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Protecting Yourself Against Scholarship Scams

Unfortunately, scholarship scams always look like legitimate scholarship opportunities. Individuals and organizations suspected of perpetuating scholarship scams are held accountable under the Scholarship Fraud Prevention Act of 2000 and convictions carry stiff financial penalties as well as jail time.

Although scholarship scams are illegal, they are common. Scams are so widespread that the Federal Trade Commission’s website includes a page dedicated tohow to spot and report scholarship scams.

To protect yourself, it is important to know how legitimate scholarship programs work. Legitimate scholarships are always free. There are no application or processing fees. Under no circumstances should a scholarship provider ask for your credit card or bank account information. If this happens, the scholarship is a scam. Also, although scholarship search services help you find scholarships, they cannot complete the applications for you.

Any service that charges a fee to complete your applications is a scam.

Warning Signs of Scholarship Scams:

  • Scholarship services that charge fees for information you "can't get anywhere else." Free scholarship lists are available from your school guidance counselor, the library and free services like Scholarships.com. Do not pay someone to do the work for you.
  • Paid services that have guarantees. Read the fine print. If there is any kind of money back guarantee, there will be conditions. There is no such thing as “no strings attached”. If there is a refund policy, get it in writing before you pay anything.
  • Scholarship programs that have an entrance fee. Before you send money to apply for the scholarship, look closely at all details, even if the fee is reasonable. Low fees do not make a scholarship service or program legitimate. Remember, free money should be free.
  • Promises from a service, you’ll have easy access to "unclaimed" scholarship money. Ignore the myth of unclaimed funds and the companies that advertise huge amounts of unclaimed money. There are very few unusual scholarships that are specific enough to have unclaimed money.
  • An organization that guarantees you will win a scholarship by paying a fee. Do not believe a promise of guaranteed funds. No one can guarantee that you will win a college scholarship or grant. Remember: if it sounds too good to be true, it is.
  • An organization that "sounds like" a non-profit, but has no traceable history. Don't be fooled by official-sounding names and logos. Make sure the foundation, organization or program is legitimate.
  • Claims by a scholarship service to be "holding" a scholarship for you. Disregard any news that you're a finalist in any contest that requires you to pay a fee for further consideration.
  • A company that claims it will "handle all your scholarship applications" for you. Resist high-pressure tactics like "We'll do all the work for you." Don't be fooled. There's no way around it, you must apply for scholarships or grants yourself.
  • Requests for banking or credit card information to "process your application.” Do not give out your credit card, bank or checking account numbers to anyone who claims they need it for you to be eligible for a contest, or access to "exclusive" scholarship information. Remember, scholarships are for you to win money, not for people to take money from you.

Last Reviewed: March 2017

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