US education stakeholders are concerned that a law passed in June will have an unintended consequence of banning the payment of commissions to international education agents for some institutions.
The THRIVE Act – signed into law on June 8 and taking effect August 1 – threatens the US’s ability to compete for international student talent on “equal footing with global competitors”, stakeholders said.
By omitting language explicitly allowing higher education institutions that receive government funding from a GI Bill to use incentive compensation when recruiting international students.
The Higher Education Act – first passed in 1965 – permits the use incentive compensation to recruit international students, stakeholder highlight, and they want similar language inserted to the latest THRIVE Act.
“Universities around the world regularly contract with third-party, commission-based agents to assist with international student recruitment”
The HEA’s incentive compensation ban has been in statute for decades and has been the subject of regulatory interpretations by the Department of Education agency, American Council on Education president Ted Mitchel said in a letter.
In a separate letter to legislators, NAFSA CEO and executive director Esther Brimmer urged “swift action to enact the necessary legislative fix that will restore the ability of US colleges and universities to compete for international student talent on equal footing with its global competitors”.
American International Recruitment Council and the National Association for College Admission Counseling research suggests that 49% higher education institutions in the country partner with commission-based agents, Brimmer noted.
“Universities around the world regularly contract with third-party, commission-based agents to assist with international student recruitment,” she added. “The US is in a global competition for international student talent.”
Additionally, US Departments of State and Commerce endorse the use of commissioned agents, she emphasised, and Commerce offers programs and services to connect and match institutions to agents worldwide.
By barring use of incentive-based agents, US institutions will struggle to reverse a decline in international students which has seen new international students drop 11% from fall 2016 through fall 2019, in addition to the 43% new enrolment plummet in fall 2020 as a result of Covid-19, her letter predicted.
“With a restriction in place barring use of incentive-based agents in overseas recruitment of international students, US colleges and universities will struggle greatly to reverse this decline.”
The restriction also runs counter to the Biden administration’s statement emphasising its commitment to “support key facets of international education, in partnership with US higher education institutions”, she added.
The ACE letter – signed by 17 organisations including NAFSA – encouraged lawmakers to “insert the HEA statutory language regarding foreign students so the incentive compensation statutory language is parallel”.
“Institutions’ international recruitment departments need to establish whether they receive benefits from this GI Bill,” Sushil Sukhwani, director of Edwise International explained. “If they don’t take financial benefits from this GI Bill then again the THRIVE Act doesn’t affect them.”
Institutions are being recommended to investigate whether the THRIVE Act applies to them, he added.
Founder and general manager of EDU Danmark, Palle Steen Jensen, agreed that limiting the use of commission-based agents could limit the recovery of the US sector.
“This new situation, with the THRIVE Act, can potentially do a lot of damage to US higher education institutions and their efforts to rebuild international student recruitment after Covid-19,” he told The PIE, at a time when global competition is increasing.
“And we now also see an increase in the number of US institutions, who want to recruit qualified international students for their programs.
“Restrictions on the use of agents will be a real disadvantage to the US institutions in this global competition for talent”
“Many of them see the advantage of working closely with experienced agents around the globe to maintain or increase their market share. Restrictions on the use of agents will be a real disadvantage to the US institutions in this global competition for talent.”
“Competition is fierce in the international student recruitment frontline, both international students in their home countries, and on-shore international students already on American campuses,” Andrew Chen, chief learning officer at accredited agency WholeRen Group, concurred.
“Many other countries, such as Canada, UK, Australia, Singapore, all have policies that are heavily dependent on commission-based international student recruitment. Last year, for the first time, UK attracted more Chinese international students than the US.
“To compete with them, the American international education industry, as a whole, must be equipped with similar levels of policies and collaboration. Collaboration among schools, accredited recruitment agencies, Education USA, and policymakers are critical.”
Less-ranked institutions without the benefit of being household names globally, tuition-paying international students only arrive with a tremendous amount of effort, Chen noted.
“Many public and private American schools, even state flagship universities, such as LSU, KSU, Auburn, already engaged in multi-decade contracts engaging with accredited agencies.”
However, assistant dean of international strategy and programs at SDSU Global Campus, Eddie West, the US “has a long way to go in terms of comprehensive quality assurance of an activity with so much inherent risk” compared with colleagues in Australia, New Zealand and the UK.
The development is not “uniformly bad news”, he suggested.
“Government guidance and regulations in the US are some of the weakest, to the point of being nearly non-existent”
“If you look at the international student recruitment regulatory environment in leading destination countries, government guidance and regulations in the US are some of the weakest, to the point of being nearly non-existent,” he told The PIE News.
“For all intents and purposes in the States the only federal dictate about F-1 Visa international student recruitment is the so-called ‘foreign student carve out’ in the HEA; that merely says that institutions are allowed to pay commissions for the recruitment of international students. Full stop.
“Contrast that with Australia and the ESOS Act and National Code, which have been well-developed over years and require institutions who work with commissioned-based agents to, for example, list those contracted agents on their web sites, along with other provisions aimed at protecting institutions, students and agents.”
Advocacy efforts to maintain the status quo will be successful however, West predicted.
ACE maintains that HEA provides “detailed guidance to institutions regarding when certain complex contracting and recruiting arrangements are permissible and when they are not”.
The THRIVE Act is a typical example of excessive legislation by lawmakers who do not understand the implications of their regulation, Steen Jensen added.
“I hope NAFSA, AIRC and other relevant stakeholders will be able to fight it off and explain to the US lawmakers, the damage and cost this can inflict on US institutions and the US economy in general.”
The timing of the Act is “unfortunate”, Sukhwani added, as it could hold up commissions agents are owed for the September 2021 intake.
“It is a concerning issue for the industry”
“International agents are highly dependent on these commissions especially in this moment of coming out of the pandemic and therefore institutions may consider to pay now and later investigate the implications of the THRIVE Act. Agents hope that they don’t hold back the commissions.
“It is a concerning issue for the industry.”
India-based Career Mosaic has already had a couple of universities reach out to ask recruitment to halt until further further notice, managing director Abhijit Zaveri said.
“I hope this passes away smoothly. Without agents – recruiting can’t work any more for international students.”
