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ERIC Number: ED512834
Record Type: Non-Journal
Publication Date: 2010-Oct
Pages: 58
Abstractor: ERIC
Reference Count: N/A
Higher Education: Stronger Federal Oversight Needed to Enforce Ban on Incentive Payments to School Recruiters. Report to Congressional Committees. GAO-11-10
Iritani, Katherine M.
US Government Accountability Office
In 1992, Congress banned schools participating in federal student aid programs from paying commissions, bonuses, or other financial incentives to individuals based on their success in enrolling students or securing their financial aid. The ban applies to all postsecondary schools, including private for-profit, public, and private nonprofit schools. Congress instituted this incentive compensation ban to eliminate deceptive recruiting practices and to protect federal student aid funds from fraud and abuse. However, the author recently found evidence of deceptive or fraudulent recruitment practices at certain postsecondary schools in which school officials misrepresented programs or encouraged students to falsify their financial aid applications to obtain federal student aid. Questions have been raised about whether schools are consistently acting in the best interest of students during the recruitment process, and whether the federal investment in student aid is adequately protected. The U.S. Department of Education (Education) is responsible for monitoring schools participating in federal student aid programs and enforcing compliance with the incentive compensation ban. Education has the authority to assess fines or take other actions against schools found violating the ban. In the Higher Education Opportunity Act, Congress mandated that GAO conduct a study on Education's oversight of the incentive compensation ban. In February 2010, she issued a report which provided information on incentive compensation violations substantiated by Education from January 1998 through December 2009, the nature of these violations, and the names of the institutions involved. This report provides additional information on Education's oversight of the ban during this time period. Specifically, she examined (1) how Education monitors schools for potential violations of the incentive compensation ban, and (2) the extent to which Education has used its authority to enforce the incentive compensation ban. Appended are: (1) Briefing Slides; (2) Department of Education Safe Harbor Regulations; (3) Objectives, Scope, and Methodology; (4) Comments from the Department of Education; and (5) GAO Contact and Staff Acknowledgments. (Contains 5 footnotes.)
US Government Accountability Office. 441 G Street NW, Washington, DC 20548. Tel: 202-512-6000; Web site:
Publication Type: Reports - Evaluative
Education Level: Higher Education
Audience: N/A
Language: English
Sponsor: N/A
Authoring Institution: US Government Accountability Office
Identifiers - Laws, Policies, & Programs: Higher Education Opportunity Act 1970