On July 1 of this year, for institutions participating in the Title IV federal student aid program, a new law will go into effect eliminating any compensation to college personnel specifically based on the enrollment or continued enrollment of a student. This law arises primarily from compensation and promotion practices of at a number of for-profit universities, but also stems from practices at some not-for-profit institutions as well. As a result, the new regulations have implications for admissions and financial aid offices throughout higher education.
A little background: In 1992, changes to the Higher Education Act forbid colleges and universities from offering any bonuses, commissions, or incentive payments to employees based on enrollment or financial aid goals. In 2002, this ban was revised and 12 “safe harbors” were created, allowing some compensation for enrollment or financial aid performance of an institution. During the last couple of years, as violations were confirmed at 31 college institutions, the federal government moved to eliminate these safe harbor exceptions.