Scholarship Scams

Tuesday, December 11th, 2007

They say that billions of dollars in private scholarship money goes unused every year. ‘They,’ as in the slick salesman phoning you or a glossy ad announcing that a bunch of cash is waiting for you! In reality, nearly all aid comes from the government or individual colleges. The “billions” in unused dollars is a figure used since the 1970’s, and is based on an unsubstantiated study about employer programs offering potential tuition to eligible employees. Sure it’s unused, but it’s certainly not available to the public.

Many private scholarships are for specific applicants, such as members of a church or organization. These institutions have created funds for students and are not interested in keeping the money a secret. Anyone can find out about these opportunities by checking with appropriate institutions. High school and college counselors can also provide information about available scholarships.

Telltale Signs of a Scholarship Scam

Outlandish claims that the Scholarship is guaranteed
Claims that it’s a secret scholarship that nobody knows about
Request for credit card or bank account details to put the scholarship ‘on hold’
Request for any money to supply a free scholarship - It is not really free then, is it?
Claims that you are a finalist in a contest you never entered.
High pressure sales techniques employed to get you to sign up
No phone number to contact them, or a postal box as an address
Don’t go by name - many scams could easily have official government sounding names, like “Federal” or “State-Sponsored”

Fraudsters work these scams to take your money. Usually you will have to send in an “application fee,” and if you don’t hear from them, you may simply assume you didn’t win. Other scammers will collect so many thousands of dollars in these fees that they may actually award a thousand dollars or two to a few lucky applicants. ID thieves will also ask for more personal information, such as your S.I.N. number or bank account number to “confirm your identity.”

If you suspect that you are being targeted by a bogus offer, report it immediately to your school. Never give out personal information or credit and bank account details unless you are absolutely sure the organization is legitimate, and that you contacted them first.

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