The Better Business Bureau is warning students and their families to be alert to scholarship and financial aid scams that often promise money in exchange for upfront fees but ultimately deliver nothing.
These scams are commonly aimed at students who are still searching for ways to fund their college education.
According to the BBB, many schemes falsely offer scholarships, grants, or student loan forgiveness to exploit those in financial need.
In one version of the scam, fraudsters pose as representatives from government agencies, universities, or nonprofits, using words like “National” and “Federal” to sound official.
Victims are told they’ve received a scholarship or grant, often without applying, and are then asked to pay a one-time “processing fee.”
Another variation involves pressure to apply for a “guaranteed” scholarship or grant that also requires a fee.
Once the fee is paid, the money never arrives. When the victim attempts to seek a refund, they find the company has imposed conditions that make it nearly impossible to get the money back.
Some scammers go further by sending a fake scholarship check with instructions to return payment for taxes or fees.
By the time the check is discovered to be fraudulent, the victim’s money is already gone.
To help avoid these scams, the BBB offers the following advice:
- Be cautious of unsolicited offers and verify the source through an independent channel.
- Applying for scholarships is generally free; any required fee is a red flag.
- Start your search early to avoid rushed decisions.
- Ask detailed questions and walk away if you receive vague or evasive responses.
- Use trusted sources like school guidance counselors or college financial aid offices.
- Understand that a check can still bounce weeks after it appears to have cleared; the account holder is responsible for any resulting overdrafts.
The BBB recommends that families take the time to research and verify any scholarship or financial aid opportunity before providing money or personal information.
