parent consultationOur tutors in Orange County recently learned that last month, State and Federal officials spoke of plans to shore up loopholes that previously allowed families to participate in student aid fraud: by relinquishing guardianship of their college-bound children, these families could receive financial aid for which they were truly not qualified.

Federal Aid Handbooks May Soon be Modified

A spokeswoman for the United States Department of Education said that, upon discovering the scheme, the office has suggested that the language on federal financial aid forms be modified. This would smoke out parents attempting to defraud the system and take dollars away from those who truly qualify for the financial assistance.

Last week, Illinois Governor J.B. Pritzker stated that his staff was directed to investigate these loopholes and to evaluate how widespread the scheme had become and how such fraud could best be prevented in the future.

It was also suggested to the Federal Student Aid Office–FSA–that clarifying language be added to the FSA Handbook to prevent parents and students from participating in this scheme. The rewording of this section of the handbook would be designed to make sure that prospective or current students no longer receive aid if their expenses and medical bills are being covered by their parents, even if they are legally under someone else’s guardianship.

State Legislators Call for Reforms

ProPublica Illinois reported last month on nearly four dozen suburban Chicago families giving up legal guardianship of their college-age children for the purpose of fraudulently qualifying for university, state and federal aid.

The parents, including educators, attorneys and a doctor, turned guardianship of their children over to friends or relatives prior to the children turning eighteen. This allowed the prospective students to represent themselves as financially independent, which made it possible for them to receive aid for which they would not otherwise qualify.

Illinois legislators asked for an evaluation of all state rules or laws allowing wealthy families to access the Illinois Monetary Award Program–MAP grant. In 2018, approximately 82,000 eligible students did not receive this grant due to a lack of funds, as the grant is available on a first-come, first-served basis. State Senator Pat McGuire, who is also the Higher Education Committee Chairman, stated that this means the scheme is essentially theft from taxpayers and from families who legitimately need and qualify for financial aid.

McGuire spoke of plans to reach out to the office of Governor Pritzker, as well as the Illinois Student Assistance Commission and the Illinois Attorney General’s office to seek ways to discover and close any loopholes allowing parents to perpetrate such fraud. McGuire stated that if he is unsuccessful, the filing of new legislation will be considered.

Illinois State Senator Cristina Castro shared McGuire’s concerns, and spoke of how troubling it was to consider the way MAP funds are continuously increased, yet always run out before all students are served. Castor also stated it was discouraging to learn that one parent who had relinquished guardianship of a teenager worked as an assistant school superintendent.

More Investigations on the Horizon

According to their social media accounts, the students involved in some of the aforementioned cases have now been accepted at private colleges and public universities throughout the Midwest and as far as California.

A University of Missouri spokesperson stated in July that officials are planning to pull university-based financial aid if it can be confirmed that the student’s financial situation was misrepresented for the purpose of receiving aid for which he or she was not eligible.

One of our private math tutors in Fountain Valley mentioned “I have heard about this scam before and I was absolutely appalled. There are so many kids that struggle to pay for college, and take on massive debt to do so. You hate to see anyone cut the line so to speak. Whether the scam is for financial aid, or for admissions, I can show you dozens of deserving students who won’t get the same opportunities as people who decide to cheat the system.”

As of August 2019, the Inspector General’s Office was unaware of any prosecutions concerning this particular kind of student aid fraud, but more investigations will be forthcoming.