US parents ‘giving up’ children to access college financial aid

The US crisis in college student debt has reached the point that some families are legally relinquishing their children in order to help them afford their education.

An investigation by ProPublica found dozens of cases in the Chicago area in which parents had surrendered guardianship of their teenagers to a friend or relative so that their children could at least afford a public college.

The manoeuvre allows the students to declare themselves financially independent of their families, letting them qualify for federal, state and university aid and scholarships they otherwise would not receive.

The director of undergraduate admissions at the state’s public flagship institution, Andrew Borst, of the University of Illinois at Urbana-Champaign, told ProPublica he regarded the tactics as a “scam”. Wealthier families “are taking away opportunities from families that really need it”, Dr Borst said.

The US Education Department is investigating the matter, according to The Wall Street Journal, which compared the case to the admissions scandal in which wealthy parents paid bribes to help their children gain entry to elite US colleges.

But a Chicago attorney who helped families with student guardianship transfers, Mari Berlin, told ProPublica that the cases – many involving public institutions – reflected the realities of college affordability in the US even for families with relatively high incomes.

“It’s hard to argue that this is not in the student’s best interest,” Ms Berlin told ProPublica, a non-profit newsroom that pursues investigative journalism.

Illinois is a state that has cut its public higher education spending by about 25 per cent over the past 17 years, leading to a doubling of in-state tuition fees over a period in which median household income has actually declined. Nationwide, total student debt is nearing $1.6 trillion (£1.3 trillion).

Ms Berlin told ProPublica she has helped about 25 families, many with incomes too high to qualify for financial aid but not enough to afford college. The move does not violate any legal limits on the reasons for transferring legal guardianship, she said.

“It’s a solution they have been able to find as college costs go up and they are unable to pay,” she said. “It is in the best interest of the minor, which is the statute’s purpose.”

The Wall Street Journal quoted a Chicago-area woman who last year transferred guardianship of her 17-year-old daughter to her business partner. The woman said she and her husband earn more than $250,000 a year, but already had spent about $600,000 putting several other children through college and were left with no equity in their home.

ProPublica said it contacted parents or guardians in 15 cases and found none willing to speak on the record. One guardian speaking of the condition of anonymity described being conflicted over the ethics but hopeful it would not deprive another student of financial aid.

Dr Borst said his university has cut aid to some students whose families used the tactic, and is asking questions of other families in a bid to deter its use.

paul.basken@timeshighereducation.com