What Is the Scholarship Scam and Why Should Students Be Worried?

As exam results are being declared all over India, a fresh batch of scholarship scams is in the news as it is targeting students and their families. The scams exploit the aspirations of students to be awarded scholarships to pursue higher studies.

A report released by the Ministry of Minority Affairs found that of 1,572 minority institutions that had been probed, 830 were fake or non-functional and comprised about 53% of the total.  This resulted in the diversion of Rs 144.83 crore in five years, funds meant for minority students' education.

What Is a Scholarship Scam?

Scholarship scams are fraudulent techniques where scammers impersonate valid organizations providing financial assistance. They can establish phone sites or email messages that offer scholarships, seek personal information, application fees, or bank account information. Once they obtain this information, they can utilize it for identity theft or financial exploitation.

A closer examination of the scholarship applications for 2022-2023 revealed that among the 25.5 lakh applicants, more than 6.7 lakh did not exist. Biometric verification procedures revealed that only 30% of the renewal applicants were real, and the remaining huge majority proved to be bogus beneficiaries taking advantage of the system.

Major Scholarship Scams Exposed

There have been many big scholarship scams which have recently been emerging online which calls for an effective system to resist their operations. Let us see about a couple of recent scholarship scams.

Minority Scholarship Scam

A government investigation showed that nearly 53% of the colleges under the minority scholarship scheme were 'phantom' institutions, which resulted in a scam of Rs144.83 crore.

Himachal Pradesh Scam

Enforcement Directorate (ED) and Central Bureau of Investigation (CBI) officials have been reported to be involved in a Rs 250 crore fraud. Funds that were to be transferred to scholarships for Scheduled Caste (SC), Scheduled Tribe (ST), and Other Backward Class (OBC) students were reported to be routed out by the officials. 

Properties worth Rs18.27 crore have been made obsolete in the context of this case.

Tripura Incident

Tripura government is registering FIRs against 34 students on suspicion of their being involved in fraudulent income certificates that have been provided to avail scholarships under post-matric.

Education inflation is pushing students toward scholarship scamming, says Director and Professor Jaipuria Institute of Management Dr Deepankar Chakrabarti.

He averred, "Societal progress, personal aspiration, and economic growth have all been coupled together to lead to a position where professional development is flourishing but with an extremely hefty price." 

Scholarship impersonators lure students with fictitious scholarships or admission lottery programs and proceed to scam them by getting them to send their bank information or pay mysterious fees.

"Gullibility proves costly for all concerned at the cost of credibility loss and the threat of punishment by the state," he went on, invoking greater awareness and vigilance.

Government Response To These Scholarship Scams

Grateful to these ominous incidents, the government of India has enacted a few actions:

Investigations By CBI: The Ministry of Minority Affairs forwarded the issue to the Central Bureau of Investigation (CBI) to inquire about the minority scholarship scam.

Digital Authentication: The government is imposing tighter authentication procedures on institutions which desire to apply for scholarships, e.g., physical authentication of facilities and student population.

Public Awareness Campaigns: There is an ongoing campaign for educating parents and students on how to recognize and steer clear of scholarship scams. This involves bringing to the forefront typical red flags such as unsolicited letters, requesting upfront fees, and no apparent eligibility criteria.

While parents and students are going through the post-exam period, they need to be cautious not to fall victims to scholarship scams. They need to be cautious and aware so that they do not fall victims to them.