US educators concerned over new rules on ‘third-party’ relationships

New guidance: The Department of Education issued new guidance on February 15th that would expand scrutiny of third-party services and require all institutions to declare those relationships. On February 28th, the Department of Education confirmed that the implementation of the guidance had been delayed until September 1st.

The new guidance appears is targeted at Title IV programs, a federal funding scheme exclusive to domestic students, and the use of edtech companies and ‘Online Program Managers’ (OPMs).

Payment of ‘incentives’ or commission for the recruitment of domestic students has long been prohibited in the USA, but the Department of Education has expressed concerns about how an exemption for ‘bundled services’ by third parties, such as OPMs, had led to growth in incentive-based recruitment for online courses.

“Online education has the potential to meet the needs of many students and lower costs,” said Under Secretary James Kvaal, in a statement. “But we are concerned about the growth in loan debt and want to ensure students get value for their money. These listening sessions are part of the Department’s commitment to undertake a careful, fair, and thorough review of the rules around how contractors recruit students for online programs.”

International impact: The guidance makes no mention of international students or agents, and overseas student recruitment does not appear to be the intended target of the guidance, but nonetheless institutions are worried that their recruitment could be affected.

In an update to stakeholders, the American International Recruitment Council (AIRC) – an organization that advocates for ‘standards-based’ international student recruitment practices and provides an accreditation service for agencies – highlighted the issues.

“Some AIRC members have expressed concerns that the guidance will prohibit institutions from making incentive payments to international educational recruitment agencies, negatively impacting institution-educational agency partnerships,” said Brian Whalen, Executive Director.

AIRC has contacted the Department of Education to seek clarification on whether the guidance pertains specifically to institutional arrangements with educational recruitment agencies, and is also seeking advice from its law firm.

Brian confirmed to StudyTravel Magazine that the Department of Education had not responded at the time of writing.

He said that the association was hopeful that this was a case of unintended consequences from a policy focused on domestic students, and wanted to be certain about the intent of the guidance.

The association will be attending Department of Education listening sessions next week on the new guidance to “offer feedback and to advocate for AIRC Standards and our member partnerships”.