Tougher Enforcement of Ban on Recruiter Bonuses

The Obama administration has instructed regulators at the U.S. Department of Education to more aggressively pursue colleges found violating the federal ban on paying bonuses to recruiters.

Officials announced Monday that they repealed a 2002 Bush administration memorandum that largely restricted the department’s enforcement of the incentive compensation ban to using fines rather than tougher penalties like limiting a college’s access to federal aid.

That approach was heavily criticized earlier this year in a report by the department’s inspector general, which said the department has not done a good job of enforcing the ban on tying recruiter pay to student enrollments.

The new memo, signed last week by Under Secretary of Education Ted Mitchell, instructs department employees to claw back all the federal funds a college received while breaking the rules instead of imposing a fine, which in most cases would be lower. The memo also says that the department may “limit, suspend, revoke, deny or terminate” a college’s ability to accept federal loans and grants as a punishment for violating the incentive compensation rules.