Scholarship Scams

1. Application fees. Beware of any "scholarship" which requests an application fee, even an innocuously low one like $10 or $20. Most legitimate scholarship sponsors do not require an application fee.
2. Other fees. If you must pay money to get information about an award, apply for the award, or receive the award, it might be a scam. Beware of 900 number telephone services, which charge you a fee of several dollars a minute for the call. There are many legitimate scholarship search services that charge students a fee to compare the student's profile against a database of scholarships. It is, however, very difficult to distinguish between legitimate services and scam imitators, because the services are often small operations that pay fees to search one of a handful of national databases. Remember, FastWeb, FinAid, Discover, and other sources all have free scholarship searches.
3. Guaranteed winnings. No legitimate scholarship sponsor will guarantee that you will win the award. Also be wary of guarantees that you'll receive a minimum amount of financial aid — usually such guarantees are counting the federal student aid programs and private student loan programs, for which most people are eligible.
4. Everybody is eligible. Scholarship sponsors do not hand out awards to students simply for breathing.
5. Unsolicited opportunities. Most scholarship sponsors will only contact you in response to your inquiry. If you've never heard of the organization before, it is probably a scam.
6. Typing and spelling errors. If the application materials contain typing and spelling errors, or lack an overall professional appearance, it may be a scam.
7. No telephone number. Most legitimate scholarship programs include a telephone number for inquiries with their application materials. Be careful if the application materials do not include a telephone number and directory assistance does not have a listing for the organization.
8. Mail drop for a return address. If the return address is a mail drop (e.g., a box number) or a residential address, it is probably a scam. Some scams may attempt to disguise a mail box as a suite number. (It is illegal to misrepresent a mail box as an office.) If a legitimate scholarship program uses a mail box, they almost always include their street address (and telephone numbers) on their stationary.
9. Operating out of a residence. Since when did a major nonprofit corporation operate out of a home or apartment? This isn’t a sure sign of a scam, because there are legitimate home-based businesses, but a residential address can tell you something about the size of an organization.
10. Time Pressure. If you must respond quickly, and won’t hear about the results for several months, it might be a scam. A scholarship scam might say that grants are handed out on a "first-come, first-served" basis and urge you to act quickly.
11. Unusual requests for personal information. If the application asks you to disclose bank account numbers, credit card numbers, calling card numbers, or social security numbers, it is probably a scam. All a scam operator needs to know in order to withdraw money from your bank account is the name of the bank!
12. Notification by phone. If you have won a scholarship, you will receive written notification by mail, not by phone. Even if the sponsor calls to congratulate you, they will follow up with a letter in the mail. If the phone call asks you for money, hang up.
13. High success rates. Overstated claims of effectiveness are a good tip-off to a scam. For example, less than 1% of users of scholarship search services actually win an award. If the service claims a 96% success rate, they are probably counting the number of clients who were successfully matched to awards in their database, not the number of clients who received money. If something sounds too good to be true, it probably is.
14. Excessive hype. Scams try to get you so excited that you’ll ignore your natural sense of caution. If the brochure or advertisement uses a lot of hyperbole (e.g., "free money", "win your fair share", and "everybody is eligible") or mentions the "6.6 billion in unused scholarships", be careful.
15. Disguised advertising. Don’t believe everything you read or hear, especially if you see it online. Unless you personally know the person praising a product or service, don’t believe their recommendation. They could be an employee of the company or a friend or relative of the owner. Sometimes the person making the recommendation will be earning a commission on every client they direct to the company. A "department" number in the address, an offer number, or a telephone "extension" number is used to identify which agent should get the commission. (Not all uses of such numbers are signs of fraud; some legitimate companies use department numbers to track the effectiveness of advertising.)
16. A newly-formed company. Ask the company how long it has been in business. If it was formed recently, ask for references. Most philanthropic foundations have been established for many years.
17. A Florida or California address. A disproportionate number of scams seem to originate from Florida or California addresses. If you were a scam artist, would you live in Minneapolis, where it’s freezing, or in Florida or California, where it’s warm and sunny? (This does not mean that all offers from Florida or California are scams, but that of the suspicious scholarship offers, the majority seem to come from these states.)
18. "You are a finalist!" Beware notification form organizations that contact you in a competition you never entered. It’s flattering to think some organizations pored through records of individual across the nation and selected you without your knowledge, but there’s usually a fee involved… in some way they are trying to make money off of their contact with you.

If you receive information about a scholarship or notification that you have been selected for a scholarship that you knew nothing about, check it out with your guidance counselor. If you have any suspicions, it’s better to find out the facts that invest money for scholarships or scholarship searches that could be better spent on your college tuition bill.