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Identifying Scholarship Scams
The following material has been taken from the internet site http://finaid.org. This is an excellent site with a wealth of information concerning scholarships, loans, and other financial aid information. Some warning signs that they have identified are as follows:
1. Application fees. Even if the fee is as low as $2-$5 (many of them are much higher), don’t believe claims that the fee is necessary to cover administrative expenses or to ensure that only serious candidates apply. Legitimate scholarship sponsors do not require an application fee.
2. Loan fees. If you have to pay a fee in advance of obtaining an educational loan, be careful. It might be called an “application fee”, “processing fee”, “origination fee”, etc., but if it must be paid in advance, it’s probably a scam. Legitimate educational loans deduct the origination and guarantee fees from the disbursement check. They never require an up-front fee when you submit the application.
3. Guaranteed winnings. No legitimate scholarship sponsor will guarantee that you’ll win an award.
4. Everybody is eligible. No scholarship sponsor hands out money to students simply for breathing.
5. We apply on your behalf. To win a scholarship, you must submit your own applications, write your own essays, and solicit your own letters of recommendation. There’s no way to avoid work.
6. High success rates. Overstated claims of effectiveness are a good tip-off to a scam. Less than 1% of users of fee-based scholarship matching services actually win an award.
7. 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. If they ask you for personal information to “confirm your eligibility” or “verify your identity”, hang up. They can use this information, in conjunction with your date of birth and the names of your parents, to commit identity theft as well as other kinds of fraud.
8. No telephone number. Most legitimate scholarship programs include a telephone number for inquiries with their application materials.
9. Mail drop for a return address. It is probably a scam if a mail drop box number or a residential address is used.
10. Claims of university, government, Chamber of Commerce or Better Business Bureau approval. None of these endorse or recommend private businesses. Be careful of names that are similar to a well-known private or government group. If a financial aid “seminar” is held in a local college classroom or meeting facility, don’t’ assume that it is university sanctioned. Call the school’s financial aid office to check it out.
11. Time pressure. If you must respond quickly and won’t hear about the results for several months, be careful. Scholarships are not handed out on a first come first serve basis.
12. A Florida or California address.A disproportionate number of scams seem to originate from Florida and California addresses.
13. Don’t respond to unsolicited offers.
14. Ask the organization how it got your name. If they got your name from a reputable source, verify it with the source. The College Board, for example, only releases its mailing lists to colleges, universities and carefully vetted nonprofit tax-exempt foundations. Scams often use carefully written scripts designed to elicit your SAT score or GPA and then feed it back to you later in the conversation to reassure you as to their legitimacy.
15. Trust your instincts. There are many other tip offs to danger that can also be found at http://finaid.org.
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