Last month at the 2019 National Conference of the National Association for College Admission Counseling (aka, "NACAC"), the body voted to amend its Code of Ethics and Principles of Practice (CEPP) in response to the Department of Justice's investigation (I previously teed'up the topic here).
So, what does it all mean?
Here's the background. The CEPP formerly stated:
- Colleges must not offer incentives exclusive to students applying or admitted under an early decision application plan. Examples of incentives include the promise of special housing, enhanced financial aid packages, and special scholarships for early decision admits. Colleges may, however, disclose how admission rates for early decision differ from those for other admission plans.
- College choices should be informed, well-considered, and free from coercion. Students require a reasonable amount of time to identify their college choices; complete applications for admission, financial aid, and scholarships; and decide which offer of admission to accept. Once students have committed themselves to a college, other colleges must respect that choice and cease recruiting them.
- Colleges will not knowingly recruit or offer enrollment incentives to students who are already enrolled, registered, have declared their intent, or submitted contractual deposits to other institutions. May 1 is the point at which commitments to enroll become final, and colleges must respect that. The recognized exceptions are when students are admitted from a wait list, students initiate inquiries themselves, or cooperation is sought by institutions that provide transfer programs.
- Colleges must not solicit transfer applications from a previous year’s applicant or prospect pool unless the students have themselves initiated a transfer inquiry or the college has verified prior to contacting the students that they are either enrolled at a college that allows transfer recruitment from other colleges or are not currently enrolled in a college.
So, all of that sounds reasonable, right? Well, not according to the United States Department of Justice. The DOJ went through the CEPP and picked it apart pretty good:
Colleges must not offer incentives exclusive to students applying or admitted under an early decision application plan.
The Department of Justice believes this prohibits colleges from offering incentives exclusive to students applying or admitted under an Early Decision application plan. Department of Justice staff claims that this prohibits competition among colleges for Early Decision applicants.
Once students have committed themselves to a college, other colleges must respect that choice and cease recruiting them.
The Department of Justice staff suggests that this prevents colleges from competing to continue to recruit students who may be able to lower their college costs if they remain subject to competition among colleges.
Colleges will not knowingly recruit or offer enrollment incentives to students who are already enrolled, registered, have declared their intent, or submitted contractual deposits to other institutions.
The Department of Justice staff believes that these provisions restrain competition among colleges for students and students may lower their college costs if schools remain free to solicit even students who have committed elsewhere.
Colleges must not solicit transfer applications from a previous year’s applicant or prospect pool.
According to the Department of Justice staff, this severely hampers the ability of colleges to compete for transfer students.
Okay, okay, DOJ. We get it. You want students to be able to get the best deal possible. And that certainly has the potential to be a good thing.
So why are institutions of higher education freaking out about these changes? Simple: the original language in the CEPP helped to level the proverbial playing field - from the institutional perspective.
Prior to the removal of the CEPP provisions, colleges and universities respected a student's decision to commit to another institution. Based on the data available to them (e.g. cost of the institution, the financial aid package that the institution offered the student, academic fit, social fit, etc.), the student was expected to make an informed decision about their plans for their own higher education.
Then, once College X became aware that Sally was going to attend College Y, College X would remove Sally from their mailing lists, email campaigns, and other recruitment activities. Sally had made an informed decision (again, based on the data available), and College X would back away. Students typically made their decision around May 1st each year (aka, "National Decision Day").
But in this New World without the aforementioned CEPP provisions, college and universities can continue to recruit - and incentivise - students beyond May 1st. That means that recruiting students could potentially continue right up until the start of the fall term in August or September, or beyond.
Now College X no longer has to respectfully bow-out when Sally has made and communicated her decision to attend College Y. Instead, College X is able to do a lot of, "Are you sure Sally?" and "Here's another five thousand dollars to sweeten the deal for you to attend College X Sally. What do you say to that?"
Yikes.
Recently, at an event where we invite high school counselors to come visit the University Park campus, I had a frank conversation with a counselor from eastern Pennsylvania. In it, the counselor questioned "How can this be a bad thing? These changes will only serve to benefit the student!" And that counselor is not wrong. Honestly, this is something that I do grapple with because in the end, many students can and will benefit from opportunities presented to them. But, the question that always reels me back in is (somewhat ironically), but at what cost?
I worry that college and universities will be forced into operating like a used car dealership does. When a family says, "Well, Institution X is giving Little Johnny $5,000 more than you are - what can you do for Johnny?" the admissions representative will be forced to reply, "Well, let me go talk to my manager..."
Bottom line: I don't think that most institutions of higher education want to be likened to used car dealers.
And then there is the view from a different angle: those in the financial planning sector. This makes my skin crawl:
Now middle and upper-income investment clients who would usually pay full-price for college will think you’re a genius when you show them how to negotiate $5,000-$10,000 a year off their cost!
Or...
Every financial advisor can now capture new clients by merely showing families how to NEGOTIATE price reductions from colleges!
The bottom line is colleges can now “poach” good students from other colleges ANYTIME using “money incentives”. Financial advisors can clean house showing new investment clients how to get these money incentives from colleges.
This new change creates a free market for colleges to lure good students away from other colleges at any time by only offering more money. This will create tremendous price competition between colleges. In other words, college recruiting just got more competitive!
Or...
These new regulations create an opportunity of a lifetime for financial advisors!
Most state schools are priced at $35,000 and up. Private college prices range from $50,000 to almost $80,000. It’s not that high-income investment clients cannot afford to pay that full price, THEY JUST DON’T WANT TO!
As a Certified College Funding Specialists (CCFS®), you will be trained in appealing college financial award letters and showing families how to negotiate the price of college. The only difference is now high net-worth families are in the driver’s seat for these price incentives because they have the money to pay the balance of the tuition bill.
If you are not using “college” in your current investment practice, you should be. The result of this change by NACAC is an opportunity of a lifetime for financial advisors. I encourage you to learn more about becoming a Certified College Funding Specialist® and help these families take advantage of the changing landscape in college planning.
All quotes taken from the same industry blog post by a gent named Ron Them. And I
In the end, at least right now, it appears that NACAC is hoping that colleges and universities will take the proverbial high-road:
David Hawkins, executive director for educational content and policy at NACAC, said, "We are aware that colleges are taking advantage of the new space created by the elimination of the three ethical/professional practice standards at the heart of the Department of Justice investigation. We are also aware that there are institutions taking advantage of the moratorium on enforcement of our ethical principles. We encourage institutions to consider the best interests of students, and protect their ability to make informed enrollment decisions without being subjected to undue pressure. We also encourage colleges to consider the equity implications for their admission policies, given the significant gaps in college access for underserved populations."
We'll just have to wait and see. I think that we'll have a much clearer picture of how this plays out come May 2020...
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