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Scholarship Scams

Scholarship Scams

The Federal Trade Commission’s Bureau of Consumer Protection and Fastweb.com cautions you to beware of companies that tell you:

  • “This scholarship is guaranteed or your money back.” Legitimate scholarships are always competitive. No one can guarantee that you will receive a grant or a scholarship. Refund guarantees often have conditions or strings attached.

  • “You can’t get this information anywhere else.” There are many free lists of scholarships available. Check with your school or library before you decide to pay someone else to do the work for you.

  • “For a fee, we provide a comprehensive list of scholarships.” Don't spend money on a fee-based matching service. The biggest and best scholarship databases are available for free on the internet.

  • “Billions of dollars of award monies going unclaimed.” Statements about funds going unclaimed are simply untrue. If funds are available, students will compete for them.

  • “May I have your credit card/bank account number/social security number to hold this scholarship?” Don’t give out this information; no legitimate scholarship should require your credit card number or bank account numbers. It is likely a set-up for an unauthorized use of this information.

  • “We’ll do all the work.” Don’t be fooled. There’s no way around it. To receive a scholarship, students must complete the applications and essays themselves.

  • “Congratulations! You have won XYZ scholarship! In order to accept, please send us a check to hold/confim your award....” Before you send money to apply for a scholarship, check it out. Make sure the foundation or program is legitimate. This type of message should be a BIG red flag.

  • “You’ve been selected by a ‘national foundation’ to receive a scholarship” or “You’re a finalist” in a contest you’ve never entered. Be very skeptical of winning an award for which you did not personally apply!! Occasionally, students will be nominated by a school official for a scholarship or award. In this case, students are almost always notified of their nomination status.

In addition, scholarship scams usually have a particular set of characteristics. Watch out for these warning signs: application fees, other fees, guaranteed winnings, everybody is eligible, unsolicited opportunities, typing and spelling errors, no telephone number, mail drop for return address, operating out of a residence, masquerading as a federal agency, time pressure, unusual requests for personal information, notification by phone, high success rates, excessive hype, disguised advertising, or newly formed company.

Beware: Financial Aid Seminars

Some seminars charge fees for services or information you can obtain for free from another source. How can you tell if the seminar is a scam?

  • While the presentation might be free, you are pressured to give them a check, checking account number or credit card to sign up for the service.

  • You are told that the program can adjust your income and/or assets to make it seem like you earn less money, thereby qualifying for more aid. Such practices are frequently illegal.

  • You are told that they can only answer specific questions after you have paid the fee.

  • A seminar being held at a local school does not make it legitimate. Be sure to check with your school or advisor if you think the seminar might be a scam.

What if You Suspect A Scam?

  1. Save all forms you receive from the suspect company. Keep copies of written details about the offer and any correspondence, emails, or other paperwork. Make sure all materials are dated.

  2. Take notes during the seminar and any phone conversations. Record the date, time, phone number, and the person's name with whom you spoke. Also include a detailed account of your conversation.

  3. Report the suspected scammer to any of the following organizations:

    1. * National Fraud Information Center (NFIC)

      * Federal Trade Commission (FTC)

      * State Attorney General's Office

      * Better Business Bureau (BBB)

      * United States Postal Inspection Service (USPIS)

      1. Fill out an online complaint form (http://www.fraud.org/) or call foll-free: 1-800-876-7060

        Fill out an online complaint form (http://www.ftc.gov/) or call toll-free: 1-877-382-4357)

        File your complaint with the Bureau of Consumer Protection in Washington State.

        Be sure to have the address of the company about whom you are filing the complaint: http://www.bbb.org/ or 1-703-276-0100

        www.usps.gov/postalinspectors/fraud/welcome.htm or 1-800-654-8896