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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: 4, Informative) by JoeMerchant on Tuesday July 30 2019, @07:31PM
No, it's about people getting up in other people's business, determining who gets what based on "need" and let's give the full rectal exam to determine need before releasing a penny.
Let's start with a sound bite: Bernie's "insane socialist proposal" to forgive all student loan debt. It's cheaper than Trump's tax cuts for the rich were, it's far cheaper than the un-necessary Gulf War II was - the numbers don't lie, these are choices that our leaders are making for us, choices that "we the people" would make differently, if our system wasn't warped by the concentration money and power in the hands of a few.
BTW, on principle, I do not agree with Bernie's idea, you accepted debt, that's yours to repay. I do, however, fully endorse the numbers behind the proposal which are: tax cuts for the rich are not insignificant, and there's more than one way to inject "wealth" into the economy.
Historically "ground up" investments produce significantly more economic growth than "trickle down", per dollar invested.
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