As we’ve discussed here on the blog, scholarships are an incredible opportunity for college-bound students. You’ll want to apply for as many as you can as graduation gets closer. After all…who turns down free money?!

Unfortunately, not every opportunity is as good as it seems. That’s why we’re here to talk to you today about scholarship fraud: an increasingly-dangerous threat to your scholastic and financial well-being.

Scholarship Fraud is a Real Problem

Fraudsters will sometimes use the promise of a scholarship to try and trick you into giving up your personal data. Sensitive information like your Social Security number, birth date, or even your driver’s license number can all be means to help a fraudster steal from you.

This isn’t a rare occurrence; roughly 350,000 students become a victim of these criminals every year. In the process, these scammers manage to steal about $5 million dollars from kids like you and their families.

The victims of scholarship fraud are people who haven’t even graduated high school yet, but may already be saddled with bad credit—and possibly thousands of dollars in debt—because someone stole their identity. Don’t panic, though; we’ve got some of the most common warning signs here that may tip you off to multiple different scams and scholarship fraud tactics.

#1. Non-Refundable Fees

It’s not a hard rule, but you should generally be skeptical of awards that require a fee to apply.

Imagine a scholarship that promises a $500 reward, but requires a $10 application fee. If 1,000 students from across the country apply, that means the organizers have raked-in $10,000…or $9,500 more than the total prize. They may, of course, use some of that money to promote the contest and pay for other incidental costs. You’ll want to research any organization carefully before you even consider sending out any money, though.

#2. No Qualifications Specified

Most scholarships are provided to students based on set criteria, such as:

  • Academic achievement
  • Unique talents
  • Identity
  • Background / family history / income level

Even awards meant to apply to tens of thousands of students every year, like the Florida Bright Futures program, still have basic qualifications. So, you should be wary of scholarships that promise to just hand out free money to anyone regardless of your qualifications. Awards that don’t provide any specific requirements to apply are probably a scam.

#3. Fake Search Services

As we discussed several months ago, there are plenty of legitimate databases out there to help connect students with scholarships. However, there are also fake search sites out there whose goal is simply to steal your personal information and use your identity to commit fraud.

Before you start researching scholarships, you should research the database you’re using as part of the process. Be sure to use a legitimate, reputable search sites, and NEVER, under any circumstances, provide sensitive information like a Social Security number to a third-party site.

#4. Guaranteed Awards

Ever hear the saying, “if it sounds too good to be true, then it probably is?” That logic holds true when you’re on the scholarship hunt as well.

You should stay away from any service that offers you a “money-back guarantee,” or promises that you will be accepted for an award. As we mentioned before, scholarships are awarded based on a combination of need and merit. They’re not given out to everyone who applies, so there’s no way a legitimate site could promise you a scholarship.

This same thing is true for “first-come, first-served” awards. Every application is going to have a deadline…but no application is going to simply hand out an award to the first people who apply.

#5. Application-Free Awards

Did you receive any award offers without even applying? It’s not a lucky break…more likely than not, just a scam. Fraudsters might call you repeatedly or send you multiple letter informing you that you’ve earned a scholarship, but all they’re trying to do is trick you into giving up your personal information.

You should keep detailed records handy of any scholarship you apply for in case you get a call asking for information. If you do get a call like this, it’s not necessarily a scam; there are certain situations where organizations do need to verify certain application details. However, before giving up any information, you should ask for time to look over the details. If the person tries to pressure you, then it’s definitely a fraud attempt.

Stay Safe. Report Fraud.

If you suspect that a scholarship offer is a scam, you should report the organization to the appropriate government office: