Beware of Scholarship Scams

“Billions of dollars worth of scholarships went unclaimed last year. Send us $79.95, and we’ll send you a scholarship of at least $1000 or we’ll send your money back!”

Does this sound familiar? Have you seen emails, online ads, or even postcards with phrases like this? You’re not alone. Thousands of statements like this are posted all over the internet. Today, families are struggling to pay for education and sometimes they turn to outside sources for help without researching them out. Are statements like this one legit?

The old saying “if it sounds too good to be true, it probably is” definitely applies to scholarships. There are few things to keep in mind with scholarships.

1. If you are guaranteed a scholarship before filling anything out, then don’t trust it.
2. Scholarships are free, so if you have to pay for information, help, or the scholarship itself, then it’s a scam. Application fees are also included. You shouldn't pay for any fees either.
3. If you “won” a scholarship you didn’t enter, it’s a scam.
4. Scholarship organizations don’t contact you unless you’ve contacted them first.
5. If they use phrases like “everyone’s eligible” or “60% of all applicants win”, it’s a scam because usually few people win scholarships. Also, most scholarships are open for a select group of people. For example, a scholarship for left-handed people won't work for people who are right-handed.
6. There's no contact information for the organization giving the scholarship. Phone numbers and addresses should be somewhere.
7. Be wary of P.O. Boxes. Some legitimate places use P.O. Boxes, but most won't. Most organizations giving out scholarships will use an actual business address.
8. Be wary of California and Florida addresses. There are some legitimate scholarship organizations from California and Florida, but it seems many of the scams have addresses from those two states.
9. Be wary of organizations that notify you by phone. Legitimate places use snail mail almost exclusively with their notifications.
10. If you contact the organization and they treat you badly when you ask questions, then it's probably a scam. Real organizations want to help students, but scammers just want your money.
11. Beware of endorsements. Government entities such as the US Dept of Ed or the US Chamber of Commerce don't sponsor or endorse any private businesses. Also if a college or the Better Business Bureau supposedly sponsors or endorses these organizations, then call the Better Business Bureau and the college and see if that's true.
12. Look out for phrases like "guaranteed to win!" With these claims, they are either a scam or there is a lot of fine print. You may be guaranteed to win if you jump through an obscene amount of hoops.
13. Beware of the places asking for your personal information. If they get information like your name, date of birth, social security number, bank accounts, or credit card numbers, they will be easily able to commit identity theft.
14. Make sure the federal agencies mentioned are real agencies. Just because it sounds official and has a Washington DC address doesn't mean it's legitimate.
15. Don't let any organization apply for you. Scams like to use this method as well as have you pay for that service to get you twice.
16. This may be strange, but make sure the scholarship information has good spelling and grammar.
17. If they use a phrase about how much money went unearned or uncollected in a year, then it's a good idea to steer clear. 
18. Just because the organization uses the term "fund" or "foundation" doesn't necessarily mean it's a non-profit scholarship group.

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In the end, your best bet is to do your research, and when in doubt, consult with the Financial Aid administrator at your school.

If you want to learn more about scholarships, go to Education Planner. If you want a legitimate scholarship search website, check out FastWeb or College Board.