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Rich Families Are Legally Separating from Their Kids to Pay Less for College

It's the latest tactic the wealthy use to game the system.

by Allie Conti
Jul 30 2019, 4:31pm

Georgetown University's campus. Photo by Alex Wong/Get

On its website, Destination College describes itself as "a Chicago based firm working with families to make college affordable for their children." The smiling blonde woman holding an award on its homepage, Lora Georgieva, has apparently helped "many homeless students, refugees, and single moms achieve their college dream." But a new report from ProPublica tells a different story—court records show Georgieva has coached dozens of rich families into gaming a system intended to help the less fortunate. These families do so by having their high-school–aged children declare themselves financially independent from their parents, letting them access financial aid they would not otherwise be entitled to.

Gorgieva's business is part of a constellation of private counseling shops that employ legal—albeit ethically dubious—methods to help wealthy parents give their kids a leg up. This particular brand of scam was uncovered after a high school guidance counselor called an admissions director at the University of Illinois to ask why a specific student had been invited to an orientation for disadvantaged kids. The director, Andy Borst, looked into it and found that she had legally emancipated herself from her parents—a process that is intended to protect kids from abuse, but does not require any such abuse to have taken place.

The Wall Street Journal was able to reach two parents who were coached by Destination College into transferring guardianship of their kids before they applied for financial aid. One woman said that after putting several kids through school, her family's resources were tapped out despite living in a $1.2 million home and earning more than $250,000 a year. She transferred her daughter's guardianship to her business partner using completely legal methods, after which point that daughter only had to claim her income from working a summer job. She received a $20,000 financial aid package, including a federal subsidy meant for needy students known as a Pell Grant, and was able to cover the rest of her $65,000 tuition through a combination of scholarships and help from her grandmother, the woman told the Journal.

"The problem is there's not much the colleges can do about it," said Mark Kantrowitz, an expert on student aid. Questions about whether a child should be emancipated or otherwise legally separated from their parents are the domain of the courts. However, the college can ask how the student was able to support themselves, and take steps to ensure that all cash support received by the student, whether from their parents, grandparents or other relatives, is reported as untaxed income on the (financial aid form)," he added.



This latest revelation comes amid concurrent national conversations about the fairness and price of college. In March, the biggest college admissions scandal in history implicated 50 people in a shocking criminal conspiracy to grease the admission of lackluster students' into big-ticket schools by manipulating test scores and faking extracurriculars. More recently, the College Board tried to level the playing field by introducing an "adversity score" metric to the SATs. On Tuesday, Democratic presidential candidates Elizabeth Warren and Pete Buttigieg, among others, will likely duke it out on their competing visions for how to make the system more equitable, whether that means making public universities tuition-free or merely expanding the Pell Grant system.

Now it seems on top of fixing all that, a comprehensive solution to revamping the way college works in America should include an overhaul of guardianship law. "The guardianship law was written very broadly," Mari Berlin, an attorney who has overseen several of these cases, told the Journal. "Judges were given an immense amount of discretion. The standard is, best interest of the child, and I think it's hard to argue that this is not in the student's best interest."

ProPublica's investigation was limited to a northern suburb of Chicago, where it found about four dozen suspicious guardianship applications in the past 18 months. It's unclear how widespread the practice is nationwide, or how long it's been going on for.

In the meantime, Borst, the Illinois admissions official, said he'd alerted the Department of Education. Its investigative arm told the Journal that it's already suggested the DOE add language to the Federal Student Aid Handbook clarifying that if a student enters a legal guardianship but continues to receive support from parents, they are still considered their dependents. However, now that they've been tipped off to this latest chapter in the ongoing college admissions scandal, a nationwide investigation may soon be in the works.

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