Scholarship Scams and How to Avoid Them

Posted by Susan Dupre on 10/9/2019

It's that time of year when high school seniors who plan to pursue university degrees begin considering exactly how much getting there will cost. After all, even though a TOPS award will help with tuition, the other things--books, transportation, housing, food--are still costs that must be met. Unfortunately, the Internet has made scamming current and potential college students much easier. 

For example, a recent email urged recipients to apply for a $1000 nationwide scholarship with no eligibility requirements.  However, the scholarship website included no contact information and no listing of past award winners. By offering $1000 (with no evidence that any money was awarded to students), these crooks collected the personal information of thousands of unwary high school seniors and created a database which was later sold to other scammers.  

Another email scholarship offer requires students to sign up for an account with a "homework helper" website before applying for the scholarship. While this company does award the scholarships, they also use the application information to entice students to pay $10/month for their service once they enter college.  Student quickly discover that they have been charged up front for the entire year and that the website does not contain enough information to be helpful at all.

Since identity theft and financial loss are primary concerns, students should look for these red flags before completing any online scholarship application: 

  • An Application or Disbursement Fee: No legitimate scholarship will collect money for handling or processing.

  • Membership Requirements: If you are already a member of a group that offers a scholarship, that's great--the applicant pool will be smaller. However, if you have to buy something or join an organization where fees are required, skip it. Claims like "We Have Exclusive Access to . . . " or "We'll Do All the Work for You" should be warning signs.

  • "You've Won!" or "You've Been Selected" Without an Application:  A phone call or email that says you've won something should be immediately questioned, particularly if you didn't apply.

  • Unclear Eligibility Requirements: Legitimate scholarships will have a list of requirements. If anyone can apply, it may be a scam.
     
  • Missing Information: Anyone can create a scholarship website. Does the website provide clear contact information and represent a legitimate company? When you ask questions, are they answered promptly? Is there evidence of past winners? If not, skip this one.

  • Requiring Too Much Personal Information:  Any scholarship that asks for credit card numbers, social security numbers, and bank account information should be immediately red-flagged. Check the privacy policy, too, if you are asked to disclose information about personal attributes that you might like to keep private.
     
  • Spelling or Grammar Errors: Scholarships are serious matters, and the providers will make sure their applications and websites are professional.
     
  • Scholarship Seminars: In these "informational" sessions, representatives often pressure you into buying access to a scholarship search or resume preparation service. In some cases, the product is not even related to a scholarship--it's a time share or life insurance policy. Just skip this, too.