Well-to-do Illinois parents, including lawyers, doctors and realtors, are reportedly giving up custody of their high school-aged children in order to help them secure scholarships and financial aid reserved for low-income students.
Separate investigations conducted by ProPublica Illinois and The Wall Street Journal have uncovered dozens of cases in the wealthy suburbs of Chicago involving parents transferring legal guardianship of their teenagers to grandparents, aunts, friends, or even co-workers over the past year-and-a-half.
The idea behind the tactic, which is legal in Illinois, is that once the parents give up custody, the children are able to declare themselves financially independent on college applications and show dramatically lower incomes.
The Wall Street Journal article cites one example where a student whose parents owned a $1.2 million house ended up declaring only $4,200 earned from a summer job, and securing $47,000 in scholarships and federal grants to attend a private university where the annual tuition costs $65,000.
Wealthy Illinois are reportedly giving up custody of their teenagers so that they can declare lower incomes in order to qualify for financial aid at colleges in the state, including University of Illinois at Urbana-Champaign (pictured)
Students are not required to state their parents’ income on federal financial aid applications if they are legally independent. In those cases, the household income is not factored in when determining an applicant’s financial aid package.
Andy Borst, director of undergraduate admissions at the University of Illinois at Urbana-Champaign, called the tactic ‘a scam’
‘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 revelations come just months after a bombshell college admissions scandal in which more than 50 people, including actresses Lori Loughlin and Felicity Huffman, have been accused of paying tens and hundreds of thousands of dollars in bribes to get their children into elite universities.
ProPublica Illinois’ investigative journalists have uncovered nearly four dozen petitions seeking to transfer children’s guardianships in the past 18 months in Lake County, Illinois.
The University of Illinois at Urbana-Champaign has identified 15 applicants who had been declared independent prior to admission, three of whom are now rising sophomores.
Borst said the university informed the trio of students midway through their freshman year that their financial aid would be slashed.
Some of the students who had their custody transferred to a guardian have attended some of the most prestigious schools in Lake County, including Stevenson High School
‘We didn’t hear any complaint, and that is also a big red flag,’ Borst said
On its part, the Journal said it has identified 38 similar guardianship transfer cases in the same area.
According to the newspaper, most of the parents who had relinquished custody of their children own homes ranging from $500,000 to over $1million.
One mother who spoke to the Journal on condition of anonymity explained that the family has a combined annual income of $250,000, but they had already spent $600,000 to send their other children to college.
In order to help her high school senior daughter obtain $20,000 in need-based financial aid to attend a private college with a $65,000 tuition, the mother transferred her legal guardianship to a co-worker.
The guardianship law that Illinois currently has on the books allows judges to approve custody transfers for any reason, so long as all the parties involved agree that it is in the best interest of a child, even if the parents are able to financial support her.
Many of the applications obtained by ProPublica seeking custody transfers openly state that the chose guardian can provide ‘financial and educational support and opportunities’ that the parents could not provide.
The children seeking guardianships for the purpose of securing financial aid and need-based scholarships have attended some of the most prestigious schools in the county, including Stevenson High School and Glenbrook North High School.
Some applicants secured federal grants and scholarships that allowed them to attend the University of Missouri (pictured)
Some ended up going to large public institutions, including the University of Wisconsin, the University of Missouri and Indiana University, while others opted for smaller private colleges.
While some critics that ProPublica has interviewed for the story slammed the practice of using guardianships to help the children of wealthy parents pay for college as unethical, lawyers handling custody transfer cases pointed out that it is not against the law.
‘It’s a solution they have been able to find as college costs go up and they are unable to pay,’ Mari Berlin, of Kabbe Law Group, said of the families her firm has represented. ‘It is in the best interest of the minor, which is the statute’s purpose.’
The US Department of Education told the Journal that it is looking into the matter.