Looking for a college scholarship and finding sites offering easy, “no essay” applications? Beware. Applicants may not realize that they are trading their personal information for what is essentially a raffle ticket.

Unlike traditional scholarships, no-essay prizes often aren’t based on a student’s academic record or other accomplishments. Rather, they are awarded by random drawings, with the odds of winning dependent on how many students apply. The private student lender Sallie Mae, for instance, offers monthly no-essay scholarships of $2,000 through its Scholly search site. The official rules describe the process as a “sweepstakes.”

The same language appears in the rules for no-essay scholarships on other scholarship matching sites, including ScholarshipOwl — which is upfront in estimating, for those who click through to online rules, that the odds of winning are about one in 140,000.

Why offer drawings for scholarships? Online applications can serve as “lead generators” for products like private student loans, said Mark Kantrowitz, a financial-aid expert who years ago helped develop early scholarship-search and financial-aid websites.

Essay-free scholarships do pay out awards. The websites are replete with pictures of happy winners. Jackie Bright, chief executive of the National Scholarship Providers Association, said in an email that “low burden” applications could reduce barriers for students who might not have extra time or writing support at home.

But their potential value to the sites is that applicants provide personal details that the sites may sell — “monetize,” in digital lingo — not just to obvious buyers like colleges and scholarship providers, but also to businesses that want to advertise products and services to students and their families.

“The idea of getting a scholarship is a very tempting reason to provide your personal information,” said R.J. Cross, who directs the “Don’t Sell My Data” campaign for the U.S. Public Interest Research Group.

How has scholarship marketing changed?

Student data has long provided grist for colleges and outside scholarships — those offering awards that don’t come directly from colleges and universities — that want to find interested students. Anyone who has taken the SAT knows that college brochures are sure to appear in the mailbox. But marketing has become more sophisticated in the digital age.

“It’s a really clear example of a power asymmetry between individuals and big data companies,” said Caitriona Fitzgerald, deputy director of the Electronic Privacy Information Center, a Washington research group that aims to protect privacy.

Applicants and their families may not realize just how widely the information they provide to scholarship search sites may be shared or how long it is retained, privacy experts say. As technology advances, the data may be redeployed in ways that weren’t foreseen when it was collected, Ms. Cross said.

ScholarshipOwl’s privacy policy says the site may sell users’ personal information to “other parties.” But David Tabachnikov, the site’s chief executive, said it didn’t sell data to third parties because it earned revenue from user subscription fees. The site’s basic services are free, but users can pay — typically $15 a month — to see more detailed information about scholarships.

Ms. Fitzgerald said it was possible that some sites didn’t currently sell personal data but might do so in the future.

Worries about the use of student data surfaced in a lawsuit that Christopher Gray, who as a college student co-founded Scholly, filed against Sallie Mae last month in Delaware Superior Court.

In July 2023, Sallie Mae said it had acquired the “key assets” of Scholly, which is now part of the company’s SLM Education Services unit. Mr. Gray joined Sallie Mae as an executive but was fired in October 2024 — after, he said in his complaint, he raised privacy objections about the company’s plans to sell information provided to Scholly by students, many of them under 18, to third parties. He said the company had “intentionally” concealed such plans from him.

The suit said Mr. Gray had been wrongfully fired and seeks damages including pay and benefits. The lawsuit was reported earlier by TechCrunch, which covers technology start-ups.

In an interview, Mr. Gray said he was disturbed that the data might be misused to pitch “predatory” credit cards or loans. “It makes me very angry,” he said. “These are students who are very vulnerable.”

Sallie Mae is seeking to dismiss the suit, saying in a brief filed on May 1 that Mr. Gray was fired because he was spending too much time on a new start-up. The brief also said he was spreading “misleading and baseless accusations” as part of a strategy to “improperly use media pressure to extract a monetary settlement.”

Sallie Mae added that it was “fully compliant with all applicable privacy laws and regulations.”

Richard Castellano, a Sallie Mae spokesman, said in an email that Education Services tried selling limited student data as part of a pilot last year but discontinued the strategy in mid-2025. “We are not selling personal information to third parties today and have no intention to do so,” he said.

Still, the privacy policy that applies to Education Services lists a wide swath of personal information that the company may collect, starting with basic items like your name and email and mailing address. But it may also include things like your date of birth and more sensitive information, like your Social Security number, driver’s license number, race, ethnicity and sexual orientation.

The site may potentially share this personal information, the policy says, with partners and business customers, including those “that want to market to you,” and may enter into agreements with third parties to “sell or license information to them for their own purposes.”

Sallie Mae — which has begun calling its overall business Sallie — recently created its own advertising arm, Backpack Media, which helps translate consumer data into targeted ads. The unit has hired digital advertising specialists and said its “proprietary education and audience insights” could help companies reach students at key moments, such graduating from high school, choosing a college and starting a first job. “We know who students and recent grads are, where they’re headed and what they’ll need next,” the website says.

Backpack Media does not sell individuals’ data, and its partners do not get access to any personal information, Mr. Castellano said.

Can I check how a site uses my information?

Take time to read a scholarship site’s privacy policy, experts say. Search for words like “collect,” “sell,” “share” and “disclose.”

Such tedious, site-by-site research wouldn’t be necessary if the United States had a national, comprehensive digital privacy policy, Ms. Fitzgerald said. The Children’s Online Privacy Protection Act, from 1998, applies only to children under 13. States are starting to pass their own privacy laws, she said, but protections vary.

If what you learn on a site makes you uncomfortable, see if it offers a way to opt out of having certain information shared or sold. If you can’t opt out, try another site with policies that limit the sale of information.

In general, it’s best to limit sharing your information, Ms. Cross said. The more widely it is spread, the more vulnerable it is to being compromised.

What other steps can I take?

Creating a separate email account specifically for scholarship search sites can help. That way, if your information is shared or sold, promotions or pitches will go to that email rather than clogging your main email account.