I remember nearly the same in Germany. When I was at university governmental student loans were a thing (still are). I didn't qualify, as my single dad earned too much (while having to pay the credit on the house and money was always tight). I worked two jobs next to my university.

Quite a few economics and law students driving new BMWs, Mercedes and the likes received student loans (they only needed to be paid back in part, so quite a good investment to cover living expenses one could say) as their parents mostly lived from dividends with the family income from salaries (from their parent owned companies) were by design very low to reduce tax burden and had the nice side effect for their daughters and sons to qualify for government subsidized student loans.

The system is setup to be gamed by those who have the financial means to do so without actual need to do so. While those with a need but no means need to pay (for those others).

It was quite grotesque. Not few of these kids had higher end cars and more spending money than their professors. While still being subsidized by the state.

Seriously? So for instance I could just pay myself double this year and nothing next year from my personal corporation, and my kid would somehow pass as having a low income parent?

Surely you have to count things like dividends, income in previous years, assets...

Failing that just make it clear that you know when you're tricking the system and fingers will be pointed.

I was easily able to get federal money for college even though my parents were doing fine and supporting me. I didn't cheat or lie or even bend the rules, I just had a secret power: I was married. Because of that, my parents' financial status wasn't even entered into the picture. It didn't even come up on any form.