You and your teen are hunting for college scholarships. Unfortunately, there are scam artists hunting for you. They’ll seek to ensnare you with promises, tempt you with devious emails, sly letters, forked-tongued phone calls, and websites advertising their bogus businesses. They use the desire for financial aid and college funds to manipulate, every year, thousands of parents out of more than $100 million annually. Don’t be fooled. Here are 13 red flags that can alert you to fraudulent scholarship scams.
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Asking for advance fees
A common trick is to guarantee your student a scholarship for an “advance fee” of usually $10 to $25. If they can’t get your child a scholarship, they promise to return your money. Don’t fall for this trap. Zero funds will be found for your teen, and your return fee will be impossible to claim.
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Requesting access to your funds
This scam asks for your personal info — credit card, checking account, social security number — either in a phone conversation or via the website. Never provide this. They might say they want it to “confirm your eligibility” or to “hold this scholarship,” but what they really want is to debit your account, once, monthly, or even weekly.
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Claims of exclusive info
The con artist might say, “We have a list of scholarships you can’t get anywhere else,” for which he’ll ask you to pay an “access” fee. Untrue. There are no secret, exclusive databases. Scholarship information is available for free at numerous sites, like Scholarships.com, Fastweb.com, and CollegeBoard.org. Better yet, check your counselor’s office and the local library for information about local scholarships, which will have fewer applicants and are less likely to be an online scam.
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Offers to fill out applications, for a fee
A smooth operator might tell you, “We do all the work; we’ll locate scholarships for your student and fill out the paperwork. We just need a ‘processing fee.’” This is totally ridiculous. They can’t, and won’t, write usable scholarship essays for you or acquire meaningful letters of recommendation. They’ll cash your “processing fee” and send you some garbage they googled, plagiarized, or use for all their victims.
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Sham congratulations
Fraudsters might say, “You’ve already won!” or “You’re a finalist!” or “You’ve been selected!” They’ll ask you for a “disbursement”, “redemption”, or “administrative” fee so they can deliver scholarship prize money from a contest your teen never entered. Sometimes they’ll even send you a big check, saying it can only be redeemed after you pay the required price to release the funds. Put mail like this in the trash.
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Official-sounding names
Scam operations often have names that impersonate government programs, scholarship organizations, and nonprofit education foundations, even using words like “National”, “Federal”, and “Administration.” Plus, they might have a Washington, DC address. Don’t be duped. Google any group’s name to certify its legitimacy before you even talk to them — especially if they reached out to you first.
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Pseudo-scholarships
This ruse displays what appears to be an actual scholarship, but the giveaway that it’s a scam is a small application fee. Be cautious! Rarely is every student eligible for a legitimate scholarship, without any restrictions. (But a scammer would love an application fee from everyone.) Either avoid this entirely or carefully investigate its history. Does it display evidence of past winners? As a general rule, avoid scholarships where there’s an “application fee” unless you’ve carefully checked it out.
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Offer of a low-interest education loan
This enticing snare offers your cash-strapped family a very low interest rate loan for education, but it requires you to pay a fee before you can receive it. Suggestion: take their offer to your bank manager and get their opinion; they’ll almost certainly tell you it’s a scam.
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Free seminars
Perhaps you’ll be invited to attend a free event that promises useful scholarship information. Upon arrival, if you’re greeted by aggressive sales reps pressuring you with hyperbolic pitches for overpriced services, loans, and student resume formatting, then there’s no need to be polite. Leave straight away, there’s nothing of value for you there.
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Pat phrases that sound too good to be true
Scammers use verbal bait in their advertisements. You’ll see statements like, “Everybody is eligible for this scholarship” and “There are billions of dollars in scholarship funds unclaimed every year.” Wrong + wrong. The truth is, restrictions apply with every scholarship, and very few scholarships go unclaimed.
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Pressure to respond quickly
Scholarship fraudsters often pressure you to respond immediately (or unreasonably quickly) by employing time-sensitive malarkey like “First come, first served,” “For lucky applicants who apply first,” and “Act now to claim recent additions to our file.” Don’t rush into this trap.
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No legitimate contact info
Reputable scholarships provide a telephone number and a business address. Frauds do not, because they don’t want to be traced. Beware of operations using a PO box or a residential address, especially if it’s in Florida. Hang up on people who won’t give you their phone number because they insist that they’ll call you. Don’t call, or return “one-ring” phone calls that have a 900 area code or any other unknown number (here’s a list of area codes to be wary of); these might be long recordings that charge you several dollars per minute.
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Government endorsements
The U.S. government, U.S. Department of Education, U.S. Chamber of Commerce, and the Better Business Bureau do not endorse private businesses. If the scholarship service says they’re endorsed by these entities, they’re lying.
Think you’ve come across one of these scams? Here’s what to do.
Experts are available to help if you believe you’re getting hassled or ripped off by a scam. You can contact your school’s guidance counselor, a financial aid officer at your teen’s future college, the National Fraud information Center, the U.S. Department of Justice, the Federal Trade Commission (FTC), the Better Business Bureau, or the Department of Education Office of the Inspector General. You’re one of the lucky ones who spotted a red flag — report these con artists and save another family from getting tricked.
