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Today’s students are at high risk for financial aid and scholarship scams due to college costs, financial pressure and new technologies. It’s no wonder stressed students are falling under the trap of college scholarship scams. Financing a college education is costly. Who wouldn’t need the money? Students and their families seek creative ways to pay skyrocketing tuition bills and dorm room costs. Unfortunately, in the efforts to pay the bills, they fail to notice the red flags and never thought twice about how to avoid college scholarship scams.
Don’t take scholarships at face value. In other words, make sure you’re alert when receiving and applying for scholarships. We’ve put together a few of the many signs you’re being duped instead of getting the financial assistance you need.
The Fees
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Searching for or applying for a scholarship should never cost money. Period. Some services may charge money to help you conduct your search, but these services only have access to information that is freely available. if you hear “It will only cost -“, that’s a red flag that you’re being scammed for money. Any attempt to charge you for information or to charge you to “hold” the scholarship is a scam.
According to the Federal Trade Commission (FTC), the nation’s consumer protection agency, unscrupulous companies guarantee or promise scholarships, grants or fantastic financial aid packages. Many use high-pressure sales pitches at seminars where you’re required to pay immediately or risk losing out on the “opportunity.”
Some manipulative companies guarantee that they can get scholarships on behalf of students or award them “scholarships” in exchange for an advance fee. Most offer a “money back guarantee” – but attach conditions that make it impossible to get the refund.
Some companies claim they have programs that could make you eligible to receive financial aid, including grants, loans, work-study and other types of aid. For a processing fee, they’ll handle all the paperwork. But experts caution: The only application that will determine eligibility for all programs is the Free Application for Federal Student Aid (FAFSA) – a form you can complete and submit for free.
“Free” Scholarships
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An official-sounding organization can tell you about an incredible opportunity, send you a check with a note of congratulations, offer you a coveted spot at a scholarship seminar, or simply use messaging designed to get you to impulsively act on adrenaline. These are all tricks! Scholarship providers don’t send funds out randomly.
If someone invites you to a “scholarship seminar”, don’t go. These are typically going to be an information session in which representatives use high-pressure sales tactics to get you to buy some product, such as a scholarship search service or a resume formatting service.
If you do attend one, take your time. Investigate the organization you’re considering paying for help. Talk to a guidance counselor or financial aid advisor before spending your money. You may be able to get the same help for free.
Friend Request Scams
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A new scam circulating begins with a random friend request on Facebook, Instagram or Snapchat. Some might ignore the request. However, you may just accept it and suddenly, they start messaging you about a foolproof way to make money for college: they work for a scholarship provider and have found a loophole. You can split the money, all they need to do is enter you as a winner.
Students in times of stress may see the word money and be tempted, but the situation could cost more than money. You could end up losing your identity. Don’t give out your info to anyone trying to message you through social media.
Report Scams
If you believe you’ve responded to a scam, file a complaint with:
- the FTC
- your state Attorney General
