Dive Brief:

• The U.S. Department of Education won’t prevent colleges from paying recruiters to bring in students who ultimately graduate, but they still can’t get bonuses for recruiting minority students who enroll.
• The Chronicle of Higher Education reports that the changes come a year after a federal judge required the department to justify parts of its incentive compensation rule for a second time, following a 2011 lawsuit by for-profit colleges.
• The Obama administration said it doesn’t have enough evidence to prove for-profit colleges are using graduation-based bonuses as a proxy for those based on enrollment, which are explicitly forbidden.

Dive Insight:

The Obama administration refused to change either portion of the compensation incentive policy the first time a judge asked them to look into it, in 2012, arguing that graduation is necessarily preceded by enrollment. But a federal judge last fall said that wasn’t good enough.

Some for-profit colleges have quickly raised enrollment numbers with aggressive recruitment strategies that reward those who can bring in more students. As that encourages the recruitment of students who are not a good fit for programs and likely will not be successful, the practice is banned. For-profit colleges, however, have argued the compensation structures can help them increase diversity on their campuses.