Scholarship Scams

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It’s a fact; school is expensive. Scholarships are a great way to help fund your college education. There are a variety scholarships available to a myriad of applicants with requirements ranging from perfect grades in high school to being a single mother to being left handed. With such a range of stipulations, unfortunately it’s easy to be fooled by a scam posing as a legitimate scholarship. But how can you tell the difference? Here are the common signs of a scholarship scam.


Legitimate scholarships do not require a fee. Never pay a fee to apply for or get a scholarship.

Application Fee: For scholarships, you should never be charged an application fee. Most websites that require a fee are just collecting the money and never awarding a prize. Some of these fee collecting unscrupulous organizations may occasionally hand out a small scholarship to a few students in order to masquerade as a reputable company, but the truth is they’re only looking to make money off of unsuspecting (and often broke, that’s why you’re looking to get a scholarship anyway) applicants. And guess what, they’re making plenty of money.

Prize Fee: If you receive a notice of being awarded a scholarship, but they require you to pay a redemption fee or an upfront tax fee in order to get the money, you know it’s a scam. Another version of this scam is to receive a check where you are instructed to cash it and then send back a percentage of the total in order to pay a tax fee. The check is a fraud and you’d be out the money sent, as well as the bank fees for cashing a bogus check.

Scholarship Application Services

There are websites that claim to “do all the work for you” and apply on your behalf for scholarships. All scholarships require you to apply yourself. Since the requirements of each scholarship vary greatly (such as presenting a portfolio of work, writing an essay of specified topic, proof of accomplishments, etc.) it would be impossible (and unethical, even illegal) for someone to apply to scholarships on your behalf.

Guaranteed Scholarship Services

These websites charge fees but claim their service is guaranteed. They claim to match you with a winning scholarship, but they are not the company awarding it, so they are completely unable to guarantee that you will indeed be the recipient of any scholarship. When they don’t decide who wins, they have no guarantee that you will win. Sometimes these claims even state you’ll get your money back if it doesn’t work. Don’t count on it. The fine print usually says they’ll find you a scholarship that you qualify to apply for but they never truly guarantee that you’ll win it. Also don’t expect them to provide information that was worth your money either.

Scholarship Matching Services

All scholarship information can be found for free. There is no need to pay a company to provide you with scholarship information. Run a search online and you can find plenty of information, free of charge, on your own. You can start with and

Phone Solicitations

Scholarship award notices are sent through the mail. It is extremely unlikely that a legitimate company would contact you via phone in regards to a scholarship. However, scam artists won’t hesitate to call. Remember, never give out personal information over the phone.

Scholarship Loan

If that “scholarship” requires you to pay it back, it’s not a scholarship. That actually makes it a loan. There are some dishonest financial companies that pull the switch-a-roo where you apply for what appears to be a scholarship but when you receive the supposed “award notification” it turns out to be a loan, usually with an extremely high interest rate.

Furthermore, watch out for student loan scams, too.

Upfront Loan Fee

Real educational loans do not require an upfront fee. If you find an offer for a low interest student loans, but you have to pay a fee first, don’t do it. You’ll send off your money, but you’ll never get the loan money in return.

Be careful, guard your personal identifiable information, do your homework on scholarship companies, and if you get an offer that’s too good to be true, realize that it probably is.

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