How to Avoid Scams when Searching for Scholarships

Tuition and fees can add up to well over $30,000 at some universities. Many parents hope their children can secure a scholarship so that they can further their education without exhausting the family’s savings.

With scholarship dollars often hard to come by, and parents anxious to get them, it’s no surprise that “scholarship fraud” is on the rise. In fact, people taken in by scholarship scams lose a total of $100 million annually, according to the college planning site The good news, according to the California Society of CPAs (, is that there are steps you can take to avoid becoming a victim.


Generally, you should not have to pay an application fee to qualify for a college scholarship or an education loan. Sometimes parents are taken in by non-existent scholarships that require a fee to apply. Parents pay the fees, then later simply assume that their child did not qualify.

The Federal Trade Commission, which has studied scholarship scams, does advise that some legitimate companies may charge fees to search for scholarship information. If fees are required, find out in advance what they cover and when and if refunds are available. Get this information in writing before handing over any money, even a small amount.

Be wary of programs that request fees claiming to “handle all the paperwork for you.” Legitimate scholarships generally require the student or parents to file the application, so this claim is a red flag that the offer could be a scam.


If you have doubts about any scholarship or funding program, consult your child’s high school guidance counselor or another financial aid expert to get some feedback. In some cases, even a legitimate scholarship advisory group may offer to sell parents information about funding opportunities, but experts in the field may be able to guide you to the same information for free.


Legitimate scholarship programs do not guarantee that anyone will qualify for any of their offerings. If a group does promise that you will receive funds, it’s very likely that the organization is not trustworthy. Be wary, too, if there is a lot of hype surrounding the scholarship or if you are pressed to apply immediately in order to qualify.


A legitimate scholarship program should not require you to share your credit card or bank account number or other financial information. Scam artists, on the other hand, may tell you they need your personal data to confirm that you’re eligible. They can then use this information to help themselves to funds from your bank account, run up bills on your credit card or commit identity theft.


Web sites such as and offer information you can use to learn more about securing the education funds you need without falling victim to a scholarship scam. In addition, your local CPA can offer expert advice on the best ways to pay for those high college tuition payments. Whether you have young children and want to begin planning early or you are looking for ways to cover a teenager’s looming tuition costs, a CPA can help. Consult him or her with questions on any of your family’s financial issues.

To listen to podcasts with more financial tips, go to