Scholarship scams can come in many forms. Some scams appear to be too good to be true that is why many people easily fall into its lair. There are ways to tell a scholarship scam.

Up-front fees. A rule of thumb here is that if you have to pay money in order to get a scam, then it may be a scam. Keep in mind that legitimate scholarships do not require an up-front fee in exchange for an award. There are scams that offer an educational loan with an unbelievably low interest, but require you to pay a fee before you can avail of the loan. Real educational loans do not require you to pay an up-front fee upon submission of the application and usually deduct default fees and origination from the disbursement check. Moreover, obtaining information about loans and information only usually require you to spend for postage stamps and nothing more.

Free Seminars. Companies offering free seminars on financial aid may constitute a scholarship scam as well. These may just be cleverly disguised as sales pitches for investment products, insurance as well as financial aid and scholarship matching services. Remember that if it requires you to purchase a product first before receiving, say, a federal scholarship, then it directly violates federal and state insurance regulations. Even if the seminar is held in an appropriate meeting facility or a college classroom, it does not always necessarily mean that it is already sanctioned by your school. You may want to contact your school’s financial assistance office to know whether the activity is approved or sponsored by your school.

Guaranteed Winnings. Organizations that offer you a guaranteed winning may also indicate a fraudulent scholarship. Keep in mind that legitimate scholarship sponsors do not apply this type of policy and neither scholarship matching services since they do not have control over the sponsors’ decisions.  Moreover, overstatements of high success rates and effectiveness are also usually a cover up for a scam. Even claims that say everyone is eligible should be treated with caution as well. Remember that all scholarship providers grant these awards to candidates based on merit, financial need or other criteria. Simply put, certain restrictions always apply to any available scholarship program.

Unclaimed aid claim. Claims of huge amounts of scholarship funds going unused annually because students do not know where and how to apply is simply not true. As a matter of fact, financial assistance programs are very competitive and there are no unclaimed scholarships either. Even if funds go unused, it is because these cannot be used anyway.

Membership and endorsement claims. Be cautious of organizations that claim approval by the government or other well-known organizations such as the Better Business Bureau, Chamber of Commerce or a university. Keep in mind that the US Chamber of Commerce, US Department of Education and the federal government do not recommend or endorse private entities. Look out for organizations that suggest they are a nonprofit or charitable organization even when they are not. Some organizations can get away with this because law enforcement lacks teeth. Know the company very well so you can be sure.

Unsolicited opportunities. Usually, scholarship providers will contact you if you inquire first. If you did not make an inquiry or have never heard of the organization, then you might be in for a scam. Also, notification is usually done in writing and not by telephone. Moreover, if the written notice is grammatically or typographically incorrect or has poor professional appearance, then you should take caution.

It’s always better to be safe than sorry. By knowing these warning signs, you can safeguard yourself from becoming a victim of a scholarship scam.