Guardianship-surrendering parents divide US university leaders

The case of US parents surrendering guardianship of their children to help them afford university is revealing high-level fault lines within academia over blame and duty in the country’s growing student debt crisis.

The situation involves at least two dozen instances in which parents in the Chicago area signed over guardianship of their teenagers to a friend or relative, legally cutting financial ties so the students would become eligible for federal, state and university aid and scholarships.

The bulk of the known cases involved students at the University of Illinois at Urbana-Champaign, whose admissions director has unapologetically called the manoeuvres a harmful and indefensible “scam”.

The nation’s chief higher education lobby group, the American Council on Education, agreed. “The actions reported in Illinois may not meet the legal definition of fraud and perjury,” said Terry Hartle, its senior vice-president for government and public affairs, “but they certainly meet the dictionary definition.”

Other higher education leaders, however, see more of a mixed message: parental actions that are ethically debatable, but also deliver a clear warning of desperation that even public university tuition fees have risen beyond the reach of too many Americans.

One of them, F. King Alexander, the Louisiana State University president known for chastising states for cutting higher education spending, rejected emerging comparisons between the middle- to higher-income families in the Chicago case and the very wealthy parents who paid bribes in this year’s elite college admissions scandal.

“What the Chicago parents have done is simply to take advantage of the additional information that they have to manoeuvre the system – not exactly ‘cheat’ it like the US admissions scandal,” Dr Alexander said.

Robert Shireman, a senior higher education official in both the Clinton and Obama administrations, had a similar take. “I do not think it is scandalous for middle-class parents to ask what hoops they can jump through to reduce their college tuition bills,” said Mr Shireman, the director of higher education excellence and senior fellow at the Century Foundation.

“The guardianship scheme seems a bit extreme and a bit sleazy, but is it really that different from the ways that accountants help people shield assets or income from taxes?”

While the specific tactic in the Chicago case strikes higher education leaders as new in some aspects, deceptions by parents, universities and states have a long history. A generation ago, some parents realised that their child could obtain a Pell Grant – the main federal subsidy for low-income college students – if they stopped the practice of claiming the child as a dependant on their tax returns.

State lawmakers, meanwhile, have been cutting budgetary support for their purportedly public college systems for more than a decade, forcing many institutions to reject the children of their taxpaying citizens in favour of out-of-state applicants who are charged higher fees.

One of the worst situations is in Illinois, home of the guardianship scandal, where state support for higher education has fallen by 25 per cent over the past 17 years, leading to a doubling of in-state tuition fees. Illinois now ranks among the US’ top five most expensive states to attend a public four-year institution, according to College Board figures.

Andrew Borst, admissions director at Urbana-Champaign, said that he understood the financial constraints on public institutions. But Dr Borst questioned the ethics of families under financial stress acting in ways that took resources from those with even lower incomes.

“Financial aid resources at the federal, state and university level are not infinite,” he said. “We do our best to help as many families as we can, as well as we can, for as long as we can.”

Dr Hartle said that he too had “enormous sympathy” for families struggling with university costs at a time when total student debt nationwide was nearing $1.6 trillion (£1.3 trillion). The state of Illinois, in particular, “has been a government train wreck for a decade”, he said. “But it doesn’t justify fraud or perjury,” Dr Hartle said.

And while public colleges and universities in Illinois are expensive compared with those in other states, they are “not outrageously so”, he continued. “I think we have reached the point where too many Americans think they can’t afford a post-secondary education when in fact they may be able to do so with the help of available financial aid,” Dr Hartle said.

Dr Alexander was less clear that student affordability needs were being met at Urbana-Champaign, or across the US. The cases of parents surrendering guardianship, he said, were “another consequence of state disinvestment, which has led UIUC to increase tuition and fees rapidly over the years”.

paul.basken@timeshighereducation.com