Parents Give Up Custody of Their Kids to Get Need-Based College Financial Aid

https://www.propublica.org/article/university-of-illinois-financial-aid-fafsa-parents-guardianship-children-students

by pseudolus • 7 years ago

51 95 7 years ago

cheeky78• 7 years ago

You can go to a community college for much less money and all kids aren't required to go to College to earn a good living.

This is just silly.

jagermo• 7 years ago

Read the article. Its a scam-tactic.

t-writescode• 7 years ago

This depends on the degree. My computer science degree had CS classes all the way from freshman year, and I think the pre-requisite graph required at least 3 years, so the standard ‘2 years of core classes for an associates and then 2 years of degree-specific courses’ wouldn’t have worked well for people like me and it would have taken me 5+ years of relatively light classes to finish college with a degree rather than 4.5 (130+ credits required for my CS degree)

thinkmassive• 7 years ago

Community colleges offer CS classes. Whether they’ll be accepted as specific prerequisites at a specific 4-year institution would require further research, but it’s definitely not a reason to completely dismiss community college. You can also go to community college for one year, then transfer to a university. There’s no requirement to get a degree before transferring.

Source: I did one year of community college before transferring into the computer & electrical engineering program at a university.

dragonwriter2• 7 years ago

My computer science degree had CS classes all the way from freshman year, and I think the pre-requisite graph required at least 3 years, so the standard ‘2 years of core classes for an associates and then 2 years of degree-specific courses’ wouldn’t have worked well for people like me

Community colleges often have CS programs, they don't just offer GE.

They may not have equivalents for all of the courses in a particular universities lower-division major curriculum in a particular major, which can be an issue.

asdfman1234• 7 years ago

You can go to a community college for much less money and all kids aren't required to go to College to earn a good living

Do you hear that sound? It is the sound of ten million wealthy upper middle class parents simultaneously recoiling in horror.

But seriously, parents that do these sorts of things have spent the last 20 years of their life ensuring their kids stay on the maximum-privilege track, and they're not going to quit now.

akhilcacharya3• 7 years ago

It is the sound of ten million wealthy upper middle class parents simultaneously recoiling in horror.

I went to a community college during high school, and this seems like the stigma is the reason why more people don't do dual enrollment.

TomVDB2• 7 years ago

My daughter decided to defer going to ‘real’ college for a year to figure out what she wanted to do: why spend all the money when you haven’t figured out things anyway?

She enrolled at a highly rated local community college and signed up for some difficult classes and she was very much not impressed: the pace of instruction was very slow, the students unmotivated (not doing homework, not participating during class), and the overall level of instruction often easier than what she had in high school.

It’s an excellent way to get some garden variety general courses off you plate at low cost and low effort, but, in her case, it was not a substitution of the real thing.

jimbokun2• 7 years ago

You can go to a community college for much less money

Agreed.

and all kids aren't required to go to College to earn a good living.

This will need a citation. My understanding is that the gap between between college graduates incomes and non-college graduate incomes continues to increase.

GVIrish• 7 years ago

There are plenty of skilled trade jobs that pay as well or better than a number of undergraduate degrees. Electrician, aviation techs, construction managers, plumbers, radiology tech, LPN, and dental hygienists are all jobs that pay as well or better than some of the lower paying bachelor's degree careers. So that would be your history, english, biology, psychology degrees, etc. Here's a chart of salaries by 4 year degree:

https://www.visualcapitalist.com/visualizing-salaries-colleg...

Obviously once you get into engineering degrees, computer science, finance, law degrees, and the like, no trade school or community college degree can compare. But the ultimate point is that a 4 year degree is not the only path to a decent income. Especially when you factor in student loan debt.

dv_dt6• 7 years ago

It seems much fairer to universally fund zero or low cost tuition for public university (or trade school, etc) irrespective of wealth and people wanting the prestige or networking or whatever of private university institutions can then pay for that perceived added value.

Instead, we have squabbles over the scraps of funding over current access and the enforcement costs of trying to keep one group from "getting ahead" of another while wealth is being drained from most labor classes - even the upper middle classes where current college aids generally falls away completely.

davidw3• 7 years ago

This is more or less how things worked where I lived in Italy, but I'm not totally convinced. There's still an 'opportunity cost' to going to college; for that and other reasons, it's still more an institution for middle/upper class kids. So they're taking advantage of a subsidized benefit more than those who aren't so well off, which is a bit perverse.

Also, while I think kids in US schools are treated way too much like paying customers, it seemed that in Italian schools students were seen in some cases as more of a burden to be dealt with.

I don't know what the best answer is. I'd happily take Italy's health care system, because everyone either uses it or has the potential to.

liability2• 7 years ago

Also, while I think kids in US schools are treated way too much like paying customers, it seemed that in Italian schools students were seen in some cases as more of a burden to be dealt with.

In America you tend to get both. Administration treats you like a customer (in the sense that they see a wallet with legs when they look at you) while the professors frequently seem to view teaching courses as a chore that gets in the way of their research.

Of course there are plenty of exceptions to go around, but all-in-all it's generally pretty crap.

dv_dt6• 7 years ago

I didn't look at college prices in Italy from the US, but in many nations (germany, netherlands), the tuition and the board was not zero but a reasonably low cost where family or even part time work would pay for that (low hundreds of euros per semester). That seems like a far more level playing field than what we're looking at in the US where a majority of students currently face a lifetime debt burden (and that is the best "aid" offered..)

akhilcacharya3• 7 years ago

Its clear that federally backed student loans are one of the causes for increased tuition across the board. It seems that instead of pushing for debt cancellation it would be better to restrict any sort of federal assistance unless you're going to your in-state public school (likely the cheapest option in 99% of cases).

dv_dt6• 7 years ago

I think federal and state funding should go directly to public universities (with strings on administrative overhead and tuition costs). Federally backed student loans might remain for partial coverage of private university, but otherwise, they do exactly what you say - allow tuition costs to rapidly increase.

But the principle of universal low cost access and bulk financing of it what is the cost saver vs trying to apply consumer product market models where transactions few and in most cases once in a lifetime per consumer. Tuition increases because the consumer product model of giving loans can't regulate prices in the market with that kind of transaction structure.

Edit: Worse, as I mentioned in another comment, it's an industry that gets a detailed map of your finances before issuing a price for the services. That's no kind of market.

jimbokun2• 7 years ago

Pass a law that ZERO federal or state money can go to private universities. It is not the role of public tax dollars to subsidize wealthy private institutions.

The lion's share seems to just go to administrators, anyways.

jseliger• 7 years ago

It seems much fairer to universally fund zero or low cost tuition for public university (or trade school, etc)

I like the inclusion of trade school: https://jakeseliger.com/2018/03/12/the-case-against-educatio..., as a lot of modern college education is bogus: https://jakeseliger.com/2014/04/27/paying-for-the-party-eliz.... I've been on the supplier side of it, and the extent of the corruption in the system is understated.

Still, zero or low cost will create shortages, and that will create fairness or unfairness of a different variety. There is no panacea. We should admire and work towards better vocational education, though, because many people don't like sitting quietly and doing abstract symbol manipulation.

digikata• 7 years ago

I reject that low cost will create shortages in education, why? The more people we educate, the more are available to educate others. People, ingenuity, and education are a renewable resource.

rhino3692• 7 years ago

The biggest problem is cost. We shouldn’t devote a cent more funding to colleges without requiring massive spending and tuition cuts.

Even public colleges resemble country clubs. That’s great, but we shouldn’t tax non-college grads so kids can have a good time.

If college cost the same as it did 30 years ago (adjusted for inflation), there really wouldn’t be an issue.

Additional funding will just lead to more admins, useless programs, and larger tenure salaries.

liveoneggs2• 7 years ago

this is an excellent scam and like ten levels higher than moving your kid into a crappy high school senior year to qualify for similar assistance.

astura2• 7 years ago

I went to a crappy high school all four years, I don't remember any particular assistance I got for the pleasure.

liveoneggs2• 7 years ago

according to the people who told me about moving to a worse school, transcripts coming from "urban underserved schools" (there was an actual technical term they used but i forgot it) are more appealing to ivy league schools. They had about five tricks to make their kids more appealing to ivy's that included moving houses, changing schools, specific sports, certain extra curricular, etc. -- to clarify we were chatting at a 4 y/o's birthday party.

See this thread for young marriage to hide parental income as another tactic.

You probably went to a crappy school because your parents were poor and they wouldn't know any tricks to give you advantages.

You (having poor parents) wouldn't need an entire class of these scams designed to hide your wealthy upbringing.

Alternatively watch king of the hill episode "The Redneck on Rainey Street" :)

matz1• 7 years ago

More like money saving tricks to me, doesn't seem illegal.

godshatter• 7 years ago

Yeah, I'm having a definition problem with this one too. It appears that what they did was not prohibited by the system. Maybe not the most ethical way to go about things, but not explicitly prohibited.

chriskanan• 7 years ago

Getting married is another way to get financial independence for the purposes of financial aid in the US: https://budgeting.thenest.com/can-married-students-financial...

Some have fake marriages for this purpose: https://www.vice.com/en_us/article/4wbeqg/how-some-students-...

sjg007• 7 years ago

FASFA requiring a parental contribution has always seemed weird. You are 18, an adult, why is there an expectation on parents to pay for anything?

kd0amg2• 7 years ago

Even weirder if it also doesn't expect legal guardians to contribute

Someone12344• 7 years ago

It does. The students are declaring themselves "financially independent." The guardianship is a tool towards that end goal.

- Parents voluntarily grant guardianship (to friend/relative).

- Guardian dissolves (either voluntarily or automatically).

- Student gains financially independent status. Is eligible for financial aid.

notahacker• 7 years ago

Because in practice, parents of sufficient wealth usually do contribute towards 18 year olds' education (or their living costs where the education is government funded), and every subsidy a university gives to a multimillionaire's offspring means less subsidy available for the genuinely poor.

boxfire• 7 years ago

Funny, that missed me. I FAFSA'd out of support due to my parents income and didn't get a dime from my parents. I suppose they supported me with the clothes on my back, but that is about it. I'm pretty sure I sit with a majority of my generation, and I find the only people placating this abusive pillaging to be those who simply do not perceive it is happening. In practice sufficient wealth to contribute doesn't mean the motivation nor incentive. I truly hope this corrects itself in time, but it is far far too late for me. If I achieve moderate financial success I'd most likely philanthropize in the form of a scholarship dedicated to exactly this gap, and/or lobby for change.

romwell3• 7 years ago

and every subsidy a university gives to a multimillionaire's offspring means less subsidy available for the genuinely poor.

Sure, let's deprive 100 people of their benefits so that 1 of them doesn't get that same benefit unjustly.

rhino3692• 7 years ago

18 year olds don’t have much income or assets, outside of special cases. If you want to give financial aid to “poor students” there really isn’t any other way to do it.

ngngngng• 7 years ago

I considered doing something like this when I entered college. My parents make enough money that I didn't qualify for any aid at all, but they also wouldn't give me a penny under any circumstance. One of my dads favorite sayings was "I have to clothe your butt, not decorate it." Which is how he justified us never having clothes that fit.

Anyways, I didn't end up doing this and just went without food sometimes to make ends meet, ended up dropping out when I ran out of the money I'd saved at my minimum wage job in high school.

I'm writing this out to show that while on paper I came from a wealthy family, a loophole like this would have really helped me.

sudosteph2• 7 years ago

I honestly think your situation is probably more common than the one in the article.

I knew a few people in a similar situation to yours, where they could not rely on parental support after turning 18, but they were not considered legally emancipated before that point so FAFSA wasn't giving them any grants. The one kid I knew who has actually homeless due to parents kicking him out in high school, did get legally emancipated and was able to qualify for FAFSA, but it was a huge pain.

The people I knew in this situation mostly ended up working some job, going to community college and transferring into a state school or getting a cert for a different career path from community college.

whymauri• 7 years ago

To add to this, a good friend of mine had her sister adopt her as guardian when applying for aid. A messy parental divorce made financial paperwork nearly impossible to file, not to mention that even if it was filed her father wouldn't contribute anything.

That scenario, an estranged parent who refuses to pay any of their "contribution", is unfortunately really common.

jandrewrogers2• 7 years ago

This is a common situation, I've known several people that ended up in it, myself included. Most of them ended up dropping out of college because working 40-50 hours per week at the same time as taking a full course load at university is a surefire recipe for burnout. It also makes for a pretty poor college experience generally. You can spread it out over more years by going part-time but that has its own costs.

It really is a very disadvantageous position to be in.

mox12• 7 years ago

So it is ok for companies to do things like this with the tax laws, but not OK for individuals?

There is no law against giving up custody of your child. Additionally, FAFSA says you must include parents wealth, so if you have no "parents", then you don't have to include them.

dsfyu404ed2• 7 years ago

People who didn't circumvent the obvious spirit of the rules while complying with the letter of the rules are pissed off that there exist people who did just that, saved a bunch of money doing so and have an presumably clear conscience.

While I understand why these people are annoyed I don't have much sympathy. Always read and understand the fine print. Always read and understand the rules. If X is allowed and doing X would benefit you then you are shooting yourself in the foot by not doing X. If the people writing the rules don't like it then they have the power to change it. And no, I didn't take advantage of this but I knew of the loophole at the time, wish I did and I'm paying for my laziness every month.

mox12• 7 years ago

Yes, but once you replace "People" with "Corporation" everyone is more or less ok with it.

I'm willing to bet 90%+ of the people in the article complaining about this own, use or like Apple products. Yet Apple does this exact same thing!

jatsign• 7 years ago

I have 529 plans for both my kids. Lets say I save up enough for them to pay for their entire college. If an alternate family, making the same as us, saves nothing, could they qualify for aid, while we wouldn't?

sudosteph2• 7 years ago

Not likely. FAFSA is almost 100% determined by your parents income from the previous year tax reports. It doesn't typically cover everything, even if you get the biggest possible grant. I got a decent FAFSA package, went to a very-affordable in-state college, but I still have loans that probably would have been avoidable if my parents had invested in a 529.

wanderr• 7 years ago

It's hard to say without knowing how much you make, or what schools your kids might go to, but it is certainly possible. Many schools use FAFSA not just for federal aid but for determining how much "need" your kids have for other assistance beyond what the federal government might offer. They look at how much they think you can afford, assume willingness to take on some amount of debt, and weigh how much they actually want your kid in their school. If you make so much that the schools are going to consider you able to pay full tuition no matter what, a 529 will only help you. If you might qualify for some aid based solely on your income, it could make a difference: https://www.reuters.com/article/us-column-feldman-529/dont-l...

tzs• 7 years ago

Borst said the university told the three students midway through last school year that their university-based financial aid would be reduced. “We didn’t hear any complaint, and that is also a big red flag,” Borst said. “If they were needy, they would have come in to talk with us.”

That's reminiscent of what gave away Louis Colavecchio, who was ripping off Atlantic City casinos with counterfeit tokens. The casinos knew they were being ripped off, because their token inventory was higher than they could account for, and the discrepancy was increasing.

The counterfeit tokens were good enough that the casinos had no way to detect them, and when they sent a batch of tokens back to the manufacturer that they were sure include at least some counterfeits and asked if the manufacturer could come up with some way to fight this, the manufacturer said all the tokens were genuine.

What finally happened is that Colavecchio was using his counterfeit tokens at a slot machine that took high value tokens, like $50, and the token mechanism jammed. Colavecchio just moved over to the next machine, and continued playing.

The security people saw this, and found it very suspicious. When a machine jams and eats someone's $50 token, they don't just move over and continue gambling, even if they are a gambling addict. They go find casino staff to retrieve the jammed token or get reimbursed.

They detained him and searched his car and room, and found a large collections of tokens for several casinos, and knew they had finally found the counterfeiter.

mevile• 7 years ago

How are private hotel security able to search someone's car? That seems sketchy.

TazeTSchnitzel• 7 years ago

Would it have to be private security? They could have called the police.

onemoresoop• 7 years ago

Good luck trying to enforce your rights in a casino.

refurb2• 7 years ago

I remember watching a show about that guy. Really incredible amount of effort skill to pull that off. If I remember correctly he bought himself a $250K EDM (electric discharge machine) to create basically perfect copies of the tokens.

But as you said, he used them and the machine malfunctioned (not his fault). When he walked away from a pile of money, they immediately knew he was the culprit.

pacerwpg• 7 years ago

There's some irony that his actions to avoid drawing attention ended up drawing attention because they're weren't at all consistent with the expected behaviors.

He could've played a table game like Blackjack, but he would've been subjected the scrutiny of a human dealer.

He could've used smaller denominations, but the reward may not have been worth the effort.

protomyth4• 7 years ago

“We didn’t hear any complaint, and that is also a big red flag,” Borst said. “If they were needy, they would have come in to talk with us.”

Or, being needy, have been crapped on by institutions multiple times and have a fatalistic view. Well, it was fun while it lasted, or guess I need to get a job and spend time working to complete my education. It is amazing how many problems could be resolved by a talk with a school administrator that doesn't because students just accept what they are told.

apsanz• 7 years ago

I completely agree. I also think there is a racial and class bias to this. Both Rich and middle class white people are taught to complain to authority figures to get their way. Poor people assume they don't understand the system and don't have time to do research or consult with family members to let them know that they are being fucked over.

refurb2• 7 years ago

This is why regulations in general are so messy. You come up with a "common sense" regulation to address a problem. You end up creating a new problem as people attempt to skirt the rules and get around it.

It's a good reason why healthcare is so messed up in the US. A ton of rules that create really bizarre incentives to get around them.

stickfigure2• 7 years ago

It's odd to me that folks are calling this a scam. I'd describe it more as unintended consequences of a poorly thought out governance system. These "scammers" are using the letter of the law just the same way that accountants figure out how to use every possible loophole to minimize tax burden. Every role-playing gamer in the world is already familiar with the concept.

The solution is to fix the system, ideally by fixing the incentives. If we craft a system that lets someone legally fill out a form and get cash, don't be offended when people use it. Solutions that expect parents to put the "greater good" ahead of the interests of their children are doomed to failure.

Someone12344• 7 years ago

The student is intentionally misleading the colleges about their financial status and the financial support they receive. They're literally declaring themselves financially independent while not being financial independent. That's outright fraud:

In law, fraud is intentional deception to secure unfair or unlawful gain

This isn't clever maneuvering. It is unlawful deception.

riku_iki3• 7 years ago

misleading the colleges about their financial status and the financial support they receive.

I think colleges don't care if students actually receive support from parents, they only check parents income/assets, and if parents refuse to provide support then student is in trouble. So giving up custody is a legal way to express this situation in legal terms.

stickfigure2• 7 years ago

This is not quite correct. The colleges are asking about the financial status of the parents, not the child, and making poor assumptions. Not only does this open up the system to legalistic scheming, it also seriously disadvantages kids with estranged parents.

The colleges are not asking the right questions. It sounds like that's changing, which is good. But they're the ones making the rules and they bear the blame for the consequences.

DanBC• 7 years ago

Hang on, are they actually giving up custody?

What happens if the child is hit by a car, is unconscious, and needs medical attention?

dsfyu404ed2• 7 years ago

If nobody has custody then those decisions are made by next of kin which would be parents/siblings/children. I forget the specific order (maybe varies based on state law and context?) but it doesn't really matter for functional families since parents and siblings will generally be in agreement about those sorts of things.

jandrewrogers2• 7 years ago

This addresses a real public policy failure: students with no financial means are denied all financial aid because eligibility is dependent on a third-party with no legal obligations. Imputing that a person has assets to which they have no legal title or right is indefensible policy. Imagine if receiving welfare assistance was contingent on your neighbor's income being sufficiently low and the kind of incentives that would create.

The policy assumption that parents will financially support their adult children is false for a non-trivial percentage of the population, and leads to bad outcomes for those people. People that fall into this crack are often left with no recourse when it comes to public assistance, which leads to loophole hacks like the one in the article.

sdinsn• 7 years ago

It's ridiculous to call this a "scam". I don't understand why people would be denied aid because of their wealthy parents. Wealthy parents have no legal obligation to pay for their kids education.

goldcd2• 7 years ago

My favourite idea for fixing the cost of tertiary education, is for universities to "buy a stake in you".

i.e. You apply for Course X and the university quotes you Y% of your income for the next Z many years. Say 15% for 15 years over say a £20k floor.

Better students get a lower percentage. Courses with poor prospects get punished with having to publish higher percentages before you get in the door. You as the student decide whether the quality of a university and their facilities, outweighs say an extra percentage etc etc.

Aligning the goals of the university and the student is beneficial in other ways as well. If 7 years down the line the field your course pointed you towards implodes and you're laid off - well the university could offer a free course/masters to retrain in a subject that'll get you back earning for them.

dmitrygr2• 7 years ago

This would basically make art degrees and history degrees unattainable except for the rich. Not that I mind, but that is the complaint you'll get with this system.

goldcd2• 7 years ago

I'd disagree.

The cost of delivering an arts and history course should be cheaper than say a course requiring a medical-teaching-hospital, a super-computer, wind-tunnel - whatever.

If all you need are some great lecturers, you can poach them and set up a department somewhere with a low cost of living for staff and students.

These subjects are also a fine fit for distance-learning, part-time etc.

Basically, I'd hope that universities would be forced to consider how they could reduce the cost of these courses in a sensible way. Current system of "all of you get on this expensive campus and pay your share" is unfair, as a lot of the benefits of this are skewed.

malandrew• 7 years ago

That's a feature, not a bug.

dmitrygr2• 7 years ago

A few of my friends figured out that they can avoid having "expected family contribution" being so high to due to parental income is to get married, because then parental income no longer counts. Some did this and it worked

perkee• 7 years ago

the best case scenario for means testing is always perverse incentives like this. Just give it away, man. K-16, ezpz. If you want to find efficiencies go after the sub provost to the assistant registrar for the vice dean; bureaucracies have ballooned inside of colleges compared to instructor salaries.

Parents Give Up Custody of Their Kids to Get Need-Based College Financial Aid

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