In America, it seems the rich continue to get richer while the poor continue to get poorer. Mainstream media recently broke a story about how wealthy parents are giving up custody of their children so they can get more government handouts to pay for their child’s education. Because these wealthy parents want more money, they have decided to abandon custody of their children in order to qualify for more government aid and get their children into college for a super low price – while hardworking families continue to struggle to get financial aid and educate their children.
A group of wealthy families from the suburbs of Chicago were discovered to have been exploiting the federal government. They use a “legal” tactic of disowning their children and allowing the kids to declare themselves financially independent. Because of this loophole, the children enter the college system with a lot less money on their record, which automatically qualifies them for financial aid.
The parents who are scamming the system for more government handouts include lawyers, doctors, and rich realtors.
These rich families are taking away financial aid opportunities that would otherwise be available for low-income families by exploiting this loophole.
ProPublica Illinois and The Wall Street Journal launched separate investigations into this scam and uncovered dozens of cases where wealthy parents in the suburbs of Chicago were transferring legal guardianship to their teenagers to poorer relatives including grandparents, aunts, and uncles.
The tactic, which is still legal in Illinois, allows students to declare themselves financially independent, so they have dramatically lower income reported on their financial aid application.
One student, who grew up in his parents $1.2 million home, declared a measly $4,200 earned income for a summer job. As a result, the child got a $47,000 in scholarships and federal “free” grant money that otherwise would have gone to a student who truly was from a low-income family. As a result, that student managed to attend a high-class institution for a very low rate compared to the annual tuition price of $65,000.
Andy Borst, the director of undergraduate admissions at the University of Illinois at Urbana-Champagne, called it what it was.
“It’s a scam,” Borst said to 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.”
These rich Illinois families are stealing from the government and the poor so they can get their children further ahead in life.
This scam comes just months after more than 50 wealthy parents were exposed to bribing their kids into elite colleges.
ProPublica found nearly four dozen petitions seeking to transfer children’s legal guardianship over the last 18 months in Lake County, Illinois. And they’re predominantly from wealthy – and I mean wealthy – families.
Borst identified three students at his school who participated in the scam. He told them that their financial aid package would be slashed. The rich kids hardly cared.
“We didn’t hear any complaint, and that is also a big red flag,” he said.
The Journal identified 38 similar guardianship transfer cases in the same part of Illinois. Most of the parents who abandoned custody of their children owned homes worth $500,000 to $1,000,000.
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