Several companies try to attract visitors to their sites by giving away money. The most well-known of these is iWon.com, which gives away $10,000 a day, $1 million a month, and $10 million a year. Similarly well known is the Publisher's Clearinghouse. Jackpot.com has a top prize of $2 million.
On this page you'll find a list of the money give-aways with a scholarship theme. We call these scholarship lotteries or scholarship sweepstakes. These sites use the lure of free scholarships to attract traffic to their sites.
Most of the sites listed below select winners using a random drawing, using largely unrestrictive selection criteria. Your odds of winning a free scholarship in these lotteries are low, since the sites expect the lure of free scholarships to attract millions of visitors.
The odds of your winning a free scholarship from these lotteries is usually less than 1 in 10,000. (If the scholarship lottery isn't well-publicized, the odds may drop to as low as 1 in 500.) With more traditional scholarship programs, which select winners based on academic, artistic, or athletic talent, your odds of winning are closer to 1 in 15 (assuming, of course, that you qualify for the award). To search for scholarships that select winners using more objective merit-based criteria, visit FastWeb or one of the other scholarship search sites listed in the Scholarship section of FinAid.
The Rise and Fall of FreeScholarships.com
Scholarship lotteries achieved a bit of fame in February 1999, with the launch of FreeScholarships.com. FreeScholarships.com awarded one $10,000 scholarship each weekday and one $25,000 scholarship a month to students at all educational levels. They hoped that the visitors to their site would generate enough advertising revenue to pay for the scholarships. Unfortunately, FreeScholarships.com was not profitable and became defunct in October 2000.
Another site that offered a large scholarship sweepstakes was VarsityBooks.com. They offered one $10,000 scholarship, five $5,000 scholarships and ten $1,000 scholarships a month and one $25,000 scholarship a year to undergraduate and graduate students. They ended the program when they found it to not be economically viable.
Current Scholarship Lotteries
The only current scholarship lotteries still in operation are those offered by education lenders, where scholarship sweepstakes are more likely to be a viable promotion. The scholarships by education lenders are for smaller amounts, typically $1,000 each, with up to 100 scholarships awarded each year.
One of the first banks to use a scholarship sweepstakes promotion was Corus Bank. Education lenders that previously offered such scholarship sweepstakes include Academic Finance Corporation (AFC) and EFSI, AES/PHEAA, Bank of America, KeyBank, Nelnet, StudentLoanXpress, SunTrust, US Bank, Wachovia DoubleTake and Gimme Five and Wells Fargo.
Lenders are unlikely to offer such scholarship lotteries in the future due to a stricter regulatory environment. The New York Attorney General published a Direct Marketing Code of Conduct on December 11, 2007. This code of conduct prohibits lenders from "using gift cards, sweepstakes, contests, or prizes to entice students to sign up for their loans". The US Department of Education's final regulations concerning prohibited inducements and preferred lender lists (published November 1, 2007 and effective July 1, 2008) specify a ban on "payments or offerings of other benefits, including prizes or additional financial aid funds, to a prospective borrower in exchange for applying for or accepting a FFEL loan from the lender" in 34 CFR 682.200(b)"Lender"(5)(i)(A)(1) and 34 CFR 682.401(e)(1)(i)(A). (These regulations encode previous subregulatory guidance from Dear Colleague Letter 89-L-129, which gave examples of prohibited inducements, including "A lender's promotional activities include providing borrowers the chance to win prizes if they apply for loans.") The regulations do emphasize a quid pro quo relationship by using language like "in exchange for". Likewise, the New York Attorney General's code of conduct focuses on using such programs to "entice students to sign up for their loans". So it is possible that such generalized promotions could continue, so long as it is clear to consumers that they are under no obligation to obtain a loan. But lenders are likely to end such promotions in order to minimize the risk of appearing to violate the law and regulations.
So long as the sites do not charge you a fee to enter, there doesn't seem to be much harm in it.
Please note that many of these sites will either sell your email address or use your email address for marketing purposes. It is one of the ways they pay for the prizes. If you do not want to receive junk email, you should be careful to opt-out of any commercial use of your email address. You may also want to use a disposable free email account (e.g., a Hotmail.com account) instead of your real email address.
|Home | Loans | Scholarships | Savings | Military Aid | Other Types of Aid | Financial Aid Applications
Answering Your Questions | Calculators | Beyond Financial Aid | Site Map | About FinAid®
|Copyright © 2014 by FinAid Page, LLC. All rights reserved.
Mark Kantrowitz, Founder