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How to find legitimate college scholarship opportunities 

How to pay for school: scholarship scams

At a glance

  • Scholarships are financial awards that can be applied to educational expenses and usually do not need to be repaid.
  • As with any financial information or investment, it’s important to exercise caution when pursuing scholarship opportunities. Scholarship scams may use certain words or phrases, exert pressure to act quickly, or offer funding guarantees that feel “too good to be true.”
  • When researching scholarships online, avoid scams by adopting a buyer-beware mentality and reaching out to your school’s financial aid office or the FAFSA® website for additional guidance or information.
  • Explore scholarship opportunities for new, current, alumni and returning students across all degree levels at University of Phoenix.

Figuring out how to pay for college can be daunting. The limited time you have to secure sufficient funding for tuition may make developing a financial plan not only challenging but also stressful enough to potentially let down your guard when it comes to scams disguised as opportunities.

Fraudulent businesses such as self-proclaimed scholarship search services or scholarship clearinghouses may advertise in reputable publications or mail you letters containing toll-free phone numbers and websites, but that doesn’t mean they’re necessarily trustworthy.

Here, we explore when to believe a legitimate scholarship opportunity and when to beware of scholarship scams.

Explore scholarships for new, current, alumni and returning students in bachelor’s, master’s and doctoral degree programs. 

Buzzwords to watch for

According to the Federal Trade Commission (FTC), students should be wary of certain language that’s frequently used in scholarship scams to separate you from your money. Such wording may include:

  • So-called “processing costs,” “redemption fees” or other upfront payments
  • Claims that you’ve been chosen as a “finalist” for a scholarship you never applied for
  • Claims that your credit card or checking account number is needed to “confirm eligibility”
  • Reference to a “money-back guarantee” (that comes with strings attached)
  • A promise of a scholarship award or grant

It’s not unusual to see advertisements for a financial aid or scholarship seminar. While some are legitimate, such as those offered by reputable institutions or schools, others are cleverly framed sales pitches for overpriced loans or scholarship consulting services.

Before attending a workshop or seminar, do an online search using the organization’s name followed by “scam” or “complaints,” and see if this turns up anything concerning. Don’t pay any fees at the seminar regardless of what company representatives may tell you about missing a limited-time opportunity.

Red flags a scholarship assistance company may not be legit

Scammers may use words like “national,” “federal,” “administration” or “foundation” as part of their company name to sound as if they represent a branch of the government or a nonprofit group. (Many of these words are actually part of legitimate organizations, making their adoption by fraudulent endeavors that much more confusing.) Often, these names are just a slight variation of the name of a real government agency. Fraudulent entities may even appropriate certain seals used by federal agencies in their literature to imply an endorsement or authorization.

Other scholarship scams can happen over the phone. Your caller ID, for example, may indicate that the phone call about the federal grant you just won is coming from Washington, D.C., but scammers located elsewhere can use technology to “spoof” the call to make it appear it’s coming from an expected location when really it’s being placed from someplace else.

According to the Better Business Bureau (BBB), one scam involves sending a scholarship check along with a request that you remit payment for taxes or other charges. The check turns out to be bogus and whatever money you sent is lost. Remember, it’s illegal for anyone to charge you to better your chances of receiving a federal grant.

Protect yourself and your personal information

Here’s what you can do if you experience any of these red flags when seeking scholarship assistance or funding:

  • Make sure scholarship awards are received through the proper channels. If you’re informed through a phone call, online or email that you won a scholarship you didn’t apply for, it’s probably fraudulent. Most organizations will provide you with official notification by mail or email, not phone. Inquire how the organization got your name and contact information. Any unsolicited offer of this type should make you wary.
  • Resist pressure to quickly pay a fee. If you’re told over the phone that you must act fast but that you won’t learn the results for several months, there could be a problem.
  • Do your due diligence when it comes to online testimonials. Rave reviews can be faked or bought. To ensure what you’re reading is authentic, ask to contact people in your area who have done business with the firm so that you can talk with them personally. 
  • Don’t give out confidential information. Never share your bank, credit card or Social Security numbers over the phone or online unless you initiated the contact.
  • Don’t share your Federal Student Aid ID or password. Even if someone is helping you fill out the Free Application for Federal Student Aid (FAFSA® form), keep your Federal Student Aid ID and password private.
  • Make sure your questions about fees are answered in an upfront and transparent way. Does the organization provide refunds? What are the terms of service? Ask for their policy in writing, and check with your college financial aid office to see if they’re familiar with the company.
  • Know that checks can bounce, even when it looks like they’ve cleared. You can deposit a check and withdraw the funds and still find out later the check bounced. Even a “cleared” check can, after several weeks, turn out to be fake. And it will be your responsibility to pursue reimbursement with the scholarship company — if you can track it down.

While there are legitimate firms that offer scholarship assistance, the BBB reminds students they can often find the same awards by searching online themselves or turning to the financial aid office at the college they plan to attend.

Additionally, you don’t have to pay for help with federal student loans or with completing the FAFSA form. Free help is available at your school’s financial aid office, at the FAFSA website or the Federal Student Aid Information Center via phone call, email or online chat. Additionally, the website provides resources for legitimate scholarships and how to avoid scams.

Before handing over payment for a commercial scholarship service, stop and consider what you’re paying for. Is it worth it? Does it seem too good to be true?


Dawn Handschuh has been putting pen to paper for more than 30 years, writing widely on topics related to student lending, personal finances, everyday money management and retirement planning. She makes her home in Connecticut with her husband and two energetic German shepherds.


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