Scholarships vs. Marketing & Scams: The Wisdom of Jen

Happy Tuesday, estudiantes! I told you yesterday that I was holding back a really good comment from a gal named Jen who added her thoughts to my initial $10,000 Scholarships post. She has some good advice that’ll help you cut through the mountain of scholarship-related bullshit on the Internet, and I’ve chimed in throughout to clarify. Enjoy!

Yep. They really used to sell it.

Jen writes:

I am/was a 40 something year old returning student post divorce. I work a full time job that requires a lot of travel so I was looking for on-line programs.

The first education I learned is that any site that helps “match you” to an educational program is not “matching you” with anything other than giving your information to high pressure sales staff.

For the most part, I find a lot of what Jen says to be true, but you have to know what she’s referring to. While there are scholarship-matching sites like Fastweb and that are legit, they’re not what Jen is referring to here. There are literally hundreds (probably thousands) of websites out there which are built by affiliate marketers in order to steer you toward filling out lead forms for places like University of Phoenix, Argosy University, Full Sail University, etc. — and collect a hefty bonus from the school when you do. (If you aren’t familiar with affiliate marketing and its connection to the higher-education business, please see my explanation in this previous post for context).

These sites have names like “College Match Finder” or “” and, literally, hundreds of other random names like that. Very often, there’s no brick-and-mortar company or organization behind the sites — it’s one guy who’s build a home page with a lot of affiliate links to the various schools. He hopes you’ll fill out as many of those lead forms as possible, because he’ll usually make a pretty fat chunk of cash for every one you fill out — somewhere in the neighborhood of $25-$40, even as high as $60 sometimes.

Now, I’m not saying there’s anything wrong with a guy collecting commissions for sending leads to the University of Phoenix or any other school — I’ve certainly done my share of it over the years. I’m just explaining to you how the whole process works and trying to shed some light on why, exactly, 8,000 different websites out there that all look and feel pretty much exactly the same are trying to “help you” find an online school for you. These guys definitely do get warm and fuzzy inside when you find one, but more than likely it’s because of the cash they make on the transaction.

Now, enter the high-pressure sales tactics that Jen mentions in her comment. You don’t have to look far to verify that this claim is true. There’s a lot of money in online schools, and “admissions counselors” who are making hefty commissions for each student they enroll will obviously have a giant incentive to really pressure the hell out of you to sign up.

University of Phoenix is the 800-pound-gorilla of online schools, and probably will be for a very long time. They’re a legitimate learning institution that has — and I don’t think it’s an exaggeration to say this — transformed the landscape of higher education over the last 10 years, especially for working adults. HOWEVER, they were also fined $9.8 million by the federal government in 2004 for their hyper-aggressive marketing tactics — the highest fine ever levied by the Department of Education at that time, and for all I know, even today. Frankly, I had no idea the Department of Education could even levy fines at all until this case — and I’m a member of the National Association for College Admission Counseling! Maybe I better brush up on the handbook or something.

Anyway, the point is — once you fill out those lead forms for those online schools, Jen’s right — you better believe they’ll be calling you and trying to convince you to enroll. And of course, maybe they’re right in some cases; after all, you did fill out the lead form. That’s the assumption, anyway — the trouble comes when people have perhaps filled out the lead form without knowing what they were doing, or after having been deceived or misled intentionally by an unscrupulous affiliate marketer who was just after a commission check.

Even brick and mortar reputable schools with an on-line extension outsource the on-line programs to “high pressure sales staff” that will try to fast talk you into a contract you can’t afford. Some of the on-line schools are plastered all over “rip off report” and other consumer watch sites. I was shocked at what I learned.

True again — like I said, University of Phoenix is a reputable school and was fined nearly $10 million, but it’s not just them. Boston University has an online program that’s marketed aggressively, as do many other “big name” schools. And it’s a simple equation here: the schools make big money off online students. You still pay tuition and fees (some of which are very high!) — yet you never/rarely show up on campus and use their brick-and-mortar services. You’re a high-margin customer! So they can afford to hire a team of salespeople admissions counselors to really go at you over the phone.

And again, in fairness, I add again that attending the schools is actually something that many hundreds of thousands of people do, want to do, and benefit from doing. Just realize that there are incentives at play all over the place here, and people will respond to behavior that is incentivized.

The second lesson I learned was scholarships are 80% scam.

80% is an awfully big number, so I’ll have to disagree with that one; however, there are a lot of scams out there, and you should research any organization you’re sending your information to before doing so.

I spent a solid year writing essays, completing forms, having “friend” vote on pictures of this, that and the other thing and all I got was a lot of SPAM and telemarketing calls to “earn six-figures with this business to pay for school”. Of course they never tell you what the business is until you go to a website to sign up for more spam. I remember one site, by the end of the month increased emails from 1X a day to 30X a day – I never figures out what the business was or what they were selling just a bunch of videos from a front guy looking for my credit card information “to make me rich beyond my wildest dreams”.

Yeah, it’s definitely time to unsubscribe and run the other way when people start promising to make you rich beyond your wildest dreams. I mean, even if it weren’t obviously bullshit, my dreams can get pretty wild. I’m not even sure that Bill Gates and Warren Buffett together could finance my “wildest dreams.”

I learned the art of setting up a SPAM account to get no obligation information after this noteable annoyance. I also learned about setting up a dummy phone number with Skype that automatically goes to voice mail. I check it once a week or so. Keeps the peace and quiet.

The spam account is definitely a great idea. Interesting Skype idea, hadn’t heard of that. Jen, if you’re out there, wanna give us the details on that one?

The REAL scholarships are funded by non-profits, professional organizations, etc. They usually require a demonstration of capability as well as your GPA.

Again, for the most part, this is true. There are definitely private organizations out there that award legitimate scholarships, but definitely check the Internet, word of mouth, the BBB, etc., to vet them before you send them your information.

For the thousands of applications I sent, not one panned out. I took a cheaper route with American Military University and although I am in the honors program with a 3.89 GPA out of a possible 4.0, I am not a priority/preference from a demographic standpoint for most scholarship programs.

Way to go, Jen!

The best bet, look for a part time job for a year to save some money and/or a full time job with generous tuition reombursement.

The three most sage words in Jen’s whole post are right here. And it ain’t complicated:

“Save some money.”

I don’t want to get too out-in-left-field on this one, but I’ll just say this, and I mean it wholeheartedly, without exception and regardless of your income level. If you are able to master the discipline of “saving some money” early and regularly, then compound interest will solve almost every money problem that you’ll ever have in your life. It’ll do more for you than any scholarship will (even a full-ride), or award, or lottery (because you won’t win the lottery).

More on that another time. I’m off to take more cough syrup and sign some bank papers before meeting the family at Culver’s for a fundraiser. The theatre department at Rapid City Stevens High School needs some money, so if you happen to be in Rapid City, S.D. at dinnertime this evening, swing by and bring a few greenbacks. Those kids put on a hellacious show.

7 thoughts on “Scholarships vs. Marketing & Scams: The Wisdom of Jen”

  1. Good one. It took me about a year to finally distinguish between legitimate scholarships sites and fake ones. I remember the excitement I felt when I first filled out an “easy $10,000 scholarship” … I was so naive then. Anyways, the saying still holds true, if it looks too good to be true, it probably is.

  2. I have also done the same thing and set up an additional phone line with my Magic Jack that I previously owned. If you have no phone attached to it then it doesn’t ring, but the number still works and goes to voicemail. You are then able to call the number yourself from another phone line and check your voicemail that way, just as a cell phone, by typing in your password. Makes life so much easier!! 🙂

  3. Wow, Jen really nailed the last nail in the coffin for all the research and advice she gave us. While I’ve been naive enough to fill out those “easy $10,000 scholarships,” it is refreshing to see how unreliable and full of false hopes these too good to be true scholarships are. Thank you so much Josh, and you too Jen, for these wise words. They will definitely “pay off” for us in the long run.

  4. Josh,

    Thanks for the kind words!

    Here is the nitty gritty on my SKYPE idea. Many of the VOIP providers offer a PC Phone, Skype happened to be the cheapest at the time at $36 annually for unlimited calling. It’s just a “virtual phone” that I have set up to go right to voice mail. When a store asks for your phone, or a website I give that number and when I have the time I check messages. Again, it’s not a priority – just on the off chance something is legit or I want to continue discussions I will give my REAL number.

    It may be extreme, but I live a very busy life constantly networking for new career opportunities, career advancement while simultaneously finishing that degree. If that is not enough on the plate, I also volunteer a lot of time helping victims of consumer abuse and ID theft, so for me the “virutal number” system really allows me to focus on my studies/career without distraction.

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