The lure of free money can turn even the smartest student or parent into a naive victim of a scholarship scam. After all, an award may just tip the scales in your favor when it comes time to pick a school and pay for it. Unfortunately, the private scholarship business has very few rules or guidelines and is full of cheats. Illegal programs benefit from the loose rules surrounding award criteria, application procedures, timetables, and decision-making processes and when it comes to getting their mitts on your money, it's game on!
For every ten students who obtain legitimate scholarships, there's one who falls prey to a scam.

Fraudulent scholarship proposes come in pretty packages, posing as legitimate foundations, scholarship search services, or scholarship sponsors. These businesses advertise in campus newspapers, spread flyers, postcards and mail letters, provide toll-free numbers, and even have sites on the Web. Some of the more apparent frauds operate as scholarship search services or clearinghouses, and the least obvious are often set up as an illegitimate scholarship sponsor.

It may be difficult to imagine how an agency that wants to give you money can actually take it away from you, but it's really quite easy. Most of these scammers pocket money from fees they charge you and a lot of other hopeful scholarship seekers, but give out little or nothing in proportion to the amount they collect. In the worst case scenarios, hopeful students are conned into giving out their credit card or checking account numbers, leaving them vulnerable to getting seriously ripped off through unauthorized withdrawals.

In spite of the existence of illegal programs, there are legal scholarship search services that charge a small fee. Nevertheless, since they cannot honestly guarantee you a scholarship, you're better off doing your own legwork employing a trustworthy scholarship information source.