How to Avoid Scholarship Scams

Students can have a tough time telling legitimate scholarship opportunities from frauds. According to US News, around 350,000 students and families fall for scholarship scams every year, resulting in a loss of $5 million annually. If you are searching for a scholarship, make sure you know about these common scholarship pitfalls, so you can protect yourself better.

1. Application or Processing Fee

Don’t trust scholarship offers that ask you to send in an application or processing free. These so- called “scholarships” are not genuine. Don’t trust any statement that guarantees a refund, as the money is almost never returned. Application fee scams come under the most frequent scholarship scams, as they trick thousands of students every year. If you want to avoid such a scam, always keep in mind that you don’t need to pay a fee. You also need to be careful about loans that offer very low interest rate and ask you for a small fee up-front. Such loans never materialize and end up wasting your time and money.

2. Rewards for no effort

Be wary of scholarships that seem to offer you large amounts for no effort. These scholarships are quite similar to the pop up ads you usually come across that say “You have just won $10,000 and obtain your reward by paying a $100 processing fee.” If you did not apply for a scholarship or enter a contest, it is highly likely that the particular scholarship offer is a scam. Always remember that there is no such thing as a free lunch. If you are being offered something that looks too good to be true, make sure you investigate further. If the scholarship looks too easy to acquire, there is a pretty good change you are being duped.

3. Free Seminar

Students occasionally get invites to attend free seminars to get scholarships and financial aid. Apparently, there seems to be no harm in attending such a seminar, however, this free information can be a trap. The free seminar often turns out to be a crafty sales pitch trying to sell students insurance and other investment products. A worst case scenario can be where these seminars trap students into getting overpriced loans or expensive scholarship services. If you want to avoid going to fraudulent seminars, make sure you’ve done your homework by doing extensive research. If you are unsure about the legitimacy of a seminar, you must call the company or your college financial aid office. If no number is listed on the seminar, it is a red flag. Only look for those scholarships and financial aid options that you trust.

4. Exaggerated claims

You will come across scholarship offers making sweeping claims. If you see such an offer, just stay away. Following are some of the examples of claims made my fraudulent scholarship schemes.

  • “You can’t get this information anywhere else.” If you can’t get information about a scholarship anywhere else, then there is a pretty good chance it is not legitimate.
  • “For the scholarship, I need your bank account number or credit card.” Scholarship providers would never need this information, as genuine scholarship fund is either paid by check or sent directly to your college.
  • “Guaranteed scholarship or your money back.” There is no such thing as guaranteed scholarship, so don’t let such a claim deceive you.
  • “This scholarship will cost you some money.”  Real scholarships do not cost money. They are supposed to provide money, not to take it away.

First Come First Served Scholarships

Beware of time-sensitive scholarships that offer students scholarships on first-come-first-served basis. Genuine scholarships provide a deadline by which an applicant must complete and submit their application. In contrast, time sensitive scams usually offer an amount to whoever applies first. Most of the time, these scholarships seem to be available for those ‘lucky’ applicants who apply first. If it is a legitimate scholarship, all applicants will be required to apply at one time i.e. before the deadline date. Besides, time sensitive scholarship may also lure students in by telling them that they are already qualified for a scholarship, based on academic achievement, cultural background, handicap and disabilities, or religious affiliations. Pre-qualification may sound legitimate but it’s not. Legitimate scholarships have so many qualified applicants that they never extend offers like that.

Always keep in mind that the only application that will decide your eligibility for all scholarship programs is the Free Application for Federal Student Aid (FAFSA).  You can fill out the FAFSA form and submit for free. If you want reliable information, you may try these free sources of information.

While looking for scholarships and financial aid for college, it is always preferable that you conduct proper research and avoid hasty decisions. If you have more tips and questions on how to apply for reliable scholarships and avoid scams, feel free to share with us in the comments below.

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