Taking on Incentive Compensation
WASHINGTON -- Just as new scrutiny surfaces on the University of Phoenix’s alleged use of illegal recruiting practices, a Department of Education-appointed panel debated possible changes in federal rules governing recruiter compensation for bringing students to their institutions.
In discussions Tuesday afternoon and Wednesday morning, the team of negotiators charged with considering the revision of regulations meant to protect federal financial aid programs from potential abuses by colleges, universities and others turned to the rules guiding incentive compensation for recruiters, financial aid officers and others who may get paid based on how many students apply to or enroll at their institution.
The department chose to reopen the issue in this current round of "negotiated rule making," in an attempt to see whether some or all of the safe harbors needed to be revised or eliminated, or if others ought to be added.
Though complaints about aggressive recruiting tactics have come from all kinds of institutions, there was an inferred emphasis on for-profits like Phoenix (which, for its part, refutes the allegations made by ProPublica and NPR's "Marketplace" in the news story mentioned above). Hawkins said NACAC has catalogued violations “taking place primarily in the for-profit sector but also in nonprofits.” His group’s policies regard admission officers “as professionals, rather than salespersons” and support a full ban on incentive compensation.
Margaret Reiter, a former California deputy attorney general on the panel representing consumer advocacy organizations, voiced specific concerns about the language in almost all of the safe harbors. [Inside Higher Ed]
