Colleges and Universities: Scholarship Scams

Colleges and universities scholarship scams prey on students who are young, vulnerable, and perhaps not as familiar with what to look out for when investigating funding options. These swindles are created for two reasons, to obtain money or to obtain personal details. The basic rules of life apply; you should never pay money up front in order to obtain money down the track and you should never give out personal details.

Colleges and Universities: Scholarship Scams - Never Pay a Fee and Never Give out ID.

The United Stated Federal Trade Commission (FTC) provides excellent resources and advice on how to avoid being scammed. They also offer information about the latest frauding schemes, so if you are considering a particular scholarship option, it pays to consult the FTC website or phone the Commission directly.

How to Spot a Scam

The telltale lines the FTC recommends looking for are:

• The scholarship is guaranteed or your money back.
• You can't get this information anywhere else.
• I just need your credit card or bank account number to hold this scholarship.
• The scholarship will cost some money.
• You've been selected.
• You are a finalist in a contest (and it’s a contest you never entered)

It makes sense to look to trusted sources when making colleges and universities scholarship enquiries. Excellent resources for information include school, local government body, the library and the Department of Education.

While it does make sense to research beware that these companies will not always be listed as fraudulent. In the United States, there is nothing illegal about charging a fee for a service. If you do need to hire an organization to help with the paperwork involved in applying for a scholarship, make sure you read the fine print and don’t pay fees up front.

Another popular fraud to avoid is the ‘seminar’. That unsolicited phone call inviting you to attend a seminar about scholarship opportunities may charge you for information available in the public domain. These organizations generally supply information services only, not scholarships.

There are numerous resources available to help find colleges and universities funding sources with are legitimate, easy to access, and which do not require fees. Legitimate colleges and universities services don’t have elaborate schemes requiring parents and students to front up time, information or money.

Colleges and Universities: Scholarship Scams - Suggestions for Applying for Scholarships

Some suggestions for avoiding the pressures of applying for financial aid, and avoiding the scams are:

• Apply early
• Complete an application for Federal Student Aid
• Consider your options thoroughly and ask the school councillor or finance office for applications for scholarships if you qualify.
• Are you of a particular ethnicity, gender or other minority that is being targeted for success? If so, there may be special scholarships available for you too but they will be limited.

If the application process seems too cumbersome, parents and students are better off seeking assistance from colleges and universities guidance counselors or college finance departments than external sources. These office administrators will help you to understand and complete the forms.  The scammers will try to get you to pay for something you will end up having to do for yourself anyway because students must complete their forms at the end of the day. 

Some excellent websites are available to help parents and students search for legitimate colleges and universities scholarship information. These sites allow an individual to type in either a keyword search or a profile search to obtain a listing of scholarships that match skills, academic ability, study interests and demographics.

If you do choose to work with a colleges and universities scholarship assistance company, always check out their legitimacy with the Better Business Bureau, state or county Consumer Protection Agency or the Attorney General's Office.