Scholarship Scams

Posted on September 14, 2016 in Scholarships

How To Avoid Getting Burned

Scammers always seem to target people who are vulnerable and looking to improve their financial circumstances. No surprise, they've begun targeting students and parents seeking help to pay for the hefty price of college.

High school and college students searching for scholarships are at risk of being scammed, and it's not just a problem online. Scammers are reaching students via phone, email, and traditional mail, often using official sounding names and fancy looking documents to acquire a student's money and personal information.

While there are millions of legitimate scholarship opportunities that can help you offset the cost of tuition, some programs are completely bogus. Here's what you should look out for so you don't get burned by the bad guys.

Services that will find you scholarships for a fee. Be very leery of any company or person that requires money from you in order to find you a scholarship. This is not one of those situations in which you have to spend money to make money.

Very few legitimate scholarship programs require application fees, and all scholarships are free to find and read about. There isn't any one agency or person that has 'special access' to a scholarship. And they can't guarantee that you'll win a scholarship, either. Don't fall for 'money back guarantees'.

Awards that you never applied for. While there are thousands of organizations and businesses that have scholarships available to students, they don't take the time to find the students themselves. They definitely don't pay for people to find students for them. They make the student come to them, via an application.

If you receive a phone call, email, or fancy looking letter in the mail that congratulates you for winning a scholarship that you never applied for, it's probably a scam. The old saying 'if it's too good to be true, it probably is' fits this scenario perfectly.

Scammers know how to get a hold of your basic information (name, address, phone number, your graduation date, etc.) and they are experts at baiting people. Do not respond to or proceed with this person. Better yet, report the incident to the Federal Trade Commission to help stop the scammers.

Organizations that ask for your credit card number or bank account information. There aren't many times in life when someone says they're going to just give you $2,500. It can be tempting to want to get your scholarship funds right away, but providing your financial information could end up costing you money or put you at risk for identity theft.

Exactly how you receive the funds from a scholarship is completely up to the scholarship provider. Some may send a check directly to you, while others may send the funds directly to your college via check or electronic transfer. Therefore, even if you believe you're being contacted by someone legitimately connected to a bona fide scholarship, you should still conduct your own research into the organization before providing any information.

Programs that use common sales techniques and salesy language. We've already covered one of these, which is the 'money back guarantee.' That's common language you'll hear when buying a car or an appliance; it has no place in the realm of college scholarships.

Other common scholarship scams create a sense of urgency, telling you to 'Act now!' so you don't miss your chance at a scholarship. The truth is that all scholarships have a cycle (usually annual) in which they accept applications and award funds. Sure, there are deadlines, but taking action today won't make you any more likely than the other applicants to win the scholarship.

Real or Fake: How to Tell the Difference

Here are a few ways to tell if a scholarship is the real deal:

It has requirements related to your academic career. In order to apply, you must submit your high school transcript, your SAT/ACT scores (this is common, but not required for all scholarships), or you must have a minimum GPA of X. These are all things that legitimate scholarship committees use to select a winner. If a scholarship isn't asking for some of these items, it could be a scam.

It requires an essay or a few open-ended questions. Writing an essay isn't a requirement for every legitimate scholarship, but it is very common. At the very least, most scholarships want you to provide some written explanation as to why you are pursuing the scholarship or what makes you an outstanding candidate. If a scholarship application doesn't ask for any written portion, or asks you to describe yourself in just a few sentences, it could be a scam.

It is only awarded once or twice per year. Legitimate scholarships are usually awarded once per year, in the spring or summer, before students go off to college in the fall. Even scholarships that are awarded by small, non-profit organizations need time to receive and review applications. They don't have time to do it every week or every month. If you are presented with a scholarship that gets awarded weekly or monthly, it is probably a scam.

Be Curious and Cautious

Let's say it again: there are millions of legitimate college scholarship opportunities available to students. You should research them and pursue them if you qualify; they could really make a dent in your college bills!

The rule of thumb when it comes to searching for college scholarships is to be cautious. You will likely find scholarships from companies or organizations that you have never heard of before, but that doesn't mean that it is a scholarship scam. It means that you need to do some research to make sure that it is legitimate.

Do an online search. Look up company addresses on Google Maps to see if they are real. Make a phone call and anonymously ask questions about the organization. Ask your high school guidance counselor or advisor what they know about the scholarship. Proactively avoiding the scammers will make your senior year a little less stressful.

ADDITIONAL RESOURCES:

https://www.consumer.ftc.gov/articles/0082-scholarship-and-financial-aid-scams

https://bigfuture.collegeboard.org/pay-for-college/grants-and-scholarships/how-to-spot-scholarship-scams

http://www.collegescholarships.org/scam.htm

http://www.fastweb.com/college-scholarships/articles/scholarship-scam-red-flags

http://www.usnews.com/education/blogs/the-scholarship-coach/2012/07/26/dont-fall-for-these-5-college-scholarship-scams

https://www.petersons.com/college-search/college-scholarships-identifying-scams.aspx

http://www.thescholarshipsystem.com/blog-for-students-families/2015/8/31/how-to-tell-if-a-scholarship-is-a-scam-or-not

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