Financial Matters: Scholarship Scams Targeting Families
As the cost of college continues to rise, it’s understandable that families are eager to find financial aid opportunities. Unfortunately, scammers know this too, and every year, they take advantage of well-meaning parents and students, costing families millions of dollars in lost money and stolen information.
You may receive official-looking letters or emails claiming to “guarantee scholarships or your money back,” or inviting you to a “free financial aid seminar.” These offers often appear legitimate, but many are designed to pressure families into paying for services that provide little to no value, or worse, lead to identity theft. Phrases like “act now – this offer won’t last,” “you’ve been selected,” or “exclusive opportunity just for you” are often red flags that the offer is too good to be true.
One common tactic is the claim that “millions of dollars in scholarships go unclaimed every year.” While this sounds promising, most of that money is reserved for very specific groups, such as the children of company employees or members of certain organizations. It’s not generally available to the public, and reputable scholarship programs never require families to pay upfront fees just to apply or receive awards.
Additionally, some services begin with what appears to be a free seminar but quickly shift into high-pressure sales tactics, urging families to sign costly contracts on the spot. While some companies do charge fees, they should always be transparent about their pricing, never make promises about guaranteed scholarships, and certainly never pressure you to make immediate decisions.
Another tactic to watch out for is any message claiming your child has won a scholarship they never applied for, especially if you’re asked to pay a processing fee or provide personal banking information. No legitimate scholarship program will ever ask for payment to release an award. It’s also wise to be cautious of websites or organizations that aren’t affiliated with a recognized institution—resources that end in .gov or .edu are generally more trustworthy.
If you’re ever unsure whether a scholarship opportunity is legitimate, talk with your child’s school counselor or college advisor. They can help you evaluate the offer. You can also report suspicious activity to the Federal Trade Commission by calling 877-FTC-HELP. Additionally, the U.S. Department of Education has a hotline for reporting fraud at 1-800-MIS-USED (1-800-647-8733), or you can file a report at the OIG Hotline.
Despite the scams that exist, there are also many legitimate sources for scholarships. For example, Fastweb, College Board’s Big Future Scholarship Search, and Going Merry are great places to start looking for scholarships without spending a dime.
No organization can guarantee scholarship money, but with a cautious approach and the right tools, families can confidently avoid scams and focus on real opportunities.
