Several thousand students and parents fall prey to the cleverly plotted scholarship scams. These operations often disguise themselves to be government agencies or grant foundations / lenders, using names such as ‘Federal’, ‘National’ or ‘Foundation’. Are they asking you to pay for a scholarship, beware!! It could be a scam.

Types of Scams:

Every fraudster finds a new way to fool people around and the result is that, people become victims of innovative frauds. The list is unlimited and so is the fraudsters’ innovation.

• You pay for the scholarship and get no reply. The victims end up thinking that they were not selected for the program, while the fraudsters would have escaped.
• Scholarships for profit. They charge you an application fee of say $5 to $40. After having bagged about 5,000 to 10,000 applications, they end up paying scholarship of $1,000 for random applications and still make huge profits.
• Certain scholarships are offered at a very low rate of interest, they charge fee for providing such scholarships and later abscond with the money.
• Messages claiming that you have won scholarship prizes collect money towards redemption fee. Be suspicious if you have not entered any such contest.
• Scholarship search services are offered by many websites wherein, they guarantee scholarship matching service or refund the fee collected if they found no match. All they do is simply collect the money and run away.
• Requiring you to make an investment towards insurance or a brokerage fee for a Federal Scholarship is definitely a scam as there is no such requirement what so ever.
• The idea of conducting a free seminar providing scholarship details is basically to find customers for other investments like financial products and matching services.

Students Beware:

Any propaganda about scholarship which seems too good to believe, excessively hyped, requests for unusual personal information, contains pronouncements of high success rates in procuring scholarships, charges money in the name of application, processing or redemption fee, kindly understand, they are scams plotted to make illegal gains.

Scholarship Fraud Prevention Act 2000:

The College Scholarship Fraud Prevention Act 2000 aims at protecting against such fraud by increasing penalties for fraudsters, removing any bankruptcy loop holes to stop the illegal trade and enabling Department of Education to publish details about scams.