Updated on February 5th, 2025
Finding scholarships that pertain to YOU is one of the biggest challenges students and parents face in the scholarship process. To make it even more difficult, there are now companies out there that put out fake scholarship applications simply to collect your information and sell it. Additionally, some services promise to secure scholarships or offer refunds through a guaranteed scholarship search service, but these often result in scams where the provider disappears with applicants’ money or provides unqualified scholarship matches.
Today, we are going to cover how to tell the difference between a legitimate scholarship and a fake one.
Perhaps you’ve applied to those scholarships that have little to no requirements and take 5 minutes maximum to fill out. They have monthly ‘drawings’ and will announce who the winner is each month so you are told to keep applying over and over (a.k.a. just enter your information). These, unfortunately, sound too good to be true because they are too good to be true.
Want help finding legitimate scholarships? Sign up for our next free webinar here. We cover the exact strategies to uncover hidden scholarships with the least competition (and that are legit.)
But DON’T FEEL BAD! We’ve all been there.
When I started applying for scholarships, I fell, and I fell hard. I spent an entire junior year entering my information to the ‘sweepstake’ scholarships, as I like to call them. Little did I know, I was actually just giving out my information so that companies could spam me.
Though it probably doesn’t need to be said, I no longer use that email.
Understanding Scholarship Scams
Scholarship scams are a type of financial aid scam that preys on students seeking financial assistance for their education. These scams can be incredibly deceptive, often masquerading as legitimate scholarship opportunities. They come in various forms, such as fake scholarship offers, guaranteed scholarship search services, and advance-fee loan scams. The tricky part is that these scams can be difficult to detect and may persist for years before people catch on. Understanding the tactics used by scammers is crucial to avoid falling victim to these schemes. Always remember, if something seems too good to be true, it probably is.
Assessing a Scholarship: Is it a scam or not?
So how can you tell the difference between a legitimate scholarship that is worth your time and if a scholarship is a scam that is just trying to get your information?
High pressure sales pitches are a common tactic used by scammers to pressure students into making quick decisions.
Related video: Where to Find Legitimate Scholarships (& Avoid Scholarship Scams)
Legitimate scholarship opportunities:
- Legitimate companies operate transparently, do not charge fees for applications
- require essays or at least a few short-answer responses.
- Require additional support such as transcripts, SAT/ACT scores, and recommendation letters
- Most have minimum G.P.A requirements – though there are some exceptions to this
- Are rewarded once or twice per year
Scholarships that are most likely scholarship scams:
- One 100 characters or less for your ‘essay’
- Commonly use the term ‘sweepstakes’, ‘drawing’, or ‘random selection’
- Have zero requirements aside from entering your basic information
- Ask for your social security number (FAFSA [a government site] is the only legitimate site that should ask for this)
- Are rewarded weekly or monthly
- Request your bank account details for verification
Other Red Flags to Watch Out For
When you’re on the hunt for legitimate scholarships, it’s vital to be aware of the red flags that might indicate a potential scam. Here are some common warning signs to keep an eye out for:
- Requiring an application fee: Legitimate scholarships do not require you to pay to apply. If you’re asked for money upfront, it’s a major red flag.
- Promising unusually low-interest educational loans: Offers that seem too good to be true often are. Be cautious of any loan offers that promise exceptionally low interest rates.
- Claiming that you’ve won a college scholarship worth thousands of dollars: Be wary of unsolicited offers, especially if they require payment or personal information to claim the award.
- Requiring you to pay a “disbursement” or “redemption” fee: Legitimate scholarships will never ask you to pay to receive your award.
- Requiring you to send back a check for taxes or fees: Be extremely cautious if you’re asked to send money or provide financial information.
By staying vigilant and recognizing these red flags, you can better protect yourself from falling victim to scholarship scams.
Protecting Yourself from Financial Aid Scams
To safeguard yourself from financial aid scams, it’s essential to be cautious and informed when searching for scholarships and financial aid opportunities. Here are some tips to help you 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 organization is 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: Legitimate scholarships do not guarantee awards or promise easy money. If it sounds too good to be true, it probably is.
- Check for red flags: Be aware of the red flags I mentioned earlier and steer clear of scholarships that exhibit these characteristics.
- Report suspicious offers: If you suspect a scholarship scam, report it to the relevant authorities, such as the Federal Trade Commission (FTC) or the Federal Student Aid office.
Reporting Scholarship Scams
If you suspect that you’ve encountered a scholarship scam, it’s crucial to take action and report it to the appropriate authorities. Doing so not only protects you but also helps prevent others from falling victim.
The first step is to report the scam to the Federal Trade Commission (FTC). You can file a complaint online through the FTC’s website or call their toll-free hotline. The FTC tracks fraud cases and works to shut down fraudulent operations targeting students and families. Additionally, you should report the scam to the Federal Student Aid (FSA) office. The FSA provides resources for students and can take action against deceptive scholarship offers. You can visit their website to submit a report online or call their hotline for assistance.
It’s also essential to inform your school’s guidance counselor or financial aid office. Many scams target students through emails, social media, and even mailed letters, so notifying school officials can help spread awareness and prevent others from becoming victims. Schools may also have their own reporting procedures or connections with authorities who can take further action.
Finally, consider sharing your experience with others. Whether through social media, online forums, or student groups, raising awareness about scholarship scams can help protect other students from being misled. Many scams rely on secrecy and misinformation, so by speaking out, you play a key role in stopping them.
By taking these steps, you can help combat scholarship scams and ensure that students seeking financial aid are not exploited by fraudulent schemes.
Still on the fence?
If you still aren’t sure whether or not the scholarship is legitimate, try Googling the company. Trust your intuition – if there isn’t much about the company, it could possibly be that the scholarship is a scam. If the only results about the company are for the scholarship and/or sweepstakes, more than likely the scholarship is a scam.
Test Your Knowledge
See how well you do by choosing whether or not the scholarship below is legitimate. When finished, check your answers against the key down below.
#1 Is this “scholarship” worth your time?
#2 Is this “scholarship” worth your time?
#3 Is this “scholarship” worth your time?
If you want more information on The Scholarship System or the scholarship process, here are a few options:
- Hard copy or eBook (with free audio version): The Scholarship System on Amazon
- Join us on Facebook, Twitter or Pinterest for scholarship deadlines, tips & tricks, and much more!
- Click here to see when I am holding my next free 45-minute training on the 6-step scholarship process, including more details on spotting those scams!
Answer Key:
- Though it may not be a scam (they may actually give out money now and then), it is NOT a scholarship. This is simply a drawing and isn’t worth your time.
- This is legitimate.
- This is actually a real scholarship though the chances of winning one of these is at least one in thousands, if not one in millions. I would say any time it says ‘Enter to win’, it’s not legitimate or it’s not worth your time. I did this to show you that there is indeed a gray area but you can decide what you think is worth or time or not.
Want help finding legitimate scholarships? Sign up for our next free webinar here. We cover the exact strategies to uncover hidden scholarships with the least competition (and that are legit.)