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posted by Fnord666 on Tuesday July 30 2019, @11:39AM   Printer-friendly

Submitted via IRC for Bytram

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


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  • (Score: 0) by Anonymous Coward on Tuesday July 30 2019, @05:40PM (2 children)

    by Anonymous Coward on Tuesday July 30 2019, @05:40PM (#873198)

    You could have moved out or joined the coast guard reserve. Or you could do what these people have done which is quite clever.

  • (Score: 2) by EvilSS on Tuesday July 30 2019, @07:00PM (1 child)

    by EvilSS (1456) Subscriber Badge on Tuesday July 30 2019, @07:00PM (#873234)
    Moving out has no bearing on financial aid. Self-sufficiency also has no bearing on financial aid. You can apply for a waiver, but they are hard to actually get approved. Military reserves (as well as ROTC) also do not count. Must be active duty, either currently or in the past (and honorably discharged). If you are married or a parent (or have dependents) and are providing the majority (more than 50%) of their support, you are automatically considered a non-dependent. Foster kid, parents deceased, or ward of the court after age 12, court emancipated youth, or if you are a declared (by the government) unaccompanied homeless person will also get you declared independent. Finally, if you are in a masters or doctorate program you are independent.
    • (Score: 0) by Anonymous Coward on Wednesday July 31 2019, @09:45PM

      by Anonymous Coward on Wednesday July 31 2019, @09:45PM (#873734)

      Well then have them transfer your guardianship to the maid.
      You could have but you weren't thinking like a rich man.