7 Ways to Spot a Scholarship Scam

If you’re a student, or the parent of a student, that is about to head off to college, you’ve got to be very careful, because you are on a lot of shady people’s list.
You are going to get a lot of offers by phone and by mail for scholarship searches, or telling you you’ve won a contest or scholarship…..and most of them are TOTAL scams.
Seriously, it’s a huge problem that costs parents over 100 MILLION dollars each year. And that is just what gets reported. I’m sure the actual amount is much, much higher.
So, let me tell you what to watch out for…by the way, feel free to pass this along to any of your friends.

First, let me give you the goal of someone who would try to scam you. It’s one of two things:

1.To get you to pay for something that isn’t going to help you and in fact is a total waste of money

2.To get you to disclose your personal information to them, so they can steal or abuse your identity. With that said, here’s what you’ve got to be careful of.

  • Anyone calling you to tell you that your student has won an award or scholarship, and they just need some personal information (like a bank account number or credit card number) to ‘process’ your award. A legitimate scholarship is NOT going to charge a processing fee…..ever. Period. So do NOT be giving that information out.
  • Also, beware of any scholarship that you have to pay to enter. Even if the fee is modest, you shouldn’t pay anything. Many of these are just ‘lotteries’….meaning that they collect a ton of money from unsuspecting parents, and then award one token scholarship…just so they don’t get in trouble with the law.
    Technically, this is legal, but don’t waste your time, it’s still a scam. Go to a 7-11 and buy some lottery tickets instead. The result will be about the same, and hey, at least you don’t have to write an essay!

  • Beware of high pressure. If somebody is calling or mailing you and is trying to put pressure on you, it’s almost a sure sign of a scam. Look, most legitimate scholarships have thousands of applicants, so they don’t HAVE to pressure anybody. In fact, just the opposite, they have students lined up trying to win their money. If you are not interested, that’s fine, they’ll just move on to the next student, but they won’t pressure you, they won’t be asking you for money, and they will send the college or you a check, they WON’T need your credit card number. (Sorry, that was just a little review of what we’ve covered so far).
  • Beware of any company that ‘guarantees’ you will win a scholarship. Many will just take the money and run. No one can guarantee the scholarship except the organization that is giving it out.
  • Watch out for anyone telling you ‘We’ll do all the work for you’. Getting scholarships is a ton of work, and though a good service can weed out what not to waste time with, the student still has to do the work.
  • Many scammers will go out of their way to use official sounding names, like: ‘federal’, ‘national’, ‘education’, or ‘foundation’ to fool parents into believing they are legit.
  • Lastly, remember that private scholarships account now for only about 3% (no, that’s NOT a typo) of the total money that is out there.
    My office is focused on getting you the other 97%, making sure your kid gets into the right college, and making sure you can reasonably afford your share, among other things.