Scholarship Scams are Prevalent. Students Need to Keep their Guards Up

Scammers continue to prey on the most vulnerable individuals in society. College students are no exception to this sad tale. Given the unique needs of college students—mainly financial need—college scammers employ high-pressure tactics to persuade students that they’re applying for a scholarship. These unscrupulous actors are maliciously stealing a treasure trove of personally identifiable information that could damage the student in a damaging manner.

One of the most common scams involves upfront fees. These scams are easy to identify because the perpetrators of this scam hoodwink the student into believing that they need to pay a processing fee or taxes to release the award. Credible scholarship opportunities are free to apply for and are relatively tax-free due to the gift nature of the prize. Students should be wary of any individual who claims that the student must take these actions before the organization can release funding to them.

Another common tactic is guaranteed winnings. Unfortunately, no single entity or organization can ensure that a student will automatically win a scholarship or grant. If a suspicious actor alleges that you will win the award no matter what, it’s better to walk away than fall prey to this swindle. Scholarship awards often select recipients in various ways, including through a selection process, a merit-based approach, or a financial need-based strategy. Evade any scholarship opportunity that claims all you have to do is apply to win the award proceeds. It’s likely to be an elaborate yet easy scam.

Unsolicited offers are also a tell-tale sign of a scholarship scam. Whether it’s through a poorly written email, an odd-looking social media post, or a mailed document from an unfamiliar sender, unsolicited offers are likely to raise immediate red flags. If you are in doubt, contact your financial aid office to determine the validity of the offer. Do not click on suspicious hyperlinks that portend a credible scholarship website experience. It may be a phishing attempt to steal your personally identifiable information.

Scholarship applications often request mundane information from applicants, such as basic contact and academic details. If a scholarship organization mentions they need additional information, such as your bank account number or Social Security number, immediately cease any communication with that organization. Once again, scholarship applications should be a relatively straightforward experience. Anything else outside of the norms should alert you to the fact that it may be a con.

Con artists may also claim that they have access to secret scholarships that only their organization or themselves is aware of. Once again, please don’t fall for it. A simple internet search should yield information that the fraudster claims to have access to. When in doubt, contact a trusted financial aid source, such as your financial aid office or high school guidance counselor, to determine the validity of the statements made by the potential swindler.

Like all other scams, scholarship scams will attempt to coerce you into making a quick decision using high-pressure tactics. These high-pressure tactics may confuse your natural senses that guard you from making a poor decision. As the adage goes, if it’s too good to be true, then it is. While their demands may sound reasonable at the time, it’s often too long after the fact that a person realizes they’re a victim. Do not hesitate to end communication with that individual if you feel uncomfortable about what is happening.

Other elaborate scholarship scams include fake checks. In this case, the fraudster sends you a phony check but tells you that it will only clear your financial institution until after you wire the scholarship organization money for the processing fees of the check that they mailed to you. Unbeknownst to you, the original check from the con artist will bounce, and you are on the hook for the wired money. Any scholarship that requires you to pay processing fees or taxes is a scam, pure and simple.

Finally, lack of legitimate contact information and poor grammar should raise concerns. Reputable scholarship organizations prominently display their contact information on their materials. Disreputable entities obscure this information. In fact, you should be able to cross-reference the contact information through a basic internet search. Poor grammar is often a classic sign of a scammer operating in a foreign country with limited writing ability.

There are many methods you can employ to avoid falling for a scholarship scam. First, never pay for any processing fees or taxes. Trustworthy entities do not charge processing fees or claim you owe the Internal Revenue Service taxes on scholarship winnings. Second, conduct thorough research to determine if scholarship opportunities are legitimate.  Rely on your financial aid experts at your institution or high school if you are uncertain whether the scholarship you are applying for is a genuine one. Finally, like anything else in our daily lives, always trust your gut instincts. Often, your gut instinct is a reliable indicator that you are dealing with a scam operation.

Good luck with scholarship hunting this winter season.