Another College Admissions Scandal, Parents Giving up Guardianship for More Money

A financial aid loophole is allowing families who are well off, to turn over guardianship of their teenagers to friends or relatives so that they can declare financial independence to qualify for tuition aid and need-based scholarships.

What We Know:

  • The investigation done by ProPublica Illinois shows that families near Chicago are exploiting this loophole. Andy Borst, director of undergraduate admissions at the University of Illinois at Urbana-Champaign, called the tactic a scam. “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.”
  • According to the publication, “more than 40 guardianship cases fitting this profile filed between January 2018 and June 2019 in the Chicago suburbs of Lake County alone.”
  • The University of Illinois started investigating a year ago when a high school counselor from a wealthy Chicago suburb called Borst to ask why a certain student was invited to an orientation program for low-income students. After checking the student’s financial aid application, Borst discovered the student had obtained a legal guardian, making her eligible to qualify for financial aid independently. The university has since identified 14 applicants who did the same; three of which who completed their freshman year and 11 who plan to enroll this fall.
  • The university immediately notified the U.S. Department of Education. “The laws and regulations governing dependency status were created to help students who legitimately need assistance to attend college. Those who break the rules should be held accountable,” department spokeswoman Liz Hill said in a statement. “The Department is committed to assessing what changes can be made – either independently or in concert with Congress – to protect taxpayers from those who seek to game the system for their own financial gain.” Hill said the agency has not yet been told about a specific case, but that it would alert the state attorney general and the U.S. Department of Education if necessary.
  • The Illinois Probate Act, which governs guardianship, does not specify circumstances in which guardianship should be denied. However, a court can appoint a guardian if the parents consent, the minor agrees and the court determines it’s in the minor’s best interest.

It’s unclear how much money students might have been able to secure. The maximum yearly amount for a Federal Pell Grant, depending on family income, is $6,195. Students don’t have to pay back the money.