Skip to comments.Illinois parents are giving up custody of their children to qualify for college financial aid [tr]
Posted on 07/30/2019 1:06:29 PM PDT by C19fan
Well-to-do Illinois parents, including lawyers, doctors and realtors, are reportedly giving up custody of their high school-aged children in order to help them secure scholarships and financial aid reserved for low-income students.
Separate investigations conducted by ProPublica Illinois and The Wall Street Journal have uncovered dozens of cases in the wealthy suburbs of Chicago involving parents transferring legal guardianship of their teenagers to grandparents, aunts, friends, or even co-workers over the past year-and-a-half.
The idea behind the tactic, which is legal in Illinois, is that once the parents give up custody, the children are able to declare themselves financially independent on college applications and declare dramatically lower incomes.
The Wall Street Journal cites one example article where a student whose parents owned a $1.2 million house ended up declaring only $4,200 earned from a summer job, and securing $47,000 in scholarships and federal grants to attend a private university where the annual tuition costs $65,000.
(Excerpt) Read more at dailymail.co.uk ...
Makes economic sense to me. If the government puts in incentives without monitoring that are that perverse, somebody's gonna figure them out and take advantage of them.
No different than a tax loophole, except one offers you more money while the other ruins your kid(s)
Brick and Mortar Higher Edumacation has a broken bidness model.
Scammers gonna be scamed...
And all those parents in the college admission scandals go to prison........
I have a former colleague whose parents engaged in something like this so that she and her brother could attend an elite university.
I remember people talking about this when I was in high-school.
Well-to-do parents would set their kids up in an apartment and let them file their FASFA form as an independent. They qualified for a lot more in grants and aid that way.
The Reagan Administration changed the rules to clamp down on this practice. I guess the lawyers eventually found a way around that.
Saving makes tuition worse. Having a million dollar house and savings makes for a max tuition bill.
Universities charge according to what you own. I don’t blame the parents for doing this.
This has been going on for decades.
American “higher education” has become another government-funded progressive scam
Like the 2007 housing bubble, ever-higher prices are fed by government spending and massive debt, mostly guaranteed by Fed.gov. The results will be the same - ever higher costs to consumers, middle-class getting priced out, a bloated, politicized economic interest feeding off it, and when it pops - massive fraud revealed.
I work for a very prestigious university, and children of employees attend free.
Told my siblings if any of their kids gets accepted, I’d adopt them to save the tuition. That would be somewhere around $250K for four years.
Who knew ?
This has been happening for a very long time.
These wealthy parents might be paying a fortune in taxes.
If they found a loophole in financial aid, I can’t blame them.
But it’s a shame for the other families who have to pay full price.
Well thats the difference between doing something you can legally do, and doing something that’s illegal.
In CA, they buy them a home near the college on the fairly easy bet the home will go up in value 30% by the time they get out of college.
I don’t think a house counts as a FAFSA asset. The proceeds of the sale of house does. Fafsa is screwed up. If parents divorced but dad wealthy and you live with mom then dad’s income assets don’t count. But if mom remarries stepdad assets income count. Go figure.
What bothers me most about the FAFSA form and process is that I must voluntarily provide private information about my financial status to another government agency and to the University that the government already has and is nobodies business but the IRS.
If the government was efficient and had its stuff together, the only thing necessary for an application to FAFSA to check for eligibility should be my taxid ( Not my social security number! ) and a software application that takes said taxid and tells the folks who give out federally backed student loans whether I’m eligible or not.
My name and vital information is duplicated ( probably with errors ) all over computers in DC and everywhere I’ve ever lived.
Writing this application should take 2 or three programmers a couple of weeks if things were organized distributively and properly. But what do I know ..... I quit! Retired as fast as I could because Rational, efficient and sane thoughts are frowned upon in the corridors of .gov
This stuff has been known and doable for decades.
Call me back when people grow up and get serious.
We were asked the value of our house when applying for loans.
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