Despite schools across the nation starting their fall terms unconventionally, parents of high school juniors or seniors know it is time to start college applications. Starting the application process means that it’s also time to peruse scholarships and other aids to pay for college. You also need to look out for “scholarship scams.”
Guidance counselors have always had to warn parents to be aware of scholarship and financial aid scams. However, due to the pandemic causing an economic downturn, the scammers are crawling out of their holes, seeking fresh prey.
Most scholarship scams seek to get students and their families to pay money to the scammer, but some scams involve identity theft.
The experts say the first and most obvious sign of a scholarship scam is if you have to pay money to get money. You should never invest more than a postage stamp to get information about scholarships or apply for a scholarship. Any organization or scholarship sponsor that is charging any fees upfront is a fraud.
Here are some other signs of scholarship scams. The scammer may:
- Request unusual information. Beware of scholarships that ask for your credit card number or Social Security Number. Scholarships do not need your credit card number to verify your identity or “hold” the scholarship for you. Scholarship providers are not required to report scholarships to the IRS unless the scholarship is a fee for services.
- Ask for your bank account number. Sounds innocuous, but a scam artist can empty your bank account with just your bank account number and the routing number. They can issue a demand draft to withdraw money from your account without your signature.
- Tell the student that they won a scholarship for which they never applied. One scholarship scam deceived students by sending a letter congratulating them about winning a scholarship. It then asked them to pay the application fee.
Emails offering scholarship scams may often contain misspelled words. Also, be wary if they only have a PO box and no mailing address or phone number. The scammer may claim to be associated, sponsored, or affiliated with a reputable sounding agency like the Department of Education. However, the law prohibits the federal government from endorsing private businesses.
The experts also say be on the lookout for any scholarship matching service that offers a free seminar or a one-on-one interview. Both are nothing more than a high-pressure sales pitch for a useless product or service.
If you encounter a scholarship scam, report it to the National Fraud Information Center (NFIC) at 1-800-654-7060 or visit www.fraud.org. This way, you will be doing your part to prevent other parents or students from falling victim to the scam.
Have you, or anyone you know, been a victim of a scholarship scam? Can you share the details below?