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.

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.

Just because there are millions of college scholarships out there doesn’t mean you have time to go searching, and many won’t even match your profile. We’ve done the work and Scholarships.com is totally free. We have the search algorithms and scholarships database, saving you time in searching, finding and applying to thousands of dollars in college scholarships. Get instantly matched to scholarships that meet your unique talents, skillset and strengths, only those you qualify for. Access a complete list of college scholarships now by conducting a free college scholarship search at Scholarships.com.

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


 

    When it comes to large dollar scholarships, mo' money means fewer problems in paying your college tuition bill. The average student will land between $1,000 and $5,000 in college scholarships after investing a decent amount of time and effort into applying for scholarships. Even smaller scholarships worth $500 are enough to cover books and fees, even if they aren't enough to foot an entire semester’s college tuition bill.

Biggest / Largest Dollar Scholarships in 2020

January 16, 2020 9:41 AM
by Susan Dutca-Lovell
When it comes to large dollar scholarships, mo' money means fewer problems in paying your college tuition bill. The average student will land between $1,000 and $5,000 in college scholarships

    High school graduation is right around the corner for high school seniors class of 2020 and - while many students may have already committed to their dream colleges - securing college financial aid is still a top-of-the-list priority in bringing that dream to fruition. Luckily, right now is the scholarship application peak season, with just enough time to apply for and win scholarships for college. Many 2020 scholarship deadlines are within the next several months, giving students like you sufficient time to conduct a free scholarship search and apply for those that best suit and interest you. Here's a sneak peek of the many scholarships for high school seniors class of 2020:

20 Scholarships for High School Seniors Class of 2020

January 8, 2020 3:18 PM
by Susan Dutca-Lovell
High school graduation is right around the corner for high school seniors class of 2020 and - while many students may have already committed to their dream colleges - securing college financial
Pacific Gas and Electric Company (PG&E) is offering more than 150 college scholarships totaling almost $500,000 for college-bound high school students, current college and continuing education students living in Northern and Central California. The college scholarships being offered by PG&E include the employee resource group (ERG), engineering network group (ENG) and Better Together STEM scholarship programs.

PG&E Offers Over 150 Scholarships Totaling $500k

January 7, 2020 2:57 PM
by Susan Dutca-Lovell
Pacific Gas and Electric Company (PG&E) is offering more than 150 college scholarships totaling almost $500,000 for college-bound high school students, current college and continuing education

    What better way to start off the New Year than by applying for and winning free college scholarships? Our New Year's Resolution is for you to attend and graduate college debt-free, so we've already compiled a list of top 2020 scholarships to help you achieve your college financial aid goals in the upcoming New Year.:

New Year, New You, New 2020 Scholarships

January 2, 2020 9:03 AM
by Susan Dutca-Lovell
What better way to start off the New Year than by applying for and winning free college scholarships? Our New Year's Resolution is for you to attend and graduate college debt-free, so we've
If there is one thing upon which 2020 Presidential candidates and government officials agree, it is that something must be done to resolve the issue of college student debt, which has now outpaced credit card and auto debt. More than fifty percent of Americans believe that college student debt is a major problem, with the average college student currently graduating with $30,000 in student loan debt. Some of the proposed college debt plans - such as student loan forgiveness plans - would leave students debt-free, while others would offer new repayment and refinancing options. Here are some of the major changes that could take place in the near future:

Plans to Tackle Student Loan Debt in 2020

December 30, 2019 2:44 PM
by Susan Dutca-Lovell
If there is one thing upon which 2020 Presidential candidates and government officials agree, it is that something must be done to resolve the issue of college student debt, which has now outpaced
While many students widely anticipate the moment they are able to go home for winter break and spend time with their family and friends, thousands of students dread the month-long campus shutdown as they have no home to which they can go.

Battling College Homelessness During the Holidays

December 24, 2019 10:45 AM
by Susan Dutca-Lovell
While many students widely anticipate the moment they are able to go home for winter break and spend time with their family and friends, thousands of students dread the month-long campus shutdown as

    We like you a lakte, which is why we put together this list of 8 Hanukkah scholarships. To best coincide with the holiday, these scholarships are exclusive to students of Jewish faith or ethnicity. For more religious scholarships or ethnic scholarships, click here. Good luck in winning scholarships for college and Happy Hannukah!

8 Lit Hanukkah Scholarships 2019

December 23, 2019 12:04 PM
by Susan Dutca-Lovell
We like you a lakte, which is why we put together this list of 8 Hanukkah scholarships. To best coincide with the holiday, these scholarships are exclusive to students of Jewish faith or

    Looking to spend some (but not all) of your time this winter break applying for scholarships? Then these are the top 10 easy scholarships for which you should apply, based on their ease of application for the amount being offered. Prep yourself financially in the upcoming new year and school semesters while you have time off from school, starting with this list of scholarships*:

10 Easy Scholarships to Apply for Over Winter Break

December 20, 2019 4:18 PM
by Susan Dutca-Lovell
Looking to spend some (but not all) of your time this winter break applying for scholarships? Then these are the top 10 easy scholarships for which you should apply, based on their ease of