There’s another college scandal that is becoming more and more prominent. No it’s not admissions – it’s what comes after the admissions: tuition. Rich families from the US have formed a legal loophole in order for their children to get ‘free money’ – they are emancipating their children. In other words, these families are giving up the custody of their children in order for them to meet the criteria of a ‘low income household’ making them eligible for financial aid, money that is reserved for poorer families.
Newspapers ProPublica Illinois and The Wall Street Journal found that families near Chicago were giving up legal guardianship of their children to their close friends or relatives. The children would file for financial independence, opening the door to financial aid which they would be ineligible for, due to their parent’s high-income and affluence.
The guardianship in Illionis allows judges to approve custody transfers for any reasons just so long as all the parties agree that it is in the best interest of the child, even if the parents are financially able to support her.
When the university investigated this further, they uncovered a pattern of students entering into legal guardianship even though, on the side, they were still supported by their parents
The University of Illinois uncovered this ethically questionable scandal when high school counsellors from fairly wealthy neighborhoods began asking about how low-income children gain tuition fees. When the university investigated this further, they uncovered a pattern of students entering into legal guardianship even though, on the side, they were still supported by their parents, according to Andrew Borst the Director of Undergraduate Admissions.
Even though the university will not provide its own money to the 14 potential students, Borst mentioned how they cannot legally prevent the children from receiving federal or state money. The Wall Street Journal article cites one example where a student whose parents owned a $1.2 million house ended up declaring only $4,200 earned from a summer job. They further securing $47,000 in scholarships and federal grants to attend a private university where the annual tuition costs $65,000.
The US Department of Education spokeswoman Liz Hill said, “the laws and regulations governing dependency status were created to help students who legitimately need assistance to attend college. Those who break the rules should be held accountable”. There are many children in developing countries or from poorer families who are seeking an education. They are seeking to learn and follow the route to gain a job in the future. But, these individuals are taking their opportunities away from them. Opportunities that they already have access to and these opportunities, for low-income families, are already so limited.
It is simply unfair assume that everyone who files for emancipation is taking advantage of this scheme
But, it is unclear how universities should respond as there are many instances where students file for emancipation or legal guardianship because their parents cannot or will not care for them, whether that be physically, mentally or emotionally. Therefore, it is simply unfair assume that everyone who files for emancipation is taking advantage of this scheme.
In the UK, however, the scheme is a little different. The minister allowed high-earning divorcees to avoid joint income calculations, allowing more than 25% university students to qualify for £3,200 in grants when only a few actually come from poor income households. The scandal is able to permeate even in the UK.
Responding to the scandal, Frank Field, the Labour MP and anti-poverty campaigner, said divorced families were being discouraged from getting back together or becoming parents in reconstituted families. “I believe this creates a moral hazard. I will be asking BIS why it has penalised cohabiting parents in this way.”
But, that is a different issue. The bigger issue here is the exploitation of privilege
If one divorcee is a low income earner than the other, the student can qualify for student loans and financial aids regardless of the income of their other parent, even if they are well off. The Student Loan Company assess the income of the main carer in single-parent families, without reference to the other parent.
Child support sent from a high-earning father or mother to the main carer is not counted as income under the SLC rules. With a UK divorce rate of 42%, it is possible there could be tens of thousands of students from wealthy backgrounds who have £5,000 more to spend each year than students whose parents have stayed together.
There is no question that university tuition is high – along with the books, food, activities and other necessities. But, that is a different issue. The bigger issue here is the exploitation of privilege. How the privileged are gaining even though they are already advantaged.