
Parents Give Up Custody of Their Kids to Get Need-Based College Financial Aid - pseudolus
https://www.propublica.org/article/university-of-illinois-financial-aid-fafsa-parents-guardianship-children-students
======
tzs
> 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
How are private hotel security able to search someone's car? That seems
sketchy.

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

~~~
esrauch
Unless he cracked it seems like throwing away $50 in a casino shouldn't be
enough grounds for the police to search your car.

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dv_dt
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.

~~~
davidw
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.

~~~
liability
> _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_dt
Name any other industry that gets a detailed map of your finances and savings
before issuing a price for their services. It's a recipe for maximal
extraction.

~~~
slg
The government. I pay more in taxes not because I use more roads, need more
protection from our military, or send more kids to the local school. I pay
more because the government knows I can afford it. That is how the system was
designed and it is completely appropriate in my opinion. College is just a
continuation of that since it is in part funded by the government. Except in
recent decades we have shifted the burden from the overall taxpayer to the
students themselves (and their parents). However the basic idea that the
people who have more money should pay more for the service has stuck around. I
can't say I disagree with that approach even if it does incentivize weird
loopholes like the one discussed in the article.

~~~
dv_dt
I agree with people with more paying more into the general fund of the
government. But when major parts of the US budget get deficit funded, why does
higher education get individually loaded cost wise? It makes no sense, there's
no real need to discourage people from getting too much education. And long
term loans, are just as inflationary to issue to the economy - and when you
collect the interest back long term, you're just causing a drag on economic
expansion.

~~~
slg
I completely agree with you that this approach to education isn't ideal and
that we collectively would be better off if the onus for funding education was
shifted back to the general tax payer again. That said, if you have a system
in which the education dollars are limits, like we currently do, the best
approach in my opinion is to charge people based on their ability to pay.

------
stickfigure
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.

~~~
Someone1234
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_iki
> 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.

~~~
Someone1234
> So giving up custody is a legal way to express this situation in legal
> terms.

That's a different situation than the situation the article discusses. These
kids are still receiving support while pretending not to (for financial gain).

The colleges are now asking if the student is still on their parent's health
insurance and or getting their bills paid by their parents to combat the abuse
they've been seeing.

~~~
riku_iki
> That's a different situation than the situation the article discusses. These
> kids are still receiving support while pretending not to (for financial
> gain).

could you provide citation?

I think article says exactly that some students want to separate from parents
through guardianship concept and try to push this through court, but colleges
investigate and flag such cases internally.

~~~
skinnymuch
The article.

~~~
riku_iki
As I said: article doesn't state there is any actual finding of such things.

------
ngngngng
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.

~~~
sudosteph
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.

~~~
jandrewrogers
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.

------
jandrewrogers
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.

------
chriskanan
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...](https://budgeting.thenest.com/can-married-students-
financial-aid-money-28065.html)

Some have fake marriages for this purpose:
[https://www.vice.com/en_us/article/4wbeqg/how-some-
students-...](https://www.vice.com/en_us/article/4wbeqg/how-some-students-are-
using-fake-marriages-to-get-financial-aid)

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sjg007
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?

~~~
notahacker
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
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.

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mox1
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.

~~~
dsfyu404ed
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.

~~~
mox1
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!

------
refurb
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.

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sdinsn
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.

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goldcd
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.

~~~
dmitrygr
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.

~~~
goldcd
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.

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dmitrygr
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

------
jatsign
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?

~~~
wanderr
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...](https://www.reuters.com/article/us-column-
feldman-529/dont-let-that-529-college-plan-hurt-your-financial-aid-
idUSBRE93S0LZ20130429)

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liveoneggs
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.

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

~~~
liveoneggs
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" :)

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DanBC
Hang on, are they actually giving up custody?

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

~~~
dsfyu404ed
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.

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perkee
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.

------
matz1
More like money saving tricks to me, doesn't seem illegal.

~~~
godshatter
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.

------
cheeky78
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.

~~~
asdfman123
> 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.

~~~
TomVDB
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.

~~~
caseymarquis
Having attended both types of college, I actually had the opposite experience.
At the community college, I was taught entry level classes by PHds who taught
purely for enjoyment. The students were largely very motivated and
professional. The university I attended was decent (top 60s), but all my
direct interactions were with graduate TAs, many of whom struggled with the
English language. The students mostly just wanted to party and constantly
needed their hands held.

Most likely I just got lucky. My main point is that anecdata isn't very good
data.

~~~
romwell
>by PHds who taught purely for enjoyment

Yeeeeeah, right.

Signed, PhD working in the industry.

