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Scams to avoid when applying for college scholarships

Natalie Mayrath
Producer/Reporter

Scholarships are a great way for college students and their families to help with the rising cost of tuition, but some scholarship offers might not be what they seem.  

According to FinAid.org, several hundred thousand students and parents are defrauded by scholarship scams every year. A recent survey of 1,000 college students conducted by the Student Loan Report found that 41% of them were asked to pay a fee when applying for a scholarship, and 73% of those who were asked to pay gave over their money – when, in fact, applying for scholarships should never require payment.

We spoke with Andrew Elwell of the College Board about scholarship scams students might encounter while applying through both the federal government and private organizations that offer scholarships, and how best to protect yourself.

Scam: ‘Guaranteed’ scholarship

“There are no guarantees in life,” Elwell says, and the same goes for scholarships.  Any scholarships that boast a guarantee should warrant a closer look. According to a Federal Trade Commission report, no single company can guarantee that you’ll receive a scholarship.  

Allen Grove of the education information website Thoughtco.com explains, “Some organizations may ‘guarantee’ a scholarship because everyone who spends a certain amount of money will get a small scholarship. This is nothing more than a sales gimmick, much like winning a trip when you buy a $50,000 car.”

Scam: Payment required

You should not have to pay money upfront or give your credit card or bank information when applying for a scholarship. Legitimate scholarship programs do not charge a fee to apply.  “If you have to pay money to get money, it’s probably a scam,” says Mark Kantrowitz, an expert on student loans.

Kantrowitz says no student should ever invest more than a postage stamp to gather information about scholarships. Elwell recommends websites such as The College Board, and its sister site Big Future, or Fastweb, which provide free searches across a wide range of scholarships based on your interests and experience.  

Scam:  Doing the work for you

If a scholarship service says they will fill out your application and send it on your behalf, it might not be legitimate, Elwell says.

“If it sounds too good to be true then it probably is,” he says.

Grove explains that if an application states that you don’t need to do anything other than fill out some personal information in order to receive financing, chances are the “scholarship-granting entity” is not trustworthy. “Scholarships are awarded because you’ve proven yourself worthy of the award. Why would someone give you money when you’ve put in no effort to prove you deserve the funding?” he says.

If you do feel like you’ve been the victim of a scholarship scam, Elwell recommends talking first with a trusted adult, such as a parent or your school counselor, and then possibly contacting the Better Business Bureau, who has warned recently that scams are in full force, the FTC’s website, or your local authorities.

He assures students that they can get through the process unscathed, as long as they’re aware of anything that doesn’t look or feel right along the way. “The best way to protect yourself is really to know what to be on the lookout for and to trust your instincts,” he says.

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This story was originally published on October 22, 2018.