How to Avoid College Scholarships and Grants Scams

Applying for college scholarships and financial aid can be overwhelming. There are so many different websites to comb through, and it feels like there are an infinite number of scholarships and grants to apply for.

Scammers take advantage of this situation and use a variety of schemes to target students with fraudulent offers that can result in loss of money or even identity theft.

Protect yourself from scholarship and financial aid scams by learning about the types of scams and how to avoid them.

Common Scams to Avoid

Look out for these common scams when applying for grants and financial aid.

Financial Aid Scams

Financial aid scams are especially dangerous because they can put you at risk for identity theft and other severe consequences since financial aid often requires filling out sensitive personal data.

Financial aid paperwork program: Some companies claim they can make you eligible to get financial aid and, for a processing fee, they will handle all the program’s paperwork. They are actually just filling out the FAFSA for you, and they may use false information about your financial situation to qualify you for more financial aid than you’d receive by telling the truth. In addition to losing out on money, you could also be held liable for providing false information on your FAFSA if you fall for this scam. Students and parents should fill out the FAFSA together to ensure the application is completed accurately.

Advance-fee/low-interest loan: This scam offers a suspiciously low-interest educational loan that requires you to pay a fee before you receive the loan. Real educational loans do not require an up-front fee when you apply (they deduct fees from the disbursement check). If you’re applying for a loan that is not issued by a bank or other reputable lender, it is probably a scam. 

Due to FAFSA Fraud, You May Have to Verify Your Identity

Heads up: To combat FAFSA fraud involving identity theft and “ghost students,” the federal government implemented new detection tools within the 2026-27 FAFSA. If the system finds your behavior while you complete the FAFSA suspicious, you may be asked to verify your identity on camera. If verification fails or you opt out, your FAFSA submission will be rejected, and your school will not disburse financial aid funds.

The “red flags” that trigger the verification haven’t been made public, but it’s unlikely that you will be asked to verify. If your FAFSA is rejected based on identity verification, contact the financial aid office at your school and offer to prove your identity by submitting supporting documents.

Scholarship Scams

There are a variety of scholarship scams to watch out for, including the following:

Scholarships for profit: These scams may look just like a real scholarship application, but they require an application fee. (Real scholarships never require a fee.) They aim to collect a small amount of money from thousands of applicants, then pay out $1,000 scholarships to a few random recipients, if they award any of the money at all. Either way, they pocket a huge profit.

Scholarship prizes: In this scam, you’re usually told that you’ve won a scholarship worth thousands of dollars, but you have to pay a redemption or disbursement fee before they can release the prize. Be suspicious any time you’re told you’ve “won” something you never entered.

Scholarships that never materialize: In these scams, you’ll be encouraged or required to send money upfront, and then you’ll receive nothing in exchange. Victims will believe they simply did not win the scholarship, but they’ve actually been scammed.

Guaranteed scholarship search service: Scholarship matching services will guarantee that you’ll win a scholarship or they will refund your money. Instead, they may disappear with your money or send you “matching” scholarships that are difficult to qualify for.

“Exclusive” scholarship database: This scam claims to have access to exclusive information or a secret scholarship database. These don’t exist. All information about scholarships can be found for free online.

Scholarship of Financial Aid Seminar

Companies promote seminars where you can learn about scholarships and financial aid. While some are legit, many are scams. They involve high-pressure sales tactics: Pay immediately or risk missing out on the “opportunity.” If you do attend a seminar, the U.S. Federal Trade Commission recommends the following steps:

• Don't pay any money at the seminar.

• Investigate the organization by searching for their name online, plus the words "scam" and "complaint."

• Don’t trust “success” stories since they may have paid people to give testimonials.
• Don’t do business with anyone hesitant to give details or answer questions.
• Ask how much money you will have to pay and the company’s refund policy.
  

Signs of Scholarship or Financial Aid Scams

If a scholarship or financial aid offer is advertised using these phrases or something similar, it's a scam:

• "Guaranteed or your money back."

• "Everyone qualifies."
• "You can't get this information anywhere else."
• "We have exclusive access."
• "It will only cost..."
• “I just need your credit card or bank account information to hold this scholarship.”
• “I just need your FSA ID.”
• “We’ll do all the work for you.”
• “The scholarship will cost some money.”
• “You’ve been selected/you’re a finalist [for a contest or scholarship you never entered.]”
• “Act now.”
• “You just need to attend our scholarship seminar.”

In addition to those specific phrases, common scholarship and grant red flags include:

• Guarantees: If there is any guarantee of winning a scholarship, it is a scam.

• Unsolicited offers: Be very careful when you get an offer via phone, email, or mail but never requested information from that provider. You have to apply for almost all scholarships; they aren’t given out randomly.

• Limited-time offers: While scholarships typically have deadlines, if a provider says that a scholarship is only available for a limited time, it’s a scam.

• Fees: Legitimate scholarship opportunities are always free. Don’t ever pay to apply for a scholarship, even if it’s just $5.

• Personal information requests: Scholarship applications typically require contact information, such as your email address, phone number, and street address. If a provider requires private information, like your Social Security number, bank account, or credit card information, be very suspicious.

• Eligibility: If a scholarship has open-ended, broad criteria that can apply to almost anyone, it may not be legitimate.

• No contact info: Scholarship providers should give you contact information in case you have questions. If there isn’t any way to get in touch with the provider, they are probably a scammer.

Best Practices for Avoiding Scams

If you’re looking for financial aid or scholarships, follow these guidelines to avoid falling for scams:

• Protect your personal information.

• Fill out the free FAFSA form to apply for financial aid.
• Never pay for help finding money for college or completing the FAFSA. Instead, use the FAFSA form's online help and the Federal Student Aid Information Center.
• Don't tell anyone your FSA ID username or password.
• Review your financial aid offers and track what you've applied for and received.
• Ask a guidance counselor for recommendations on scholarships and financial aid.
• Ask for information from the financial aid office of the school you want to attend.
• Never pay at a seminar.
• Think before you hire consultants. Some consulting services may be scammers. Others may be legitimate, but not that helpful.
• Use only reputable sources for your scholarship and financial aid search.
• Be cautious of unexpected emails or messages. Phishing scams are convincing enough to entice you to click a link. The USF IT department has tips to spot phishing and stay safe online. 

Here's a general rule of thumb: If something sounds too good to be true, it probably is.

Avoiding AI Scams

As AI technology has advanced and become more commonly used, its use in scams has also increased. More than 22,000 AI scams were reported to the FBI in 2025, so you should equip yourself to sniff out common AI scam tactics:

• Realistic voice clones: AI voices can convincingly mimic real people. If you get a call from someone you trust but they start asking for sensitive personal or financial information over the phone, you should verify their identity by asking them a question only they could know the answer to. You can also hang up and redial the number you have for them, then begin the conversation again.

• Video deepfakes: Face-changing filters and AI-created “people” can look shockingly realistic, but there’s a big giveaway: They don’t move around much on screen. If you’re on a video call with someone asking you for personal or financial information, insist that they move around first and watch out for glitches against the background.

• Forms that look legitimate: Before typing any sensitive information into a form, make sure it really belongs to the organization it claims to be from. If it’s a web form, check the URL, and if you get the form in an email, see if the domain matches what you’d expect. For example, a form from USF will usually have “usf.edu” in its URL, and official USF emails will be “@usf.edu.”

If you aren’t sure, call a trusted authority and ask for help before making a move. There’s no shame in being tricked, and it’s better to be safe than sorry.

What to Do if You've Been Scammed

If you've encountered a scholarship scam or been a victim, report the scam to one or more of these agencies:

• Federal Trade Commission
• Your state's attorney general
• Better Business Bureau
• U.S. Department of Education Office of Inspector General
• National Consumer League (Fraud.org)

How to Find Legitimate Scholarship and Financial Aid Opportunities

There are many legitimate resources for scholarships and financial aid. When trying to determine the legitimacy of a website, consider the following:

• Is the company's contact information listed? Does anything seem unusual about it?

• Is there an “about” page with clear information on the company?
• Does the site request financial or personal information?
• Is the site regularly updated?
• Are there grammatical or spelling errors?

When it comes to scholarships, USF students have it easy. Everyone who applies to USF by the Scholarship Consideration Deadline in January is automatically considered for merit-based scholarships from the Office of Admissions. Many more scholarship opportunities contribute to making USF one of the most affordable top universities. In this case, too good is true!