Each year, hundreds of thousands of students fall victim to fraudulent scholarships. Many of these scam operations are run under the guise of being a legitimate government service or grant-giving foundation. Fraudulent scholarship matching services are also quite popular.

Planning to apply for scholarships soon? If so, it’s essential to know how to spot fraudulent organizations. This way, you won’t lose money or hand personal data over to a scammer that could be used for identity theft.

Keep reading to learn more about fraudulent scholarships.


Types of Fraudulent Scholarships

There are many types of fraudulent scholarships. If you receive an offer that uses any of these tactics below, be suspicious and report the scam to your school, the Federal Trade Commission, and/or your local state attorney general.

For-Profit Scam

The most common fraudulent scholarship is a for-profit scam. While these appear to be real scholarship programs, they require an application fee. On average, these scams receive 5,000 to 10,000 applicants at the cost of $5 to $35 each.

Sometimes these scams do pay out small scholarships to one or two applicants, but it’s more common that no money is paid out at all. These scams can generate tens of thousands of dollars in profit.

Scholarship Prizes

Have you received a notification that you’ve won a scholarship, but for the funds to be released, you must pay a disbursement or redemption fee? This is known as a scholarship prize scam.

If an organization reaches out to you and says that you’ve won a prize for a contest that you don’t remember entering, this is a huge red flag.

In most instances, the student is sent a check that requires funds to be sent back to cover taxes ad other fees. Or, sometimes, the scammer will send a check for more than the prize amount and ask for a check to be sent back to cover the difference. 

Ultimately, the check bounces, and any funds you paid are gone.

Guaranteed Scholarship Search

There are many legitimate scholarship search services. However, if you come across one that guarantees a scholarship, otherwise they’ll refund your money, be suspicious. Chances are that they’ll take your money and disappear. 

Or, if you do happen to receive a list of matching scholarships, it’ll be impossible to qualify for a refund.


Red Flags of Fraudulent Scholarships 

There are several warning signs to be aware of when determining if a scholarship is a scam or not. Some of the most common red flags include:

  • Making guarantees and false promises
  • Limited time offers
  • Fees
  • Unsolicited scholarships
  • Lack of transparency
  • Asking for very personal information (i.e., SSN)

If a scholarship sounds too good to be true, or if something just seems off about the sponsor, trust your gut. There are millions of free legitimate scholarships out there. If one doesn’t seem right, report it and move onto the next one.


Use Scholar’s App

One of the best ways to avoid fraudulent scholarships is to use an app that weeds out scams. 

Scholar’s App is the all-in-one solution for students who are looking to apply and win scholarships. The app connects students to verified scholarships and tracks the financial aid process from beginning to end.

Don’t fall prey to fraudulent scholarships. Create an account on Scholar’s App today so that you can search for scholarships and easily submit applications online.


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