Wealthy parents of college students have a new trick up their sleeve.
Now, some moms and dads are transferring guardianship of their teenage children to friends or family in order to help them get government-issued financial aid set aside for students in need, reports ProPublica.
An investigation found that in Chicago, dozens of affluent parents found a loophole in the law, which allowed them to transfer legal custody of their kids to friends, relatives, or someone else – which completely cuts off their children’s ties to their finances. Doing so made made these kids eligible for federal, state, and university financial aid. Illegal, no. Unethical? Yes.
Has Lori Loughlin taught us nothing?
The investigation found at least 40 instances where parents who work as lawyers, doctors, realtors, and insurance agents found a legal guardian for their high-school age child between January 2018 and January 2019.
That allowed the potential student to apply for aid without having to list their parents’ incomes or assets. The report labeled the dirty trick “opportunity hoarding.”
The Department of Education is now investigating.
Silva Megerditichan, CEO of SLM Law in Los Angeles and former public defender, told Personal Space that these parents are acting unethically when they take advantage of this loophole.
"The unfortunate reality is these parents did not do anything illegal: What they did was exploit a gaping loophole which allowed them to take advantage of a system put in place to aid those who are truly in need," she explained.
"It is unethical, immoral, and quite honestly gross. It is difficult not to feel some sympathy for the children involved…being forced to live with someone else for the sole reason of saving their parents' money — money that, allegedly, these parents had more than enough of."
Megerditichan said the parents should be able to be prosecuted somehow.
"Lori Loughlin’s case showed us just how much people do not like cheats — people who seek advantage when it is not earned legitimately," she said. "Taking away financial aid from students who legitimately need it through a scam like this should be prosecuted in some way, but for now, until the loophole to this law is officially taken care of, the Department of Education can only take away the aid and the status of the children."
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