Beware of Scholarships Scams

As you get closer to going to college, your mailbox will be filled with tempting information from colleges and universities, trying to entice you to come to their campuses. You will also receive information on a variety of services relating to finding scholarships for college. Some of these scholarship offers are fraudulent, but savvy marketing techniques make them look very attractive.

How can you tell which offers are legitimate and which are scams? The information below will help counselors, students, and parents learn ways to identify scholarship scams and how to tell between real and fake offers. The signs that follow may not mean an offer is a scam, but if an offer has more than one of these characteristics, it should be treated with caution.

Warning Signs:

• If you have to pay money to get money, it may be a scam. Over 95% of legitimate scholarships do not require an application fee. Never spend more than a postage stamp to get information about scholarship programs.
• Up-front fees required: These scams look like prizes, but require that you pay fees in order to claim your prize. If you win a prize from a contest you don't remember entering, be suspicious. Some scams look like offers for low interest loans. Education loans never require an up-front fee; instead, they subtract fees you owe from your loan disbursement.
• Guaranteed scholarship search services: Nobody can guarantee a student any financial aid money. Scholarship search services have no control over the scholarship agencies or sponsorsthey cannot determine who will win each award. Guarantees typically come with hidden conditions that make it impossible to get your money back when their guarantee turns out to be false.
• Free seminars: Many scholarship services offer a "free" seminar or interview to provide information about financial aid and their services. Though the meeting may be free, its real purpose is to get you to pay for their product. Students and parents can get all the information they need about financial aid, without a sales pitch, from ESF or their school counselor.
• Requests for personal information: Scholarship applications will never request your bank account or credit card numbers, and usually will not request your social security number. This information can be used to get confidential information about you or to illegally use your credit or bank accounts. Do not release this information.

Other clues to indicate a scam:

• Organization name sounds like a federal agency, or uses an official-looking government-type seal.
• Claims to be endorsed or recommended by a university, government, Chamber of Commerce, or Better Business Bureau. These kinds of organizations do not endorse or recommend private businesses.
• Uses a post office box for its address, with no other address information provided, or no phone or contact number is listed. You should always be able to get in touch with a scholarship agency. Call directory information to see if there is a listing for the organization to check out if it is legitimate.

Unsure? Have questions about a scholarship offer? Here's what you can do:

• Get an independent opinion from a trusted source.
• Students should show the offer to a school counselor, to the staff at a college's financial aid office, or to a counselor at an ESF College Planning Center.