Avoiding Scholarship Scams
By College Toolkit
Given the skyrocketing college tuition costs and expenses, it is understandable
that parents and students are searching for as much financial aid as possible.
However, it is important that they be wary of scholarship scams. The
Federal Trade Commission (FTC) put together a
list of six phrases that are warning signs of a scholarship scam. They are:
"This scholarship will cost some money."
Scholarships are there to provide money for students who qualify as a result of
merit and/or financial need. Therefore, students should be wary when an
organization requires them to pay a fee in order to apply for the scholarship.
As a general rule, free money should be just that… free.
"The scholarship is guaranteed or your money back."
Organizations that offer money back guarantees often make it very difficult for
students to obtain a refund.
"I’ll need your credit or bank account number to hold this scholarship."
Students should be very careful with financial information. They should make an
effort to get things in writing before providing this information over the
phone or via the internet.
"We’ll do all the work."
Students must apply for scholarships and grants themselves. There may be
services which can help locate relevant scholarships or provide assistance with
essays, but students are responsible for completing the application.
"You've been selected" by a ‘national foundation’
to receive a scholarship or "You're a finalist" in a contest
you never entered.
If you do not remember entering a contest or know nothing of the "national
foundation" that is offering the scholarship, the chances that this contest
could be a scam are much higher. You should find out more about the
organization before pursuing the scholarship.
Many legitimate companies do offer scholarship search or information services
for a fee. However, they can never guarantee or promise a student that he will
win any money.
What You Can Do To Protect Yourself
There are a number of things you can do to protect yourself from scholarship
scams. Here are a couple of tips from the
National Fraud Information Center:
Investigate who you are dealing with
Find out what the organization actually does and if they offer any scholarships
themselves. They may be trying to charge you to apply for a scholarship which
you could apply for yourself for free. Also, they may be charging you for
information you could obtain easily without paying a dime.
Beware of guarantees
Search services have no control over scholarship award decisions. It is also
unlikely that a foundation would offer any guarantees about the awarding of
scholarships before you have applied.
Get information in writing
A legitimate organization should be willing to give you any details and
information in writing.
Understand refund policies
Make sure that the refund conditions are attainable. Often the conditions are
so difficult to meet that getting a refund is impossible.