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Lawmakers seek answers to student aid scandal, but officials short on details

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Friday, August 9, 2019  |  Article  |  By Cole Lauterbach | The Center Square

Education--Higher (37) Ford, La Shawn--State House, 8
University officials said Thursday that Illinois lawmakers need to do something to address a loophole in the law that allowed the children of wealthy parents to get tuition assistance after transferring custody of the students to qualify for that aid, but the school officials were tight-lipped about what happened.

University personnel in 2018 found that a number of parents had given up custody of their children to qualify for state and federal tuition assistance and started warning officials. Illinois lawmakers huddled in a committee Thursday to learn more from school officials about the loophole and what they could do to close it.

Officials said University of Illinois gets more than 50,000 aid applications per year. About 33,000 of those student receive some sort of aid. College officials weren’t sure how much money had been given out to students who used the custody loophole. Students who were no longer dependents could have received more than $5,300 annually.

Michelle Trame, director of financial aid with the University of Illinois, said there were definitely students who used the loophole but said school officials couldn't disclose much to lawmakers about it.

“This practice appears to be legal and we have no authority to adjust or deny these students federal aid,” she said.

State Rep. La Shawn Ford, D-Chicago, led the hearing. He said the parents’ actions set a bad example for their children.

“It’s unfortunate that the parents are teaching their children how to cheat the system,” he said.

Lawmakers expressed frustration at school officials’ reluctance to share how many students had potentially manipulated the system to receive aid.

“Our concern at this point is that it is possible for people to go to the courthouse and identify the students that are in guardianships and then tie that back to our institution,” Trame said.

Eric Zarnikow, executive director of the Illinois Student Assistance Commission, gave lawmakers an estimate of how many students whose parents gave up custody of them that were receiving financial aid.

“The percentage under a guardianship is less than one percent ... so, overall for the program, we’re really talking about two-tenths of one percent of the students who are receiving MAP awards,” he said.

Colleges are set to distribute state and financial aid for the fall semester in two weeks.

Representatives from other state schools, Southern Illinois University, Northern Illinois University, and Western Illinois University, said they found no instances of students in guardianship solely to get aid. A representative from Illinois State University said school officials were still exploring it. Other universities in the state had confirmed that they hadn’t seen any instances either.

Students who falsify aid application forms face up to $20,000 in fines and prison time but state officials didn’t say that the students in question did so.

State officials said the Illinois Attorney General’s office is investigating if there were any laws broken by the students or parents during the process.