Scholarship Scam Targets College Students

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A scholarship scam is targeting college students and costing them a lot of money.

The MSU Police Department has seen an increase in cases this school year and is issuing a warning about it.

It's the phone call or letter every student wants to get: "You've received a college scholarship worth thousands of dollars." But MSU police say don't celebrate right way, speculate instead.

"They look real, but they're not," MSU Police Department Sgt. Florene McGlothian-Taylor said.

In some cases, it's a fraudulent scheme conning students out of money who need it most. A fake scholarship fund sends a congratulatory message and even a check in the mail, and then it asks the student to send a check for taxes and fees in return. No big deal, right?

"False information, it's a scam," Sgt. Florene McGlothian-Taylor said.

It's a scam that's hit at least five MSU students this school year. What happens is that check from the scholarship company bounces, and then the student suffers the costly consequences, even identity theft.

"It's not the bank that's out of the money, but it's actually their account that's going to be losing the money," McGlothian-Taylor said.

This shouldn't scare students away from applying to scholarships though. The MSU Office of Financial Aid has one easy rule of thumb to avoid becoming a victim.

"You never pay anything for a scholarship," MSU Associate Director of Financial Aid Val Meyers said. "You don't pay application fees, you don't pay search fees, you don't pay processing fees. Legitimate scholarships are always free."

Students should not hand over any financial information, and they're encouraged to speak with an advisor if they have any questions.

"We're glad to look at these things and say, 'Yea, that one looks ok,' or 'Yes, we've heard of these people before and they're alright' or 'No, they're not,'" Meyers said.

Because once you hand over that check, there's no going back.

"If it sounds too goo to be true, it is too good to be true," McGlothian-Taylor said.

She said there could definitely be more students out there who have been victims of this scam, and it's happening all across the state, not just in East Lansing.

Lansing Community College has also had some student fraud issues. The LCC Financial Aid office said it's made changes to the school's code of conduct to help better protect students.

Both MSU and LCC are turning to social media to inform students and send out warnings.

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