The latest college scandal isn’t about parents using bribes to get their children into the school of their choice. Instead, parents in an affluent suburb of Chicago have been transferring guardianship of their children to give them a better chance at receiving both state and federal financial aid.
The idea is simple. Parents with a household income that would preclude them from receiving financial aid, petition the courts to transfer guardianship of their child to a friend or family member. Once guardianship has been transferred, the student is seen as financially independent.
According to the US Department of Education, “if you are an emancipated minor or someone other than your parent or stepparent has legal guardianship over you,” then you are able to complete the Free Application For Federal Student Aid (FAFSA) form as financially independent. This means the student isn’t required to provide any information about their parents or income on the FAFSA. This significantly changes their eligibility for financial aid. And, technically, it’s completely legal.
The transfer of guardianship is up to the discretion of the judge hearing the petition. It just so happens a large amount of these petitions were filed in the aforementioned affluent suburb of Chicago.
ProPublica Illinois reports at least four dozen of these petitions were filed in northern Lake County within the last 18 months. The reasons for the petition were often cited as “best interest” or “The Guardian can provide educational and financial support and opportunities to the minor that her parents could not otherwise provide.”
The University of Illinois started an investigation once it began receiving calls from school counselors from wealthy areas about some of the state’s financial aid programs. In some instances, the university has reduced aid and is scrutinizing students’ financial aid applications more closely. But the state has no control over financial aid distributed on the federal level.
Beyond its ethical implications, pursuing this kind of legal loophole seems like an extreme measure. It begs the question of why parents would go to such great lengths to secure financial aid for their children. The increasing cost of higher education may have something to do with it. As Parentology reported earlier this year, the average cost of a four-year college degree is around $40,000, according to The College Board, making a college education affordable for fewer and fewer American students and their families.
According to The Wall Street Journal, parents that employed the guardianship strategy were following the guidance of Destination College, a Lincolnshire, Illinois-based company that focuses not just on getting students into college, but specifically on the costs associated.
According to its website, “Our firm specializes in helping families plan and pay for college in the most efficient and inexpensive way.” The company’s website goes on to list, “FAFSA and CSS application assistance, strategies to lower tuition expenses, financial aid appeal letters, scholarship search and assistance and negotiating college tuition,” as just some of the services it provides.
While this latest scandal will now force universities and colleges to be more diligent in their financial aid process, the hope is it will also prompt the US Department of Education to do the same to ensure financial aid is being distributed to those truly in need.
Legal Loophole to Obtain Financial Aid for College: Sources
ProPublica
The Wall Street Journal
U.S. Department of Education
Destination College