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Scholarship Scams
Online graduate studies can be expensive. However, if you meet eligibility requirements, you may qualify for a Scholarship, Grant or Financial Aid. Scholarships may be awarded based on various criteria: Academic accomplishment, the applicant’s race, veteran status, church affiliation, membership in an organization, or a field of study. Unfortunately, just as there are thousands of opportunities for you to receive these gifts, there are even more con artists who want to appropriate your money and provide nothing in return. We created this guide with the goal of spreading awareness about how these con artists run their scholarship scams and swindles.
Fake Scholarships
There are a lot of scamsters in the business of fake scholarships. It is essential to understand how they operate. For this, it is necessary to understand how scholarships work and how they use the scholarships to lure the students. Scholarships are a type of financial students based on several factors. Scholarships are basically free money that you can use to pay for all, or part, of your educational costs. Read more our page Financial Aid and Scholarships for Online Graduate Students where we cover the following topics:
- Financing an Online Master’s Program: Getting Started with FAFSA®
- What are the Different Types of Financial Aid for an Online Master’s Program?
- Examples of Financial Aid Opportunities for Online Master’s Programs.
- Resources for Finding Financial Aid and Scholarships for Grad School.
Fake Scholarships are a fraud where the scammer promises to provide guaranteed college scholarships. Most scholarship scams seek to get students and their families to pay money to the scammer upfront, but some scams also involve identity theft.
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 tactics to get you to pay upfront or risk losing out on the scholarship. If you have to pay money to get money, it is probably a scam. Never pay to get information about scholarships or to apply for a scholarship.
How to know if a scholarship is fake?
Fake Scholarships are increasingly becoming a problem, and the con artists are improving their methods. But here are some of the most common phrases used in scholarship scams:
“We’ll do all the work for you“
No company can do all the work on your behalf. All they can give you is a list of potential scholarship options, which you are then required to apply for by filling out the application and submitting it.
“We only charge a small fee“
Most scholarship scams charge some kind of fee. The fee may seem small and reasonable, such as an application fee, processing fee, or taxes, but legitimate scholarships do not charge any fees.
“We need your financial information for confirmation purposes“
Beware of scholarships that ask for your credit card number or Social Security Number. Scholarships do not need your credit card number to verify your identity or hold the scholarship. Scholarship providers are not required to report scholarships to the IRS unless the scholarship is a fee for services.
“You won a scholarship”
One scholarship scam deceived many students by sending them a letter that congratulated them on winning a scholarship but asked them to pay the application fee. But when you haven’t applied for the scholarship yet, you receive an email or letter stating that you have been selected for a scholarship, then it is definitely a scam. It’s a warning sign which says that you are dealing with a scammer. These companies generally want to collect all your information – both financial and personal.
“We are a foundation or tax-exempt charity“
Check whether the organization really is a foundation using the Exempt Organizations Select Check tool, formerly known as IRS Publication 78.
“We offer a guarantee“
Nobody can guarantee that you’ll win a scholarship!
“We have exclusive access to scholarships“
Some paid scholarship matching services claim that you can’t get this information anywhere else. That is never the case. All the information regarding the scholarship is freely available and easy to access through the internet. If anyone states that they have exclusive access for information for an exchange of money, it’s definitely a scam.
“We have a high success rate“
Paid scholarship matching services sometimes say that a high percentage of their clients win scholarships. But only about 1 in 8 students win private scholarships, and the average amount received is less than $4,000.
“Millions (or billions) of scholarship dollars went unclaimed last year“
The unclaimed aid myth has been around for decades. It is just as false now as it was 40 years ago. Most scholarships have more applicants than money. The few scholarships that go unclaimed cannot be claimed because they have very restrictive criteria.
“You must act now“
Although scholarships do have deadlines, they aren’t awarded on a first-come, first-served basis. There is no need to act unless you are submitting your application for the scholarship by the deadline. You don’t need to act to get a scholarship. If you are selected for a specific scholarship, then it’s yours.
“We are approved by a reputable organization“
Some scams will falsely claim to be affiliated with the U.S. Department of Education or another government agency. The federal government is prohibited from endorsing private businesses!
“We’ll send you a check“
This is the most devious scam. The check they send to you is more than the value of the scholarship. The scammer will claim that the check was issued in error but cannot be canceled. They instruct you to deposit the check and send them your check for the excess that they “overpaid” you. The scholarship check may look legitimate, but it is a forgery and will bounce after you deposit it. Your bank will probably charge you for the bounced check. And, the check you send them will be deducted from your account.
Too Good to Be True
Some scammers guarantee that they can deliver scholarships on behalf of students or award scholarships in exchange for an advanced fee. Others may only provide a list of readily available scholarship sources. Still, others tell students they’ve been selected as “finalists” for awards that require an up-front fee. Sometimes, these companies ask for a student’s financial information as confirmation of identity, then debit the account without the student’s knowledge. Other companies only require a small fee and then provide nothing of value.
However, some legitimate scholarship search engines do charge an advanced fee to compare a student’s profile with a database of scholarship opportunities and provide a list of awards for which a student may qualify. However, there are usually free sources of the same information. Always remember that legitimate companies never guarantee or promise scholarships or grants.
Seminars
Watch out for scams that offer a free seminar or a one-on-one interview. Both are nothing more than a high-pressure sales pitch for their “scholarship services.” Don’t be rushed into paying at the seminar. Avoid high-pressure sales pitches that require you to buy now or risk losing out on the scholarship opportunity. Be wary of “success stories” or testimonials of extraordinary success – the seminar operation may have paid “shills” to give glowing stories.
These scholarship seminars are a session where the representative will pressure you to buy their products, such as scholarship search services or the resume formatting service, which you don’t need, but they will still force you into it.
If it is a Scholarship Scam…
If you encounter a scholarship scam, report it to the following law enforcement authorities. By reporting a scholarship scam promptly, you may help save other students from becoming victims of scholarship scams.
Report the scam to the National Fraud Information Center (NFIC) at 1-800-654-7060 or visit www.fraud.org. The NFIC shares information with the Federal Trade Commission (FTC) and state attorney general.
You can also report the scam directly to the FTC by filing a complaint form or calling 1-877-FTC-HELP (1-877-382-4357). The FTC published an article about scholarship and financial aid scams, as well as an annual report to Congress about scholarship scams.
The U.S. Postal Inspection Service investigates mail fraud, which includes scams sent by postal mail. Report such scams using the Postal Crime Hotline online complaint form or by calling 1-877-876-2455 (say “fraud”) or 1-800-654-8896.
To report fraud involving federal student aid funds, such as FAFSA fraud rings, contact the Office of the Inspector General at the U.S. Department of Education by calling 1-800-MIS-USED (1-800-647-8733) or filing a report using the OIG Hotline.
The College Scholarship Fraud Prevention Act of 2000 (P.L. 106-420) created enhanced penalties for scholarship fraud to encourage law enforcement to prosecute scholarship scams.
FAQs about Scholarship scams
| Q: How to spot scholarship scams? |
| A: There are signs that you can look for: • When they ask for your bank account number • They ask you not to call them, but only they will call you • When they charge a fee upfront, it is essential to note that some legit scholarship providers also do that, and it is vital to use all other signs mentioned on this page to determine if they are a scam. • They tell you that you won a scholarship that you never applied for. We created a section that will walk you through in spotting scholarship scams here. |
| Q: How to avoid college scholarship and grant scams? |
| A: See for the signs for a scam. We laid out all the signs for you to look for here. If you think it is a scam, there are few things you can do. Read them here. |
| Q: Is Scholarship Owl legit? |
| A: Yes, they are a legit scholarship information provider. |
| Q: Is Scholarship Points legit? |
| A: Yes, they are a legit organization. |
| Q: Is FastWeb legit? |
| A: Yes, FastWeb is legit, and in fact, they are one of the largest scholarship information providers. |
| Q: Is scholarships com legit? |
| A: Yes, Scholarships.com is a legit organization. |
| Q: Is Unigo legit? |
| A: Yes, Unigo is legit and provides a lot of information about scholarships to its user. |
| Q: Is Cappex legit? |
| A: Yes, Cappex is legit and provides useful information to its users using their massive database. |
| Q: Is Questbridge legit? |
| A: Yes, they are legit. |
| Q: Is Going Merry legit? |
| A: Yes, Going Merry is legit, and it is recommended by many student counselors. |
| Q: Is Niche scholarship legit? |
| A: Yes, Niche scholarships are legit. |
Legit Scholarships
Here is a list of websites that provide information about legit scholarships that are available for students.
Scholarships.com is a substantial scholarship database that consists of over 3.7 million college scholarships and grants. Scholarships.com has more than two decades of expertise in providing students with all the information about a wide variety of scholarships available. Students can quickly register on this site and create a profile for the types of scholarships that they are interested in.
Fast Web is one of the leading resources that many students use to get information about various scholarships. Fast Web has been providing scholarship information for more than 15 years and provides more than 1.5 million scholarship details. According to their website, they have $3.4 billion in funding that are available for students.
Chegg is a popular textbook store for renting and buying textbooks online for affordable prices. Many students use Chegg.com for textbooks, but Chegg also provides information about more than 25,000 scholarships. Chegg created an online tool for users to browse through various available scholarships.
College Express is another service that provides a search tool for users to search for scholarships based on the search keyword. They also provide featured scholarships that can be applied online.
Petersons has been in the education field for a long time, and they also provide a scholarships search tool that provides information about $10 billion in scholarship awards from 4000 scholarship providers. Peterson’s online search tool is really user-friendly and provides various search categories for searching for scholarships, grants, prizes, etc.
Cappex is a great website that provides information about various colleges and scholarships. Their website also provides tools for students to see their chances of getting admitted to any colleges. They also host a massive database of scholarships that $11 billion in scholarship amount that students search for, by creating an online account and profile.
Unigo is an extensive database of over 3.6 million scholarships. Users can create an account and profile and enter scholarship entries. And based on all this, the Unigo will provide the personalized results, which will also be updated every month. Users can also browse through various types of scholarships based on categories.
College Board is one of the oldest educational organizations in the nation. College Board provides a lot of information to students about examinations, dates, prep tests, etc. but they also provide a massive scholarship database that has information about 2200 scholarships with nearly $6 billion in scholarship amount. Their online search tool is flexible, and it can be used to search for scholarships based on personal information, academic information, types of awards, etc.
Scholarship Monkey is another database that provides information about more than 4000 scholarships. Scholarship Monkey provides three ways in which users can search for scholarships.
o Personalized Search – Users can register online and get email updates when the profile matches with scholarships
o Search – The scholarships can be searched based on the keywords.
o Lists – Users can browse through various scholarship lists.
SallieMae is famous for its student loans, but they also provide information about scholarships in various categories. They provide scholarship information, not just undergraduate students but also for graduate schools. Users can register online and create a profile and start searching for scholarships that fit them and also use other resources like college-planning calculator tool and determine the cost of education.
More Resources
FAFSA– There is an online application that will determine eligibility for all scholarship programs. It is the Free Application for Federal Student Aid (FAFSA). This form can be completed and submitted for free. You can complete the FAFSA and learn about other FAFSA filing options at www.fafsa.ed.gov/options.htm. You also can call 1-800-4-FED-AID.
Student Aid – Another source of free information is StudentAid.gov, the U.S. Department of Education’s site for free resources on preparing for and funding education beyond high school.
Financial Aid Guide – Read more about Financial Aid and Scholarships here.