On Monday July 29, 2019, ProPublica Illinois and the Wall Street Journal independently reported that a few dozen wealthy families from near Chicago, Illinois, are possibly transferring custody of their children (before they turn 18) to relatives or friends so that they are able to qualify for financial aid, when otherwise the students would have been considered too wealthy to do so.
Upon the transfer of guardianship, students would declare financial independence. The reason for the transfer of custody is due to the fact that in order to be recognized as financially independent, the student has to prove formal separation from his/her parents. The transfer of legal guardianship therefore allows the student to qualify as an independent.
While not illegal, actions such as these may divert funds from the finite pool of financial aid resources that could have been given to poorer students. The president and CEO of NASFAA, Justin Draeger, remarked on the students in question with this statement: “They are gaming the system, whether it is legal or not doesn’t make it any less unsavory.”
Read more: Propublica Illinois, Wall Street Journal, NASFAA