How To Spot a Scholarship Scam?

Recently a student of mine fell for a scholarship scam, paying someone to help her find "secret" scholarship money. Students and parents, with the best of intentions, often find themselves victims to someone who promises "free" college scholarships for a fee (and rarely delivers the actual scholarship).

Below, I list several "Warning Signs" that it might be a scholarship scam. Please take time to read this, to educate yourself and friends and family. I also recommend reading my posts on FREE college search options, the benefits of merit aid scholarships and my book recommendations for Best ACT Prep and Best SAT Prep.

Warning Signs of a Scholarship Scam

Sign #1: You have to pay a fee to someone to access the college scholarship

Some of these operators make it seem like there is millions of dollars out there for college that no one knows about and is virtually impossible to find EXCEPT if you sign up for a specialized college search for a fee, typically anywhere from $199-499. Sometimes students and their families are sometimes invited to attend a "free" workshop on college scholarships only to find themselves held hostage to a "hard sell". Two words: Walk away! And notify your high school college counselor about the scam.

 Sign #2: You must give away credit card or bank account information as a requirement to access the college scholarship listings

Not only should you NEVER pay a fee to find out about college scholarships, but you should also NEVER give away personal information, such as credit card and bank account numbers, Social Security number, or any personal information, including e-mail address. Be especially aware of a potential "pharming" scholarship scam, in which you receive unsolicited e-mails (or regular mail and phone calls) that encourage you to visit a website, click on suspicious links, or send personal information (especially to a PO Box). To protect yourself, keep you inbox spam filters up to date.

Sign #3: You are offered a "money-back" guarantee, which is a ploy to get you to sign on

The problem with "money-back" guarantees is guaranteed by whom? Anyone can put those words on a website, but does that mean the offer will stand when you contact them, if you can even find a way to contact them. Most of these operations, after a certain period of time, just shut down, so when someone asks for the "money-back" guarantee, there is no one around to process the complaint. To protect yourself from a college scholarship scam, visit the Better Business Bureau (BBB) at or call 703-276-0100 and remember do this BEFORE you sign up with anyone!

Sign #4: You are promised something "too good to be true". Guess what. It probably is a scam.

We all want to believe in miracles. Wouldn't it be great if there was some "secret" pile of money that could be used to pay for college that no one knows about? Yes, that would be nice, but not realistic. But those who operate these scholarship scams knows that everyone fantasizes along those lines and engage in "magical thinking", which is why we are targets for these scams! If it doesn't pass the "smell" test, walk away.

Okay, so what do I do now?

The good news is that there are plenty of REALLY good and FREE college scholarship search options and great books, like Gene Tanabe's The Ultimate Scholarship Book, but you need to do the footwork (no one else will do this for you). Many colleges will also award merit aid (in the form of tuition reduction) to students based on GPA and test scores (this is where the "big" money is). 

Invest in Test Prep. It Pays Your Back.

One "secret" that any parents do not know is the impact of test scores on merit aid scholarships. Some parents think it is crazy to invest $1500+ (and some $4000+) in test preparation, but if a student can raise her ACT score from 26 to 31, for example, the parents might save $60,000+ in tuition payments over the four years. You don't have to be an ACT tutor to know that the math the return on that investment is GREAT. For a list of colleges that offer merit aid scholarships, click here.

But before you invest tons of money into test preparation, read my book recommendations for Best Books for ACT and Best Books for SAT, which can help students who want to try self-study first. Yes, I get it. Not everyone has $1500 in the budget to hire a tutor, let alone a good one (again, make sure you get solid recommendations before spending money on a tutor). 

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Several times each week, I post articles and test taking tips about the SAT and ACT tests as well as college admissions. These blog entries are a great way to keep current with what is happening in high school test prep and college admissions. So please bookmark this page (or subscribe to my RSS feed) and let your friends and family know about!