Watch Out for Scholarship Scammers Who Promote Exclusive Access or Expertise for a Small Fee

Many people get taken advantage of while trying to avoid student loans with scam scholarships

August 8, 2025

With average published college tuition rising more than twice the rate of inflation over the past two decades, students and families are hunting every source of grant money to shrink their loan bills. Scammers exploit the demand by pitching paid services for “exclusive” scholarship lists or guaranteed awards. In reality legitimate scholarships are freely listed on federal, state and nonprofit websites. Paying for access or application help often nets nothing and can even expose you to identity theft.

How Scholarship Scams Work

Scam operators reach out via email, social media ads, text message or direct mail claiming insider knowledge of high value awards. They may promise to complete applications on your behalf or guarantee you an award if you pay a processing fee of $50 to $200. Some pose as official state or college representatives while others register lookalike domains that mimic well known scholarship platforms. Their goal is to collect fees or harvest personal data such as your Social Security number and FAFSA credentials.

Red Flags to Watch For

Any scholarship that requires you to pay an application or processing fee
Offers that claim your acceptance is guaranteed or your money back
Requests for sensitive information such as your FAFSA login or full Social Security number before eligibility is confirmed
High pressure tactics urging you to act immediately to secure “limited time” awards
Emails or websites with poor grammar, misspellings or unofficial domain names

Finding Legitimate Scholarships

Free scholarship databases hosted by the U.S. Department of Education at StudentAid.gov, the College Board’s Scholarship Search and the nonprofit Scholarship America list hundreds of thousands of awards without charge. North Carolina students can also explore the NC State Education Assistance Authority programs and the North Carolina Community Foundation’s scholarship listings at no cost. Always start with official .gov or .org domains.

Protecting Your Personal Information

Never share sensitive data before confirming a sponsor’s identity. Legitimate programs request only basic information such as name, school and major. If a site asks for your tax returns, bank account details or full Social Security number, close the browser and report it. Use a password manager and unique passwords for scholarship sites and create a separate email address to track scholarship correspondence without exposing your primary inbox.

Avoiding FAFSA and College Application Scams

The Free Application for Federal Student Aid is always free at FAFSA.gov. Any service that charges you to submit your FAFSA or offers to speed processing is fraudulent. Colleges also will never charge separate fees to apply for scholarships they administer. Always verify application portals on your institution’s official website before entering personal data.

What to Do if You Suspect a Scam

Stop all contact and do not pay any fees
Report the site or individual to the Federal Trade Commission at reportfraud.ftc.gov
Notify the North Carolina Attorney General’s Consumer Protection Division at (919) 814-5400 or via the AG’s online portal
Report phishing emails to your institution’s IT or financial aid office so they can warn other students
Monitor your credit reports and consider a free freeze with the three major credit bureaus if you shared financial data

Tips for Maximizing Legitimate Scholarship Success

Start early and apply widely, thousands of small awards go unclaimed each year
Use school guidance counselors and college financial aid officers for free application help
Tailor essays to each scholarship’s criteria and proofread carefully to avoid simple mistakes
Keep a calendar of deadlines and submit applications at least one week early
Follow scholarship sponsors on social media or subscribe to their newsletters for updates on deadlines and new awards

By relying on free official resources, guarding your data and applying strategically to hundreds of opportunities, you can build a scholarship portfolio without risking money or privacy. When in doubt, ask a trusted school official or family member before handing over a dime or your FAFSA credentials.