Sunshine for International Recruiting

Amid criticism, U.S. universities have quietly paid companies commission to recruit students abroad. Now they're doing it publicly, and trying to standardize practices.
December 4, 2009

While the prospect still causes some squeamishness across higher education, 10 more universities have outsourced international recruitment services to private agents working on commission for every student they send back to the U.S.

IDP Education released the names of its “charter partners” Thursday, marking the company’s first public declaration of its U.S. client base. Perhaps more significant than the names of the institutions themselves is the fact that they have been publicly declared – an indication that the use of paid private counselors for recruitment abroad may be going mainstream, or at least coming out of the shadows.

“As the number of traditional college students drops and overseas institutions advance their recruiting efforts, U.S. universities face unprecedented competition that, if left unchecked, could lead to another iconic American industry succumbing to foreign competition,” Mark Shay, North American director of IDP Education, said in a news release. “Our charter partners are being proactive in working to compete for students worldwide.”

IDP Clients

Ashland University
Bellarmine University
Chaminade University
Dean College
Fisher College
Keck Graduate Institute
Lewis University
Saint Francis University
St. Michael's College
University of Mississippi

Although it is commonplace among colleges in Britain and Australia, the use of in-country agents for recruitment has been met with skepticism in the U.S. Many college counselors and admissions officials question whether agents with no direct ties to an institution will be motivated to find the most qualified and appropriate students or merely driven to deliver the maximum number of students to boost commission revenue.

While some are sure to continue questioning the practice, efforts are underway to create standards of best practices for international recruiters. The American International Recruitment Council (AIRC) approved standards to certify recruitment agencies in May, and the group is expected to certify some or all of eight pilot agencies, including IDP, at its meeting in Miami, Fla. this week. Certification requires a number of steps, including external reviews, self studies, and the development of improvement plans.

Commission Still Taboo

IDP began as a non-profit cooperative, recruiting international students to Australian institutions. As a for-profit company working on behalf of U.S. colleges, IDP now promises to give American institutions access to students in 22 countries, beginning in India and expanding to Asia and the Middle East.

Michael Metcalf, associate provost for international affairs at the University of Mississippi, said the university plans to sign on with IDP with the full expectation the company will be AIRC certified.

“We want to continue to increase the number of international students in our student body, not least of all at the undergraduate level, and therefore we were attracted to this new model, or a model that has not been broadly used in the U.S. before,” he said.

International recruitment is, of course, nothing new. Universities of the greatest means have planted flags in foreign countries for years, often pulling in talented students who are willing to pay full freight at out-of-state rates or even higher. The distinguishing feature of IDP and other recruitment agencies, however, is the fact that the recruiters are not directly employed by the institution and they work on a commission basis.

Commission-based recruitment has been taboo in the U.S., so much so that in 1992 Congress acted to bar financial-aid eligible colleges and universities from providing any commission, bonus, or other incentive payment to recruiters for enrolling students. An exception, however, is carved out for international recruitment, making the practice that IDP and others engage in perfectly legal – while still questionable in the views of some.

The National Association for College Admission Counseling’s “Statement of Principles and Good Practice” forbids tying commission and bonuses to recruitment numbers in any case, foreign or domestic. David A. Hawkins, director of public policy for NACAC, said he remains skeptical of the practice, even as groups like AIRC seek to regulate it.

“The idea that a student walks into an admission office with a dollar sign on his head that is attributable to any single admissions officer is something that is at this point foreign to nonprofit higher education,” Hawkins said. “Whenever you reduce the basis of compensation to whether the student enrolls, you are reducing or eliminating the students’ interests from the equation. [The agents] have every reason to manipulate the transaction to their own benefit.”

The compensation model for in-country recruiters is often to give the recruiter 10 percent or 15 percent of the first year of a student’s tuition, which has given rise to criticism that recruiters are motivated to steer students toward the most expensive college. IDP, however, says it gives flat rate commission to all of its agents, no matter which college the student attends.

“It is a consistent flat fee, and our director chose that because he doesn’t want there to be any commission-related biases,” said Matt Ulmer, spokesman for IDP.

While IDP would not disclose the per-student commission level, the company did say that no more than 20 percent of an agent’s total compensation can be incentive-based.

Hobsons, another company that plans to seek certification and provide international recruitment services to U.S. colleges, has similarly adopted a flat fee, according to Jeremy Cooper, managing director of integrated marketing solutions for the company.

“With our model, they will be receiving commission for students they bring into the portfolio, but that commission won’t drive their behavior,” he said.

That said, the agents with Hobsons’ International Counselors Network will clearly be offering students a limited menu of institutions from which to choose. Hobsons has 30 U.S. clients – as yet unnamed – and Cooper concedes the company will need somewhere in the neighborhood of 100 to 200 to be “credible.”

“I’m not saying at 30 that’s a rounded portfolio. It can’t be,” he said.

Hobsons plans to send its first student recruits to the U.S. in the fall of 2010, but Cooper says it will be fall of 2011 before the operation begins in earnest. And he says he’s confident the market will be there.

“We’ve seen a real shift in the U.S.,” Cooper said. “Far more universities are publicly saying they are engaging in [this] practice.”

While so much debate over foreign recruiters is based on commission, there’s no denying that admissions counselors employed by universities are in a real sense paid for performance – even if it’s not on a per student basis. Even those who object to using in-country agents concede that numbers are important for admissions officers, too.

“We are not naive,” said Barmak Nassirian, associate executive director of the American Association of Collegiate Registrars and Admissions Officers. “A dean of admissions who doesn’t bring any students in will not have the job for very long.”

On the other hand, an admissions official may have a series of competing priorities, Nassirian said. The need to consider diversity, a student’s academic preparation, and even weighing the long-term likelihood that a student will graduate and be inspired to give back as an alumnus are all considerations for admissions officers that may not be on the minds of third parties looking for commission, he said.

“There are a broad range of additional requirements, some of which are in conflict with the simple numerical goal of bringing in students. It’s not just that they have a pulse,” Nassirian said. “We are reducing the complexity of the [process] by focusing on a single metric – numbers.”


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