"A loophole that has allowed some wealthy families to get federal aid meant for low-income students is now being challenged, according to reports. Details of the scheme were first reported by ProPublica and The Wall Street Journal, and the Education Department is now being urged to close the loophole," Fox News reports.
"'The laws and regulations governing dependency status were created to help students who legitimately need assistance to attend college,' Department of Education Press Secretary Liz Hill told Fox News via email. 'Those who break the rules should be held accountable, and the department is committed to assessing what changes can be made — either independently or in concert with Congress — to protect taxpayers from those who seek to game the system for their own financial gain.'
An independent watchdog for the Education Department is recommending a change to close the loophole.
'They are gaming the system, whether it is legal or not doesn’t make it any less unsavory,' Justin Draeger, chief executive officer and president of the National Association of Student Financial Aid Administrators, told The Journal.
Officials at the University of Illinois reported the scheme after finding several cases there.
School officials said the maneuver seems to be legal, but at the same time it takes away from limited money that's intended to bolster needy students."
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