THE BLOG
08/25/2013 06:34 pm ET | Updated Oct 25, 2013

College Scholarship Scams: 5 Questions You Should Ask

You don't have to search very far to get tips and strategies for getting college scholarship money these days. But how often do you hear about the seedy underworld of scholarships?

Fact is, the number of scholarship scams and frauds have picked up considerably over the last decade.

And, like so many other scams, the tactics used have taken on all new levels of deception.

So, to protect yourself, here are some vital questions to ask, should you come across scholarship opportunities online or in the mail.

1. Is the scholarship company making "too good to be true" claims?

Some scholarships go as far as to claim they're sponsored by the Better Business Bureau, government agencies, or specific colleges or universities.

In fact, we've seen many fraudulent scholarship companies use names designed to trick families into believing they're federal agencies and organizations. (A common tactic is using a Washington, D.C. address to "appear" official and gain people's trust.)

Use great caution here, because no government agency endorses or sponsors any private organization.

In short, the bigger the claim, the faster you should turn away. But if you do think the scholarship is legitimate, by all means investigate their claims.

2. How long has the company been around? Does the company have proof of past winners it will share with you?

Most scholarships have been around for some time, and if they're legitimate, they'll answer your questions and provide records assuring their legitimacy. (Note: Not all "new" scholarships are frauds, but you should always ask new companies for references, and get as much factual information up front as possible.)

3. Is the Company Offering "Unclaimed Scholarship Money?"

This tactic involves the scam artist marketing some huge amount of money -- often in the millions or billions -- that went "unclaimed" the previous year.

Do not fall for this! Truth is, there's not a single legitimate scholarship search that has ever published a list of unclaimed scholarships.

4. Do You See Bogus Applicaton Fees in the Fine Print?

Some companies will ask for "application" or "processing" fees, often citing very convincing reasons for doing so. The reality is that true loan and scholarship resources will never ask for money up front.

Bottom line: You should never pay a fee to apply for a scholarship.

5. Is the Company Making a "First Come, First Served" Pitch?

This approach baits families into believing they'll increase their chances of scholarship money if they're among the "first in." This couldn't be any further from reality. Most times, it's a trick designed to get people to act quickly and impulsively. Legitimate scholarships simply don't give preferential treatment on a first-come, first-served basis.

In conclusion, think about that old saying, "If it seems too good to be true, it probably is."

Never be afraid to ask questions, get claims in writing, and do your research.

Co-Founder, College Planning Network LLC

Publisher, CollegeMadeSimple.com -- The free educational resource of College Planning Network

Scott Weingold is the publisher of CollegeMadeSimple.com and also co-founder and a principal of College Planning Network, LLC - the nation's largest college admissions and financial aid planning firm. Scott has been ranked the #1 "College Financial Aid Expert Worth Knowing About" in the U.S. by CollegeStats.org, and he co-authored the book, "The Real Secret To Paying For College"

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