Beware of Scholarship Scams

Receiving a letter of acceptance from your desired college or university can be one of the most exhilarating experiences in your life. But once the rush of excitement wears off, reality begins to sink in and now you have to face the challenge of how you can pay for the high tuition fees.

One of the most appealing sources for student aid would be scholarships, since they don’t need to be repaid. But the high demand for scholarships has also given rise to a more sinister development: the scholarship scam.

The basic modus operandi for scholarship scams is to promise students that they're guaranteed to win a scholarship award in exchange for a specific sum of money. Scammers will present themselves as legitimate, believable companies with attractive offers that the unwary can easily fall for.

One of the most common techniques for these scams would be to assure clients that they can ‘guarantee’ an award by paying a ‘service’ charge. They will claim that their service can match you to a scholarship that suits your eligibility. Other companies may also ask for a ‘processing fee’ which they claim will be used to ‘handle’ all your scholarship applications for you.

The marketing pitch for this technique is all about convenience. They would have you believe that by paying money upfront, you will be assured of important college money. And to make the ‘client’ feel even more reassured, some companies will present you with a ‘money-back’ clause should their service fail.

But when you do pay, chances are they will simply take your money and run away faster than Usain Bolt. Try calling their company and you’ll be greeted by abandoned lines or an unattended answering machine.

Other techniques also include unsolicited phone calls or letters telling you that you’re one of the lucky winners of a hefty scholarship prize. They will tell you that in order to claim your award, you must pay for a disbursement fee and/or other tax fees. Most of the time, these con artists will ask you for your bank account and credit card number for ‘verification purposes’. The moment they do, hang up or walk away. You're most probably dealing with a scammer who wants to con you out of your money.

Other scammers are more cunning, however, by passing themselves off as a credible organization. For instance, you may be invited for a financial aid seminar. The seminar will have professional looking presentations with fancy videos. They may even present useful information. But in the end, the whole event is merely a ruse to make you fork over hundreds of dollars for "valuable" scholarship information.

Understand that there are already numerous legitimate scholarship websites that already provide detailed and useful information regarding scholarship types and application guidelines free of charge. In addition, there are also other sources for scholarship information such as government agencies, colleges and universities and even your high school guidance counselor. All these sources won’t cost you a penny for your inquiries. So why should you even cough up money for a seminar?

Always remember that scholarship money is like an investment. Credible scholarship providers want to help deserving students get the financial aid they need to finish college and pursue promising careers. But it’s up to you to prove that you deserve the award, and there are no short-cuts for the whole process.

If someone tries to convince you that there is an ‘easier way’ by availing of their services, it's likely that you are looking at a scam. Be wise enough to decline and, of course, report the company you suspect of fraud.

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