Scholarship and Grant Scams: How Florida Seniors Beat the Fake Student Funding Fees

In Vero Beach, a grandmother named Ruth answered a call from someone claiming to be from the “National Merit Grant Board.” Her granddaughter Emma had just been accepted to college, and the caller said Emma had won a $10,000 grant. There was just one small step: a $250 “disbursement fee” had to be paid before the money could be released, and it had to be paid today, by gift card. Ruth paid. Then came a $600 “tax clearance” fee, then a $1,000 “insurance bond.” She was out $1,850 before she called the college’s financial aid office, which had never heard of the grant, the board, or the caller. The money would have gone straight to the school anyway, never to a family and never by gift card.

This is the fake student funding fee scam, and it targets the most caring people first. The Federal Trade Commission reported that consumers lost more than $12.5 billion to fraud in 2024, up 25% from the year before, and according to finaid.org, several hundred thousand students and parents are defrauded by scholarship scams every year.

The FBI’s IC3 2023 Elder Fraud Report shows why grandparents are the target: confidence fraud, the family-impersonation category these scams ride on, contributed to more than $3.4 billion in reported losses, with adults 60 and older the most frequently targeted age group. And the hook is a single false belief: that an award needs a fee to be released. Real federal grants never require an upfront fee, because legitimate applications go through Grants.gov or the agency’s own website, and legitimate aid is disbursed through the school. The defense is simpler than the offense: one call to the school’s financial aid office, and one reminder that FAFSA is free at studentaid.gov.

The red flags, in one glance

If you see any of these, you already know the script:

• Red flag 01 A “guaranteed” scholarship that requires an upfront processing or application fee.

• Red flag 02 A grant award notice that needs a “disbursement fee,” “tax,” or “insurance” before release.

• Red flag 03 A caller who already knows the grandchild’s name and school.

• Red flag 04 Payment demanded by gift card, wire, cryptocurrency, or a payment app.

• Red flag 05 A scholarship search service charging a monthly fee for listings that are free elsewhere.

• Red flag 06 A “grant writer” who charges to submit applications.

• Red flag 07 A “government” grant named after a bureau or program that does not exist.

• Red flag 08 A check for more than the award amount, with a request to send the difference back.

• Red flag 09 Pressure to act immediately because the offer “expires today.”

• Red flag 10 A request for a Social Security number, bank account, or FAFSA login to “verify” the award.

• Red flag 11 Contact information that is a personal email or a phone number that does not match the school or agency.

If it happens, this is your plan

Nine moves keep you calm, in control, and one step ahead, no matter how official the letter or the voice sounds:

1. 1

   Never pay any fee to claim a scholarship or grant. The fee is the scam, full stop.

2. 2

   Verify any award by calling the school’s financial aid office using the published number on the school’s own website.

3. 3

   Remember FAFSA is free and only at studentaid.gov, and no helper ever needs the family’s FAFSA login.

4. 4

   Check the FTC’s guidance on government grant scams at ftc.gov.

5. 5

   Do not deposit a suspicious check, and never send back the difference.

6. 6

   Report to the FTC at reportfraud.ftc.gov, to the FBI IC3 at ic3.gov, and to the Florida Attorney General fraud hotline at 1-866-9-NO-SCAM.

7. 7

   Report to the Florida Department of Education if the scam impersonates a school or a state program.

8. 8

   Contact the bank if money was paid, and consider a credit freeze if a Social Security number was shared.

9. 9

   Remember that grandparents who act out of love are never at fault, and the shame scammers plant is part of the trick.

The honest truth: what a real award looks like

A fake award is scary, but it is also beatable, because the real system works the opposite way from the script. Here is what actually happens and what actually protects you:

• Real scholarships and grants never charge upfront fees, and real federal grants never require an upfront fee, since legitimate applications go through Grants.gov or the agency’s own website.

• FAFSA is free and only at studentaid.gov, and the application takes about an hour, completed by the family themselves.

• Legitimate aid is disbursed through the school, never to a family by gift card, wire, or a payment app.

• Federal grants are applied for, not awarded out of the blue, and the government does not call to announce surprise awards or collect fees.

• One call to the school’s financial aid office, using the published number, settles whether an award exists.

Where to report scholarship and grant scams in Florida

Reporting a scam is protection, not embarrassment. Every report helps stop the next fake award:

• FTC Report any scholarship or grant scam at reportfraud.ftc.gov.

• FBI IC3 Report fake award and advance-fee fraud at ic3.gov with the caller’s number.

• Florida AG Call the state fraud hotline at 1-866-9-NO-SCAM.

• Florida Department of Education Report at fldoe.org if the scam impersonates a school or a state program.

• Local sheriff File with your local sheriff’s non-emergency line, such as pbso.org or ircsheriff.org. In immediate danger, call 911 first.

Frequently asked questions about scholarship and grant scams

Quick, honest answers to the questions Florida grandparents and their families ask me most. Tap a question to open the answer.

Beat the fake student funding fee

The grandparent who knows the scam is the one who beats it, and knowledge is your armor. Verify any award with the school’s financial aid office, remember FAFSA is free at studentaid.gov, and never pay a fee to claim a gift. Then share what you know at the dinner table and in the family group chat, because the grandparent who teaches the script protects a whole family. The Senior Scams hub holds every story in the series, the inherited home guide covers the family and wealth side of transitions, and the home page shows the full picture of how The Complete Real Estate Team helps families build, protect, and transfer generational wealth.

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