Advocacy Alert: Institutions are Encouraged to Comment on USDE Review of Prohibition on Incentive Compensation for College Recruiters

As part of the Middle States Commission on Higher Education’s (MSCHE) strategic priority to promote advocacy initiatives for its members and others, we encourage institutions to attend listening sessions regarding and submit feedback during the comment period for the United States Department of Education (USDE) Review of the Prohibition on Incentive Compensation for College Recruiters. Read USDE’s Announcement.

Review of Prohibition on Incentive Compensation for College Recruiters

On February 15, 2023, USDE announced its plans to gather public input on the effects of the Department’s guidance on compensation for recruiters. According to the release,

The Higher Education Act prohibits institutions of higher education from providing a commission or bonuses to individuals or entities based on securing enrollment or financial aid. This prohibition is known as the ban on incentive compensation. In 2011, the Department issued guidance related to the ban, which created an exception for third parties if they provide a bundled set of services, which can include recruitment. Since issuing the guidance, the number of students recruited by entities operating under this exception has increased, particularly through online programs operated by third-party entities, including Online Program Managers (OPMs). Given the growth in online enrollment and associated federal student debt, the Department is seeking public input to understand the impact of this exception and whether any updates are necessary to the guidance.

Institutions should attend the virtual listening sessions and provide their feedback by submitting written comments. Listening sessions will be held March 8-9, 2023, from 1:00 until 4:00 p.m. each day, and written comments will be accepted through March 16, 2023. Visit the announcement to learn more and register for the listening sessions as preparation to submit comments.

Submitting Public Comments

Institutions should submit written comments via the Federal Rulemaking Portal by March 16, 2023.