CommunityForce Youth Empowerment Initiative

How to Protect Your Child From Scholarship Scams

This advice can prevent you and your child from being the victims of a scholarship scam.

Basic Signs of Scholarship Scams

1. It asks you to pay money in order to receive money- you should NEVER have to pay anything.
2. If it sounds too good to be true, it probably is.
3. Spend time, not money.
4. Don’t ever pay for more than a postage stamp to get information about scholarships.
5. If somebody guarantees that you’ll win a scholarship, it’s not real.
6. No authentic scholarship foundations ask you to pay application fee.
7. If you find yourself wary of an offer, trust your instincts.

Telltale Signs of a Scholarship Con

Certain warning signs can help you spot possible scholarship rip-offs. We would like it to be noted that none of these are guaranteed indicators of a scam; however, any scholarship organization or foundation that demonstrate multiple characteristics should be regarded with caution.

  • Application fees. Even if the fee is as low as just a couple dollars, be suspicious of any organization that requires a fee. Typically, the fee is somewhere between $10 to $25, but some have fees as low as $2 and as high as $5,000. They will probably claim that the cost is to cover administrative expenses or to ascertain that they receive entries only from serious applicants, or that applicants who do not receive any money could be entitled to a refund. Chances are that even if they do award a prize of some sort, the odds of your winning it are less than your chances of winning the lottery. Legal sponsors do not require an application fee. Ever.

  • Loan fees. The same advice applies to requests for an education loan. The fee could be called an “application fee”, “processing fee”, “origination fee”, “guarantee fee”, “default fee” or “insurance fee”, but if they’re asking you to pay it ahead of time, it’s probably a scam. A real education loan usually takes their fees and expenses out of the check you receive. No legitimate educational loan will require a fee when you submit the application.

  • Other fees. At any point in the process, whether it’s to receive information about the scholarship, apply for it, or receive the prize, if they ask you to pay, be wary. You should never pay more than the cost of a postage stamp when it comes to scholarship applications.

  • Guaranteed winnings. Bottom line: Nobody can promise you that you will win any prize money. This goes for scholarship matching services too: They absolutely cannot guarantee that you’ll win any scholarships either, because they have nothing to do with the decisions made by the scholarship committee. Usually, when promises like this are made there are other hidden caveats as well, so keep an eye out.

  • Extreme hype. If the brochure or advertisement uses a lot of hyperbole (e.g., “free money”, “win your fair share”, “guaranteed”, “first come, first served” and “everybody is eligible”), be careful. Also be wary of letters and postcards that talk about “recent additions to our file”, “immediate confirmation” and “invitation number”.

  • The unclaimed aid myth. You may be told that millions or billions of dollars of scholarships go unused each year because students don’t know where to apply. This simply isn’t true. Most financial aid programs are highly competitive. No scholarship matching service has ever substantiated this myth with a verifiable list of unclaimed scholarship awards. There are no unclaimed scholarships.

  • We apply for you. To win a scholarship, you must submit your own applications, write your own essays and solicit your own letters of recommendation. There’s no way to avoid this work.

  • Everybody is entitled. All scholarship sponsors are looking for candidates who best match certain criteria. Certainly there are some scholarships that do not depend on academic merit, some that do not depend on athletic prowess and some that do not depend on minority student status, but some set of restrictions always applies. No scholarship sponsor hands out money to students simply for breathing.

  • Strange requests for personal info. If the application requires you to give them bank account numbers, credit card numbers, calling card numbers or social security numbers, DO NOT give it to them; it is probably a con. If they call and ask you for personal information to “confirm your eligibility”, “verify your identity” or as a “sign of good will”, hang up immediately. They can use this information, along with birthday your parents’ names, to commit identity theft and apply for new credit cards in your name. They can also use the numbers on the bottom of your checks (the bank routing number and the account number) to take money from your bank account.

  • Claims of influence with scholarship providers. Scholarship matching services do not have any control over the awarding of scholarships by third parties.

  • High success rates. This refers back to our initial assertion: “If it sounds too good to be true, it probably is.” Just a heads up: less than 1% of people who use scholarship match services actually win anything, so any service or scholarship match promises much more than that is probably wildly overstating the truth.

  • No telephone number or mail drop address. Don’t bother applying if you find that the application doesn’t include a legitimate telephone number for questions or concerns or if the return address is a post office box or a residential address. It is probably a scam.

  • Claims of university, government, Chamber of Commerce, or Better Business Bureau endorsement. You should be suspicious if an organization claims to be endorsed by or a member of a federal group, especially an organization with a name similar to that of a well-known private or government group. The federal government, US Department of Education and the US Chamber of Commerce don’t recommend private businesses.

  • Just because a financial aid “seminar” is being held in a local college classroom or meeting facility, doesn’t mean that it is university sponsored. You should call the university administration’s office to find out whether it is a university sponsored or private event.

  • Pretending to be a federal agency. If you get an offer from an organization with an official-sounding name and/or has an official-looking “governmental” seal as its logo, check whether there really is a federal agency with that name. Don’t trust an organization just because it has a impressive Washington, DC return address.

  • Pretending to be a non-profit organization when they are not. Just because an organization has a charitable-sounding name that it has a charitable purpose. Most states have laws against using a misleading business name, but enforcement of the law is sloppy. As an example, an organization with “Fund” or “Foundation” in its name doesn’t necessarily mean that they are charitable foundation.

  • Typing and spelling errors. Application materials that contain typing and spelling errors or lack an overall professional appearance, can be signs of a con. Many scams misspell the word “scholarship” as “scholorship”.

  • Time pressure. If you are urged for a quick response but you won’t hear about the results for several months, it could be a con. A scholarship scam might say that grants are handed out on a “first come, first served” basis. Very few, if any at all, scholarship or grant awards are given on a rolling basis.

  • Vague or nonspecific information. You should be looking for solid answers that specifically respond to your questions. If they repeat the same lines over and over, or they reword the same answer in multiple ways, the caller is probably reading a standard pitch from a boilerplate script.

  • Phone notifications. If you have won a scholarship, you will receive written notification by mail, not by phone.

  • Opportunities you didn’t apply for. Most scholarship sponsors will only contact you in response to your request for information. If you’ve never heard of the organization before, it’s probably a con.

  • Inability to verify awards. If the organization can’t prove that its scholarships are actually awarded, be careful.

  • Masked promotions. Especially when it comes to online offers, don’t believe everything you read. Unless you personally know the person praising a product or service, don’t trust the endorsement.

  • A new company. Most charitable foundations have been established for many years. If a company was only recently launched, ask for references.

  • A Florida or California address. For some reason, a rather large amount of scholarship cons seem to come from Florida and California addresses.

  • Abusive treatment. Obviously, a caller should never swear at you or become abusive when you ask questions.

 

Check out Scholarswag for a safe source of scholarships for your child.  It’s free to create a membership.

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