A student in Amarillo, Texas, received an exciting phone call last month: Damon Bennett, a high school senior, had been applying for grants and scholarships to help pay for college, and a woman called to tell him he received a $7,000 grant.
All he had to do to claim his award was deposit $200 into a bank account. Bennett realized it was probably a scam (yep) and told a local news station about the phone call. (The TV station called the number back, and the woman who answered said to never call again.)
Figuring out how to pay for college can be stressful and frustrating, because completing dozens of scholarship applications doesn't mean you'll get any of them. Scammers prey on this vulnerability and hope they can trick desperate students into forking over a few hundred dollars in exchange for thousands toward their educations.
Scholarships are fantastic ways to ease the financial burden of higher education, but applicants need to balance their eagerness for funding with awareness of people trying to dupe them. If someone asks you to pay for a scholarship or charges fees for scholarship matching or access to a scholarship database, it's probably a scam.
Another thing to know about scholarships (but isn't scam-related): Schools adjust their aid packages based on how much outside scholarship money you receive. While college-bound high schoolers have most likely committed to a school already, it's important to know institutions' outside-scholarship policies when comparing costs.
"If you won a lot of scholarships, and you’re receiving need-based aid, your school will reduce your need-based financial aid package," said Mark Kantrowitz, senior vice president and publisher of Edvisors.com. "They have flexibility in how they adjust your aid: Are they using your scholarships to replace loans?"
If they don't reduce the amount of loans you qualify for, they may take away some of the merit scholarship they previously awarded you. You want scholarships to reduce the amount of money you have to borrow or pay out of pocket, but depending on your school's policy, that may not happen. Kantrowitz recommended calling the financial aid office if the scholarship policy isn't available on the university's website.
More From Credit.com: