In a letter, the Student Borrower Protection Center (SBPC) responds to the Department of Education’s (ED) opportunity to comment on the incentive compensation prohibition under Title IV of the Higher Education Act, and particularly on the so-called “bundled services” exemption to this key consumer protection. SBPC’s letter notes that the bundled services exemption has given rise to the same bad incentives and predatory practices among colleges and their agents that necessitated the incentive compensation ban in the first place, all while failing to fulfill its stated purpose. Moreover, SBPC notes that this loophole has accelerated the hollowing out of public and nonprofit colleges, and that ED has failed to establish substantive oversight of the issue space even as student harm has become evident.
SBPC calls on ED to immediately rescind the bundled services loophole, and to restore the full spirit and scope of the incentive compensation ban.
Read the Letter: Written Comments Submitted in Response to the Department of Education’s Listening Session Regarding Improvements to Guidance on the Incentive Compensation Prohibition Under Title IV of the Higher Education Act, Particularly with Respect to Bundled Services