As college students and parents seek assistance to cover the ever-soaring costs of tuition, some have been targeted by scammers offering false promises of scholarships and grants.
“At CPA, we always encourage prospective and current families to apply for as many scholarships as possible in order to receive the maximum amount of free financial help,” said Mary King of College Parents of America. “Free is a key word. Remember to apply more, but give the least amount of information needed, and never pay to win money.”
According to the Federal Trade Commission, unscrupulous companies sometimes approach prospective college students with bogus offers of scholarships, financial aid or consulting services in exchange for an application fee or payment. Some use high-pressure sales pitches at seminars, urging students to pay immediately or risk in losing out on opportunities for aid.
“We don’t know how widespread this is,” FTC spokesman Frank Dorman said.
Some scammers, according to the FTC, guarantee the students will get their fees refunded if they don’t receive a scholarship, but then attach conditions that make it impossible to collect a refund.
Others tell students they’ve been selected as finalists for awards and demand an upfront fee, or request bank account information on the false premise of confirming their eligibility.
“Don’t pay,” King advised. “Legitimate scholarships do not require a fee. Stay away from any types of fees when looking for scholarships.”
Legitimate scholarships, she said, also don’t require recipients to provide personal banking or credit card information.
Conducting some online research into the background of a scholarship or consulting company can also help students spot fraudulent or deceptive offers, she said.
Signs that a scholarship offer may be a scam include the presence of application fees, no proof of past winners, no phone number listed, a request for personal financial information and winning a scholarship you didn’t apply for, King said.
There are also companies that claim they have programs that can increase a student’s eligibility for certain scholarships or grants.
Some legitimate companies provide students with lists of scholarships or run students’ profiles through national scholarship databases to find potential scholarships for which they’re eligible. But legitimate companies won’t guarantee scholarships or grants, according to the FTC.
King recommends that students and parents can save money by doing the legwork themselves.
“Avoid companies that state they will do the work for you,” King said. “Scholarships are work. No one else can do it for you. Try to avoid any company that states it will do the work for you.”