Sketchy Scholarships & Scams: How to Spot Them

Paying for college is a challenge for many families, and scholarships are a great way to make it more affordable. However, the increased demand for scholarships has also attracted scammers looking to take advantage of hopeful students. 

These scholarship scams or “sketchy scholarships” often promise “easy” money in exchange for a fee or personal information, leaving families without the aid they sought and sometimes in financial trouble or with an identity theft risk. Here’s a guide on recognizing, avoiding, and reporting scholarship scams to protect your family’s future.

Common scholarship scams

Anyone can fall victim to scholarship scams, but that shouldn't stop you from searching for financial aid. If you know what to do and what to avoid when considering a scholarship offer, you'll be able to find legitimate scholarships. 

Avoid these common scam scenarios:

“Guaranteed or your money back”

Scammers may advertise scholarships with “guaranteed” acceptance, often with the assurance that no GPA or test scores are required. Scholarships are competitive by nature; no organization can truly “guarantee” you will win.

“It will only cost…”

Many scams require a payment to “process” an application or access an exclusive scholarship list. Legitimate scholarships do not require payment to apply. Any attempt to charge you for information or to charge you to "hold" the scholarship is a scam.

“You’ve been selected”

These are just the words you want to hear — when you've applied for a scholarship and won. If a scholarship organization contacts you out of the blue with a winning offer, it could be a scam. Typically, the company just wants to collect your personal information or get money from you. True scholarship providers usually require you to apply before reaching out with an award notification.

“Act now!”

Scammers may claim that an offer is only available for a limited time, pressuring students to pay quickly. Real scholarship opportunities have deadlines, but they don’t require you to “pay now” to keep your place. Companies who want you to "act now" are typically trying to get your financial information.

“We’ll do all the work for you”

Beware of these claims. My daughter’s email was inundated with these types of offers, and I admit we were tempted to accept them. Searching for and applying to scholarships requires an extensive time commitment. However, these scholarship help offers can only provide you with a list of potential scholarships to apply for. You must fill out and submit all your own applications. Companies who claim to "do all the work for you" are just trying to scam you.

“We have exclusive access”

All information about scholarships can be freely found online. Anyone who claims to have access to a secret database is lying and likely trying to charge you money for the "exclusive" information. After paying them for the access, you may discover that you are provided with bogus information, or they have taken your money and disappeared.

“Simply attend our scholarship seminar”

This will be an information session promising results in which representatives pressure you into buying some product, such as a scholarship search service or a scholarship resume formatting service. These sessions include high-pressure sales tactics, and leaving without buying anything can be very uncomfortable. If someone invites you to one of these seminars, don't go.

Red flags to watch out for

The best way to safeguard yourself against scholarship scams is to remain vigilant. During a valid college scholarship application, you will be asked to provide various information about yourself, including standardized test scores, letters of recommendation, transcripts, interviewing acumen, and video documentation of you and/or your talents. But there are red flags to watch out for.

Vague or no contact information

Genuine scholarships often list a specific organization, foundation, or school as the provider. If there’s no clear way to research the organization’s credentials, that’s a red flag.

Requests for sensitive information

It’s not sketchy for a scholarship to ask for your address. But be wary of scholarship applications that ask for sensitive details, such as your Social Security Number, bank account numbers, or passwords. Scholarship providers don’t need this information to assess eligibility.

Unclear eligibility criteria

Most legitimate scholarships have specific eligibility requirements, such as GPA minimums, majors, or location restrictions. Be cautious if a scholarship claims everyone is eligible without needing specific information.

Offers from fake or scammy organizations

Apply for scholarship opportunities from legitimate companies or reputable organizations— the FTC and Better Business Bureau can help identify whether a scholarship provider is legitimate or a scam.

What to do if you’ve been targeted

Despite your best efforts, you may still encounter a scholarship scam while searching for college aid. If you do run into a scam, or what you suspect to be a scam, there are several agencies to which you can report the company:

• Federal Trade Commission
• Your state attorney general's office
• Better Business Bureau
• Your state bureau of consumer protection
• National Fraud Information Center

If you are unsure whether you have encountered a scholarship scam or should report it, talk with your school's financial aid counselor, guidance counselor, or academic advisor for advice.

You can read more about scholarship scams on the following pages: the Federal Trade Commission (FTC)'s "Scholarship and Financial Aid Scams," the College Board's "How to Spot Scholarship Scams," and the Better Business Bureau (BBB)'s "Avoiding Scholarship Scams."

Legitimate alternatives for finding scholarships

The good thing is that finding legit scholarships is quite easy. You can search for scholarships using criteria such as academics, religious affiliation, race, gender, and so on to help you find a scholarship for which you may be eligible. 

Try these trusted sources:

School counselors

Your school counselor is a valuable resource for local scholarships that may not appear online. They have firsthand knowledge of legitimate opportunities that match your needs.

Community organizations

Many local groups and churches offer scholarships, and they are often smaller and less competitive than national scholarships.

College and university financial aid offices

Reach out to the financial aid offices of the colleges you are applying to. Many schools have their own scholarship programs or can direct you to reputable sources.

Reputable search sites 

One of the best ways to avoid scholarship scams is to search through vetted scholarship lists. Appily's scholarship search engine allows you to search our database of opportunities tailored to your situation. 

How to know if a scholarship is legit

Taking a few precautionary steps can help you avoid falling victim to fraudulent offers. Here’s how you can identify a legitimate scholarship:

Check the source and contact information

• Research the organization or institution offering the scholarship to confirm its legitimacy.
• Verify the scholarship provider’s website and contact details. A professional website, an official email domain, and a customer service line are indicators of legitimacy. Be cautious if they use free email services like Gmail or Yahoo.

Read the terms and conditions thoroughly

• Legitimate scholarships clearly outline eligibility requirements, application deadlines, and how funds will be awarded.
• Avoid scholarships with vague or missing details, as this may indicate a scam.

Search for reviews or reports

• Look for testimonials or reviews about the scholarship from past recipients or trusted sources.
• Ensure the scholarship is mentioned on reputable scholarship databases or educational platforms.

Don't give up on your scholarship search

Many families believe that scholarships are a scam. They apply and apply and never win any money. They see promises of massive awards and wonder if winning a scholarship is even possible.

But scholarships can open doors to higher education if you know where to look, how to apply, and what to avoid. By recognizing the red flags and knowing the right places to find scholarships, you can help ensure that your family’s search for college funding stays safe and fruitful.

Remember, any offer that seems too good to be true probably is. Stick with reputable sources, avoid paying any fees, and always verify before you apply. With a careful approach, you’ll be well on your way to finding legitimate scholarship opportunities.

Search Appily's scholarships database

Now that you know what to look out for, it's time to get busy finding that free money for college. Appily's scholarship database is where you should start. We have millions of dollars worth of scholarships you can apply for to help bring down the cost of college, and they've all been vetted, so they're legit and scam-free.

Click the button below to create a free account and get personalized scholarship matches today! You'll automatically be entered for the Appily $1,000 Easy Money Scholarship, which is awarded monthly.