Feds Back Down From Ban on Recruiter Pay

The U.S. Education Department is backing down from its ban on bonuses for recruiters based on graduation rates, reports The Chronicle of Higher Education and Inside Higher Ed.

The department announced in the Federal Register on Friday that it will no longer prohibit colleges from paying commissions to recruiters that are tied to students' completion rates. The announcement does not alter the federal law prohibiting colleges from paying recruiters bonuses based on the number of students they enroll. The department will still prohibit commissions connected to minority enrollments.

"Although the ban on incentive compensation may cause minority student enrollment numbers to decline," the department stated, "we expect that the minority students who do ultimately enroll will have a better chance at success, because they will have enrolled based on a decision made free of pressured sales tactics, and they presumably would be a good fit for the school they select."

The Obama administration had been working toward tightening the incentive compensation rule, which aimed to stop abuses among for-profit colleges. The department's reversal comes after federal courts twice sided with for-profit colleges in ruling that the administration failed to provide sufficient justification for the regulation.


Related Links

Federal Register


Inside Higher Ed


The Chronicle of Higher Education