Stephen Burd Ignores Incentive Compensation Issues in All of Higher Education

The career college sector is not perfect. The traditional college sector is not perfect. Stephen Burd, true to form, seeks only to castigate the former. Mr. Burd views safe harbors as an incentive compensation blank check rather than interpretive guidance pertaining to a complicated and often times ambiguous set of regulations. Given his obvious bias, Mr. Burd would no doubt prefer a situation where only litigation and administrative rulings define recruitment do’s and don’ts. Such an approach, however, is hardly helpful or productive for students, who are ready to get on with their education.

Mr. Burd also paints the Government Accountability Office as toothless, gormless or both. The GAO issues a report that finds few incentive compensation violations in the last 12 years. Is the report definitive? No. Is it highly suggestive? Yes. But beyond the merits of the GAO study, there is the simple logic of the matter: were career colleges to engage in aggressive marketing simply to fill seats, the basic model of career education would break down. Such colleges would fail to produce the retention and graduation outcomes required by accrediting agencies, and they would fail the test of the marketplace because word would get around and students would steer clear.

We note with interest that a report from the National Association of College and University Business Officers found the average tuition discount rate for first-time, full-time freshmen jumped dramatically between 2007 and 2008, reaching an all time high. So let’s see: elite colleges and universities responding to competition by handing out discounts to college track kids is acceptable, but career colleges, serving a non-traditional, working class population, using enrollment as one factor among many to determine compensation, is not. Like so much else in the traditional postsecondary world that Higher Education Watch ignores, where is the fairness in that?