Giving up guardianship for aid.......

[AlbionGirl]

It looks as though the families taking advantage of this “guardianship” loophole are about to get a financial aid verification. From a second article in the WSJ

The U.S. Education Department condemned Ms. Georgieva’s actions and said it was moving to stop them.

“Those who break the rules should be held accountable,” spokeswoman Liz Hill said Tuesday in a statement. “The Department is committed to assessing what changes can be made—either independently or in concert with Congress—to protect taxpayers from those who seek to game the system for their own financial gain.”

Also.

Colleges started receiving applications from Ms. Georgieva’s clients last year. The University of Illinois, where annual costs, including tuition, room and board, range from $32,000 to $36,000 for in-state students, said it spotted 15 students who may have used the strategy. “The university likely will withhold institutionally funded need-based financial aid until we are satisfied that students who have transferred guardianship don’t have other financial resources available,” said Andy Borst, director of undergraduate admissions of the University of Illinois.

I think the loophole is about to be closed.

[privateID]

@BelknapPoint

We never filled out the FAFSA. But do gifts to parents have to be reported, or only gifts to the student?

Only gifts to the student from someone who is not already reporting financial information on the student’s FAFSA.

Although not reported on the FAFSA, gifts to parents from grandparents are reported on the CSS Profile. I apologize for not being clear.

[LittleStitious]

U of I withdraws its aid from 4 students
https://www.news-gazette.com/news/ui-withdrew-its-financial-aid-from-students-suspected-to-be/article_eb2c2970-f9fd-5bc4-a04f-7cd28c2ead60.html

[kelsmom]

The community college in my district is a whopping $94.50/credit. Nice to be in a place where we have access to a somewhat affordable education.

[austinmshauri]

The families will lose the $8-10k/year institutional aid, but they’ll still get $6k from Pell and $5k from the state unless those loopholes are closed. It sounds like the feds are including new guidelines for the FAFSA so only “whole person” guardianship cases count, but people fill out the forms however they want. I don’t see how self-reporting closes the loophole.

UI has started requiring so much additional information for verification that some families aren’t bothering to return it. If you answer yes to being in a guardianship then you have to answer questions about who’s paying for your insurance, cell phone, car, and living expenses. Maybe the FAFSA will have something like that – a series of questions that lead to other questions so they can determine who’s supporting the child.

[ucbalumnus]

Longer FAFSA form, more verification needed, … a few cheaters cause implementation of rules and procedures that add cost somewhere in the system and increase the burden on everyone else. Pretty common story.

[mommdc]

Middle income families that can’t afford college, don’t usually have to worry about having assets that affect EFC.
Also, PA universities aren’t affordable without merit either.
A $0 EFC student would get a $6,195 Pell Grant and $3,772 state grant.
Tuition, fees, room and board at PASSHE schools is over $20,000 and state related schools $30,000.
Pitt did start a Pell match program and tuition stayed the same last year and rose 2.75% this year for undergraduate instate students.
PASSHE schools froze tuition this year, but fees and meal plan and housing costs can still increase.
Without parent help, living away at school is hardly affordable.

[AlbionGirl]

@austinmshauri
It seems likely the IL state aid will also end up being withdrawn.

“It looks like theft from taxpayers and theft from students and families who legitimately deserve need-based financial aid,” said state Sen. Pat McGuire, a Will County Democrat who chairs the Senate higher education committee.

McGuire said he plans to contact Gov. J.B. Pritzker’s office, the Illinois attorney general’s office and the Illinois Student Assistance Commission, which administers the MAP grant, to look for ways to close any loopholes.

If that doesn’t work, he said, he will consider filing new legislation.

At that point families are only getting 6k Pell under increasing scrutiny from the Feds if they continue to self-report. Hardly worth the risk.
https://www.propublica.org/article/college-student-financial-aid-guardianship-loophole-us-department-of-education

[twoinanddone]

Maybe the FAFSA will have something like that – a series of questions that lead to other questions so they can determine who’s supporting the child.

The FAFSA is set up to capture the income and assets of the custodial parent, not necessarily the parent who is supporting the student. The non-custodial parent can still provide health insurance, a car and insurance, and a whole lot of other support, including tuition, as long as it isn’t paid to the custodial parent as child support and it really won’t show up anywhere.

I don’t think the U of Illinois is doing enough by just taking away the school aid. It could verify the FAFSA, find the student isn’t independent, and void the Pell grants and state grants. That would claw back the bonus $11k these students are getting.

[BelknapPoint]

The FAFSA is set up to capture the income and assets of the custodial parent, not necessarily the parent who is supporting the student. The non-custodial parent can still provide health insurance, a car and insurance, and a whole lot of other support, including tuition, as long as it isn’t paid to the custodial parent as child support and it really won’t show up anywhere.

Not completely accurate. At the very least, tuition paid by a non-custodial parent needs to be reported on the student’s FAFSA. If the NCP is paying other bills that are in the student’s name, that is also reportable on FAFSA.

[thumper1]

I have a solution…maybe Illinois publics should start using the Profile with NCP Profile required.

[ucbalumnus]

@thumper1

I have a solution…maybe Illinois publics should start using the Profile with NCP Profile required.

That would certainly greatly reduce the number of Illinois students who get financial aid, since so many have divorced parents, many of whom are uncooperative. Since so many of them will not be able to afford college in that case, that may also reduce the overcrowding in some campuses and majors.

From a student’s point of view, that tips going to college even more to being based on parental circumstances and choices, rather than the student’s own academic achievement.

[Dave_N]

And in what world is a two-physician family middle class?!

Why, College Confidential World, of course.

If this scandal increases the complexity of applying for financial aid, the real damage will be that deserving applicants may not be able to complete financial aid applications if they don’t get more support.

[OHMomof2]

Apparently many thousands of actual low income kids were turned down for Illinois funds because they ran out.

Illinois Gov. J.B. Pritzker said he has directed his staff to investigate the practice. The state has a limited pool of money to give low-income students. Last year, more than 80,000 students who were eligible for the Illinois Monetary Award Program, or MAP, grant did not receive it because there wasn’t enough money. The grant, up to $5,000, is awarded on a first-come, first-served basis.

https://www.propublica.org/article/illinois-lawmakers-call-hearing-college-financial-aid-scandal-guardianship-loophole