There are several financial aid opportunities available to students who are looking to offset the cost of university tuition, including grants and scholarships. Unfortunately, today some operations are targeting unsuspecting students by imitating legitimate educational lenders or scholarship matching services, even posing as grant foundations. If not careful, students can wind up losing money and end up far worse off than they did before applying for financial assistance in the first place.
However, there are ways students and their parents can protect themselves from phony scholarship traps. Here are some of the warning signs to look out for and what can be done to stop them.
The old rule of “if it’s too good to be true, then it probably is” reigns factual, especially in this arena. If an organization tells you about an incredible-sounding opportunity or sends you a check with a note of congratulations, using messaging designed to make you act quickly, it’s probably not real. The check will probably bounce or you’ll be asked to send it back for processing. Tear it up. Scholarship providers will never randomly send out money.
Another rule of thumb to abide by – students should never be required to pay a processing fee, even a few dollars, when applying for a scholarship. Legitimate organizations want to give you money, not take it from you.
Similarly, look out for providers that claim to have a no-strings-attached grant or a low-interest loan to offer, as long as you pay the tax up front. Others bait students by asking them to pay for a premium search service first, and in turn, will “match” them with guaranteed scholarships. There is no such thing.
Most private scholarship providers will award funds to students who first fit a certain set of criteria. If you come across one that’s open to anyone, it’s best to research the provider before you apply. A big red flag – if you Google search the scholarship and there is no evidence or history of a past winner, it could be a fabrication.
Remember, while searching and applying for legitimate scholarships is one way to offset the cost associated with a university education, it is best to start saving early by opening a tax-sheltered savings plan.
In Canada, registered education savings plans or RESPs are offered through long-standing providers like Children’s Education Funds Inc. (CEFI). Representatives at CEFI are skilled at matching students and their parents with savings options that fit their financial needs.
Dishonest operations are always looking for an opportunity to jump on an unsuspecting or stressed-out student. That is why it is so important to plan ahead and be vigilant in your search for financial assistance.