Report: Wealthy Illinois families received aid meant for needy students through loophole

ILLINOIS (AP/WIFR) -- The U.S. Education Department is being urged to close a loophole that has allowed some wealthy families to get federal, state and university funding that’s meant to help needy students.

Federal authorities were notified last year that some parents in Illinois were transferring custody of their children to friends or relatives to make it appear they came from poorer backgrounds and to make them eligible for more financial aid.

Officials at the University of Illinois reported the scheme after finding several cases there

“Wealthy families are manipulating the financial aid process to be eligible for financial aid they would not be otherwise eligible for," said Andy Borst, director of undergraduate admissions at the University of Illinois at Urbana-Champaign, in a ProPublica report​. "They are taking away opportunities from families that really need it.”

According to ProPublica, dozens of Chicago families are using the loophole in order to get their children more need-based financial aid they would not otherwise receive.

While the practice is considered a loophole, it is not deemed illegal. ProPublica reports that the University of Illinois now asks more questions of students who have recently entered into a guardianship, including questions about their living situation and whether they have contact with their parents.