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Illinois lawmakers discuss how wealthy families are qualifying for college financial aid

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CHICAGO — State lawmakers are using words like disappointed, disgusted, shocking and disturbing to describe the practice of parents giving up guardianship of their children, so they qualify for state and federal college financial aid.

"While this may be a legal loophole, that does not make it morally and ethically OK," said State Rep. Katie Stuart.

The loophole Stuart is referring to was uncovered by a ProPublic Illinois story. They reported that it found 46 cases of wealthy Lake County parents taking advantage of it.

It starts when parents transfer guardianship of their children to a relative or friend.

Then, when the teenagers apply for college, they can claim they are independent.That lets them qualify for loans they otherwise couldn't get.

The University of Illinois was first alerted to the practice in 2018 by a high school counselor. The university looked into it and realized it was not just an isolated incident.

The university is now automatically checking any guardianship financial aid applications. But even if someone uncovers a problem, there's not much that can be done because no laws were broken.

"To the best of our knowledge, the guardianships have been approved by a court and appear to be legal," said University of Illinois Financial Aid Director Michelle Trame. "Without an intervention, we are obligated to disperse state grants and federal need-based aid."

Lawmakers want to see if there is a way to stop the abuse of the system, without hurting those legitimately changed guardianship and qualify for the aid.

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