Sending your children to college is increasingly becoming an impossible financial task, and testimony to that is the latest cheat that has seen parents give up guardianship of their children to qualify them for the financial aid that comes with independence. Quite a few 2020 presidential candidates are making waves with their proposals to cancel student loan debt, make college free or at least refinance the debts.
It rings quite loudly at this point because some 45 million Americans owe a staggering $1.6 trillion in student debt. On top of that, both private and public college fees have increased by 30 percent from a decade ago.
That latest cheat, however, isn’t necessarily being undertaken by those truly in financial need: Instead, it’s the wealthy who have found a way around expensive college education.
Investigative journalism outlet ProPublica recently discovered that wealthy families from Chicago suburbs have been exploiting a legal loophole to enable their children to obtain financial aid and scholarships.
According to the findings, parents are giving up legal guardianship of their children during their junior or senior year in high school to other family members or friends. This clever change in guardianship status then allows the students to declare themselves financially independent of their families so they can qualify for financial aid.
To obtain financial aid, an independent student is only required to list their own income, not their parents’ income or their guardian’s.
In total, ProPublica found over 40 guardianship cases fitting this profile in the last 12 months alone.
And the parents involved weren’t from the lower, or even lower middle class--they include lawyers, doctors, and insurance and real estate agents, among others.
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Most of the guardianship cases were executed by a few law firms in the Chicago suburbs. The petitions filed in each case noted that the guardianship would be in the minors’ “best interest” due to education reasons. Also typically, it was noted that the guardian in question was better suited to provide educational and financial support and opportunities to the minor than the parents were able to provide.
From a legal standpoint, it sounds pretty solid. It’s certainly true that this guardianship arrangement provides more financial opportunities.
Furthermore, Andy Borst, director of undergraduate admissions at the University of Illinois at Urbana-Champaign, says the school’s lawyers have advised them the move is legal.
Borst doesn’t think it’s on the up-and-up, though.
“It’s a scam…wealthy families are manipulating the financial aid process to be eligible for financial aid they would not be otherwise eligible for,” Borst told ProPublica.
According to ProPublica, more than 80,000 Illinois students who were eligible for the state’s Monetary Award Program did not receive those scholarships because the fund ran out of money.
From a legal standpoint, though, Borst is not likely to get any relief. It may be morally and ethically wrong, but not legally. That means that any change will have to come from university regulations.
These findings follow the national “Varsity Blues” college admissions scandal.
In March, federal prosecutors charged more than 50 people across six states in a $25-million bribery scheme. Among the charged are actors, CEOs, owners of substantial businesses, and at least one co-chairman of an international law.
The indictment says that between 2011 and 2018, 33 parents of college applicants paid more than $25 million to William Rick Singer, organizer of the scheme, to help students cheat on their standardized tests and classes and pay bribes to the coaches who could get them into college with fake athletic credentials.
Both cases make a mockery of college admissions.
According to a recent poll, most Americans believe that college admissions should be based on merit, not wealth or lineage. But in this case, the majority is irrelevant: At least 40 colleges in the U.S. (including five Ivy League colleges) have more students from the top 1 percent of the income scale than from the entire bottom 60 percent, according to the New York Times.
College is too expensive, but only the wealthy are finding the loopholes.
By Josh Owens for Safehaven.com
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