How to Spot and Avoid Scholarship Scams

Robert DiGiacomo
How to Spot and Avoid Scholarship Scams

Although U.S. universities, service and non-profit organizations, and private companies offer billions of dollars each year in scholarships and financial aid, they typically provide such opportunities only to students who meet specific academic, financial, or other requirements.

In other words: if a scholarship offer sounds too good to be true — with few or no requirements necessary to qualify — it may not be legitimate.

International students who may not be familiar with the American system are especially vulnerable to scholarship scams, as outlined in this free, downloadable e-guide: Passport to American Education: A Simple Guide to International Student Financial Aid.

Here are tools to evaluate whether a scholarship opportunity is the real deal- and some resources for legitimate aid:

Warning Signs for Common Scams

Scammers will regularly deploy certain "tell-tale lines" to try to convince you to sign on to their schemes, according to the Federal Trade Commission (FTC).

Beware of any scholarship promotions that ask for your credit card or bank account information upfront, claim to be only way to access certain information, or pledge that you've been chosen by a "national foundation" or have become a finalist in a contest for which you didn't apply.

how to spot scholarship scams

Specific come-on lines that should raise a red flag include:

  • "The scholarship is guaranteed or your money back."
  • "We'll do all the work. You just pay a processing fee."
  • "The scholarship will cost some money."

Are you an international student interested in studying in the U.S.? Check out "The Best Ways to Make Studying in the U.S. Affordable!"

How to Protect Yourself

Beware of companies that charge a fee to determine your eligibility for grants, loans, work-study and other forms of need-based financial aid, the FTC warns. The only way to find out whether you qualify for such aid is by filling out the Free Application for Federal Student Aid.

how to spot scholarship scams

Should you decide to use a fee-for-services organization to assist with the financial aid process, the FTC advises the following:

  • Vet the company through a guidance counselor or financial aid officer
  • Ask for references from local families who have worked with the company in the past 12 months
  • Get in writing the scope of services and fees charged (before advancing any payment)

If you think you have been scammed by such a company, you can contact the FTC Complain Assistant or your state's attorney general.

Where to Find Real Scholarships, Aid

Fortunately, there are multiple legitimate sources to find out about real scholarship and financial aid opportunities:

how to spot scholarship scams

  1. Federal Student Aid: This U.S. Department of Education-run site offers a helpful clearinghouse for learning everything you need to know about scholarships and aid.
  2. Scholly: Founded by a recent Drexel University graduate who won $1.3 million in scholarship money, this website and mobile application for scholarship opportunities also received funding on the reality competition series Shark Tank.
  3. FinAid!: Launched in 1994, FinAid was developed by Mark Kantrowitz, an expert on financial aid who has written multiple books on the subject. He is also the publisher of FastWeb, a free scholarship-matching service.
  4. Scholarship Search: Promising information on scholarships, financial aid, and internships from over 2,200 programs valued at almost $6 billion, this site is sponsored by College Board, which administers the Scholastic Aptitude Test.
  5. This site, which started in 1998, offers a matching service to some 3.7 million scholarships and grants valued at more than $19 billion.

Studying abroad? Here are some additional resources for finding study abroad grants and scholarships!

Intl Student Financial Aid Guide

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