Look for these red flags to avoid scholarship scamsAs the cost of college tuition continues to skyrocket, students and families are eager to seek relief, and one of the ways they do so is through scholarships. Unfortunately, scammers know this and have for years set their eyes on the market for scholarships. The complexity of the scholarship system, as well as the genuine desperation for money, allows for scammers to thrive. Here’s what you need to know to identify and avoid falling for a scholarship scam this season as you and your student navigate the application system.

When searching for scholarships …

The biggest piece of advice you should keep in mind when you begin searching for scholarships to apply for is to only apply for scholarships offered by reputable organizations. The term “reputable organization” can seem subjective, but there are several key signs that indicate you might not be dealing with, at the very least, a professional organization that you can expect to competently deliver financial support. These indicators include:

1. Clear eligibility requirements. Nearly all scholarships have some basic requirements. It’s very rare, for example, that you find scholarships that are open to everyone without specifying some basic criteria for eligibility. Additionally, this information should be clear, concise and transparently provided to all applicants in some fashion, either on an official website or through written communications.

2. Direct, written communications. Reputable organizations typically avoid keeping applicants in the dark by providing written communications (usually with a letterhead, if sent by mail, or from an official email address if emailed) throughout every phase of the process.

3. An established history of charity/providing scholarships. In most cases, legitimate scholarships are offered by organizations that have an established history of giving scholarships or community involvement in some fashion. However, regardless of how extensive an organization’s scholarship-giving history is, this information should be transparently visible on the origination’s website. You should take some time to research the history of any organization you don’t know before applying for a scholarship through it.

The best way to find reputable organizations offering scholarships is by using established sites like Fastweb, CollegeBoard, Chegg and Scholarships.com. A student’s intended college(s) or their high school counselor may have resources to search for scholarships as well. Finally, organizations in your own community might offer scholarships, especially for students that they’ve worked with over an extended period of time. These organizations can include churches, sports teams, places of employment or any other entities providing programs and extracurricular activities to students. Consider leveraging networks at these local groups and institutions to see if they know of any scholarship opportunities, internally or otherwise, for your student to look into.

When filling out a scholarship application …

As with most scams, there are typically a few red flags that will pop up to indicate that you might be dealing with a fraud. These are the things you’ll want to keep an eye out for when filling out any scholarship applications.

1. If it seems too good to be true, it probably is. As we stated above, nearly every scholarship has some sort of eligibility requirement and a strict application process, so if you find one that’s inconsistent about eligibility conditions, you’ll want to be on alert. Similarly, if you get contacted out of the blue by an organization that offers you a scholarship with very little action on your part or which guarantees that it’ll help you find you one, you are safe to assume it’s a scam. The same goes for scholarship opportunities you receive by email or find online, especially if they aren’t listed on a reputable website.

2. Legitimate scholarships don’t ask for sensitive information. While most scholarship applications will collect some personal information about the applicant, there’s a limit to the kind of details you should be asked to provide. If you’re looking at an application that requests things like bank account info, social security numbers or other information that you don’t feel comfortable providing, it’s highly likely fraudulent.

3. Avoid application fees. Parents and students should be aware that no legitimate scholarship charges you a fee to apply, even a small one. Any attempts to collect application fees on the part of an organization offering a scholarship mean it is likely a cash grab, not an act of altruism. As such, you’ll want to avoid these at all costs.

What should you do if you run into a scholarship scam?

If you find scholarships like these, regardless of whether you fall victim to them or not, you should contact the FTC and report them so that the offending scammers can be put out of commission. Remember to also file an identity theft report if the fraudsters were able to solicit personal information from you or one of your family members through their bogus application process. You might also want to consider using identity theft protection or monitoring public records information for signs identity abuse. Remember that being underage doesn’t prevent your student from becoming a victim of identity theft, so it’s vital to protect and monitor their information as well.

Fraudsters will stop at nothing to find new victims, which is why people need to be vigilant in all aspects of your life. Keep reading our scams blog to learn the skills and tips that can help you stay safe.