'Greedy colleges' not off the hook for latest college admissions scam, scholar says

Months after the largest college admissions scandal in history, a new college admissions scam is making headlines.

Dozens of wealthy parents in the Chicago area have been giving up custody of their own children in order to receive financial aid and evade extra costs, according to ProPublica Illinois.

“We can take it as one more unintended consequence of the overpricing of higher education in America"

As highlighted by Forbes, the parent can give up legal guardianship of a child to a family friend or relative during a child’s junior or senior year of high school. When this child applies to college, he or she can claim to be financially independent of their own family, ultimately expanding their eligibility for need-based scholarships and financial aid.

[RELATED: Univ pres claims financial aid verification leads some to 'drop out'...but gives zero evidence]

“It’s a scam,” said Andy Borst, undergraduate admissions director at the University of Illinois, Urbana-Champaign, where 14 applicants have now been identified to have participated in the practice. “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 practice of this loophole was uncovered in north suburban Lake County by ProPublica Illinois. So far, four dozen such guardianship transfers were filed in the past year and a half alone. Propublica Illinois also noted that similar petitions have been filed in other counties.

Some of the parents involved in these incidents are lawyers; there was also a doctor, insurance and real estate agents, and even an assistant schools superintendent.

“It is shameful for parents to do this, even if their children go along with the ruse,” Peter Wood, president of the National Association of Scholars, told Campus Reform. “From what I can tell, however, the practice is legal.”

[RELATED: University of Illinois makes massive free-tuition 'commitment']

“Bad incentives, mistaken ambitions, [and] greedy colleges are all part of this picture,” Wood continued. “Along come cynical parents who see a loophole and seize it, even if it means an ethical betrayal of their children."

This financial aid controversy falls within larger nationwide discussions over the potential for free college tuition.

As Campus Reform previously reported, prominent Democrat 2020 presidential contenders such as Bernie Sanders and Elizabeth Warren have both unveiled plans to either make college free or cancel significant amounts of student debt.

Under Warren's plan to eliminate student debt, only students whose parents make less than $250,000 per year would qualify. Sanders' plan would cover not just the tuition and fees, but also other costs, such as books and room and board for students whose parents make less than $25,000 per year.

Neither the Sanders nor Warren presidential campaigns responded in time for publication when asked whether their plans included safeguards to prevent scams such as the one in Illinois.

“We can take it as one more unintended consequence of the overpricing of higher education in America," Wood told Campus Reform. "The overpricing itself is a consequence of our federal student loan system that creates incentives to colleges to raise their prices, and the mistaken idea that a college degree from a well-known institution is the only way ahead in life for young people.”

Follow the author of this article on Twitter: @ethanycai