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College Financial-Aid Loophole: Wealthy Parents Transfer Guardianship of Their Teens to Get Aid
Amid an intense national furor over the fairness of college admissions, the Education Department is looking into a tactic that has been used in some suburbs here, in which wealthy parents transfer legal guardianship of their college-bound children to relatives or friends so the teens can claim financial aid, say people familiar with the matter.
The strategy caught the department's attention amid a spate of guardianship transfers here. It means that only the children's earnings were considered in their financial-aid applications, not the family income or savings. That has led to awards of scholarships and access to federal financial aid designed for the poor, these people said.
Several universities in Illinois say they are looking into the practice, which is legal. "Our financial-aid resources are limited and the practice of wealthy parents transferring the guardianship of their children to qualify for need-based financial aid—or so-called opportunity hoarding—takes away resources from middle- and low-income students," said Andrew Borst, director of undergraduate enrollment at the University of Illinois. "This is legal, but we question the ethics."
Also At:
https://www.propublica.org/article/university-of-illinois-financial-aid-fafsa-parents-guardianship-children-students
https://chicago.suntimes.com/2019/7/29/20746376/u-of-i-parents-giving-up-custody-kids-get-need-based-college-financial-aid-university-illinois
(Score: 3, Informative) by The Mighty Buzzard on Tuesday July 30 2019, @01:27PM (21 children)
It may be underhanded but it's not fraud and there is not remotely a case for it. If you legally transfer guardianship, you are legally not the guardian(s). The truth can never be fraud.
My rights don't end where your fear begins.
(Score: 3, Informative) by The Shire on Tuesday July 30 2019, @02:40PM (16 children)
There is a difference here - if the ONLY reason for transfering guardianship is for the sole purpose of deceiving the college tuition system for monetary gain then it's FRAUD.
(Score: 0) by Anonymous Coward on Tuesday July 30 2019, @03:22PM (8 children)
You keep asserting that, care to back it up? Can you at least specify who you think is being deceived about what fact?
(Score: 0) by Anonymous Coward on Tuesday July 30 2019, @03:59PM (6 children)
Try re-reading the summary, dear.
(Score: 0) by Anonymous Coward on Tuesday July 30 2019, @04:18PM (5 children)
You re-read it, honey.
I just did, and still don't see any mention of deception.
(Score: 2) by Gaaark on Tuesday July 30 2019, @07:35PM (4 children)
So if I legally transfer ownership of my gun to you and help you aim the gun and pull the trigger, I am not responsible?
So if I legally transfer ownership of my kids to you, tell you what college to send them to and pay you money to help support them (you know the 'guardian' isn't going to do this out of the goodness of their heart), I am not responsible?
It is fraud/theft/cheat. Clearly.
--- Please remind me if I haven't been civil to you: I'm channeling MDC. ---Gaaark 2.0 ---
(Score: 0) by Anonymous Coward on Wednesday July 31 2019, @02:10AM
I think that a lot of My Fellow Americans™ are no longer living in reality at this point.
I'm sorry. plz can has refugee status?
(Score: 0) by Anonymous Coward on Wednesday July 31 2019, @09:53PM (2 children)
>It is fraud/theft/cheat. Clearly.
See I don't like it but the fact you think this is fraud and not the rich doing what they always do... usually completely legally. Shows you know nothing.
Every rule, regulation, qualification out there is simply a hurdle to these people. Figure out how to get around it, hire someone else to figure it out if you have to, and succeed. This is normal
If you are angry it's a little too late for that. Worse things are happening every single day. If you're not a boomer you're acting like one.
(Score: 2) by Gaaark on Wednesday July 31 2019, @11:06PM (1 child)
I realize that.
It IS cheating, though, and people need to wake up to it.
I liked hearing Warren bring up stopping corruption in the debate: people needed to hear that.
It needs to STOP being normal. It's NOT too late.
--- Please remind me if I haven't been civil to you: I'm channeling MDC. ---Gaaark 2.0 ---
(Score: -1, Troll) by Anonymous Coward on Monday August 05 2019, @02:35PM
Using the rules of the system as defined is cheating? really?
I always thought that cheating involved breaking the rules.
(Score: 0) by Anonymous Coward on Tuesday July 30 2019, @06:04PM
So, if someone transfers guardianship of their child to another for the sole purpose of getting financial aid then yes, that is fraud. It doesn't matter if the individual actions themselves are legal.
(Score: 1, Funny) by Anonymous Coward on Tuesday July 30 2019, @05:37PM (1 child)
It's not fraud. The fact it enrages you means that you understand how unfair the rich can be but you're addicted to the taste of Kiwi Parade Gloss Boot Polish.
(Score: 1, Touché) by Anonymous Coward on Tuesday July 30 2019, @05:52PM
I weep for humanity weighed down as it is by you "stable geniuses"
(Score: 1) by fustakrakich on Tuesday July 30 2019, @05:51PM
Divining intent is risky business. Best to just close the loophole.
La politica e i criminali sono la stessa cosa..
(Score: 3, Informative) by The Mighty Buzzard on Tuesday July 30 2019, @11:02PM (2 children)
In fact, no. There has to be deception for there to be fraud and there is no need to deceive. You could wear a t-shirt saying exactly what you've done while filing the paperwork and still get the aid check. Welcome to one of the many failings of bureaucracy: common sense is not allowed, only rules.
My rights don't end where your fear begins.
(Score: 0) by Anonymous Coward on Wednesday July 31 2019, @03:34AM (1 child)
Let's retroactively apply that to people with 5 draft exemptions for bone spurs.
(Score: 2) by The Mighty Buzzard on Wednesday July 31 2019, @03:41AM
Sorry, no ex post facto laws round these parts.
My rights don't end where your fear begins.
(Score: 2) by JoeMerchant on Wednesday July 31 2019, @02:09AM
The burden of proof in the legal system means that will NEVER be proven.
🌻🌻 [google.com]
(Score: 0) by Anonymous Coward on Tuesday July 30 2019, @03:12PM (3 children)
Hey bird brain, still morphing into an invertebrate? You must be the earliest bird.
(Score: 2) by The Mighty Buzzard on Tuesday July 30 2019, @11:04PM (2 children)
You call that early? You don't spend much time in the grown-up world, do you? Even if you thought I was posting from PDT instead of CDT, I would still have been up drinking coffee for nearly two hours by then.
My rights don't end where your fear begins.
(Score: 0) by Anonymous Coward on Wednesday July 31 2019, @10:03PM (1 child)
Look to your left, and look to your right. Are you seeing bingo cards everywhere? Cause your version of "grown up" seems to tend towards senility.
(Score: 2) by The Mighty Buzzard on Wednesday July 31 2019, @10:31PM
It's possible that one of these days you'll have a grown-up job and have to get up early five days a week. You're not going to enjoy it and will probably be fired for showing up late too many times. Keep at it though and one of these days you'll join us folks who get up in the morning and go to bed at night.
My rights don't end where your fear begins.