The 10 Red Flags of Scholarship Scams

how to avoid scholarship scams


The costs of higher education have risen dramatically over the last decade. Keeping up is tough for students and parents. If you are looking to avoid student loan debt altogether, scholarships may be a great source of higher education funds. Unlike student loans, scholarships don’t need to be payed back. Think of scholarships as free money!
Unfortunately, with tens of thousands of scholarships come scholarship scams. Each year, several hundred thousand students and parents fall victim to scholarship scams.

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Before diving into your scholarship search, you should lookout and avoid these scams:

1. Any scholarship application that asks for payment.

Scholarships aren’t going to ask you to pay to apply. Scammers call these fees “application fees”, “processing fees,” or even ”finalist fees”. Scholarships are free for everyone, do NOT pay to apply.

2. Any unsolicited opportunities.

If you receive a letter, e-mail, or phone call saying you’ve been awarded a scholarship that you didn’t apply for, it could be a scam.

3. If you’re sent a check and still asked to pay a fee.

If you receive an award check in the mail, then are asked to pay a fee, you are participating in a scam. The check that you received will not clear and you will be on the hook for the fees you sent the scammers.

  [Learn how you can and can’t refinance student loans.]

4. A scholarship service that offers to apply for you.

Avoid services that offer to apply for scholarships for you for a fee. Remember, you should never pay to apply!

5. If you don’t need to do anything to apply.

Doing nothing is easy, but probably too good to be true. All legitimate scholarships require some work on the part of the applicant. At the least, you will usually need to register with an email address. Once registered, you may be entered into a scholarship drawing.

6. Don’t be fooled by official-looking scholarships.

Popular scams often include words like “foundation,” “federal,” or “national” to sound more authentic.

7. Requests for personal information.

You shouldn’t share any private information, such as your bank account, credit card, or Social Security numbers. If you provide confidential information to these scammers you may find yourself a victim to identity theft. Before providing any confidential personal information be sure to verify the organization and the security of their website.

8. Scholarship search fees.

These days there are plenty of free scholarship search tools available. A simple Google search will lead you to a number of popular searches. We even have a free scholarship search available here at LendEDU. Never pay to search for scholarships, even with money back guarantee promises.

9, No contact information.

If you don’t see any contact information for the scholarship officials, you had better be careful. In most cases there should be contact information for you to ask questions or to submit information.

10. A scholarship service that offers “exclusive information.”

Exclusive information” scholarship scams are popping up these days. These scams have no exclusive information so don’t even think about sharing your information with them.

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Applying for scholarships takes time and commitment. If it sounds too good to be true, or too easy, it is probably a scam. If you think you have found a scholarship scam, we suggest that you report the scam to the U.S. Department of Education.

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