Discover How Online Scholarship Scams Cheat Your Money

How do Online Scholarship scams cheat your money? Most students (foreign students) who plan to attend college will apply for scholarships to help support their education. Scholarship scams have become a big business since so many students are fighting for that scholarship cash. These fraudulent programs attempt to duplicate legitimate scholarship programs sponsored by government organizations, charitable foundations, and corporations in order to defraud their victims of their money. Here are some of the most popular methods used by online scholarship scammers to defraud you; be vigilant and prevent these typical online scholarship frauds.

Scams Against Online Scholarships During the application procedure, most scholarship scammers will ask for money. During the scholarship application process, you will most likely be asked to pay a variety of costs. An application cost, entrance fee, reading fee, judgment fee, or administrative fee may be charged by scholarship sponsors. You may also request to pay a processing or handling charge in exchange for a copy of the scholarship application form or further scholarship information.

Aside from those types of payments, scammers may add additional fees after you have filed an application. You may receive notification via email or mail that you have won a scholarship, but you must first pay a “disbursement” or “redemption” fee before you can claim it. When you receive emails demanding you to pay funds in order to acquire your scholarship award, you should quickly activate a warning alert since no legitimate scholarship program will request you to pay money in order to obtain the money that you have supposedly earned.

Are you aware that most scholarships are tax-free? If you are uninformed, you become a victim of a scholarship scam when requested to pay taxes on your scholarship payout. Remember that you only have to pay taxes on a scholarship award if you use the money for something other than paying your tuition fee; for example, if you use the money to buy a new computer, rent a room, or pay for transportation to and from university. Even if you are obligated to pay taxes as a result of your scholarship award, you should never pay federal, state, or sales taxes to the organization that awarded you the scholarship; instead, all applicable taxes should be paid directly to the IRS.

Another approach employed by scholarship scams that could expose you to identity theft is asking you to reveal a bank account or credit card number in order to keep the prize. Never give out this kind of information, even if the sponsor believes it’s needed to process the scholarship you’ve already won. It is not required by any credible scholarship program.

Also Read: 7 Scholarship Mistakes and How to Avoid Making Them

How to Stay Away from Scholarship Scams. While a few genuine scholarship programs do require an application or administrative fee, the vast majority do not. To be safe, limit your scholarship applications to those that do not require any application costs. If you are requested to pay a hidden fee after submitting your application, you should look for another scholarship because there are many other legal scholarship programs that are free to apply for.

Wrapping Up

Avoid scholarship scams by avoiding offers that look too good to be true and require you to pay a fee up ahead. You should proceed with caution while applying for scholarships, and limit your applications to those that do not need you to pay a price.

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