Financial aid scam benefits wealthy families

Journalists uncover dozens of misleading financial aid cases along North Shore



The University of Illinois Urbana-Champaign unknowingly granted aid as a result of this legal loophole

Recent exposé pieces published by the Wall Street Journal and Propublica Illinois exposed an alarming trend in the pool of chicagoland financial aid applicants.There were several confirmed cases in which suburban parents have given up legal guardianship of their high schooler as a legal loophole to dodge the full price tag of colleges.

Admissions scandals have been front and center in national news recently. “Desperate Housewives” star Felicity Huffman, was sentenced last week to fourteen days in jail after paying $15,000 for her daughter’s test scores to be boosted. Out of the 51 accused varsity blue parents, Full House actress, Lori Loughlin, has still not been sentenced after getting her daughter into USC,claiming she was a talented rower when she was not involved in any kind of athletics.

With the good majority of colleges being too expensive for the average American, millions of high school seniors applied for forms of financial aid last year, such as need-based funding such as Pell grants.

Eligibility for financial aid programs is based on an evaluation of family income, which is why some suburban parents are turning over custody to friends, family, and sometimes even neighbors. Upon giving up guardianship, the student is now seen as an independent and the families income and financial history cannot be accessed by colleges.

University of Illinois Urbana-Champaign officials said they were startled when 14 instances of this guardianship scandal was detected in the spring of 2018 but much to the schools frustration the practice is still technically legal because a judge must approve the transfer of custody. Five other colleges reported similar inconsistencies.

One of these seniors, whose parents owned a 1.2 million dollar home, was evaluated for their summer job earnings and received $47,000 in Pell grants post guardianship swap for a school that costs around $65,000.

School officials found suburbs such as Lake Forest, Northbrook, Libertyville, and Deerfield to be hotbeds for this trend by tracking a suspicious amount of FAFSA information requests by schools that were notoriously wealthy. According to the Wall Street Journal, 38 cases were confirmed in Lake County Illinois.

“My mom always talked about giving me up to a family in Schaumburg who isn’t really that wealthy,but the process takes two years with all the forms so it never happened,” said one New Trier Senior who wished to remain anonymous.

On Aug. 8, U.S Department of Education spokeswoman, Elizabeth Hill, addressed these parents in a statement, “The laws and regulations governing dependency status were created to help students who legitimately need assistance to attend college.” claimed Hill, “Those who break the rules should be held accountable, and 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.”

Upon further investigation, officials found that the name Lora Georgieva seemed to be involved in most of the confirmed cases. Georgieva, a Certified College Planner, and owner of the Lincolnshire based college planning firm, Destination College, promised clients on the companies website that she could save them $30,000 a year between grants and scholarships.

During several interviews, Georgieva denied being involved in anything illegal but did say she was concerned that press coverage would encourage more parents to use the loophole and that Congress should act quickly to fix it. This is especially scary as pell grants are given out on a first come first serve basis.

New Trier Post-High School Counselor, Dan Rogan, stressed the seriousness of aid fraud, “New Trier’s counseling department has never helped anyone to do that. I think we would only be aware of this if a student were to share that with us. I think it’s a practice that sometimes is fueled by people that are unethical who offer services to these parents,” said Rogan,

“Technically,by law it’s legal, but things that are legal aren’t always the right thing to do. It’s not ethical because you’re stealing from students who really deserve the aid.”

Towards the end of Huffman’s hearing, U.S assistant attorney Eric Rosen, ended the Varsity Blues trial with a message to the families of college applicants, “Parenthood is terrifying, exhausting and stressful, but that’s what every parent goes through…What parenthood does not do, it does not make you a felon, it does not make you cheat, in fact it makes you want to serve as a positive role model for your children.”