Scholarship Scams on the Rise
May 12, 2010 | 1186 views | 0 0 comments | 10 10 recommendations | email to a friend | print
Every year, thousands of students and parents fall victim to scholarship search service scams, losing more than $100 million per year to fraudulent scholarships. Scholarship scams can take many forms, but knowing what warning signs to look for can help keep more money in your pocket.

“Identity theft is the fastest growing white collar crime in the nation. In most of these cases, the con artist is making an attempt to compromise your identity by getting your personal information”, said Mechele Agbayani Mills, President & CEO of BBB Central East Texas. “By providing a fraudulent organization with this information, there’s a good chance your accounts will be cleaned out or someone else will soon be assuming your identity.”

The Better Business Bureau offers the following clues to help consumers identify possible scholarship scams:

* Advance fees. Be wary of any “scholarship” which requests a fee to apply. Often claims will be made that these fees are labeled administrative, processing, origination or application fees. Remember, legitimate scholarship sponsors do not require a fee. Charging for a service isn’t illegal – what makes some of these companies fraudsters is that they collect money to find scholarships for students but never provide the information.

* Guaranteed winnings. There are no guarantees when it comes to scholarships. No legitimate scholarship sponsor will guarantee you’ll win an award.

* Everybody is eligible. No legitimate scholarship sponsor hands out money without having criteria to qualify. Some scholarships depend on academic merit, some on athletic ability, and some on minority student status, but a set of restrictions always applies.

* We apply on your behalf. In order to be eligible for a legitimate scholarship, you must work for it. You must submit your own application, write your own essays and solicit your own letters of recommendation.

* Excessive hype. Be wary of advertisements which use the phrases “free money”, “guaranteed”, or “immediate confirmation”. It is likely they will require a fee, which, as stated earlier, would indicate the “scholarship” is not legitimate.

* Unsolicited opportunities. Most scholarship sponsors will only contact you in response to your inquiry. Before providing them with any information, do your homework.

* Claims of university, government, or Better Business Bureau approval. Scam operations often imitate legitimate agencies or foundations, using official sounding names containing words like “Federal”, “National”, or “Foundation”. The legitimacy of these claims is easily discovered by calling the above organizations or by going to

* Unusual requests for personal information. Con artists will ask you for bank information or credit card numbers to “confirm your eligibility” or to “verify your identity”. However, doing so, could result in someone else becoming you on paper and/or a zero balance in your bank account.

Unfortunately, in their efforts to minimize the expenses of obtaining a quality education, many students and families fall prey to these types of scams. Remember to keep good records, trust your instincts, get everything in writing before responding, and to be extra cautious if fees are involved. Paying for college is much easier when you’re not getting ripped off at the same time.

For more tips on how to be a savvy consumer, go to
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