Every year, an estimated 350,000 students and parents fall prey to scholarship scams. The lure of "free money" fools even the most skeptical people.
Two rules of thumb that will help safeguard you against possible scams:
- If you have to give money to get money, it might be a scam.
- If it sounds too good to be true, it probably is.
Don't give out bank account numbers, credit card numbers, calling card numbers, or social security number over the phone, email or other communications.
Here are some "red flags" to watch out for:
Application fees: Stay clear of any scholarships that require you to pay a "small processing fee," even if it is just a few dollars. The provider may claim it is to weed out "non-serious applicants," but do not be fooled. Legitimate scholarships want to give you money, not take it away. Likewise, be wary of loan programs that require "up-front payment" of origination, guarantee, or other fees. All federal, state, and private education loan programs deduct loan fees from the disbursement check. No legitimate program requires loan fees in advance.
No phone number: Be extremely wary of any scholarship opportunities that do not provide a telephone number. A lot of scholarship scams do not give out phone numbers because they are too easy to trace.
Open to everyone: The majority of private scholarship providers choose to award scholarships to students who fit a certain set of criteria. If you come across a scholarship that is open to everyone, then do some extra research on the scholarship provider, before you apply.
No proof of past winners: Try Google searching the scholarship and look for evidence of past winners. Most scholarship providers like to brag about the money they have given out, so if you cannot find any history, the scholarship could be a scam. This is not always the case though. New scholarships, of course, do not have past winners.
Fake nonprofit or federal status: Even if a company has a Washington, D.C. address or its name sounds official, it could easily be a fake! And, just because its name has the word "Foundation," or "Fund" in it, that does not necessarily make it a nonprofit.
Requests for personal financial information: It is completely unnecessary for a legitimate scholarship provider to ask you to provide a credit card, bank account, or social security number. If you get a phone call from someone claiming that they need this information to process an application, disconnect the call immediately.
Winning a scholarship that you did not apply to: If you get a call (or email) from a scholarship provider proclaiming that you have just won a scholarship, but you didn't submit an application for that particular scholarship, it is most likely not legitimate. Do not give them any information.
Claims that they will "do all the work for you:" Sorry, but this is unavoidable. It takes a personal investment of your own time and energy when applying for scholarships.
Search fees and claims "you cannot get this information anywhere else:"There are many excellent scholarship search engines that are completely free to you. You should never pay for results that you can get for free.
Source: Information provided by Hawai'i Community College's Financial Aid Office.