Most scholarship scams come down to one thing: someone wants money or personal information from you before you get any money. Real scholarships do not charge you to apply, cannot guarantee you will win, and never need your bank account number to “hold” an award. Learn to spot those signs and you will avoid most of the scholarship scams that target students and parents, especially during FAFSA season.
How scholarship scams work
The Federal Trade Commission describes the pattern in its guide to avoiding scholarship and financial aid scams. A company contacts you, or runs an ad, offering to find you scholarships, “guarantee” an award, or fill out your federal aid application. It charges a fee up front. Then the help either never arrives or turns out to be a list of public information you could have found free.
Some versions are more aggressive. A letter or email says you have been chosen for a scholarship you never applied for, then asks for a “processing” or “disbursement” fee. Others ask for a card or bank number to “reserve” the award. The goal in every case is the same: get paid before you notice nothing is coming.
Why do these work? Because the real system is confusing, deadlines feel urgent, and families are worried about cost. Scammers sell certainty in a process that has none.
The phrases the FTC says to watch for
The FTC lists specific lines that scammers use. If you hear any of these, stop and check before you pay or share anything:
- “The scholarship is guaranteed or your money back.”
- “You can’t get this information anywhere else.”
- “I just need your credit card or bank account number to hold this scholarship.”
- “We’ll do all the work. You just pay a processing fee.”
- “The scholarship will cost some money.”
- “You’re a finalist” in a contest you never entered.
None of these is how a legitimate sponsor behaves. A sponsor wants your application, your transcript, maybe an essay. It does not want your money.
Red-flag checklist for scholarship scams
Use this table when an offer arrives by mail, email, text, a social post or a “free seminar.” Each warning sign comes from the FTC’s guidance.
| Warning sign | Why it matters | What to do instead |
|---|---|---|
| Any fee to apply for a scholarship | Legitimate sponsors do not charge to apply | Walk away; search free sources |
| A “guaranteed” award | No one can guarantee you win a competitive award | Treat the guarantee itself as the red flag |
| Unsolicited “you’ve been selected” letter or message | You cannot win something you did not apply for | Do not reply with any personal details |
| Request for a card or bank number to “hold” an award | Real awards are paid to your school or to you after you win, not reserved by card | Never share account numbers |
| Pressure to pay today or lose the offer | Urgency stops you from checking | Take a day and ask your counselor |
| A fee to fill out or “process” the FAFSA | The FAFSA is free to complete yourself | File it yourself at StudentAid.gov |
| A request for your FSA ID | The FTC says to keep it private, even from helpers | Keep it private from everyone, including consultants |
| A refund policy with conditions that make it nearly impossible to collect | The “money back” promise is never honored | Get total costs and the refund policy in writing |
| Vague answers to direct questions about cost | Hidden fees | Do not sign or pay |
Never pay to apply, and never pay for the FAFSA
The FTC’s advice is plain: complete the FAFSA yourself because it is free, never pay anyone to fill out or process it, and do not pay to apply for scholarships. Legitimate sources do not guarantee awards.
Paid “FAFSA services” are a common trap in the fall. The 2027-28 FAFSA is the form for school starting in fall 2027, and you file it on the official federal site, StudentAid.gov. If you want help, ask your high school counselor or the financial aid office at a college you are considering. Many run free FAFSA help sessions. Our step-by-step FAFSA guide walks through each section too.
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Your FSA ID deserves special care. It is the login you use with the federal student aid system. The FTC says to keep it private, even from consultants or companies that offer to help. A real helper can sit beside you while you type it; they never need to hold it.
Paid help is not always a scam, but check first
Not every paid service is fraud. Some private counselors charge for real work. The problem is that you can usually get the same help free. Before you pay anyone, the FTC suggests you:
- Ask your school counselor or a college financial aid office about free options first.
- Search the company’s name with words like “complaint” and “scam.”
- At a seminar, do not pay on the spot. Ask for the names of at least three local families who used the service in the past year, and contact them.
- Get the total cost and the refund policy in writing before you sign.
If a seller resists any of these steps, that tells you what you need to know.
Where to look for real scholarships instead
The safest places to search cost nothing. Start with your school counselor, who often keeps a list of local awards. Check your local community foundation and your state’s higher education agency. Read the sponsor’s own website for any award you find, and apply there directly.
For a national search, the US Department of Labor’s CareerOneStop Scholarship Finder is free and government-run. You can also use our own free scholarship finder. Our guides on how to find scholarships and local scholarships explain how to filter for awards you can realistically win.
One quick test for any award: can you find the sponsor’s own site, a named organization behind it, and clear eligibility rules? If the only place the “scholarship” exists is in a message asking you for a fee, it is not a scholarship.
How to report a scholarship scam
If you spot a scam, or you already paid one, report it. Reports help regulators track patterns and build cases.
- The FTC: file a report at ReportFraud.ftc.gov.
- Your state attorney general: the FTC points readers to the National Association of Attorneys General’s directory for filing a consumer complaint with your state.
- Federal Student Aid: if someone used or asked for your FSA ID, or claims to be from the Department of Education, use the scam and fraud contacts on StudentAid.gov.
If you already paid
Act quickly. The FTC notes that scammers favor payment methods that are hard to reverse, so the sooner you move, the better your chance of getting money back. Contact the company you used to pay, such as your card issuer or bank, and ask about reversing the charge. Change your FSA ID password if you shared it. Then file your FTC report.
Keep copies of every email, receipt, letter and text. Those records are what your bank and the FTC will ask for first, so save them before you delete anything.
Sources
- Federal Trade Commission, How To Avoid Scholarship and Financial Aid Scams
- Federal Trade Commission, ReportFraud.ftc.gov
- National Association of Attorneys General, File a Consumer Complaint
- Federal Student Aid, US Department of Education, StudentAid.gov
- US Department of Labor, CareerOneStop, Scholarship Finder