Policy on Federal Ban on Incentive Compensation for Student Recruiting Activities or the Awarding of Federal Financial Aid

I.Policy Statement

Wentworth Institute prohibits the award of any commission, bonus or other incentive payment based in any part, directly or indirectly, upon success in securing enrollments or the award of financial aid, to any person or entity who is engaged in any student recruitment or admission activity, or in making decisions regarding the award of Title IV, Higher Education Act (HEA) program funds. This rule is not applicable to recruitment of foreign students residing in foreign countries who are not eligible to receive federal student assistance, however, recruitment of international students is addressed under other Institute policies.

II.Reason for the Policy

This policy is intended to ensure compliance with the adherence to Section 487 (a)(20) of the HEA which prohibits the Institute from providing incentive compensation to employees or third party entities for their success in securing student enrollments or the awarding of Title IV HEA program funds.

This strict ban on providing incentive compensation for performing these activities is part of a larger set of Program Integrity Rules issued by the Department of Education (DOE) in 2010 with an effective date July 1, 2011. These rules cover a broad array of issues intended to promote integrity in higher education programs by protecting students as consumers and by stemming perceived abuses of Title IV program funds perpetuated by a minority of institutions, mainly for‐profit schools and other entities. The rules apply to all Title IV eligible institutions.

III.Policy Category

Essential Policy

IV.Procedures

Determine whether any of your staff, faculty or outside consultants or entities are being (or will be) paid “incentive” compensation. Incentive compensation includes commissions, bonus payments, merit salary adjustments, and promotion decisions. Payments made to recruiters based on student academic performance is considered incentive compensation.
1. If no, then your analysis is complete and these rules are not applicable.
2. If yes, go to Step 2.
For any individual or third party that you answered “yes” to Step 1, determine whether the payment of incentive compensation, or any part thereof, is directly or indirectly based upon, either:
1. The person or entity’s success in securing enrollments which is defined as the recruiting or admissions activities related to success in securing student enrollments for any period of time, or
2. A person or entity’s involvement in making decisions regarding the awarding of financial aid in Title IV HEA programs.
  1. If no, the payment is permissible and your analysis is complete.
  2. If yes, the payment is prohibited under the Program Integrity Rules, and the Institute must immediately take steps to cease any incentive payment.

Some examples of covered activities for which incentive compensation is prohibited include, but are not limited to:

Recruitment information targeted to individuals
Recruiting solicitations to individuals
Contacting prospective students
Making student enrollment or Title IV aid decisions
Aiding students in completing enrollment applications
Completing financial aid applications on behalf of prospective students
Graduation/completion rates, retention rates, diversity numbers
Revenue related to enrollments and/or financial aid

Some examples of covered activities for which incentive compensation is acceptable include, but are not limited to:

Successful season
GPA and other measures of academic performance
Student satisfaction
Website hits
Attendance at open houses
General discussions with prospective students about the value of education and the institution.

When you conduct your analysis be aware that the rules do not restrict the following types of payments:

Cost of living adjustments to a fixed salary or wage
Payments to faculty based upon student class size or academic achievement and/or
Compensation adjustments to a fixed salary or wage based on seniority or other qualitative factors that are not related to securing enrollments or financial aid.

Examples of activities that are exempt from the ban on incentive compensation as long as the employee is not also engaged in covered activities include:

Advertising or marketing activities that provide college or program information to the public or groups of potential students,
Collecting contact information, and
Providing student support services after the disbursement of financial aid such as career counseling, tutoring, online course support.

Remember that only incentive compensation payments made to individuals for the covered activities are subject to the ban.

V. Who is governed by this Policy?

These rules apply to positions performing the restricted activities. Certain Institute departments such as Admissions Offices or Student Financial Services will have a number of employees subject to the ban since these departments typically perform covered activities. These restrictions may apply to higher‐level employees with responsibilities for the covered activities.

Additionally, these rules apply to ANY employee in any department that is directly engaged in recruiting students. Employees may not be compensated based on their success in enrolling students. Special care should be taken when reviewing the performance of employees that may perform recruiting activities as a nominal part of their work to ensure that compensation decisions are not made in relation to the success of these activities in securing student enrollment.

Do these rules apply to Athletics personnel?

Yes, the recruitment of student athletes is “not different from the recruitment of other students” however, bonus or other incentive payments to athletic personnel are typically permitted for successful athletic programs including compensation for a successful athletic season but not student athlete enrollment, retention or graduation rates.

What about agreements with third party vendors?

These restrictions extend to payments to third party entities; however, specific rules may apply if a vendor is providing bundled activities that include covered as well as other activities. Please review third party agreements to ensure they do not include incentivized payments for the covered activities and request assistance from Counsel before authorizing any third party agreements that may contain these activities.

VI. Sanctions

Violation of Institute policies, including the failure to avoid a prohibited activity or obtain required approvals, will be dealt with in accordance with applicable Institute policies and procedures. These may include disciplinary actions up to and including termination from the Institute.

VII. Responsible Administrators

Vice President for Finance, Vice President for Human Resources, Director of Human Resources

FAQ's

As a supervisor how can I assess the performance and determine salary adjustments for an employee whose responsibilities may include the restricted activities?
There are a number of standard evaluative factors that can be used to assess the performance of these employees in relation to the restricted activities, including:
- Job knowledge (knowledge of Institute programs, policies and guidance),
- Professionalism (providing quality customer service, respecting customer privacy, and demonstrating proper etiquette with students and co‐workers),
- Analytic ability (ability to troubleshoot and solve problems),
- Communication skills (written, verbal),
- Use of technology (ability to use available technology available to carry out duties),
- Dependability (follow through with customers, punctuality, low absenteeism),
- Customer evaluations (feedback from students, parents, co‐workers or other individuals/organizations the individual works with), and
- Initiative (displays positive attitude).
Can merit raises or bonuses be given to employees performing these restricted activities?

Yes, as long as it is demonstrated through employee evaluations that payments are driven by the assessment of the evaluative factors (examples noted above) in relation to the covered activities and not related to success in securing student enrollments or awarding financial aid. Employees with additional duties unrelated to the covered activities may be evaluated on their performance of those additional duties.

Last updated: May 2017