Some Parents Are Giving Up Guardianship Of Their Kids To Get College Financial Aid

NPR's Audie Cornish speaks with ProPublica's Jodi Cohen about a new report that found dozens of parents are giving up their guardianship of their kids so they can get financial aid for college.

AUDIE CORNISH, HOST:

New reporting has brought to light another way well-to-do families are gaming college admissions. ProPublica found that dozens of parents in Illinois have given up legal guardianship of their children so the kids can qualify for financial aid. And it's perfectly legal. To explain this loophole, we're joined by reporter Jodi Cohen of ProPublica in Chicago.

And, Jodi, to start, this guardianship maneuver is legal. You write about it. And how does it work? What are they doing?

JODI COHEN: So here's how it works. The families are going to court and the parents are saying, I am going to give up the rights to my child to another person. And that's typically a grandparent, sometimes an aunt or a cousin or a family friend. The parents sign off, the child or the minor signs off and the guardian agrees. And that allows the child or the minor, the teenager, to obtain the guardian.

CORNISH: One would think that this is something a parent would do under duress - right? - if they're estranged, if the parents are abandoning their kid in some way. So how does this play out? Does anyone question it?

COHEN: So in typical guardianships, you're right, this is a desperate situation for families. They feel like they have to give up their child to somebody else because they're in dire straits. In these cases, the families write in the petition that they're doing it for educational opportunities for their child. And they may say they feel desperate because college costs are very high, families feel squeezed. But these are families who would not otherwise be eligible for financial aid.

CORNISH: Right. Because some of these families are financially well-off, so to speak, right? What did you learn about the economic status of these folks and why they resorted to this behavior?

COHEN: So we were able to look at the guardianship petitions for about four dozen families. Most of them live in really more affluent suburbs of Chicago. They are doctors, lawyers, sometimes real estate agents. And their family income is such that they would not qualify for aid. So by giving the child to a guardian, what that sets in motion is the child, when filling out the federal financial aid application, can mark that they are in a legal guardianship, and that is one of the few ways they are filing the application without consideration of their parents' income or ability to contribute to their college education.

CORNISH: And what kind of aid can they get as a result?

COHEN: They can get federal aid. They can get the Pell Grant. In Illinois, they can get state aid, which is up to $5,000 year. And they can qualify for university aid. They can qualify for university scholarships for needy students.

CORNISH: What's been the reaction to your story so far?

COHEN: There's been a lot of outrage. The thing is there's only a finite amount of money. It's not limitless. So that is true for federal aid, state aid and university aid. So money that is going to these families who would not otherwise be eligible for it means that that's money that is not going to a student who really needs it. In Illinois, for example, last year, there were 82,000 students who were eligible for the state grant who did not get it because the state ran out of money.

CORNISH: Have you heard from federal aid officials? Has anyone weighed in on this?

COHEN: So I think the Department of Education is now aware of it. The state financial aid folks are aware of it. The universities are on alert now. I think they will be looking closely at financial aid applications from students who mark that they are in a legal guardianship. But keep in mind, there are students that really are in that situation. So you don't want there to be so many restrictions that it becomes harder for those students to get the aid.

CORNISH: That's Jodi Cohen, reporter at ProPublica.

Thank you for speaking with us.

COHEN: Thank you.

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