I would imagine that there are a huge number of different scholarship scams that the unsuspecting could become victims too.
Here are 6 of the more common ones –
SCHOLARSHIPS THAT NEVER MATERIALISE
Like those advanced fee email scams I am sure we all receive on a regular basis, many scholarship scams encourage you to send them the money up front whilst providing little, or nothing, in exchange.
Usually victims will just write off the expense, thinking that they simply didn’t win the scholarship.
SCHOLARSHIPS FOR PROFIT
This scam may look like a real scholarship program, however, it requires an application fee.
Scholarship scams such as this can often receive 5,000 to 10,000 applications and charges fees of $5 to $35 for each.
This allows them to pay out a $1,000 scholarship or two, making them look legitimate, and still pocket a hefty profit.
The chances of you winning such a scholarship from one of these scams are probably far less than your chances of winning the lottery!
THE ADVANCE FEE LOAN
In this scam you are offered an unusually low interest educational loan but with the caveat that you pay a fee before you receive it.
When you pay, the promised loan never materialises.
Real educational loans deduct the fees from the disbursement cheque.
They never require an up-front fee when you submit your application.
If the loan is not issued by a bank or other recognised lender, it is probably a scam.
Your local bank manager is probably well placed to advise on this.
THE SCHOLARSHIP PRIZE
This scam will inform you that you have won a college scholarship worth thousands of dollars.
However, there is a requirement that you pay a “disbursement” or “redemption” fee, or taxes, before they can release your prize.
If you discover that you have won a prize, yet don’t remember entering any contest or submitting an application, then be suspicious.
Be very suspicious.
THE GUARANTEED SCHOLARSHIP SEARCH SERVICE
There are some scholarship matching services that say they will guarantee that you will win a scholarship or they will refund your money.
Many of these simply pocket your money and disappear, or if they do send you a report of matching scholarships, you will find the list to be virtually worthless.
INVESTMENT REQUIRED FOR FEDERAL LOAN SERVICE
Some unscrupulous insurance companies and brokerage firms occasionally offer free financial aid seminars.
However, they turn out to be sales pitches for insurance, annuity and investment products.
If a sales pitch implies that purchasing such a product is a prerequisite to receiving federal student aid, it will be violating federal regulations and state insurance laws.