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Is Embanet An Agent?

Incentive compensation exemptions once exclusive to international students now cover university online degrees.

The "agent debate" that exists with university admissions folks that has centered on the part of Title IV that expressly prohibits incentive payment and then expressly exempts international activity. The clause reads: "The institution will not provide any commission, bonus, or other incentive payment based directly or indirectly on success in securing enrollments or financial aid to any persons or entities engaged in any student recruiting or admission activities or in making decisions regarding the award of student financial assistance, except that this paragraph shall not apply to the recruitment of foreign students residing in foreign countries who are not eligible to receive Federal student assistance."

Critics state that professional practice supersedes the regulation and since the federal government has declared that incentive compensation for domestic student recruiting is unlawful, it should be the case for recruiting foreign students. Since US law is bound to US citizens, the counter argument is that imposition of US domestic practice to international markets is paramount to restraint of trade. Back and forth the argument goes which is why NACAC has given the conundrum to a commission to help guide best practice overseas

At the first meeting of this commission, toward the end of a long day of back and forth, point-counterpoint, one member finally proclaimed – "I hear all the arguments, but I just can't get over the fact that its not OK to do it here, but that we think its OK to do it there." This apparent loophole is what has a lot of professionals in the practice of college admissions in a quandry, but haven't they missed something? What about online university degrees, who sells those?

It was about a decade ago, when online degrees offered by for-profit schools started hitting the market, that the Department of Education offered what was called the "12 safe harbors" allowing degrees to be sold by third parties and for those involved to be rewarded based on their success. The Department exempted these organizations from the incentive compensation limitations under a very defined set of parameters as long as those programs did not receive Federal Aid.

In 2008, reauthorization the Higher Education Act removed the "safe harbors" and put these exemptions into formal policy. This endorsed the practice of a growth industry, that of corporate partners that run university online degrees. These partners do everything related to student recruitment and student service while the universities are left to develop the curriculum and teach the program. The corporate partners advertise the programs, they operate call centers to take student inquiries, they manage inquiries in a CRM-style database, they sustain a dialog with these prospective students pushing them toward enrolling in a degree, they then facilitate the completion of that application and submit it to the university for approval. The university reviews the application and renders an admissions decision and the student is notified of their acceptance or denial. This is exactly the model used by overseas recruiters.

Lead Consultant

Mark Shay

The driving force behind InternetCarbon is Mark Shay, a serial entrepreneur who has created, built and in several cases sold Internet-based and educationally related businesses. Read more for just a sampling of enterprises Shay brought to life...

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Memberships and Organizations

Mark has just completed his term on the Board of Directors of AIRC - the American International Recruitment Council - an organization he is still very active with.  Mark is  a member of AIEA's Fund Raising Task Force.

He is an individual member or participant in the efforts of AIEA, NAGAP, NAFSA, Council of Graduate Schools, NACAC, AACRAO and UPCEA.

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