Scholarship scams tend to have a particular set of characteristics. These characteristics can be used to identify possible scams. We list some of these warning signs below.
- Application fees. Beware of any "scholarship" that requests an application fee, even an innocuously low one like $10 or $20. Most legitimate scholarship sponsors do not require an application fee.
- Other fees. If you must pay money to get information about an award, apply for the award, or receive the award, it might be a scam. Beware of 900 number telephone services, which charge you a fee or several dollars a minute for a call. There are many legitimate scholarship search services that charge students a fee to compare the student's profile against a database of scholarships. It is, however, very difficult to distinguish between legitimate services and scam imitators, because the services are often small operations that pay fees to search one of a handful of national databases. In any event, charging more than $50 to search a scholarship database is excessive, especially since you can search the FastWeb, College Board, and College Answer databases for free.
- Guaranteed winnings. No legitimate scholarship sponsor will guarantee that you will win the award. Also be wary of guarantees that you will receive a minimum amount of financial aid—usually such guarantees are counting the federal student aid programs and private student loan programs, for which most people are eligible.
- Unusual requests for personal information. If the application asks you to disclose bank account numbers, credit card numbers, calling card numbers, or Social Security numbers, it is probably a scam. All a scam operator needs to know in order to withdraw money from your bank account is the name of the bank.
- Everybody is eligible. Scholarship sponsors do not hand out awards to students simply for breathing.
- Unsolicited opportunities. Most scholarship sponsors will only contact you in response to your inquiry. If you have never heard of the organization before, it is probably a scam.
- Typing and spelling errors. If the application materials contain typing and spelling errors, or lack an overall professional appearance, it may be a scam.
- No telephone number. Most legitimate scholarship programs include a telephone number for inquiries with their application materials. Be careful if the application materials do not include a telephone number and directory assistance does not have a listing for the organization.
- Mail drop for a return address. If the return address is a mail drop (e.g., a box number) or a residential address, it is probably a scam. Some scams may attempt to disguise a mailbox as a suite number. (It is illegal to misrepresent a mailbox as an office.) When legitimate scholarship programs use a mailbox, they almost always include their street address (and telephone numbers) on their stationery.
- Operating out of a residence. Since when did a major nonprofit corporation operate out of a home or apartment? This is not a sure sign of a scam, because there are legitimate home-based businesses, but a residential address can tell you something about the size of the organization.
- Masquerading as a federal agency. If the offer comes from an organization with an official sounding name, like National Science Federation, National Scholarship Foundation, or National Science Program, check whether there really is a federal agency with that name.
- Time pressure. If you must respond quickly, and will not hear about the results for several months, it might be a scam. A scholarship scam might say that grants are handed out in a first-come, first served basis and urge you to act quickly.
- Notification by phone. If you have won a scholarship, you will receive written notification by mail, not by phone. Even if the sponsor calls to congratulate you, they will follow up with a letter in the mail. If the phone call asks you for money, hang up.
- High success rates. Overstated claims of effectiveness are a good tip-off to a scam. For example, less than one percent of users of scholarship search services actually win an award. If the service claims a 96 percent success rate, they are probably counting the number of clients who were successfully matched to awards in their databases, not the number of clients who received money. If something sounds too good to be true, it probably is.
- Excessive hype. Scams try to get you so excited that you will ignore your natural sense for caution. If the brochure or advertisement uses a lot of hyperbole (e.g., "free money," "win your fair share," and "everybody is eligible") or mentions the "$6.6 billion in unused scholarships," be careful.