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How to Spot and Avoid the Most Common Scholarship Scams

Advances in technology have created extremely skilled individuals. Identify theft, spam, phishing, and a number of other schemes have ruined many lives. Make sure that you protect your family from scholarship scams by learning how to spot and avoid the most common types.

I’ve seen students receive official-looking documents in the mail (that contain a Student ID and account in place) encouraging them to log into an account not associated with their university to receive their work-study and scholarship access; I’ve seen angry parents who’ve paid good money only to end up the victim of identity theft. Even I’ve received numerous emails from an organization that claims to be an honor society but has little evidence to validate this information.

Scammers have gotten good.

Scholarship scams are real and here to stay. Here’s the thing:

Scholarships are NOT regulated. Anyone that chooses to give money to a student is free to set up a website, send out emails, or post their information on or offline.

I know several community members who offer scholarships to students. They post the information on their Facebook page or have unattractive websites. Although legitimate, it becomes tricky to decipher what’s real and what’s not.

So let’s get to it. Here are the Top 7 Scholarship Scams.

The Top 7 Scholarship Scams

Scam #1: Information Infiltration

The Information Infiltration Scam is common. Fraudsters, at a minimum, may require applicants to complete specific information to be entered into a scholarship drawing or pool. (FYI, several reputable sites do conduct scholarship drawings and require your information. We will cover more on that later.)

Likewise, scholarships asking for a lot of identifying information may indicate that they are only doing so for identity theft purposes. You have to be careful entering your email. Sometimes once they’ve got you on their list, it’s hard to get off!

The point: Be careful when entering into a scholarship drawing or offering any of your family’s information such as: Name, Email Address, University Data, Majors, Minors, FAFSA IDs, Credit Card Information, or any other identifying specifics.

If the application sounds too good to be true, chances are it is.

Scam #2A: The Official Mail Look-A-Like

Have you ever received university or student loan information that you didn’t request? I get them at least a couple of times a month.

There are two ends of the spectrum with this scam. Let’s cover the hard end first.

Some scammers have set up real websites to compliment materials they send in the mail and even use a .org domain to disguise their ulterior motives.

Oftentimes, they’ll have official letterhead, a “Student’s Profile Identification Information” in the header, and the body of the letter urges students to sign up or register online because deadlines for eligible scholarships and work-study programs are approaching.

Upon visiting the “official site”, students are required to pay a fee of anywhere between $45-$75 bucks. DO NOT DO IT!

One of the families I work with received this type of letter in the mail and asked me about it.

The first thing I did was search on Google, and immediately auto-suggestion added the word “scam”. After reading numerous reviews, I knew that this was not something they needed to sign-up for or worry about. Use their experience as a lesson learned.

Scam #2B: The Website Ploy

Crappy websites do exist. I’ll be honest, some educational professionals or organizations don’t have the time, the skills, or the resources to invest in a top-notch website.

If it looks extremely dated and is not related to a reputable site, it could be a scam.

A good way to determine if the site and scholarships are current is to look for the year at the bottom of the web page. If it doesn’t have © 2017 in the footer, a red flag should go up.

I know it may be a little presumptuous, but building a blog has taught me many things about website security and outdated programs. I don’t want your family to enter information into vulnerable sites and databases. At the very least, check it out.

Most companies and organizations sponsoring a scholarship will have a blog, media, or some other aspect of their site that’s kept current. If you do not see any current information (within the last 30 days), there better be a good reason.

When in doubt, try to locate the company’s phone number or the email address of the individual that is overseeing the scholarship.

DO NOT call or email them saying, “Hey! Is this scholarship legit?”

Instead, use this as a guide:

Hi Mr. Clark,

I found the (name of scholarship) sponsored by your (organization/company/division) online.

Given the rise of scholarship scams, I just wanted to send an email confirming that your (organization/company/division) is indeed offering this educational opportunity for students.

Hopefully, it is and thank you for the opportunity!

Hope to hear from you soon,

(Your Name)

Feel free to use this for any scholarship emails you send or as a phone script.

Parents: I would recommend sending the information from your child’s account. Parent stigmas are real. You don’t want your child labeled in any way, shape, or form.

Scam #3: Pay-for-Play

This is pretty self-explanatory. Any scholarship that is asking you to pay an entrance fee could potentially be a trick.

Please note that some scholarships do ask for entry fees. These are normally more artistic or creative in nature.

Entry fees can help fund the scholarships awarded by the organization. Remember to use the website information to confirm their legitimacy and check to see if the organization or scholarship is sponsored by any recognizable companies or entities. Chances are that if it is, it’s a reputable scholarship.

Scam #4: Everybody’s A Winner

Oh, how I wish that every single scholarship I applied for resulted in more money in my bank account!

Scholarship guarantee programs and claims are scams.

Too many factors go into the scholarship process for ANYONE to be able to guarantee that your family will be awarded a scholarship.

I’ve attended countless college nights and fairs, and not once have I ever heard a college recruiter guarantee scholarships. If anything, they will draw student comparisons.

At Scholarship Informer, we don’t make any guarantees – the government would shut us down!

The only thing I can guarantee is that your family will learn everything that I used as well as the same strategies and tactics my students use. That is absolutely it.

Several large scholarship sites will say that you should “never pay for scholarship information.” This is partially a true statement. What they’re saying is to be cautious of individuals that are selling you something with a scholarship guarantee.

They’re not saying that you should get every single scholarship strategy for free. Why else would they sell or recommend purchasing specific books?

Think about the ACT or SAT. Big name companies like The Princeton Review and Kaplan are not giving their strategies away for free. You have to pay hundreds if not thousands to get access to their top-notch study programs. Yes, there are free sites like Khan Academy that offer some assistance, but it’s not always the same as Kaplan. In order to master the exam, you have to pay.

The same is true with scholarships.

In order to get help beyond the oftentimes basic and general info provided on websites, you are going to have to pay something for one-on-one help, scholarship essay editing, etc. There’s nothing wrong or illegal about seeking scholarship strategies and advice that will make you stand out from the competition.

I don’t know about you, but I don’t want to rely solely on free information. I want to learn what may not have written about. I want personalized scholarship help from the master.

Scam #5: The Free Seminar

This one – I absolutely detest because sometimes these individuals snake their way into audiences at schools or organizations. Counselors and college advisors may even recommend them because of the great information they provide, but that also makes it hard to recognize the plot behind the presentation.

I’ve seen them in action. They teach excellent big-picture information, answer questions “as much as they possibly can”, and encourage you to fill out a form to be contacted later. It’s this information outside of the seminar where families fall into traps.

Free seminars are often designed to gather your information only to try to upsell you later with insurance, investments, annuities, or other products. These individuals will oftentimes say that           “you won’t have to pay anything” and “we’ll make sure that your family’s expected financial contribution is lowered”.

Again, it’s hard to spot these people because they are at college nights or college events. The people you trust are bringing these individuals in to direct and advise your family.

I will say that there are some financial advisors really do care about saving families money for college. However, they will recommend resources like mine – where students learn the tools to be able to develop and apply for scholarships semester-after-semester…on their own.

If you are meeting with a financial advisor and college planner, research the company, check reviews, and consult with people you trust.

Real Talk: I was once recruited to become a part of a scheme like this. When I found out that they cared more about the price they charged families than helping them pay for college, I knew that I didn’t want anything to do with it. They weren’t about student success and helping families, they were about getting families like yours to invest in their company through life insurance. My intuition didn’t lead me astray on declining their offer.

Millions of students and their families need scholarships. If there are absolutely no eligibility requirements, question it.

You cannot get “something for nothing” when it comes to scholarships (or anything else in life). It’s rare that a scholarship committee won’t have requirements. Most committees and sponsoring organizations will at least have required ages, classifications, or a specific semester. They will specify something.

When in doubt – put it through the test: Contact information? Up-to-date site? Current online information?

By answering these questions, you’ll know if it’s good or not.

Scam #7: The Now or Never

Another scholarship scam out there centers on scholarship deadlines.

If the committee is pressuring you or your family into taking advantage of their scholarship – it may not be legit.

Let’s keep in mind that some organizations will send mass reminders or alerts via social media or email. That’s a reminder, not a scam.

A few committees will reach out to students encouraging them to apply, especially if they’ve completed a profile on their site.

But if you’re contacted by a scholarship company to take action on a scholarship you never applied for – run! It’s a trickster.

There are scholarships that operate on a “first come, first served” basis. These are totally different than what I’m referring to here.

Unless a committee is terrible about advertising their scholarship online, they’re going to get at least a few applications. No one should be contacting you out of the blue to apply for a scholarship.

Key Scam Phrases

I appreciate The Federal Trade Commission for making these suggestions to keep our families safe. Watch out for the following suspicious key phrases:

  • “The scholarship is guaranteed or your money back.”
  • “You can’t get this information anywhere else.”
  • “I just need your credit card or bank account number to hold this scholarship.”
  • “We’ll do all the work. You just pay a processing fee.”
  • “The scholarship will cost some money.”
  • “You’ve been selected” by a “national foundation” to receive a scholarship – or “You’re a finalist” in a contest you never entered.

How to Protect Your Family from Scholarship Scams

There you have it, folks. The 7 Sneaky Scholarship Scams.

At the end of the day, there are more than enough scholarships out there for you and your family. If you’re really struggling with this, make sure you talk to us for free because I don’t want your family to end up like other victims.

Worried about falling for a #scholarship scam? Remember: When in doubt, DON'T fill it out!Click To Tweet

As I see new scholarship scams, I’ll make sure to update this list. If you spot any or have fallen victim to any, make sure you let us know!

Stay safe!

Feature Image Artwork Credit: iStockPhoto/welcomia

About Your Author
Having earned well over $150,000 in scholarships to pay for her bachelor's, master's, and doctoral degrees, Gabrielle McCormick teaches students, parents, and education professionals from across the country about winning scholarships to pay for college. Between finishing her dissertation and watching the NFL and NBA, she runs Scholarship Informer in her efforts to make college affordable for anyone that wishes to attend.
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