National Consumers League

Personal Finance

NCL Personal Finance Issues

Watch out for scholarship scams

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Female and male graduates in cap and gownGraduation season means optimism about a bright future ahead. Unfortunately, scam artist know how stressful paying for college can be and they’ve tailored a fraud to separate eager students and their families from their money – scholarship scams.

 

Congratulations, graduates! As millions of students put on their caps and gowns this spring, many may be wondering how they will pay for college in the fall. Prospective college students often look to scholarships as a way to lessen the financial burden on parents and to avoid taking out student loans. Unfortunately, scam artist know how stressful paying for college can be and they’ve tailored a fraud to separate eager students and their families from their money – scholarship scams.

Scholarship scams prey on consumers’ eagerness to find ways to pay for higher education. They come in a variety of guises, but a common thread is that usually there is need for the victim to pay money or provide a credit or debit card number up front before a supposed scholarship or grant is awarded. A good rule of thumb is that if you have to pay money to get money, it’s probably a scam.

Other red flags when it comes to scholarship scams are offers that promise “guaranteed” scholarships or pressure to act quickly in order to secure money. Consumers should also be wary of services that offer to match grant seekers with scholarships (sometimes known as financial aid advice services), especially if they offer to apply for you or require a big fee. Some scholarship scams ask you to pay money for information you can get for free, such as the federal FAFSA form. There are any number of free sources of financial aid information, including school counselors, state education agencies, the U.S. Department of Education and the Federal Student Aid Information Center. Be careful, too, when you receive unsolicited offers to help with financial aid from people or organizations you’ve never heard of or can’t find reliable information about.

For more information on these scams, visit NCL’s Fraud Center scholarship scams page. For tips on avoiding fraud targeting college students, visit NCL’s College U page.