Wealthy parents giving up custody of kids for financial aid, report says

Would you give up your kid to get them free college tuition? Some families are doing just that in what is being called a loophole and it is being compared to the college admissions scandal.

We all know college is expensive, but apparently some wealthy families are taking advantage of a program meant to help students who have no financial support.

In response, the Department of Education is suggesting changes be made to close the loophole.

Unlike the "Varsity Blues" scandal involving Lori Loughlin and Felicity Huffman, the loophole is technically legal.

RELATED: 'Varsity Blues' At least 2 Houstonians indicted in nationwide college admissions scandal

The Department of Education and several universities are looking into an alleged scheme that allows children of wealthy families to qualify for financial aid.

Parents reportedly give up legal guardianship of their kids during high school to a friend or relative. When the child applies for financial aid, the student can declare themselves financially independent. That means the family's income and savings are not considered, allowing the family to exploit the financial aid system meant for those who really do need help paying for school.

At least 40 families in the Chicago area were found to be exploiting the system. Pro Publica and the Wall Street Journal found in some cases the families live in million dollar homes.

The Department of Education is considering closing the loophole by saying if a student in guardianship continues to get aid from parents, they are still a dependent child.

Last year, more than 80,000 students who were eligible didn't get the aid because the money ran out.

For low income students that could mean the decision not to go to college.

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