Money · Paying for college
Scholarships and scholarship scams
Scholarships are gifts you don't repay, and finding them is free. Start with the financial aid office, your counselor and the Labor Department's free search tool, then apply to big and small ones by each deadline. Never pay to apply for a scholarship or to fill out the FAFSA, and never give anyone your FSA ID password.
You'll need
- A list of your activities, jobs, interests and background
- Your counselor's or financial aid office's contact information
- A spreadsheet or notes file for deadlines
- A school-appropriate email address
What to know
- Fill out the free FAFSA first. The FTC calls it the most important step you can take to get financial aid. Source: FTC1 See FAFSA, step by step.
- Start with free sources: the financial aid office at the school you plan to attend, a high school or TRIO counselor, your state grant agency, a library, and groups like employers (yours or a parent's), religious and community groups, local businesses and professional associations in your field. Source: Federal Student Aid2
- Search the U.S. Department of Labor's free CareerOneStop Scholarship Finder. It lists thousands of scholarships, fellowships and grants, and you can filter by award type, location and level of study. Source: CareerOneStop4
- Make a deadline list. Some deadlines are a year before college starts, so high schoolers should start researching the summer between junior and senior year. Missed that? Look for ones still open. Source: Federal Student Aid2
- Confirm the rules on the scholarship's own website. Sponsors can change deadlines and eligibility without telling the search site. Source: CareerOneStop4 Read the application carefully, fill it out completely and submit it on time. Source: Federal Student Aid2
- Apply for big and small ones. A scholarship might cover all of your tuition or be a one-time award of a few hundred dollars. Either way, it lowers the cost. Source: Federal Student Aid2
- Won one? Tell your school's financial aid office. All your aid together can't be more than your cost of attendance, so the school may reduce other aid, such as loans. Source: Federal Student Aid2
See it done
Video by Atlanta News First Local TV news
FTC warning: The scholarship “guarantee” is a red flag
2026 · Checked October 3, 2026
From a local TV station, and it lines up with the FTC: never pay to apply, and no real company guarantees a scholarship. The free search tool it mentions is CareerOneStop, from the U.S. Department of Labor.
Video won't load at school or work? No problem. Everything you need is in the steps; the video's just a bonus. Watch it on YouTube later.
If it doesn't work
- Already paid a scammer? Act fast. Report it at ReportFraud.ftc.gov, and see the FTC's advice on getting your money back. Source: FTC1
- Gave out your bank or card number to "confirm eligibility"? Some of these companies take money from the account without permission. Source: FTC1 Call your bank or card company now.
- Shared your FSA ID? Log in and change your password right away. Source: Federal Student Aid3
- Not sure a company is real? Search its name with the words "complaint" and "scam," and ask your school counselor or financial aid advisor, who may help for free. Source: FTC1
- Someone offered to fill out your FAFSA with "better" numbers? Walk away. False information on your FAFSA can mean fines of up to $20,000, jail time or both. Source: FTC1
Good to know
The details, if you want them. Tap a line to open it.
The scam lines, word for word
The FTC says any of these, or a variation, means it's a scam: "The scholarship is guaranteed or your money back." "You can't get this information anywhere else." "I just need your credit card or bank account number to hold this scholarship." "We'll do all the work. You just pay a processing fee." "The scholarship will cost some money." "You're a finalist" for a contest you never entered. Source: FTC1
At a scholarship seminar
Don't pay anything there. Only scammers tell you to pay now or lose out. Ask for three local families who used the company in the last year, get the total cost and refund policy in writing, and skip anyone who won't answer questions. Source: FTC1
Paid isn't always a scam
Paid financial aid advice can cost well over $1,000. Charging for information that's free elsewhere isn't fraud by itself, but a company that doesn't deliver what it promised is scamming you. Source: Federal Student Aid3 Legitimate companies never guarantee a scholarship. Source: FTC1
A guarantee means little
A company could claim it kept a "we guarantee you'll get aid" promise just because you were offered loans or a $200 scholarship. Source: Federal Student Aid3
Taxes
Scholarship money used for tuition, required fees, and books, supplies and equipment your courses require is generally tax-free if you're working toward a degree. Money used for room and board or travel, or paid for teaching or research work, is generally taxable. Source: IRS5
How the money arrives
It may go straight to your school to pay what you owe, with any leftover paid to you, or come to you as a check. If the provider doesn't say which, ask. Source: Federal Student Aid2
Take it with you
Printable cardDownload card (PDF)Sources
- Federal Trade Commission How to avoid scholarship and financial aid scams
- U.S. Department of Education (Federal Student Aid) Finding and applying for scholarships
- U.S. Department of Education (Federal Student Aid) Avoiding student aid scams
- CareerOneStop (U.S. Department of Labor) Scholarship Finder
- Internal Revenue Service Topic no. 421, Scholarships, fellowship grants and other grants
Lesson M7.3 · Last checked October 2, 2026 against the sources listed.
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