20 Scholarship Scams: How to Protect Yourself and Spot Red Flags

Scholarship scams cheat hundreds of thousands of students and their parents each year.

According to several reports, victims of these scams lose hundreds, if not millions, of cash each year.

Scammers frequently impersonate real government institutions, grant-giving foundations, education lenders, and scholarship-matching services by utilizing official-sounding titles that include words like “National,” “Federal,” “Foundation,” or “Administration.”

This section explains how to recognize such scholarship scams, tell the difference between real and fraudulent organizations, defend yourself from scholarship scammers, and what to do if you are duped.

Scholarships with an application charge, scholarship matching agencies that guarantee success, advance-fee loan frauds, and sales pitches disguised as financial aid “seminars” should all be avoided.

Scholarship Scams: How to Protect Yourself and Spot Red Flags

Attending college, vocational school, or a degree program can often help you advance in your job and earn more money, but it can also be costly.

Scammers take advantage of this by offering to assist you in obtaining financial aid or scholarships to pay for your education. They’re only trying to steal your money or personal information.

1. What the Scammers Promise

2. Scams involving financial aid

3. Scholarship Scams

4. Evidence of a Scholarship or Financial Aid Scam

5. Going to a seminar

6. What to Do When Looking for Financial Aid or a scholarship

7. What to Do If You Have Paid a Scammer

8. Consider, “Is it too good to be true?”

9. Be aware of a sense of urgency.

10. The promise of exclusive knowledge should raise a red alert.

12. Questions about money-back guarantees

13. Ignore claims for unclaimed money

14. Look out for claims of affiliation with a respectable organization.

15. Learn how to identify fraudulent emails and websites.

16. Don’t provide personal or banking details.

17. Never pay any money.

18. Please contact them.

19. Collect references.

20. Report any scams.

1. What the Scammers Promise

Scholarship scams and financial assistance scams typically begin with a social media post, an email, or a letter in the mail.

It may appear to be a tailored invitation informing you that you have been selected for specific scholarship scams or financial aid packages.

Sometimes there is a callback number or information about an in-person training at a nearby hotel.

However, these calls and events are typically high-pressure sales pitches that force you to pay for their services immediately or risk missing out on these “special” scholarship scams or financial aid packages.

2. Scams involving financial aid

Some companies claim to be able to qualify you for financial help such as grants, loans, work-study programs, and other forms of assistance.

These companies promise to handle all of the paperwork for the so-called program in exchange for a processing charge.

What they’re doing is completing the Free Application for Federal Student Funding (FAFSA), which is a free form used to determine eligibility for federal funding.

Scammers will sometimes utilize fake information about your family’s income, assets, and benefits to qualify you for more financial aid than you would receive if they were truthful.

In addition to losing money to these scammers, providing incorrect information on your FAFSA can result in legal consequences, including fines of up to $20,000 and/or imprisonment.

Only you and your family may complete the FAFSA, which is always free to complete and submit. Never give out your FSA ID (the username and password you use to apply for the FAFSA) to anybody, including businesses or consultants.

Dishonest people could use this information to get access to your account and take control of your personal information.

3. Scholarship Scams

Never pay anything to apply for a scholarship. Walk away if a corporation offers you a scholarship or grant in exchange for a “processing cost,” “redemption fee,” or other upfront payment.

Many of these companies provide you with nothing in exchange for your fee, including a list of potential scholarship sources.

Others claim you’ve been chosen as a “finalist” for a scholarship award you never applied for or that requires an upfront payment.

These companies may request your bank account or credit card information to “confirm eligibility,” and then debit your account without your permission. Some may promise a “money back guarantee” but include terms that make a refund difficult.

Many genuine companies offer lists of scholarships for sale.

Others may charge you upfront to match your profile to a database of scholarship opportunities, and then provide you with a list of rewards for which you may be eligible.

There are other online scholarship search engines. The distinction is that respectable businesses never guarantee or promise scholarships or grants.

4. Evidence of a Scholarship Scam or Financial Aid Scam

Unsure whether an offer is a scam? Here is how to tell. If someone advertises an offer using any of these terms, or a variation of them, it is a fraud.

1. Scammers claim, “The scholarship is guaranteed or your money back.”

2. Scammers claim, “You can’t get this information anywhere else.”

3. Swindle you with the following message: “I just need your credit card or bank account number to hold this scholarship.”

4. Scammers claim, “We’ll do all the work.” You only pay a processing cost.”

5. Scammers claim, “The scholarship will cost some money.”

6. Scammers claim, “You’re a finalist [for a contest you never entered].”

5. Going to a seminar

Companies often promote workshops where you can learn how to receive scholarships and financial help. Some are legitimate, while others are scams.

These events are typically high-pressure sales presentations that need you to pay quickly or risk missing out on the so-called “opportunity.”

If you attend a financial assistance or scholarship seminar, take the following steps:

1. Don’t pay anything at the seminar. Only scammers will tell you to pay now or risk missing out on a chance. Solid opportunities are not presented using nerve-racking techniques such as rushing and strong pressure.

2. Before you make any payments, look into the organization and choices. Look up the organization’s name along with the words “complaint” and “scam” online. See what others have said about them.

You may be able to get the same assistance for free from a school guidance counselor or financial aid adviser.

3. Do not believe “success” stories. The seminar organizer may have paid people to share favorable stories. Instead, get a list of at least three local families who have used the company’s services during the past year.

Follow up with the families to see if they are satisfied with the products and services they receive.

4. Do not conduct business with someone hesitant to answer questions or provide details. Legitimate businesses are more than ready to provide you with information about their services.

5. Inquire about the amount of money you will be required to pay and the company’s refund policy. Get the total fee in writing.

Keep in mind that scammers may make it difficult or impossible to get your money back, regardless of their refund policy.

6. What to Do When Looking for Financial Aid or a scholarship

When you begin looking for financial aid or a scholarship Scam, take these steps:

1. To apply for financial aid, complete the free FAFSA form. (This is the most critical step you can take to obtain financial aid.)

2. Never pay someone to complete or handle your FAFSA. That is probably a fraud.

3. Discuss your financial assistance and scholarship opportunities with your high school guidance counselor or the financial aid office at college.

4. Never pay for a presentation on how to obtain financial help or scholarships. Especially if you are pressured to pay. That is probably a fraud.

5. Conduct your research before paying anyone for assistance with financial aid or scholarships.

6. Share these suggestions with others asking for financial assistance. You can assist them avoid fraud.

7. What to Do If You Have Paid a Scammer

Scammers frequently urge you to pay in ways that make it difficult to get your money back. Regardless of how you paid a scammer, the sooner you act, the better. Learn more about getting your money back.

8. Consider, “Is it too good to be true?”

When an offer or scholarship appears too good to be true, it generally is! If you believe something is too good to be true, sit back and conduct some more investigation because things that sound too good to be true generally are.

9. Be aware of a sense of urgency

While some scholarships have deadlines, you are unlikely to be informed hours or days in advance.

It is doubtful that someone offering a genuine scholarship will ever contact you and encourage you to apply.

Crooks utilizes the approach of instilling a sense of urgency to catch you off guard and make you comply with their demands.

For example, the Better Business Bureau (BBB) Scam Tracker reported a scam in June 2019.

This scholarship fraud phishing email specified a 24-hour response time.

Otherwise, the sender warned, that someone else would be chosen for the scholarship.

10. The promise of exclusive knowledge should raise a red alert

Consider whether an organization’s promise of exclusive access to a scholarship is reasonable.

The great majority of scholarship information is made public so that everyone eligible can apply.

11. Questions about money-back guarantees

Some scammers will utilize a money-back guarantee to entice you to give them a charge. But, let’s be honest, the only way they can promise you a scholarship is if the system is rigged. The Federal Trade Commission (FTC) highlights:

Another claim that may be made to pique your interest is the promise that everyone is eligible. Of course, there are certain conditions that applicants must meet to be considered for the scholarship.

12. Ignore claims for unclaimed money

There is a long-standing fallacy that millions of dollars in scholarship funding go unclaimed each year.

In actuality, this is a ruse designed to entice more people to give up their personal information or money to apply for fraudulent scholarships.

13. Look out for claims of affiliation with a respectable organization

Many scammers will claim to be affiliated with an organization that you recognize.

Some will go so far as to impersonate that organization, such as by utilizing its logo and possibly even an email address and site domain that appear to be affiliated with the company.

Before providing any information, conduct a thorough investigation of the company.

15. Learn how to identify fraudulent emails and websites

Some phishing techniques are simple to detect, while others are clever and extremely deceptive.

Poor spelling and language, an email address that does not match the organization’s name, and links that appear to take you to separate sites are all red flags.

16. Don’t provide personal or banking details

When you apply for a scholarship, you will be required to provide certain details.

But if an organization asks for your social security number or banking information right away, it is most certainly a hoax.

Even for seemingly trivial information such as your name, address, and phone number, thoroughly research the organization before giving it.

17. Never pay any money

You should never provide money to companies for any reason, including application fees and service costs.

Legitimate scholarships will be free to apply for and will not require you to pay money to receive money – that is not how it works.

18. Please contact them

If you receive a scholarship offer that asks for money upfront or you want to be sure they are genuine, contact them personally and make sure you can reach them by phone.

Ask for their physical address and any other information you require. Real businesses will gladly share this information, whilst scammers will be hesitant to do so.

19. Collect references

Do some research on the firm or group that is sponsoring the scholarship, such as using Google to look up their name (if someone has been defrauded by them, you will most likely find their name someplace online).

Also, check the country company registry for that organization; for example, all UK companies must be registered, and you may search for them online for free.

20. Report any scams

Please report financial assistance and scholarship scams to:

The Federal Trade Commission at

Your state attorney general


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