The Ultimate Guide to Scholarship Scams

Updated on March 19th, 2025

Finding scholarship opportunities for higher education can be challenging in its own right, but when your student also has to dodge scholarship scams, it is even more daunting.

If you want to make sure your student avoids scholarship fraud and scams, here’s what you need to know.

If you want to find out more about how to find legitimate scholarships, making it easier to avoid scholarship scams, then sign up for our free webinar! You’ll learn a bunch about how to locate available scholarships, organize documentation, fill out applications, write winning essays, and more. Take a moment and head to https://thescholarshipsystem.com/freewebinar to find out when the next training session is available.

How Do You Find Legitimate Scholarships?

When your student begins their college journey, finding ways to pay for their tuition, room and board, and other expenses are critical. Navigating the landscape of scholarships and grants involves understanding the various financial aid opportunities available while being cautious of scams.

However, it can be hard to separate legitimate opportunities from scholarship scams if you don’t know what a real award looks like. Luckily, there are a few hallmarks that increase the odds a scholarship offer is the real deal.

By and large, legitimate scholarships:

• Require essays or several short-answer responses
• Are offered by legitimate companies that operate transparently
• Don’t charge fees
• Require additional documentation, such as transcripts, SAT/ACT scores, and recommendation letters
• Have minimum GPA requirements – though there are exceptions
• Are rewarded once or twice per year

When a scholarship has criteria similar to what is listed above, there is a decent shot it’s a real opportunity. However, if your student still has doubts, then researching the awarding organization is a smart move. For example, asking their financial aid office or guidance counselor may bring clarity.

Understanding Scholarship Scams

Scholarship scams are a type of financial aid scam that preys on students seeking financial assistance for their education. They come in various forms, such as fake scholarship offers, guaranteed scholarship search services, and advance-fee loan scams. Requests for sensitive information, such as Social Security numbers or bank account details, are also common signs of a scholarship scam. The tricky part is that these scams can be difficult to detect and may persist for years before people catch on.

How Do You Find Legitimate Scholarships?

When your student begins their college journey, finding ways to pay for their tuition, room and board, and other expenses are critical. Navigating the landscape of scholarships and grants involves understanding the various financial aid opportunities available while being cautious of scams.

However, it can be hard to separate legitimate opportunities from scholarship scams if you don’t know what a real award looks like. Luckily, there are a few hallmarks that increase the odds a scholarship offer is the real deal.

By and large, legitimate scholarships:

• Require essays or several short-answer responses
• Are offered by legitimate companies that operate transparently
• Don’t charge fees
• Require additional documentation, such as transcripts, SAT/ACT scores, and recommendation letters
• Have minimum GPA requirements – though there are exceptions
• Are rewarded once or twice per year

When a scholarship has criteria similar to what is listed above, there is a decent shot it’s a real opportunity. However, if your student still has doubts, then researching the awarding organization is a smart move. For example, asking their financial aid office or guidance counselor may bring clarity.

Understanding Scholarship Scams

Scholarship scams are a type of financial aid scam that preys on students seeking financial assistance for their education. They come in various forms, such as fake scholarship offers, guaranteed scholarship search services, and advance-fee loan scams. Requests for sensitive information, such as Social Security numbers or bank account details, are also common signs of a scholarship scam. The tricky part is that these scams can be difficult to detect and may persist for years before people catch on.

How Do You Spot Scholarship Scams?

Many opportunities – including the legitimate scholarship opportunities – are freely found online. But not everything on the internet is legit.

Nearly every student encounters at least a few scams during their search for scholarships to boost their financial aid packages. They sound suspiciously good, but are still incredibly tempting. Unfortunately, the reason they seem too good to be true is typically that they are one of many forms of college scholarship scams. Companies that claim they will do all the work for students in securing scholarships are often scams.

Luckily, there are some signs a scholarship may not be what it seems. Here are the red flags seen in many scams:

• 100 characters or less for the “essay”
• Use the terms “sweepstakes,” “drawing,” “enter to win,” or “random selection”
• Have zero requirements aside from basic personal information
• Asks for your Social Security Number, credit card or debit card number, or bank account information
• Applying involves only a social media post
• An application fee or processing fee
• Companies claim they need payment before releasing “won” funds
• It’s open to everyone
• No proof of past award recipients
• Applying takes less than 5 minutes
• The company says it can “pay immediately”
• When asked to answer questions about the opportunity, there’s no reply, the response is vague, or the answer contains false information
• Are rewarded weekly or monthly
• Lofty scholarship claims with unrealistic odds of winning
• Others reporting scholarship scams mention the award

Another warning sign is an unsolicited offer featuring high pressure sales pitches stating a student won a scholarship. Scammers often contact students through unsolicited messages claiming they have won a scholarship. Scholarships generally require some type of direct application. Usually, the only exceptions are those that use information from a student’s FAFSA. While the FAFSA is mainly used for federal student aid, some institutional awards may use FAFSA information to determine a student’s eligibility.

Protecting Yourself from Financial Aid Scams

To safeguard your student and ensure they avoid falling victim to financial aid scam offers, staying cautious and informed when searching for scholarships and financial aid opportunities is essential for students and parents. Students and parents should report suspected scholarship scams to authorities like the FTC and school officials. Here are some tips to help your student avoid falling into the trap of a scholarship scam:

• Research the organization offering the scholarship: Look for reviews and ratings from other students to ensure the scholarship providers are legitimate. A quick online search can reveal a lot about the credibility of the scholarship provider.
• Be wary of guarantees or promises of easy money: Legit scholarships do not promise easy money. So, when a scholarship or search platform claims it can guarantee an award, that should give students pause.
• Check for red flags: Be aware of the red flags mentioned earlier and steer clear of scholarships that exhibit these characteristics.

IS SCHOLARSHIP OWL LEGIT?

Scholarship Owl falls in the category of scholarship search engines or scholarship matching services and application platforms students may come across when searching for more financial aid option. Students complete basic profiles and the company attempts to match students to scholarship opportunities.

By creating an account, your student is entered to win Scholarship Owl’s “scholarship,” which is actually a sweepstakes. Plus, while Scholarship Owl is a database filled with scholarships, many are the “no essay scholarships” that aren’t very legitimate.

Scholarship Owl does charge for some of its services, too. Additionally, Scholarship Owl may hand your student’s information over to third parties, at times for compensation.

Luckily, Scholarship Owl doesn’t find anything students couldn’t find on their own, so most students don’t need a service like this to find amazing opportunities.

IS SCHOLARSHIP POINTS LEGIT?

Scholarship Points has students complete surveys for a chance to win cash. Again, they aren’t offering a real scholarship. Instead, this is a sweepstakes. Additionally, Edvisors, the company behind Scholarship Points, profits by selling your student’s data through surveys, sending participants marketing emails, hosting contests, and similar activities.

While it’s possible to win the Scholarship Points sweepstakes, your student’s odds are abysmal. They would likely be better off focusing on legit scholarships.

IS SCHOLARSHOP DETECTIVE LEGIT?

Scholarship Detective is a search engine for scholarships. The company maintains a large database of opportunities and allows people to search them for free. They do list plenty of potentially worthwhile scholarships, but there are also some questionable ones that appear in the results, too.

The $1,000 scholarship from Scholarship Detective is open to all students and only requires a short application and 140-character statement; essentially, a tiny “essay.” The essays are judged to determine who receives the money.

It does encourage students to apply once a week for a chance to receive the money, so competition is incredibly high. While the company cannot show the odds of being selected, as it varies depending on the number of applicants, your student’s chances would likely be slim.

IS THE COLLEGE IS POWER SCHOLARSHIP LEGIT?

College Is Power (CIP) provides information and tools to current and prospective college students. They also list a $1,000 scholarship, where students enter using a short form and adding a 150-word essay.

Using much of the site does not require any personal information. Additionally, CIP doesn’t sell any personal or financial information as provided by scholarship applicants. However, it may be disclosed to certain third-party partners.

IS THE RETURN 2 COLLEGE SCHOLARSHIP LEGIT?

Another resource site for college students, Return 2 College has a $1,000 scholarship that can be paid to the applicant or the student. It requires an essay, though one of only three sentences or less, and a range of personal information.

Using the tools on the website does not require any personal information. They also don’t sell any details collected to unaffiliated third parties, though they may give your student’s data to third-party partners.

IS THE SCHOLARSHIP ZONE SCHOLARSHIP LEGIT?

Scholarship Zone lists a $10,000 scholarship on their website. However, the entry form requires very little information, and the winner is selected at random during a drawing, essentially making it a sweepstakes.

DOES THAT MEAN SWEEPSTAKES ARE SCAMS?

To be fair, a sweepstakes in and of itself might not be a scam. Many companies hold legitimate sweepstakes for a variety of reasons. However, labeling a sweepstakes as a legit scholarship is dishonest. The winner is selected at random and usually are no meaningful criteria (like financial need or merit) play into who’s chosen. So, it’s essentially a prize, and that isn’t the same as a scholarship.

6 Other College Scams to Watch for and How to Avoid Them

1. Tuition Scam

The most common scam targeting college students involves claims about being behind on their tuition. The would-be thief contacts your student claiming to be from the admissions department at their college or university, and asserts your student is late in meeting their financial obligations.

If you or your student receives an email or phone call making these claims, hang up right away or don’t click any links in the email. Then, contact the college directly using the phone number listed on the school’s website or in any orientation materials to determine if any payments are owed.

2. Fake Credit Cards and Other Financial Product College Scams

While the Credit Card Accountability, Responsibility, and Disclosure (CARD) Act prevents marketing credit cards to students while they are on campus, that doesn’t mean your student won’t be pursued. Plus, an unsolicited offer for any form of financing, including credit cards and loans, may illegitimate and be created by a scammer to get valuable personal information.

If your student needs a credit card, loan, or similar financial product, it’s best not to respond to any solicitation attempts. Instead, have them do their own research into reputable institutions, and select a service provider from there.

3. Behavior Blackmail

College students often cut loose once they get on campus and some of their decisions, if they were captured on video, may be quite embarrassing or harmful to their reputations. With smartphones being in everyone’s hands, your student may never know if someone photographed or filmed them when they were being a bit reckless, and this scam is counting on that.

The best defense against a scam is to not doing anything that could be used as grounds to extort money. So, warn your student of the dangers associated with drinking and partying, especially if their actions could be used to blackmail them later.

4. Advance Fee College Scams

In most cases, any service that wants to charge your student an upfront fee for something should elicit caution. For example, a site or email that says a fee is required to complete the FAFSA is almost guaranteed to a scam. Students and parents should never pay anyone to fill out or process their FAFSA. Similarly, any “scholarship” application or award that requires any form of payment from your student shouldn’t be trusted.

Completing the FAFSA, getting a scholarship, or landing a job should NEVER cost your student a dime. Anyone charging for these is probably a fraudster, so don’t provide payment or any personal information.

5. Housing Scams

For students who go to school away from home but don’t secure a dorm room, that means it’s time for apartment hunting. One popular scam involves listing a place as available, usually online, and trying to convince the potential renter to pay a fee, rent, or deposit without them ever seeing the apartment.

Then, when they think it’s time to move in, the college student discovers the person they were speaking to doesn’t actually own the apartment. And that they’ve been scammed out of a lot of money.

To keep your student from falling victim to these criminals, make sure they know to never hand over any money before they’ve seen the apartment, both inside and out. They also need to meet the landlord in person and should never pay any rent or deposits (aside from possibly a very small application or background check fee) until the keys are firmly in their hands.

6. Technology-Related Scams

Tech is often essential for college students, and certain fraudsters rely on this fact. While not all of these are overtly scams, your student should be aware of the risks outlined here to make sure they keep themselves safe and secure.

Public WiFi

WiFi is likely everywhere on campus, but public WiFi comes with certain risks. An unsecured system can be breached by hackers, and it’s possible for other people to monitor your activity when you’re cruising around on unsecured public WiFi.

Whenever your student is using an unsecured connection, they should never log in to sensitive sites, like their bank account. Additionally, using password protection software and encryption can also make their activities harder to track.

Phishing Scam

One way crooks try to get sensitive information people is through phishing. Often, this involves getting an email or heading to a site that is designed to resemble a reputable business but is actually a fake. The scammers try to get your student to provide details like your name, birth date, social security number, or user name and password into their portal, allowing them to capture the information and use it to access your account.

To avoid these attempts, make sure your student only logs into websites by going directly to the organization’s URL. Additionally, they should always check the address bar to make sure they haven’t been redirected to a copycat site as part of an attack. And, whenever they are in doubt, have them contact the company or school directly using a number found from a safe source.

Online Bookstores

College students regularly turn to online resources for textbooks to save money, and criminals have taken notice. Once scam involves creating a site, charging your student for a book, and then never delivering the product.

Before shopping online, your student should always do some research to make sure the site is reputable. If anything seems out of place, then it’s best to make a purchase elsewhere.

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