As It Happens

U.S. parents gave up custody of their teens to get more money for college: report

Parents in suburban Illinois are giving up guardianship of their teenagers so they can qualify for more financial aid for college, a new investigation has found.

After ProPublica broke the story about this legal loophole, the U.S. government said it would investigate

The University of Missouri is one several schools that Illinois students attended thanks to financial aid they accessed after declaring themselves financially independent from their parents. (Michael B. Thomas/Getty Images)

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Parents in suburban Illinois are giving up guardianship of their teenagers so they can qualify for more financial aid for college, a new investigation has found.

ProPublica Illinois reporters Jodi S. Cohen and Melissa Sanchez investigated dozens of families who transferred guardianship of their kids to friends or family members. 

When those kids turned 18 and applied for financial aid, their parents' income wasn't taken into account, making them eligible for a wider pool of state, federal and university grants. 

Because of this reporting, the U.S. Department of Education is looking at ways to close the financial aid loophole.

Sanchez spoke to As It Happens guest host Rosemary Barton about what they uncovered. Here is part of their conversation. 

It seems like a drastic thing to do. So why are parents choosing to go in this direction?

None of the parents who we've identified were willing to talk to us on the record ... but a lot of these parents are saying that they don't make enough money to pay for college outright, but they make too much money to qualify for any aid or enough aid.

And so I think parents are really desperate for some avenue to help them pay for their kids' college.

And does that ring true in the instances you found?

It's hard to know. I mean, we don't know what everybody's income levels are. But a lot of the people involved are attorneys. There's a doctor. There's a lot of teachers. It's kind of a range from middle- to upper-class families.

They live in some of the most affluent suburbs in Illinois and they own homes that are worth a half-million dollars or more. So, from the outside, it looks like some of these families might be able to pay for their kids' college. But we don't actually know what people's personal finances are.

In terms of the salaries that they might have, do you have a sense of that?

Just from personal experience, I think we're talking about some people with six-figure salaries, so $100,000 [US] and up. But we're also talking about teachers, real estate agents and other folks who might make maybe $60-$70,000 a year.

This is hurting the people who have the least ability to pay for college.- Melissa Sanchez, ProPublica Illinois 

How many parents have you found evidence of doing this in Illinois?

We started looking at one county where we had heard that this was a problem, and we identified 46 cases. 

That's just one county. So we're starting the process now of trying to pull court records in other counties where we hear this is happening to see how widespread it is.

How are these people learning about this, I don't know, tool or loophole or whatever you want to call it?

A lot of these people seem to have learned about this loophole through a college consultant. And so these are people who families hired to help them fill out applications, write essays and apparently also to look for ways to save money on college.

And we don't know exactly how people are working together, but almost every single one of these families used one of two law firms to do the work. And the paperwork looks almost identical for all of these cases.

So there is something going on with at least two law firms and one college consultant who these families are working with and paying to try to find this loophole.

You did talk to some of those lawyers. So how did they explain or defend what they were doing?

There's two lawyers involved in this. The one that we spoke with said that this is legal, that [in] the state's law on guardianship ... one of the reasons for kids to move into guardianship is if it's in the child's best interest.

And they say that it's in the child's best interest to declare themselves financially independent when they enter college so that they can qualify for all this aid, because the parents can't pay for college themselves.

So they say that it's perfectly legal, it's in the state statute and the parents aren't doing anything wrong.

Do you have a sense — because we're in Canada — of how much it costs to send a kid to college in this county where you are in Illinois?

It's about $30,000 [US] a year, and that includes room and board.

Melissa Sanchez is a reporter at ProPublica Illinois. (Submitted by Melissa Sanchez)

Is anyone affected by this adversely?

Need-based grants are limited. There's only so much to go around.

That means that there's less money on the table for families that actually do need it.

Do you have a sense of how much student aid would be taken away from the people who actually need it?

It's hard to know. What I can tell you is that in Illinois, there's a much higher number of kids who need the aid, who qualify for it, who don't get it because there just isn't enough money.

Last year there was more than 80,000 college students who qualified for the state's need-based grants but did not get them because the money ran out.

Other than the legal and ethical questions here — and I understand those — is there not a bigger question about why the heck college is so unaffordable in the United States and how even seemingly maybe well-off families or, you know, average middle-class families just can't make it work? 

That's definitely the other side of the story. College is way too expensive in this country, and that's one of the reasons it's become a big campaign issue at the presidential level.

But I think, at the end of the day, it's a problem for all families. And here we have a case of, you know, a few dozen, possibly a few hundred, families that are taking advantage of a loophole. But in doing so, this is hurting the people who have the least ability to pay for college.

Written by Sheena Goodyear. Produced by Jeanne Armstrong. Q&A has been edited for length and clarity.


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