Incentive compensation is payment to admissions or recruiting staff that is based on the number of students enrolled, or on success in securing enrollments.
How it works
The institution sets compensation for admissions staff as fixed salaries or wages unrelated to enrollment outcomes. Managers document that performance evaluations and raises are based on quality of service, compliance, or other non-enrollment factors. Contracts with third-party lead generators or call centers are reviewed to ensure they do not contain prohibited incentives. Auditors and program reviewers examine payroll and contracts.
Example: an online university pays admissions representatives a base salary plus a bonus for each student who completes an application and enrolls. The bonus structure violates the incentive-compensation ban. The institution must eliminate the bonus and may be required to return Title IV funds associated with the affected period.
How it differs
Ordinary salary and benefits are permitted. Payments for recruiting students into non-Title-IV programs may fall outside the ban, but mixed roles are scrutinized. Marketing contracts that pay per lead rather than per enrollment require careful review to ensure they do not function as prohibited incentive compensation.
Common errors
Paying per-enrollment bonuses while calling them “performance pay.” Assuming the ban applies only to in-person recruiters. Structuring contractor agreements that indirectly reward enrollment numbers.
References
- 1. 34 CFR 668.14 incentive compensation banProhibition on enrollment-based payments
- 2. Department of Education incentive-compensation guidanceScope and exceptions
Incentive compensation is payment to admissions or recruiting staff that is based on the number of students enrolled, or on success in securing enrollments.