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Scam Alert: College Scholarship Seekers Beware

College students, parents and grandparents need to be aware of college scholarship websites that ask for upfront fees to apply. (Adobe stock)
College students, parents and grandparents need to be aware of college scholarship websites that ask for upfront fees to apply. (Adobe stock)
August 26, 2019

RICHMOND, Va. — It's back-to-school season, and parents and grandparents of college students need to take precautions against scholarship scams.

A new alert from AARP Virginia says scams offering scholarship money, financial aid or government grants are on the rise in the state and across the country. Martin Bailey, an anti-fraud representative from AARP Virginia, said one of the most common frauds is when a scammer offers a check for a scholarship, but then asks you to pay a fee.

"So the individual will cash, say, a $5,000 check and say, 'I have to give you back $1,000 for a processing fee.' So I'll write a certified check to you or a cashier's check, send it back to you. I'll keep $4,000,” Bailey said. “You'll never hear from the scammer again, but you will hear from the bank when the bank tells you that it was a fraudulent check."

Bailey said if you think you're a victim of this type of fraud, report it to the Federal Trade Commission, the Better Business Bureau or the AARP Fraud Watch Network.

Bailey said some scholarship frauds are just a front for identity theft. Scammers will say they have a scholarship available if you provide them with a Social Security number and other personal information.

With the cost of college rising, Bailey said another popular scam to look out for is high-pressure seminars on college scholarships that are just a way to bilk you for fake fees.

"They'll play on your emotions, and they'll have your parents there and they'll play on your parents' emotions, saying, 'Don't you want to provide Johnny with a scholarship to lock his future in?' What they want to do is get you not to think logically, and as soon as you do that, they've got you,” he said.

Bailey said solid opportunities are not sold through nerve-wracking tactics. According to a recent Federal Trade Commission study, in 2018 the agency received 725 consumer reports of scholarship and educational grant scams.

Disclosure: AARP Virginia contributes to our fund for reporting on Budget Policy & Priorities, Health Issues, Hunger/Food/Nutrition, Senior Issues. If you would like to help support news in the public interest, click here.
Diane Bernard, Public News Service - VA