When you’re scrimping and scraping money together to pay for expensive college tuition, the last thing you need is to be scammed out of your savings. Unfortunately, there are many scammers out there who prey on well-intentioned students and parents attempting to get scholarships for college tuition. In fact, more than $100 million dollars is lost to scholarship scams every year. You must remain alert and keep your eyes open throughout your scholarship search to avoid losing money to criminals who hold no consideration for your quest for a higher education.
Part of what makes scholarship scams so dangerous is that they often disguise themselves as legal government agencies, using words like “National,” “Federal,” “Foundation,” and “Administration” in their titles. Sometimes scams will carry on for years before people notice they are being cheated. Beware of this and bear in mind that just because it sounds official and lawful does not mean that it is.
As a general rule of thumb, avoid any scholarships that charge a fee of any kind. When it comes to college funding like scholarships and grants, it should not cost money to get money. These scams require that you send them a portion of money up front. It is advisable that you never send any money for a scholarship. Many that fall victim to this scam simply assume that they did not win the scholarship when they do not see any return on their expense.
Also avoid advance-fee loans. In this scam, you are offered a loan with an unusually low interest rate, which requires you to pay an advanced fee. But after you have paid this fake fee, you never see the promised loan. Know that genuine education loans never do this. Rather they deduct any required fees directly from the disbursement check. If a loan does not come from a bank or lender whose name you recognize, you can be almost certain that it is not real.
Another scam out there claims that you have won a scholarship prize, then requires that you pay a fee or the taxes on the money in order to receive the scholarship. If you do not remember entering any contests, however, you can be sure this is a scam.
If you suspect that a scholarship is a scam, you are encouraged to report it immediately so that others will not be taken advantage of. Contact the National Fraud Information Center. The NFIC will give you information on what to do and report your complaint to the proper authorities.
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