A lot of students apply for scholarships to get financial aid for their college education. However, students and their parents should also be aware that there are scams made by people who want to take advantage of their dreams for their children.
One sign of a college scholarship scam is when the provider asks you for money for application or processing fees. Another indicator is that it asks for personal financial information. Be sure to do thorough research and background check on scholarships that you're planning to apply for.
U.S. News reported on five college scholarship scams that students should be aware of. Don't fall for these tricks.
1. "Cash up front"
Again, if a scholarship program requires you to send in an application or processing fee, it is highly likely a scam. This is the most common type of scam and has deceived thousands of students every year.
2. "Free seminar"
Getting an invitation or e-mail about a free seminar on financial aid may be appealing but it may also be a trap. The seminar may turn out to be a sales pitch that will sell you insurance, annuity as well as investment products. Moreover, there are seminars that actually offer overpriced student loans.
3. "Rewards without entries"
If you receive an e-mail saying that you won a scholarship but you did not join a contest for it, then it's most probably a scam. Scholarship grants are awarded to those who do the work, not for those who do nothing.
4. "Time-sensitive scholarships"
Time-sensitive scholarships are different from scholarships with deadlines. This type of scam usually is on a first-come, first-serve basis. Legitimate scholarships allow candidates to apply on a level playing field.
5. "Sweeping claims"
Scholarships that seem too good to be true usually are. Don't fall for lines such as "You can't get this information anywhere else" or "To hold the scholarship for you, I need your bank account number or credit card."
