There looks to be another college admissions scandal brewing. The Education Department and several universities are looking into reports of wealthy parents transferring legal guardianship of their children to friends or relatives so that only the children's earnings are considered on financial aid applications, reports the Wall Street Journal, which describes "a spate of guardianship transfers" in the Chicago area. A separate investigation by ProPublica found the same. One woman who transferred custody of her daughter to a business partner says none of the family, not even the daughter, had to appear at a court hearing, per the Journal. The daughter later received a $27,000 merit scholarship and $20,000 in need-based aid—some of which she won't have to pay back—though her family's household income is greater than $250,000 a year.
Such transfers typically state that a guardian will supply educational and financial support. As a lawyer familiar with the practice tells the Journal, "the guardianship law was written very broadly" with judges "given an immense amount of discretion"—and "it's hard to argue that this is not in the student's best interest." "This is legal, but we question the ethics," says Andrew Borst, director of undergraduate enrollment at the University of Illinois. "So-called opportunity hoarding takes away resources from middle- and low-income students." The Education Department is considering a change "to protect taxpayers from those who seek to game the system for their own financial gain," a rep tells USA Today. Meanwhile, the New York Times reports on a process in which wealthy parents pay up to $10,000 for disability diagnoses that grant high school students extra time for standardized tests. (Read more financial aid stories.)