Scholarship Scams
Many scholarship-finding services will tell you that 'millions of dollars in private scholarship money goes unused every year.' The fact is, nearly all available financial aid comes from the federal government or from individual colleges
Many scholarship-finding services will tell you that "millions of dollars in private scholarship money
goes unused every year." The fact is, nearly all available financial aid comes from the federal government
or from individual colleges.
More than 350,000 people are cheated by scholarship scams each year. Private scholarships are usually
slated for very specific applicants, such as students with a particular career interest, or members of
a certain church or organization. These institutions have created funds for students, so they are eager
to give them to qualified individuals. They are not interested in keeping the money a secret.
You can easily find out about these opportunities by checking with appropriate institutions. Contact
clubs or other organizations to find out what they seek in an applicant. Your counselor can also provide
information on scholarships.
Beware of Scholarship Scams
If you do decide to use a scholarship locator, beware. Scholarship scams have been around for years. More
than 350,000 people are cheated by scholarship scams each year, losing some $5 million, according to the
National Association of Student Financial Aid Administrators.
How to spot a Scholarship Scam
According to the Federal Trade Commission warning on Scholarship Fraud, if you hear these lines from a
scholarship service, you may be getting duped:
- "The scholarship is guaranteed or your money back."
This is a promise that can't be kept. The first red flag is that you need to send any of your money to get money. A guarantee is easy to
make but harder to honor. If it's an application you're sending then it means you probably haven't been granted
the scholarship. If this is the case then how could someone promise it to you? Anytime someone makes you
a promise that's hard to impossible to keep you should be wary.
- "You can't get this information anywhere else."
- "I just need your credit card or bank account number to hold this scholarship."
This is a common scam tactic and anytime you hear these words you should question it. Once a scam artist has this
information they can empty your bank account or charge purchases to your credit car. If you are unsure check
with the Better Business Bureau or the Federal Trade Commission to make sure that who you are entrusting this
information to is legitimate.
- "We'll do all the work."
- "The scholarship will cost money." It is possible that a small processing fee
may be required when you submit your application but it's also an indication that this is a business or a
scam and not real scholarship program. If you do send in a fee you will probably get nothing or very, very
little. Some of these fraudulent scholarship businesses do award money but make sure they take in more than
they give out. That's why they are considered a for-profit scholarship program.
- "You've been selected" by a "national foundation" to receive a scholarship or
"You're a finalist" in a contest you never entered.
People are seldom contacted by scholarship programs in this manner. The way it usually works is that you send in the paperwork and then you are selected not the
other way around. If you are contacted by someone claiming to be from a scholarship program and they ask
you for your crdit card number or a fee it's time to be skeptical. Do your homework before sending anyone
anything.
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