Scholarship News

Parents Giving Up Guardianship for College Cash?


July 30, 2019 9:24 AM
by Susan Dutca-Lovell
Dozens of suburban Chicago families have been using a legal loophole to help their children get need-based college financial aid and scholarships. By their parents' forfeiting legal guardianship, students are able to declare financial independence so they qualify for federal, state and university financial aid.

Dozens of suburban Chicago families have been using a legal loophole to help their children get need-based college financial aid and scholarships. By their parents' forfeiting legal guardianship, students are able to declare financial independence so they qualify for federal, state and university financial aid.

ADVERTISEMENT

The practice was uncovered in north suburban Lake County, Illinois, where nearly four dozen such guardianships were filed in the past 18 months, according to ProPublica. Identical petitions have been filed in at least five other Illinois counties. By giving up legal guardianship during their children's junior or senior year in high school to a relative, friend or even co-worker, parents were able to "financially divorce themselves from their kids over the past year and a half." In such instances, only the children's earnings are considered in their financial aid applications, not the family income or savings.

In one case, a student whose parent owned a $1.2 million home only had to declare $4,200 in income from a summer job. Despite having a household income greater than $250,000, the family had already spent roughly $600,000 putting multiple older children through college, leaving no equity in the home and have little cash on hand and in savings for their daughter. After her parents transferred legal guardianship to a business partner, the daughter received a $27,000 merit scholarship and an additional $20,000 in need-based aid, including a federal Pell grant, which she will not have to pay back. The daughter is responsible for $18,000 a year, which her grandparents pay. The parents learned of this strategy from a college consultant company called Destination College, located in Lincolnshire, Illinois; it boasts having saved families upwards of $40,000 per year per student in college costs.

"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 Andy Borst, director of undergraduate admissions at the University of Illinois at Urbana-Champaign. The practice, which is legal, caught the Education Department's attention "amid a spate of guardianship transfers” in the Chicago area and several Illinois universities are investigating the matter. The Inspector General Office suggested adding clarifying language to the Federal Student Aid handbook, such as: "If a student enters into a legal guardianship, but continues to receive medical and financial support from their parents, they do not meet the definition of a legal guardianship and are still considered a dependent student."

The "so-called opportunity hoarding," Borst claims, "takes away resources from middle- and low-income students," and while there is no legal issue, he questions the ethics of the strategy. For Mari Berlin, an attorney who represents families who employed this strategy, "the guardianship law was written very broadly" and "judges were given an immense amount of discretion. The standard is, best interest of the child, and I think it's hard to argue that this is not in the student's best interest.

Get instantly matched to scholarships that meet your skillset, strengths and unique talents. Our search algorithms match you to scholarships that fit your profile. Access a complete list of college scholarships now by conducting a free college scholarship search at Scholarships.com.

ADVERTISEMENT

Discuss

Share your thoughts and perhaps thousands of students will benefit from your unique insight on the subject!



If you can read this, don't touch the following fields


 
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT
When it comes to a student’s overall success, experts have found that a college’s location on the map is equally as important as the quality of the school’s curriculum and social environment. According to Forbes,  these colleges ranked #1 for each of these categories: large city, midsize city, and small city college towns out of 415 U.S. cities. When planning your next campus visit, consider schools in these top-rated college towns.

Best U.S. College Towns 2022

January 21, 2022 11:05 AM
by Liz Montenegro
When it comes to a student’s overall success, experts have found that a college’s location on the map is equally as important as the quality of the school’s curriculum and social environment.
On this year’s 27th anniversary of Dr. Martin Luther King, Jr. (MLK) Day in the United States, the national day of service has transformed into an entire MLK Week on college and university campuses around the country to honor the legacy and to continue the work of Dr. King toward greater equality, diversity, and inclusion of all people through nonviolence.

MLK Week Events Guide 2022

January 19, 2022 1:35 PM
by Liz Montenegro
On this year’s 27th anniversary of Dr. Martin Luther King, Jr. (MLK) Day in the United States, the national day of service has transformed into an entire MLK Week on college and university campuses
There are quite a few myths surrounding scholarships. Perhaps you’ve heard the most common misconception: that scholarships are only meant for graduating high school seniors. Let’s debunk this myth today by connecting you with scholarships created for high school freshmen and up.

Scholarships for All High School Students

January 12, 2022 9:56 AM
by Liz Montenegro
There are quite a few myths surrounding scholarships. Perhaps you’ve heard the most common misconception: that scholarships are only meant for graduating high school seniors. Let’s debunk this myth
Are you recognized across your campus and community for your activism driven by your passion for the environment? Channel your fervor for a greener future into funding for college. If you have a desire to make a lasting impact on our world and the track record to prove it, take a look at these scholarships. You can also find a full list of scholarships for environmental activists here.

January Scholarships for Environmental Activists

January 7, 2022 1:32 PM
by Liz Montenegro
Are you recognized across your campus and community for your activism driven by your passion for the environment? Channel your fervor for a greener future into funding for college. If you have a
The New Year promises a fresh beginning. You get to start off with a clean slate and leave last year’s worries behind. As we kick off a new semester, we all want to improve in some way and make this year better than the last.

Students, Make Your 2022 Resolutions Stick

January 5, 2022 12:14 PM
by Liz Montenegro
The New Year promises a fresh beginning. You get to start off with a clean slate and leave last year’s worries behind. As we kick off a new semester, we all want to improve in some way and make this
You’ve made it to your last year of high school- senior year- and graduation is just a few short months away! You are so close to taking that deep sigh of relief and starting the next chapter of your life, but it’s not quite over yet.

Tips for Curing Senioritis

December 30, 2021 1:44 PM
by Liz Montenegro
You’ve made it to your last year of high school- senior year- and graduation is just a few short months away! You are so close to taking that deep sigh of relief and starting the next chapter of your
If you’re a high school student, it’s never too early to start making your list of colleges. As you narrow down your search, the best way to decide on the best fit for you is to step foot on campus, get a feel for the campus culture, and ask the right questions. Do you see yourself studying in a college town or a more urban area? Does a large student body sound exciting, or would you prefer a smaller, more intimate school setting? Since most of the college’s facts can be found online, you will want to find out the “real deal” that only a living, breathing human being can answer, so that you can see how the school’s information is manifested in students’ daily lives.

5 Questions to Ask at Your Next College Tour

December 29, 2021 10:11 AM
by Liz Montenegro
If you’re a high school student, it’s never too early to start making your list of colleges. As you narrow down your search, the best way to decide on the best fit for you is to step foot on campus,
Choosing which college to attend is a huge decision that involves many factors to consider. For a Christian student who is weighing their options, there are quite a few benefits to attending a Christian college. For starters, campus culture is important no matter where you go, but Christian colleges offer a faith-based environment where you can be surrounded by students and staff who share your core values. Campus activities such as chapel and religious services, Bible studies, and extracurriculars offered on Christian campuses are designed to help you grow in your faith.

Featured Christian Scholarship Programs

December 22, 2021 1:47 PM
by Liz Montenegro
Choosing which college to attend is a huge decision that involves many factors to consider. For a Christian student who is weighing their options, there are quite a few benefits to attending a