Avoid Scholarship Scams

Kanan Singh wants to become a pediatrician. But like most college students, she wonders how she'll pay for her education. Walking across campus at Modesto Junior College, in Modesto, Calif., she thought she'd been handed the answer: a flyer for a financial aid seminar that promised to help students find scholarships.

Singh and her father drove to the advertised hotel in nearby Salida, Calif. They sat in a conference room with 30 other people while two women and one man, all well-dressed and articulate, gave their presentation. They "guaranteed you will be able to get at least $5,000 dollars from the scholarship packet they provide," Singh says. "And if you don't, they'll give your money back."

Everything about the presentation seemed legitimate. "One of the women claimed she was a high school counselor," Singh says. The presenters even discussed how to avoid fraud. Convinced, Singh's father spent $300 for three scholarship packets, one for her, one for her brother and one for her sister.

But when the packets arrived in the mail "the letter said there was nothing that fit my qualifications in order for me to receive scholarships," Singh says. The money-back guarantee was impossible to collect because the presenters had disappeared.

Singh's story is not unusual. In 2003, the Federal Trade Commission received 594 complaints of financial aid fraud and took legal action against two companies suspected of operating these types of scams. Combined, the two companies allegedly defrauded approximately 52,000 consumers out of $23 million.

Con artists are eager to prey on a student's need for financial assistance. Here are ten warning signs that can help you avoid a scam:

1. Fees: You shouldn't have to pay to search for or apply for scholarships. You can find scholarships for free online by using reputable Web sites like FastWeb (www.fastweb.com).

2. Credit card or bank account information needed: You should never have to give credit card or bank account information to award providers.

3. Scholarship guarantee: No one can guarantee that you'll win a scholarship because no one can control scholarship judges' decisions. Also, be wary of "high success rates" -- they usually do not refer to actual award winners.

4. No work involved: You can't avoid putting in time to fill out a scholarship application.

5. No contact information: Legitimate sponsors should provide contact information upon request. If the sponsor does not supply a valid e-mail address, phone number and mailing address (not a PO box), that could be a sign of a scam.

6. Unsolicited scholarships: If you are called to receive an award for which you never applied, be alert -- it's most likely a scam.

7. Pressure tactics: Don't allow yourself to be pressured into applying for a scholarship, especially if the sponsor is asking for money up front.

8. Claims of "exclusive" scholarships: Sponsors don't make their scholarships available through only one service.

9. Sponsor goes out of their way to sound "official": Scammers sometimes use official-sounding words like "national," "education" or "federal" or they display an official-looking seal to fool you into thinking they are legit. Check with your school if you question a scholarship provider's legitimacy.

10. Your questions aren't answered directly: If you can't get a straight answer from a sponsor regarding their application, what will be done with your information or other questions, proceed with caution.

Courtesy of ARA Content

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75% of high school graduates go on to some form of further education.

~US Dept. Education