Scholarship Scams – What to Watch For

Roughly 37 million students have outstanding debtб and as of this year, the figure is rising. The thought of having to carry student loan burdens after college is scary and exhausting enough. So you find other options to alleviate if not totally eradicate the inevitable task of paying off loan debt. A common recourse would be to apply for scholarships. But keep in mind that fraud takes different shapes and forms. Unfortunately, scholarship scams are becoming more common these days and scammers are getting better over time. That’s why it is essential that you don’t fall prey to these fraudulent schemes.

What makes a certain scholarship a scam? Here are some things you should see as warning signs:

1. Too good to be true. Most scams are marketed in such a way that it is hard to refuse. One form of scam would tell you that you won a certain scholarship and the company sends you a check. The catch is, you have to pay some other fees before your prize is released. First and foremost, did you submit an application? If not, forget it. It’s a scam. If you did not apply in the first place and yet a scholarship grant offers thousands of cash assistance, you are most likely being deceived.

2. Up-front money. Remember that scholarships are supposed to help you financially. When an offer requires application or disbursement fees, it should render you doubtful. Even when a scholarship offer discloses a money back guarantee, do not be easily persuaded. Legitimate scholarships most likely have no-fee applications.

3. First-come, First-served. A legitimate scholarship grant does not use this strategy. It is not about granting aid to the “lucky” ones who apply first. Legitimate scholarships have deadlines of submission and applicants are on the same playing field and will undergo the same screening process whether they were the first to apply or the last. If a scholarship grant is advertised this way, think again.

4. The little details. Do not forget to do your own research on a scholarship offer. Look for company information- phone numbers and addresses, and verify them. Does the company use a residential or P.O. box address? Although there are legitimate foundations with drop mail addresses, when you see this sign along with other doubtful ones, it should make you question if it is legitimate or not. It is important to consider that legit companies use business addresses. If the company or foundation has just emerged, ask for references. Frauds get better and use even federal sounding names. Do not be deceived. Verification of information will definitely ease doubts.

Arming yourself with information is a good way of not falling victim to schemes or scammers. Identifying the telltale signs of fraud will help you safeguard yourself.