Scholarship Scams

Yes, they’re out there.

It’s hard to imagine someone atrocious enough to want to take advantage of scholarship seekers, but unfortunately, scholarship scams do exist. At best, these sketchy scholarship opportunities may be an attempt to access your personal information, such as your address and phone number, which they could then sell to companies for marketing purposes. At worst, scholarship scams may try to trick you into sharing your sensitive, financial information, such as your bank account or credit card numbers.

The good news is that by using Cappex, you’ve already taken a step in the right direction. Our editors are experts at identifying questionable scholarships and excluding them from our database. This does not mean that all of the scholarships we don’t list are scams; it just means we use a rigorous screening process to ensure the scholarships we do list are legitimate to the best of our knowledge. Here are some tips to help you develop an equally keen eye for fishy opportunities.

Common scholarship scams

Scholarship scams change all the time, so it’s tough to issue a foolproof formula for identifying them. However, they do tend to have certain elements in common. Here are a few frequent scenarios:

  • A scholarship program claims you are “guaranteed to win” if you just pay a fee.
  • A paid scholarship matching service claims you should sign up for their service because you are “guaranteed to win” or because “you can’t get this information anywhere else.”
  • A scholarship provider requests your banking information or credit card number. Many scholarship providers will ask to see your FAFSA, which is usually normal, but any other requests for financial information should be treated with caution.
  • Upon researching a scholarship, you can’t find any reputable information on the administering organization or the past winners of the award.
  • You are informed that you were selected to receive a scholarship for which you never applied.
  • You attend a financial aid seminar and feel pressured to commit to a loan on the spot.
  • You’re offered an educational loan with a low interest rate if you pay a fee.
  • You’re told you can replace student loans with a grant in exchange for a fee.

Use your common sense

The best way to avoid scholarship scams is to trust your instincts and remember those tried-and-true sayings you’ve probably heard before, such as “If it seems too good to be true, it probably is,” and “There’s no such thing as free lunch.”

Use your noodle. Giving out scholarships is fantastic publicity for any company or organization, so you can bet if a scholarship is legitimate, there will be plenty of information to be found about the scholarship program, the organization, and the past winners. The FAFSA is an incredibly detailed financial profile of you and your family—why would a legitimate scholarship provider need additional financial information beyond that? Scholarships are supposed to award you money for school—why would you need to pay to win one? Basically, if you’re offered an opportunity that requires you to pay, appears too good to be true, or otherwise doesn’t seem to add up, be very, very careful.

Sources:

http://www.purdue.edu/dfa/sandg/scams.php

http://www.ftc.gov/bcp/edu/microsites/scholarship/index.shtml

http://www.usnews.com/education/blogs/the-scholarship-coach/2011/04/07/9-signs-of-college-scholarship-scams

http://www2.ed.gov/about/offices/list/oig/misused/sscams.html

http://www2.ed.gov/about/offices/list/oig/misused/sscams.html