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The Journal Gazette

Tuesday, August 20, 2019 1:00 am

Furthermore ...

Loophole lessens college burden for some

We recently learned how much some wealthy parents are willing to pay to get their children into select universities. Now we're learning how far some wealthy parents will go to avoid paying tuition.

Pro Publica Illinois, an investigative news service, reported recently on parents exploiting a loophole in the law so their children can access need-based financial aid and scholarships they would not otherwise be qualified to receive.

Officials at the University of Illinois at Urbana-Champaign are examining a tactic in which parents transfer legal guardianship of college-bound children to relatives or friends so the students can qualify for assistance designed for low-income families. 

“It's a scam,” Andy Borst, director of undergraduate admissions at the university, told Pro Publica. “Wealthy families are manipulating the financial aid process to be eligible for financial aid they would not be otherwise eligible for.

“They are taking away opportunities from families that really need it.”

Borst's suspicions about the racket were raised when a high school counselor from an affluent Chicago suburb called to inquire why a student had been invited to an orientation session for low-income students.

Borst checked the student's financial aid paperwork and saw she had obtained a legal guardian, making her eligible for financial aid independently.

The Wall Street Journal reported on a Chicago-area parent who transferred guardianship of her 17-year-old daughter to a business partner last year. While the woman's household income exceeded $250,000 a year, she told the Journal she and her husband had spent about $600,000 for college costs for their older children and had no equity in their $1.2 million home. Her younger daughter now attends a West Coast private college with annual tuition of $65,000. The student qualified for a $27,000 merit scholarship plus $20,000 in need-based aid, including a federal Pell Grant. Her grandparents cover the $18,000 a year tuition balance.