[Updated: 6:30 p.m.]
The tighter federal restrictions on paying incentives to admissions recruiters that take effect in July will not prohibit deans and presidents from encouraging prospects to attend their institution or bar colleges from using outside companies to help them locate, advise, and recruit students via the Internet or other means, according to assurances provided this week by the Education Department.
The assurances came in a 15-page “Dear Colleague” letter the department released on Thursday evening, a document designed to clarify three regulations announced in October and effective in July.
The letter was intended to clear up concerns over the regulations that have been particularly controversial: rules relating to incentive compensation on student recruiting; requirements that colleges’ distance-education offerings comply with state licensing regulations; and bans on misrepresenting information about colleges in marketing and admissions practices.
In January the Association of Private Sector Colleges and Universities, formerly the Career College Association, sued the department to block the regulations. Separately the American Council on Education and dozens of groups representing nonprofit and for-profit colleges signed a joint letter urging the department to scrap the state-authorization rule.
The nonprofit colleges have also raised concerns about a regulation on credit-hour policies. On Friday the department issued a second 15-page letter designed to deal with questions about that regulation.
Whether the clarifications of the four regulations covered by the letters will go far enough to satisfy the concerns remains to be seen, but one distance-education advocate was hardly placated by the language on state authorization, which calls for a “good-faith effort” by online colleges to register in every state in which they operate.
The situation is still “a train wreck,” said Russell Poulin, deputy director for research and analysis at the WICHE Cooperative for Educational Technologies. He posted a detailed critique of the clarifications on the WCET blog, in which he also called on the department to delay this “confusing and expensive” regulation.
“Many institutions have been waiting for this letter before doing much with applying to states,” said Mr. Poulin in an e-mail exchange. “They were hoping for relief, and it did not come. Although the department has maintained that its new regulation would not require states to add regulations, WCET and many colleges are concerned that complying with so many potentially different state laws will be burdensome.”
The American Council on Education does not expect to complete an extensive review of the letters until early next week, but its vice president for government relations, Terry W. Hartle, said the letters seemed to answer some questions and ignore others.
The clarifications on incentive compensation are “pretty helpful” in answering questions raised by nonprofit colleges, he said, but on the other topics they appear to fall short. On state authorization, he said, the letters indicate the department expects the states to do “a significant amount of work” at a time when many are facing their own budget stresses, while the language on misrepresentation does little to assuage concerns of colleges that they could be hit by “a surge of lawsuits” from aggressive lawyers on behalf of students alleging that the colleges’ marketing materials were confusing.
Mr. Hartle said the credit-hour letter may have not given enough guidance on how to account for certificate programs and other programs that community colleges and for-profit colleges often offer in compressed schedules.
The Association of Private Sector Colleges and Universities declined to comment, citing its pending lawsuit. Reports from two stock analysts who follow the for-profit-college industry said the clarifications on incentive compensation and misrepresentation seemed mostly reasonable.