need to profit through application fees?
They don’t!
You should only have to pay for mailing the application to them. If there is an application fee, it will be very negligible.
Those that have higher fees will likely promote their scholarships through crazy claims -- such as no-interest and guaranteed acceptance.
8) Avoid paying interest fees in advance.
Why would you have to pay multiple months of interest payments upfront?
No legitimate scholarship provider will expect you make payments upfront. Yet, there are some fraudulent foundations offering scholarships with these conditions.
Avoid making payments in advance -- no matter how good they make it sound. Bad credit loan providers often use this system, but it does not have a place in the scholarship world.
9) Never pay to have a scholarship found for you.
There are some fraudulent sites claiming they can lead you to scholarship offers that fit your needs. They expect payment upfront, and then they will locate you at least one scholarship that’s a match for you.
These services never pan out. You end up wasting your money and getting nothing in return; if you want to apply for a scholarship, look for one that’s readily available for application. There’s no reason you should need a third-party to find it for you.
10) Be weary about giving bank account and credit card details.
There’s almost no scenario where you should give your bank account or credit card details when applying for a scholarship.
What many do not know is that scholarships are typically paid directly to the school -- or through the mail as a check.
If they are asking for your banking details or your credit card information, it would be a good idea to do a little more research to see whether they are legitimate.
Conclusion: Finding a Scholarship Can Be Dangerous!
You must be cautious as to which scholarships you apply for, or else you could end up losing money. In the worst case scenario, you could even have your identity stolen.
Each of the 10 ways to avoid scholarship scams listed above will certainly help you out, but what’s more important is that you know where to go for help.
When contemplating the legitimacy of a scholarship offer -- you can reference the BBB.gov (Better Business Bureau) or contact the FTC at 877-FTC-HELP to get assistance.
Resource:
Ultimate Guide to College Scholarships - The Simple Dollar
How to Avoid and Protect Yourself from Scholarship Scams - FinAid
Scholarship and Financial Aid Scams - The Federal Trade Commission
The Comprehensive Guide to College Scholarships - Elite Personal Finance
Avoid Scholarship Scams - CollegeBoard
Don’t Fall for These College Scholarship Scams - US News