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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: 1) by khallow on Wednesday July 31 2019, @01:10AM (2 children)
While I applaud your and AK's attempts to grow up, uninformed cynicism isn't any better. What rich people can do is not much different from what average people can do. Sure, it's a better start, but only if the person takes advantage of it. What gets missed is two things. First, a better start is only worth so much. Notice how the advantage is always phrased in potentiality. One can have an advantage. But there are also disadvantages to these things, such as missing out on valuable life experiences. Meanwhile ambition, talent, and experience (what is often termed "luck") can take you much further than the luck of being born to rich parents.
Second, I don't want to sound like sour grapes, but a lot of these wealth-related advantages (especially of the kind derived from cheating) aren't desirable to us. For example, maintaining your list of elite, rich friends is great for some things, but I haven't heard a lot of people around here who value that or would want to take up the considerable effort to maintain such connections. And of course, what do you really know, if you cheated to get into a school beyond your intellectual means? Much was said of mentors who would expand one's horizons. Being born rich doesn't give you any better access to that.
(Score: 1, Touché) by Anonymous Coward on Wednesday July 31 2019, @03:53AM
Being born rich is such a terrible burden. We should make sure that doesn't happen to anyone ever again.
(Score: 2) by AthanasiusKircher on Friday August 02 2019, @07:25PM
Thank you for a clear and well-thought-out reply.
Let me just disagree on a few points:
While that is true, many average or poorer people don't even know what is possible. Or, because they have never known anyone who has succeeded in ways outside their community, they can't even imagine the possibilities, let alone have a clue about how to do it. It's true that with the growth of the internet today, it's easier to find information than when I was younger, but even then, you need to know what to search FOR.
That may be true, but that's not at all the point. Elite, rich friends get you other opportunities even if you don't want to be rich or "elite." You have more choices because of them. Someone who goes to an Ivy or other top school and mingles with the rich folk isn't just building up a list of buddies to play polo or squash with. (Aside: I don't play either.) It's people who know other people who know someone who can offer you a job or recommend you to your potential future boss or whatever.
Not to mention the sheer power of a resume with early opportunities on it. I've talked to admissions officers at Ivies (I've worked at them), and I know that if you went to one of the top private schools in the U.S. (where tuition prior to college can be upwards of $50k/year), chances are your applications will be "set aside" and given more review. I've taught at a couple of those elite private high schools, and I see the opportunities for kids have that very few public schools -- even the really good ones -- can match. And once your history of elite schools gets you into an elite college, you walk out into the workforce and hand someone your resume, and it says X Top-20 school or whatever. Again, your resume gets a second look. Maybe 5 or 10 years out from your degree, it doesn't matter as much, but it gets your foot in the door and gets you several more rungs up the ladder at the start. If you ever want to pursue a career change and need to convince someone to look at your resume again when you don't really have the expected qualifications, it doesn't help to have those colleges either (as I myself can attest to).
Lots of opportunities and doors open to such folk. Yes, you need to take advantage of them, but it's a lot easier to do so than to work your way up from nothing.
The heck it doesn't. My high school guidance counselor was a joke. The high school guidance counselors at the private schools I've worked with are fountains of resources on how to get a better edge in getting into elite schools. And most of my public school teachers were good folk who cared about their job as educators, but I rarely received the kind of attention I have seen fawned on kids who attend elite private schools. I've taught in a public high school in a reasonably poor community (lower middle class, I suppose). I've seen the difference of the kinds of teachers first-hand. I see the resources such teachers have to offer. I see the amount of time they can devote to kids -- when I taught in such a school I had to teach ~150 students per year. In an elite private school, the number is often ~50 or less at the high school level. You can devote a lot more energy and attention to individual students... in essence, you can mentor them.
And then you move on to college. You don't think a letter of recommendation from a top scientist in your field from a top research university will receive more attention than a random prof at a community college? You have better chances at getting a good position in the workforce or going on to grad school or professional school if you want. And it's easier to stay among those top schools for masters or doctorates if you're already at one.
I admittedly don't know much about your background, but I've seen my life change when I made a leap to the world of the "elite." And since then I've gone back and forth several times between those worlds in some ways in the kinds of positions I've had. So I've seen the poor student struggling to barely stay afloat as he works his way through a state school, while a rich kid coasts through an Ivy.
Again, I'm not saying social mobility is impossible or that people can't make use of resources to get ahead. And I'm not cynical about this either -- I'm realistic about the fact that rich people DO have more opportunities, more ways to find out about more opportunities, more ways to take advantage of those opportunities, etc. That's simply reality. It doesn't mean you can't be poor and pull yourself up by your bootstraps -- but it will usually take more than determination to do so. A lot of luck and a lot of people offering you opportunities you likely wouldn't find yourself helps.