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In a sequel to the ‘Varsity Blues’ admissions scandal, parents are gaming guardianship
Wealthy families have found a new way to game the college admissions system without facing the legal consequences of Aunt Becky.
According to ProPublica, parents of college applicants have started giving up guardianship of their kids to allow them to collect need-based financial aid. These families would otherwise not be eligible for the aid.
It’s happening in Illinois — and perhaps the rest of the U.S.
ProPublica’s investigation focused on the Chicago area, finding at least 4 dozen guardianships that were filed for this purpose in one suburban county in the last 18 months.
One woman — whose family makes $250k annually and lives in a $1.2m house — told the WSJ she transferred guardianship of her daughter, who then claimed annual income of $4.2k (from summer jobs). She received $20k in need-based aid, some of which she will not have to pay back.
The woman said she was following advice from a consulting group called Destination College.
The legal but sketchy basis
In Illinois, guardianship can be transferred if parents and children consent and the court deems the transfer to be in the child’s best interest.
Mari Berlin, an attorney who has overseen many of these guardianships, says the families have been using it as a solution to deal with the expensive price of college.
“It is in the best interest of the minor, which is the statute’s purpose,” she told ProPublica.
But many of these kids, from families making six figures, are taking from a limited pool of grants that would normally go to poorer students.
“It’s a scam,” the Univ. of Illinois’ director of undergraduate admissions told ProPublica. “They are taking away opportunities from families that really need it.”
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We’ve partnered with monday.com to bring you the first season of The Hustle’s first podcast: My First Million.
You’ll wish you’d thought of this LinkedIn trick
Look, cold emails are cool… But have you ever targeted ads at one, single investor?
Jack Smith, Vungle co-founder and all-around madman, used this LinkedIn targeting “trick” to raise $120k for his startup after being rejected when going the traditional pitch route.
And that trick paid off — big time. Vungle just sold for $750m one week after we recorded this podcast. Coincidence? We think not.
This week on The Hustle’s podcast, My First Million, Jack tells the story of how he got Vungle off the ground, from $0 to $750m. Listen in if you want a little motivation on how to hustle smarter, not harder.
Click below to listen for free.
Tesla’s cars may be in charge, but its batteries are in the fast lane
It’s a giant battery that will provide energy for power grids
Currently, most local power grids rely on “peaker plants” — which are powered by natural gas — to provide extra juice during moments of peak demand for power.
Megapack is designed as a sustainable alternative to existing peaker plants that stores and then distributes clean solar and wind energy instead of dirty natural gases.
Tesla tested the technology that went into Megapacks in a massive experiment facility in Australia, and that facility saved more than $40m in its first year of operation.
It’s the latest power-pack in Tesla’s booming battery business
Tesla’s energy storage division already offers 2 other products: Residential-scale Powerwall storage systems and commercial-scale Powerpack systems.
Last quarter, these 2 existing energy storage products accounted for $368m in revenue, a small chunk of Tesla’s $6.4B in overall revenue.
But the number of Powerwalls — and the amount of energy they crank out — is sharply on the rise: There are now 50k Powerwalls installed, and the amount of energy Tesla’s energy systems produced increased 81% last quarter.
|»||We like big Big Batts|
The cost of stadium naming rights is becoming too rich for some big name brands
Kraft Heinz is wrapping up a 20-year, $57m naming rights deal with the Pittsburgh Steelers, and according to Sports Business Journal, the corporate condiment cornucopia is “highly unlikely” to renew.
The recent back-and-forth between Heinz and the Steelers franchise highlights the exorbitant (and rising) costs for a brand to slap its name on a stadium — and whether, in today’s sports climate, it’s actually worth it.
Will Heinz throw in the ‘terrible towel’?
The original 2001 deal works out to an estimated $2.8m a year. To re-up, the Steelers are reportedly seeking a contract worth north of $10m annually; a number the ketchup king has balked at — and that’s still wayyy below market price.
Most companies pay between $5m and $12m and Axios reports that private lender SoFi is expected to pay a whopping $400m over 20 years to put its name on the new Rams/Chargers stadium in LA ($20m per year).
But, as IRL sports viewership wanes and stadiums begin to downsize, is the current market really worth the splurge?
Arguably more than ever
It’s all about those brand impression rates, babayyy.
Think about it: The next season of Madden (that can now be streamed across like 80B platforms alone) is basically free advertising for companies like Levi’s, Citigroup, Chase — the list goes on. And that’s just one avenue.
Of course, teams have to have a fan base. It’s hard to definitively say it’s worth it for Canadian Tire Centre to rep its logo at the front door of the Ottawa Senators — snooooooze.
|»||Pucks will fly|
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Life in the fast (food) lane: Fast food companies are picking up market steam
As humans lean more health conscious these days, snack brands and high-preservative grocery store goodies — like peanut butter — have struggled.
On the flip, the past couple of years have, surprisingly, proved to be cash cows for fast food chains.
According to Goldman analysts, OG drive-thru brands like McDonald’s and Taco Bell — and pricey fast-casual ‘straunts like Chipotle and Shake Shack — have helped the fast food industry outperform the S&P by 27% over the last 12 months.
So what’s the deal?
Some of the credit is due to fast food companies investing in digital engagement — but there’s also another (more interesting) factor at play.
The fast-food industry’s surprising boost primarily comes from the increased pay of low-wage workers.
That’s right, we have ourselves another wacky economic indicator
Goldman’s research team estimates 70% of the industry’s growth over the past 5 years can be linked to rising wages and flourishing third-party apps like Uber Eats.
You would think rising wages would hurt the “cheap-food” industry (don’t hate, Panda Express is choice) but, as gas prices stay steady, the rising paychecks of minimum-wage workers is leading to more cash dropped at the drive-thru.
|»||Pay at window #2|
Strap on your unicorn horns! Forbes says Divvy is the next billion-dollar startup
It all started 2 years ago, when Blake Murray (CEO and co-founder of Divvy) was in a parenting pinch.
He wanted to give his kids money to spend on things like ice cream, but thinking of giving his credit card to a child scared the sprinkles off him.
That sparked an idea: A card that didn’t have a preset balance, so each purchase could be approved in real-time and money could be added (or frozen) in seconds… but for businesses.
And just like that, Divvy was born.
2 years later, the expense tracking service has more than 3,000 corporate customers and has been named one of Forbes’ Next Billion-Dollar Startups for 2019.
Want to see what all the financial fuss is about? Decision makers get $100 to demo Divvy today.
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