Codify the Third-Party Servicer and Bundles Services Exemption
In 2011 the Obama Administration authored a Dear Colleague Letter (DCL) (GEN 11-05) which protected collegiate collaboration with third-party providers servicer companies offering bundled services, such as technology, online courseware, recruiting and marketing. Accordingly, the DCL has since produced thousands of successful partnerships with online program managers (OPMs) to expand course offerings and increase access to nontraditional and rural students – frequently at a lower cost than traditional in-person classes. Regrettably, the Biden Administration threatened to rescind the DCL in 2023. Because of an overwhelming response by colleges offering online or distance education, the Department of Education abandoned their regulatory zeal. In contrast to the Biden overreach, secretary-nominee Linda McMahon and the Trump Administration would be wise to codify the bundled services exemption so that online course partnership can thrive without fear of new and arbitrary rules.
Accordingly, we would recommend the addition of (b)(22)(C) below:
34 C.F.R. § 668.14(b)(22)
(i) It will not provide any commission, bonus, or other incentive payment based in any part, directly or indirectly, upon success in securing enrollments or the award of financial aid, to any person or entity who is engaged in any student recruitment or admission activity, or in making decisions regarding the award of title IV, HEA program funds.
(A) The restrictions in paragraph (b)(22) of this section do not apply to the recruitment of foreign students residing in foreign countries who are not eligible to receive Federal student assistance.
(B) For the purpose of paragraph (b)(22) of this section, an employee who receives multiple adjustments to compensation in a calendar year and is engaged in any student enrollment or admission activity or in making decisions regarding the award of title IV, HEA program funds is considered to have received such adjustments based upon success in securing enrollments or the award of financial aid if those adjustments create compensation that is based in any part, directly or indirectly, upon success in securing enrollments or the award of financial aid.
(C) The restrictions in paragraph (b)(22) of this section do not apply to an unaffiliated third party that provides a set of bundled services that may include recruitment services.
