Loophole Allows Families to get aid Meant for Needy Students

An Independent Watchdog is Recommending a Change to Close the Loophole

(AP) – The U.S. Education Department is being urged to close a loophole that has allowed some wealthy families to get federal aid meant for low-income students.

Federal authorities have been notified that some parents in Illinois were transferring guardianship of their children to friends or relatives to make it appear they came from poorer backgrounds, making them eligible for more financial aid.

Officials at the University of Illinois reported the scheme after finding several cases there. School officials say it appears to be legal but takes away from limited money meant to help needy students.

An independent watchdog for the Education Department is recommending a change to close the loophole. The department did not immediately comment.

Details of the scheme were first reported by ProPublica and The Wall Street Journal.

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