Common Scholarship Scams

Common Scholarship Scams

When it comes to fraudulent scholarships, they can take many forms. Here we’ll be talking about some of the most common types. We strongly advise that you be suspicious if you receive any of the following offers. If you think that the offer is in any way a scam then you should report it. Often times, a scholarship scam might be so intricate that it could last for years before you catch it.

Scholarships that Never Materialize.

Many scams will tell you to pay upfront but will provide practically nothing in return. Usually a victim will end up writing off the expense simply thinking that they never ended up winning the scholarship.

Scholarships for Profit.
This scam takes on the appearance of a real scholarship program, and requires you to pay an application fee that usually costs anywhere from $5 to $35. The typical scam operation receives 5,000 to 10,000 applications and those fees allow them to make a hefty profit. To try to make themselves somewhat legit, they might pay out a $1,000 scholarship to some random person but the odds of you actually getting any money is slimmer than winning the lottery.

The Advance-Fee Loan.
This type of scam offers you the chance to receive an unusually low-interest loan, as long as you pay their required fee beforehand.. They promise you that when you pay the fee the loan will never materialize. The thing is, real educational loans deduct the fees from the disbursement check. They will never require you to pay an up-front fee when you submit the application. If the loan you receive is not issued by a bank or other by any other recognized lender, in all likelihood it’s a scam.

The Scholarship Prize.
This common scam notifies you letting you know that you’ve just won a college scholarship worth thousands of dollars. They require you pay a “disbursement” or “redemption” fee before they can release your prize. If someone says you’ve won a prize and you don’t remember entering the contest or submitting an application then we advise you steer clear of it.

The Guaranteed Scholarship Search Service.
Be wary of scholarship matching services that guarantee you’ll win a scholarship or else you’ll get your money back. They might simply pocket your money and disappear, or if they do end up sending you a report of matching scholarships, you’ll find it extremely difficult to qualify for any sort of refund.

Investment Required for Federal Loans.
Sometimes insurance companies and brokerage firms will offer you free financial aid seminars. In truth, these seminars are actually sales pitches for insurance, annuity and investment products. Anytime a sales pitch implies that purchasing a product is a prerequisite to receiving federal student aid, you should note that it violates federal regulations and state insurance laws.

Free Seminar.
If you ever receive an email or letter in the mail advertising a free financial aid seminar or “interviews” for financial assistance then we advise you be cautious. While seminars do provide some useful information, they often cleverly disguise sales pitches for financial aid consulting services which they claim will maximize your eligibility for financial aid. Don’t be fooled, this is simply just another one of their clever scams.