Watch Out for Scholarship Scams

If you’ve ever been invited to a “free scholarship seminar” or received an official-looking letter from a company you’ve never heard of that guarantees “to find you financial aid or you’ll get your money back,” you may have been the target of a scholarship scam. Every year families who are looking for money to help with the cost of college fall victim to these types of scams. It’s estimated that millions of dollars are lost each year. Here’s how to avoid college scholarship scams.

Scholarship search firms try to attract people by claiming that there is millions of dollar in unclaimed aid. However, these “unclaimed” scholarships are tied up through trusts or company programs for children of employees. And some scholarship money is allocated for members of unions or other organizations. The thing to know about this “unclaimed” money is that it isn’t available to the general public. 

These search firms, for a fee, will provide you with a list of sources for scholarships and financial aid. But you can do your own research for free! You can use sites like fastweb.com or collegeboard.com.

Some companies will invite prospective clients to a free seminar. After they’re pitch, these companies will use high-pressure in one-on-one meetings to persuade families to use their services.

Other scams can say you’ve won a scholarship that you never even applied to and just need to pay a “processing fee.” Be careful of any scholarship that comes with fees–you shouldn’t have to pay any money to be awarded one. Especially beware if you’re asked for a credit card or bank information.

Legitimate companies will never guarantee or promise financial aid or scholarships. If you’re unsure if an offer you’ve received is genuine or not, you can always check with your college advisor or contact the Federal Trade Commission at 877-FTC-HELP or visit their website.