Scholarship Scams: 5 Warning Signs You're Being HadSeptember 19, 2013 in Saving & Spending
One of my students recently received a letter from a scholarship scam company stating "because of your outstanding academics, you are guaranteed to receive at least $10,000." In order to find out more about this cash windfall, the student and at least one parent had to show up at a hotel, the first warning sign that you are dealing with a scholarship scam. The company promised that the scholarship information they had could not be found anywhere else, and for the small fee of $1,000 they would take care of everything and provide access to this "privileged" information. In addition, the family was pressured into making an on-the-spot decision.
Some families choose this route because they don't know where to go or how to research money for college. The following are scholarship scam warning signs:
1. You Need to Pay Money
You shouldn't have to pay anything to search or apply for scholarships. This is a definite sign of a scholarship scam. Does it make sense to pay money to receive money? You should be wary of organizations that charge a small processing fee. If they have money to give away, why would they need extra money to process an application?
2. Guaranteed Scholarships
No organization can guarantee that you will receive a scholarship. Scholarship scams want you to believe that paying a fee is equivalent to obtaining a scholarship. There are a number of factors that determine who will win a scholarship. The number one factor is making sure you meet the criteria of the organization.
3. The Promise of Unobtainable Information
Companies that promote scholarship scams want you to believe the information they have cannot be found anywhere else. The truth is there are plenty of scholarship databases like Fastweb and Zinch that are free. If all else fails, you should always be able to Google it.
4. The Company Will Take Care of Everything
Scholarship organizations require students to submit a personal statement, letters of recommendations and an essay. You, the student, need to submit this information, you are expected to do the work. If a company promises that you won't have to lift a finger, walk away.
5. Pressuring You to Make a Decision
If a service is pressuring you to make a quick decision, it is most likely a scam. Don't allow yourself to be talked into paying money up front. If you are not allowed to "sleep on it" for 24 hours, let it go.
The best way to spot scholarship scams is to trust your natural instincts. If it sounds too good to be true, it is most likely a scam.