Don't Get Hooked: 7 red flags that a college 'scholarship' offer is actually a scam

As high school seniors and their parents weigh those college options and acceptances, they might be excited, but they also could be vulnerable, especially if they're wondering how they'll be able to pay for it all.

The desire to go to college without racking up thousands of dollars in debt can make families easy prey for con artists touting financial aid schemes - especially scams that promise scholarship money. Just consider the case of one Charlotte mom, who helped her son complete the FAFSA, the federal application for financial aid.

Soon after completing this necessary form, her son got a call from an official sounding person in Washington D.C. who had her son’s name and last four digits of his social security number, according to the College Foundation of North Carolina. This scammer promised $14,000 worth of scholarships if the family sent a $200 deposit. The son sent the money, but after calling the number many times, the family realized they were scammed. They filed a police report, but it's unlikely they'll be able to recoup the money.

Timeka Ruffin, a regional representative for the College Foundation of North Carolina, said she often hears stories like these.

"It just keeps happening," Ruffin said.

As the cost of college grows out of reach for many families, it's no surprise. Most students - about 70 percent - will take out some kind of loan to pay for college, according to a recent study by Student Loan Report. Some will work while they pursue a higher education.

And many will also compete for scholarships. According to the report, it's worth a shot. About half of respondents in the survey said they won a scholarship that they'd applied for. The average totaled around $8,500. And those scholarships, along with grants, can add up to a lot of money. During the 2017-18 school year, 127,033 awards were made for more than $270 million in North Carolina, according to the State Education Assistance Authority.

But scholarship scams also are common, according to the Student Loan Report. About 50 percent of those surveyed said they had been asked to pay money before applying for a scholarship - a red flag that you're dealing with a fraudster. And, of those, 73 percent said they had actually paid money before applying for a scholarship.

Scammers often target victims through emails, snail mail and at events and programs for high school and college bound students.

"Any money through the colleges is free," Ruffin said. "You should never have to pay for anything like that. Any time somebody asks you for any type of money, it's more than likely going to be a scam."

So how can college students and their families tell the difference between an actual opportunity and a scam? Look for these seven misleading hooks, which the College Foundation along with the North Carolina Association of Student Financial Aid Administrators have pulled together in their new Don't Get Hooked campaign.

Claim: The scholarship is guaranteed or your money back.

Ruffin said it's just not true. No scholarship committee can guarantee that you'll win money for college. And no legitimate scholarship requires you to pay money.

Claim: You can't get this information anywhere else.

There are so many different places to find information about scholarships, Ruffin said.

She recommends online resources that include websites for CFNC, College Board and FAFSA and StudentAid.gov. College financial aid offices also provide support and information - even to prospective students.

Claim: We need your credit card or account information to hold your scholarship.

That's never the case, Ruffin said.

A legitimate scholarship is "not going to charge you to do it," she said.

Claim: We do all the work.

Nope. While they may be able to fill out a portion of an application, students will still have work cut out for them if it's not a scam.

"Students will still have to write essays for a lot of those scholarships," she said. "There are still a lot of other things to do."

Claim: The scholarship requires a small fee.

Again, no. A scholarship never includes a fee.

Claim: "You've been selected" or "You're a finalist" for an award you have never applied for.

"Usually, it doesn't work this way," Ruffin said.

In some cases, after a student has taken a PSAT in ninth grade, they may be selected to be included in a pool of students to potentially earn a scholarship. But that's just the beginning of the process.

"There's still a process you have to go through," she said.

Claim: Come to our seminar and we'll show you how to get more financial aid. You only have to pay a small fee.

"It's probably a sales pitch," she said. "If it's not a college or some type of nonprofit organization, I would tell people to try to avoid these."