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University Use of Recruiting Agents, December 2011 Update

With the 2011 annual AIRC conference and another ICEF workshop occurring in December, it is a good time to reconnect with the issues relating to the use of international recruiting agents and what is the current state of acceptance.

Officially, the use of agents for foreign students is allowed and for domestic students it is not allowed. The governing law of the land is Title IV of the Higher Education Act of 1965, which defines regulations around Federal funding of student aid programs. Title IV states that its jurisdiction covers only domestic students and thus all regulations tied to incentive compensation and student eligibility are for domestic students only.

Violation of Title IV puts a school at risk of loosing its federal funding and for its students not to receive the benefits of federal programs such as subsidized student loans, federal work-study grants and Pell tuition grants. As long as all of the federal programs cover only domestic students, the federal regulations will exempt foreign students.

The Higher Education Act does expire and thus a reauthorization process has happened multiple times since 1965. After repeated extensions and much political wrangling, the act was reauthorized in 2008. This eliminated the twelve “safe harbors” dealing with Internet recruiting, adult education and online program marketing, but there were no changes in the domestic student limitations of federal programs and the foreign exemptions were restated and reinforced.

Counselors against Agents?

NACAC, the National Association for College Admissions Counseling has taken a stand against the use of agents, arguing that what is proper practice for domestic students should be proper practice for all students. Through their professional standards efforts, NACAC has defined certain recruiting practices as “ethical” and uses its market clout to enforce these standards. NACAC operates the National College Fairs, a major domestic high school recruiting platform and they also control the undergraduate Common Application (Common App). NACAC’s “Statement of Principles of Good Practice” requires mandatory compliance by its members, violations can lead to sanctions that include a ban from the organization for both the individual and in extreme cases the institution. Only NACAC members can participate in NACAC programs like the National College Fairs and the Common App, thus failure to comply with the SPGP puts an institutions participation in these lucrative domestic programs at risk.

The agent “industry” has taken exception with NACAC and has debated the differences of international and domestic practice across many forums. NACAC took the agents’ perspective into consideration but in the summer of 2011, the National Admissions Practices Committee put forth a recommendation that the use of commission-based recruiters be banned. The recommendation was to be voted upon by the membership at NACAC’s 2011 Annual Conference, but the NACAC board stepped in and delayed formal action for two years. Citing pressure from university presidents and organizations such as APLU, the Association of Public and Land-Grant Universities (APLU Expresses Concern About Possible Ban of Agents in International Recruiting )

Rationale for Using Agents

While NACAC and APLU form a committee to explore the broader issues relating to international recruiting, it bears repeating some of the rationale of using agents. In most parts of the world, public schools do not offer assistance in the search for colleges, so all counseling is done in the private sector. It is the worldwide standard to have the fees for such service paid for by the service providers (schools), just as it is done in the insurance, real estate, travel and employee search industries. Since the practice is so widespread, the best way today for American universities to compete overseas today is to conform to the worldwide norm and use agents. Agents give schools a local physical presence; they have staff that speaks the native language, operate during the same hours as the families and have ties to the local community. In most cases, agents are respected members of the community, working with schools and families to build a reputable local business.

The growth and maturity of the industry continues. AIRC, the American International Recruitment Council continues to see substantial growth in university membership and has increased the number of agencies it has certified. American universities are expanding their use of agents as witnessed by the expansion efforts of firms like Access American Education , IDP Education and EduGlobal . Also in the news lately, China’s biggest agent firm EIC has opened a US office in California and the mega education company Pearson has purchased an English language teaching firm in China that has an agent subsidiary.

Fueled by a strong desire by American universities to recruit overseas, we can expect that a lot of growth in the agent industry will happen over the next two years, making US schools much more dependent on this channel and making it much more entrenched in standard university practice. From my perspective, now is a very good time for universities to consider starting with or expanding their agent representation. Agents are not oversubscribed (they have capacity) and they are eager to build alliances and invest in bringing on new clients. Agent’s business is booming as interest in studying overseas is growing is most countries and student interest in coming to the United States remains very strong worldwide.

About the Author

Mark Shay is a business developer with a long history of success helping higher education institutions recruit students. In an illustrative career that has spanned three decades, Shay has served thousands of customers, ranging from individual faculty members and graduate deans, to university presidents and foreign governments. He is well known for balancing the non-commercial spirit of educators with the commercial realities of operating efficiently and effectively using technology to improve results. He founded, and has worked in leadership roles at two universities and IDP Education. He has recently started a consulting practice and is serving as an advisor to AAE.


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