Avoid College Scholarship Scams
The College Scholarship Scams To Avoid
While there are thousands of legitimate scholarships offered to students every year, there are also thousands of scholarship scam to offset every legitimate scholarship. With so many scholarship scams in existence, many students find that it becomes hard to differentiate the scams from the legitimate ones and accidentally find themselves to be victims of the scams. One important thing to remember to distinguish legitimate scholarships from scholarship scams is that scholarships are suppose to be free forms of financial aid granted to students to further their education. Remembering this general idea of what a legitimate scholarship aims to provide will help you avoid the many scholarship scams out there today.
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Common Scholarship Scam Pick-Up Lines
- “You can’t find this scholarship information anywhere else!” - Scholarship scams that use this pick-up line often claim to provide secret insider information about scholarship opportunities in exchange for a fee. Although you may actually receive some information about scholarship opportunities the information provided is not information that you would not be able to find elsewhere. Visit your school’s financial aid center or do some research online. There are plenty of free college scholarships that do not require pre-payment in exchange.
- “Congratulations you are a finalist in a scholarship contest!” - Although this may initially seem exciting and promising, please keep in mind that about 10,000 other students receive this email. Supposed scholarship opportunities that use this pick-up line are scams. Legitimate scholarships promising free money to students who fit a certain criteria are not run or marketed like sweepstakes. Legitimate scholarships offering free money require student application and sometimes letters of recommendation.
- “Give us your credit card number or bank account information and we’ll hold your financial aid!” - Never trust a suppose scholarship organization that asks for your credit card information or bank account information. Scholarship scams that ask for your credit card information or bank account information often suggest that you have already qualified or won some form of financial aid and that they will be able to hold it for you in exchange for your personal information. This is not true. You will only receive financial aid or win a scholarship if you apply for it. Organizations do not apply for scholarships beforehand for you or for you at all. Thus, there is nothing for them to “hold”.
The 6 Most Common Scholarship Scams
- The Scholarships for Profit Scams - This type of scam at first comes off as a real scholarship program. The tip off, however, is that it will require an application fee. Although these scholarship profit scams make enough to really offer scholarships, this rarely happens. An important thing to keep in mind when looking for scholarships is that legitimate scholarship programs have not profit making goals. Legitimate scholarships are free.
- The Advance-fee Loan Scam – This type of scam promises an unusually low-interest loan for a small upfront fee. After paying the fee, however, the loan never materializes. Legitimate education loans do not ask the borrower to pay a fee beforehand. The fee is, instead, automatically deducted from the disbursement check. Be wary of loans not issued by a bank or a recognized lender.
- The Sweepstake Scholarship/ Redemption Fee Scam - As mentioned, before this type of scam usually involves some sort of email that either claims that you are a finalist or you have won a scholarship worth thousands of dollars. The catch in this scholarship scam, like in others, is that there is a required “redemption” fee for your scholarship.A variation of the email take on this scam is where a supposed scholarship program sends you a fake check for a certain amount. You are then, in turn, asked to write a check for a certain amount (from your own bank account) back to the program for “taxes”.Legitimate scholarships are, again, not run like sweepstakes. It is likely a scam if you do not recall applying for the scholarship.
- The Guaranteed Scholarship Search Service Scam - This type of scam offers a “scholarship matching service” in exchange for a fee for their services. Such scams often “guarantee” that you win a scholarship or they will refund your money. Such scholarship search scams may just take your money and vanish (don’t even think about that guaranteed “refund”). And if they do offer your scholarship opportunities it will not be anything more than what you can find on the web for free.
- The Investment Required for Federal Loans Scam - This type of scam attempts to convince scholarship hopefuls that a purchase of a financial product (i.e. life insurance, investment products, etc.) is required to be able to receive federal student aid. Please note that federal student aid will never require a purchase.
- The Free Seminar Scam - This type of scam may come in the mail or in the form of an email. It usually claims that “you have been selected to receive a free financial aid seminar”. Although these seminars may provide a bit of helpful information, they are generally set up to make a sales pitch for one of the scams listed above.
How to Report Scams
It is important to report scholarship scams if you have been a victim of one.
Report scholarship scams to:
- The Department of Education’s Office of Inspector General (OIG): The OIG “conducts audits, investigations, and inspections of education programs and operations.”
- Federal Trade Commission (FTC): The FTC “works for the consumer to prevent fraudulent, deceptive and unfair business practice in the marketplace and to provide information to help consumers spot, stop, and avoid them.” For more information, visit the FTC Website