"Dozens of wealthy families in the Chicago area have been transferring legal custody of their kids to poorer relatives or friends to get financial aid packages in college. The report comes from the Wall Street Journal, which said Monday that sources familiar with the matter say the Department of Education and several Illinois universities are investigating the practice," the Washington Examiner reports.
"In a review of over 1,000 cases, 38 cases showed a judge allowing parents to transfer custody of their kids in the last two years of high school. The majority of the families had homes worth more than $500,000. Students stand to gain tens of thousands of dollars in financial benefits from the custody transfer.
'They are gaming the system, whether it is legal or not doesn’t make it any less unsavory,' Justin Draeger, the head of the National Association of Student Financial Aid Administrators, said.
Andrew Borst, an enrollment director at the University of Illinois, said the practice takes opportunities away from middle- and low-income students.
'Our financial-aid resources are limited and the practice of wealthy parents transferring the guardianship of their children to qualify for need-based financial aid — or so-called opportunity hoarding — takes away resources from middle- and low-income students,' Borst said."
NASFAA's "Notable Headlines" section highlights media coverage of financial aid to help members stay up to date with the latest news. Articles included under the notable headlines section are not written by NASFAA, but rather by external sources. Inclusion in Today's News does not imply endorsement of the material or guarantee the accuracy of information presented.
Publication Date: 7/30/2019