That interpretation can be expanded to a lot of other scenarios where we do or buy things solely for the tangent benefit that come along with the transaction.
I suspect it’s more along the lines of incorporating to limit liability, where you need to follow the necessary formalities for your setup to hold up to scrutiny. Regardless of the intent, the new guardian needs to actually fill the role of guardian for it to be legit.
Provided no outright lying on FAFSA forms or guardianship transfer was done, I just think that the universities and Education Department are not confident about challenging the guardianship transfers by having to demonstrate that the intent of the transfer was purely to game the finaid system. I’m guessing parents and guardians had prepared half decent reasons for the guardianship hearing and would argue that receiving financial aid in college was merely an accidental side benefit but not their main focus.
Either way, would you relish the idea of going through massive amounts of legal expenses to recover just a few scholarships? If it became more widespread, probably but if it’s just a few questionable cases, they may sooner change the rules going forward than try to claw back those scholarships.
(you attributed that quote to me, but it was scripta.)
If anything, I see it being a fallback position, like tax evasion with mobsters. “We can’t prove murder, but at least we can bust him for financial aid fraud.”
Another article with more details.
Intent doesn’t matter with most laws, either you follow the rules or you don’t. The Feds or the college make the rules, give out aid to who they want, and if you didn’t lie to them, I don’t see why you shouldn’t take their money. It’d be like saying using an IRA is an unethical tax shelter since you’re arranging your finances to pay less tax. People have been arranging their finances to qualify for college aid forever and the colleges keep asking more questions to try to give money to who they want instead of who their rules say are qualfied. It’s just cat and mouse, not illegal.
The legality of it is rooted in the court decision on guardianship. If it’s rubber stamped or if it’s only granted for strongly documented cases makes all the difference in the world. If enough cases start popping up, I’d expect guardianship judges to become much more cognizant of this finaid abuse play and refuse guardianship systematically for these cases.
And I’d expect universities to start scrutinizing any of these applications with independent students who’ve had guardianship transferred shortly before turning 18, to not distribute their own finaid to cases that seem to be gaming the system. They can change their own rules very easily on this.
But for federal aid, it’s going to be more difficult to change the rules. Even if students are gaming the system, as long as the process was legal, I’m not sure FAFSA will be able to withhold need-based aid.
Other typical example is manslaughter vs. murder. For the latter, malice can be proven and the law makes quite a bit of difference in penalty. But just like Comey described, intent can be harder to prove beyond a reasonable doubt.
Clearly for their own finaid, universities can set whatever standards they want. If they want to disregard guardianships that have occurred less than 2 years prior to application or require considerable proof that the student has had no contact/support with parents since then, they can do as they please. Don’t like their rules, apply elsewhere. But Dept of Education and FAFSA have to follow a much more uniform and probably more lenient interpretation considering there is no alternative for Federal aid.