College Scholarship, Grant and Loan Scams

College Scholarship, Grant and Loan Scams
Looking for a way to fund college? Is that college scholarship or loan offer for real?  Maybe not!  Find out below!

If you are looking for scholarships, grants and loans for colleges, you will quickly find that many of the official looking offers you hear at seminars, in emails, over the phone from telemarketers, or online are actually scams or just plain rip-offs. The offer and their websites may look real, except they will quickly ask you for personal financial information, social security number, bank account numbers, while making making ridiculous promises and unreasonable requests, like these:

warning signs of a college scholarship scam:

  • "The scholarship is guaranteed or your money back."
  • "You can't get this information anywhere else."
  • "I just need your credit card or bank account number to hold this scholarship."
  • "We'll do all the work."
  • "The scholarship will cost some money."
  • "You've been selected by a 'national foundation' to receive a scholarship" or "You're a finalist" in a contest you never entered.
  • "Millions of dollars in aid go unclaimed every year; don't you want some of that money?"
  • "Buy now or miss this opportunity."

Types of scholarship, loan and grant offers

Theses offers come in 3 varieties:

  1. legitimate scholarships, loans or grants
  2. rip-offs - they're legal, but still cost an arm and a leg; or
  3. scams - out and out criminal activity to steal your identity or rob you.

How to avoid the scams and rip-offs and find legitimate offers?

Remember, the "opportunity" is a chance to pay for information you could find yourself for free. You don't need to pay someone to help you find out whether your parent's company or association offers financial aid!

  • Learn to recognize the warning signs (above)
  • Check its reputation by contacting the Better Business Bureau, a school guidance counselor, or a state attorney general's office.
  • Check out the company and it's offer thoroughly, BEFORE giving them any confidential information about yourself.
  • Don't give in to pressure tactics.

Before you decide to use a financial aid advice service, you should  Additionally, investigate the organization yourself before making a commitment:

  • Google the name and website address along with the word "scam" - if reputable sources identify it as a scam or illegal activity, you're best to look further!
  • Ask for names of three or four local families who have used its services recently.
  • Ask how many students have used the service and how many of them received scholarships or grants as a result.
  • Find out about the service's refund policy.
  • Get everything in writing.
  • Read all the fine print before signing anything.

How to report a scholarship scam

A company charging for financial aid advice is not committing fraud unless it doesn't deliver what it promises. For more information about financial aid fraud or to report fraud, call the Federal Trade Commission toll free at 1-877-FTC-HELP (1-877-382-4357)

Scholarship Scam names


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