Suburban parents are giving up guardianship of their teens so they can claim college aid meant for poor families

University of Illinois-Urbana-ChampaignFacebook/University of Illinois at Urbana-Champaign

  • Parents are giving up legal guardianship of their kids to get them a potential leg up in college admissions, according to a new ProPublica investigation.
  • ProPublica identified cases around the Chicago suburbs where parents would hand over guardianship of their kids to friends or relatives. Students would then qualify for financial aid designed for poor students by filing as financially independent.
  • ProPublica identified more than 40 cases of parents giving up guardianship to get aid in the suburbs of Chicago, but suspect the practice may be happening across the country. Their investigation is ongoing.
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Suburban parents are giving up legal guardianship of their children so they can qualify for financial aid meant for low-income families in another sign of how competitive the college-admissions process has become, according to a ProPublica investigation.

Parents identified in the investigation reportedly transferred legal guardianship of their children to relatives or friends during junior or senior year of high school. The practice allows students to qualify for need-based government and university financial aid by applying as financially independent of their families - and it's technically legal.

Read more: The SAT is adding an 'adversity score' that will quietly let colleges track a student's wealth and privilege

The practice is another tactic parents are using to gain any advantage they can when it comes to getting into increasingly more competitive (and pricey) universities. This news follows an FBI investigation back in March that ended with 50 wealthy parents charged for bribing universities and forging documents to get their kids into elite schools.

ProPublica's Illinois bureau identified more than 40 cases of parents giving up guardianship to get aid in the suburbs of Chicago as of January 2018, though the nonprofit group suspects the practice may be happening across the country. The investigation is ongoing.

"It's a scam," Andy Borst, director of undergraduate admissions at the University of Illinois at Urbana-Champaign, told ProPublica. "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."

The University of Illinois at Urbana-Champaign identified 14 applicants who obtained financial aid through filing as financially independent. Business Insider has reached out to the university for additional comment.

According to Department of Education data from 2016-17, 80% of federal Pell Grant student aid went to families earning $40,000 a year or less. With the cost of college and levels of student debt already reaching record highs, poorer students attend college at much lower rates. Just 32% of students from the bottom fifth percentile of earners go to college, compared to 78% of students coming from the top fifth income distribution.

A college degree is almost essential, however, to getting a high-paying job: college grads earn anywhere from 38% to 133% more than high-school grads, depending on the state.

"This is the first time I have heard of something so brazen," Mark Kantrowitz, a leading financial-aid expert, tole ProPublica. "It's completely unethical."

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