With Safe Harbors repealed and monetary compensation off the table, how do you find properly motivated reps?

By Trey Wright
President, Infinity Recruiting & Staffing

It’s been a little over two months since the July 1 rollback of the 12 Safe Harbors established by the Department of Education in 2002. Most schools were undoubtedly preparing for that day well in advance, but now that we’re a couple of months in, how has it actually affected the industry?

Before the Safe Harbors were enacted, legislation prohibited financial-aid eligible schools from paying incentives (including commissions and bonuses) to admissions and financial aid personnel, lest they recruit unqualified students with the sole purpose of obtaining financial aid funds with the ultimate goal of padding their profits. Which left the for-profit industry with a dilemma: how to motivate and compensate admissions staff that is effectively bringing in qualified students.

The 2002 Safe Harbor legislation allowed schools a few avenues to reward effective recruiters through periodic salary/wage adjustments, profit-sharing plans and token gifts. Now, those avenues have been rescinded, and the original dilemma remains. Is there a way, now, to still effectively compensate effective admissions reps?

“What kind of candidates should you be seeking? The answer is deceptively simple, the execution maybe less so. You need to find those candidates who are in the industry for the right reasons.”

 

I think there is, although with restrictions. The Department of Education states that “institutions often maintain a hierarchy of recruitment personnel with different amounts of responsibility.” As long as an institution complies with the new law, it may be appropriate for an institution to have salary scales that reflect an added amount of responsibility.

For example, a newly hired admissions rep’s job description and responsibility is to only enroll students from a specific territory, zone or district. In his second year, an additional territory, zone or district is added, or the rep is given the added responsibility of managing campus visits. Institutions remain free to demote or promote representatives as long as these decisions are consistent with the Higher Education Act’s prohibition on the payment of incentive compensation.

Regarding salary adjustments, campuses “may make merit-based adjustments to employee compensation provided that such adjustments are not based in any part, directly or indirectly, upon success in securing enrollments or the award of financial aid.” The Department of Education also will be revising the final regulations to state, “an employee who receives multiple compensation adjustments in a calendar year is considered to have received adjustments based upon success in securing enrollments or the award of financial aid in violation of the incentive compensation ban.” My interpretation is that this means an employee cannot receive more than one adjustment each year.

So, although there may be a few ways to finness the new rules to provide monetary rewards to admissions reps, it’s not going to be the best long-term solution. What is needed ultimately is a sharp modification in our hiring practices, not only for our reps and financial aid staff, but for all levels and skill sets.

What kind of candidates should you be seeking? The answer is deceptively simple, the execution maybe less so. You need to find those candidates who are in the industry for the right reasons.

I started working at the campus level in a small school group in the early ‘90s as a part-time financial aid representative right out of college. I was not making much money, but I felt I was really helping people and that I was in the right place. Eventually I went to my first graduation ceremony and I was hooked. To see the joy in the eyes of the family members and the graduate is a priceless experience.

During my 15-year career at the campus and corporate level I was given an opportunity to work in many other capacities including Director of Admissions, Regional Director of Admissions and Director of Operations among other roles. What I determined early on is that if you are in the education industry for the right reason, positions will be advanced and the money will come – I promise you it will come.

One of our clients recently told a candidate “our schools are based on 5 basic principles”:

1. We know who we are and we know who we aren’t.
2. We’ll never be the biggest.
3. We’ll never be the most profitable.
4. We’ll never be the fastest growing.
5. But our school exists for the students and we listen to the students each day.

This school has not been affected by the roll-back of the Safe Harbor Act because they have been enrolling students in the right program for the right reason, every time! It’s built into their DNA, and they have operated this way since their inception in the late 1960s. They now have more than 20 campuses with close to 10,000 students. So the same holds true for schools just as it does for the staff. If you are in the education industry for the right reason, school groups will grow and the money will come – I promise you it will come.

Although the criteria for success in the new regulatory climate are simple, the search for the candidates who fit them may not be. But the effort is worth it, whether it means taking the extra time yourself or enlisting the help of a specialized recruiting firm. Those are the candidates I love and work tirelessly to find, and those are the school groups that make my business a pleasure. Those with passion, drive and relentless determination to help as many people as they can; those who are in the industry for the right reason. Those with the right thing for the right reason built into their DNA.

What are your thoughts? I’d love to hear some reports from the field, whether you agree or disagree with my assessment.