Every year, several hundred thousand students and parents are defrauded by scholarship scams.
The victims of scholarship scams lose an estimated $100 million annually. Scammers often imitate legitimate government agencies,
grant-giving foundations, education lenders and scholarship matching services,
using official-sounding names containing words like "National," "Federal," "Foundation," or "Administration."
The tell tail signs are usually scholarship services who claim to guarantee success and sales pitches disguised as financial aid "seminars".
Unfortunately this gives legitimate quality scholarship services a bad name and creates skepticism among students and parents looking for scholarships.
Typically the online scholarship scams do not use reputable credit card processing companies (if any) and they generally charge what seems like a
a very small fee - there is a lot of work involved in maintaining a real and un-to-date database of scholarships. They also have a lack relationships with
well known or respected education service providers.
Some other common scholarship scams
Scholarships for Profit: these scams have the look and feel of a legitimate scholarships operation. They charge an application fee and can receive 5,000 or 10,000 applications charged $5 to $15.
They can afford to pay out a $1,000 scholarship or two and pocket a hefty profit, if they happen to award any scholarships at all.
Your odds of winning a scholarship from this sort scam are less than your chances of striking it rich in a casino!
The Scholarship Prize Scam: takes the form of first telling you that you've won a college scholarship worth thousands of dollars,
but curiously require that you pay a "disbursement" or "redemption" fee or "taxes" before they can release your prize.
If someone says you've won a prize and you don't remember entering the contest or submitting an application, be suspicious.
What To Do If You Are Victim To A Scholarship Scam
If you do come across something that doesn't seem right or you are sucked in before you relize it's a scam, then help protect the next unsuspecting person from the same tratment and report it.
There are federal and state laws against fraud and false advertising and the penalties are enforced if they are caught. Here are some of the key organizations to alert.
National Fraud Information Center (NFIC)
PO Box 65868
Washington, DC 20035
The NFIC maintains a toll-free hotline at 1-800-876-7060
US Department of Education
Office of the Inspector General
Email: [email protected]
There are also complaint forms you can fill out on the OIG site.
When you report a suspicious offer, write a letter summarizing your experience with the company.
Include as much detail of your complaint as possible, the steps you took to try and get your money back, the company's response to your efforts.
Include names, addresses, phone numbers, fax numbers and copies of advertisements, emails and letters.
To avoid scams altogether when paying for a scholarship service we strongly recommend you use Scholarship Experts
We use them ourselves and have always had excellent service and access to what is widely regarded as the best and most up-to-date scholarship search database. While we get emails from people telling us about bad experices with scammers we have never received a complaint
about Scholarship Experts, only praise and thanks foer recommending them!
