Scam Alert
How to Avoid Scholarship Scams
Read the following tips on how to avoid common scams:
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No processing fee is required to obtain Title IV grants from the Department of Education (ED).
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A student should never provide bank account or credit card information over the phone unless he or she initiated the call and trust the company he or she is calling.
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A legitimate organization only needs information such as hobbies, past grades or other demographic information.
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Search firms cannot "guarantee" scholarships or complete the application process.
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Although a business may say millions of dollars go unclaimed each year, most of the unclaimed dollars are employer-paid benefits that are unavailable to many students.
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For information about preventing financial aid scams, visit www.studentaid.ed.gov/lsa.
Free Information
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For free, reliable information regarding the financial aid search process, contact a high school counselor or financial aid office at a local college, university or career technology school. Financial aid seminars may also be sponsored at a nearby high school or higher education institution.
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Immediately contact your bank, explain the situation and request that the bank monitor or close the compromised account.
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If you think you've already been scammed by a financial aid search firm, report the fraud to the Federal Trade Commission (FTC). The FTC has an online complaint form at www.ftc.gov and a hotline at 877.FTC.HELP (877.382.4357 or 866.653.4261 for the hearing impaired).
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The FTC will investigate if the fraud is deemed widespread. Therefore, it is important that every student contacted by the person or people in question lodge a complaint so the FTC has an accurate idea of how many incidents have occurred.
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Provide detailed information about the incident, including what was said, the name of the person who called and from what number the call originated (if the student was able to obtain it via Caller ID).
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If unauthorized debits have already appeared against the student’s bank account, the student should mention this fact in his or her complaint. Records of such debits could be useful in locating the wrongdoer.
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- Report the fraud to ED’s Office of Inspector General hotline at 800.MIS.USED (800.647.8733) or oig.hotline@ed.gov. Special agents in the Office of Inspector General investigate fraud involving federal education dollars.
Online Resources About Avoiding Scholarship Scams and Identity Theft
Looking for Student Aid (opens in a new window)
Federal Trade Commission (opens in a new window)
Federal Trade Commission - Scholarship Scams (opens in a new window)
Office of Inspector General - MISUSED
(opens in a new window)
