International students deserve a more ethical recruitment model

Eddie West outlines a method for disrupting commissions-based international student recruitment to higher education institutions

September 27, 2019
Man putting cash in his pocket behind closed door
Source: Getty

I attended the EAIE conference for the first time last year and I remember how glad I felt afterwards that I had made the trip. Among other impressions, what struck me in Geneva was how much less commercial EAIE felt compared with other international education events. I will root hard for the organisation to maintain this atmosphere not only in Helsinki but well into the future.

The fact is that international education is a colossal field in financial terms and when such large amounts of money are changing hands, the potential for abuse follows.

One area of risk deserving far greater scrutiny than it receives is the preponderance of international student recruitment agencies or, more specifically, the manner in which they’re usually remunerated: per capita commissions.

By some estimates more than 20,000 agencies operate worldwide, and the vast majority are compensated by their partner schools for each student enrolment, by either a flat rate payment or a percentage of the student’s tuition.

Among the many problems with these arrangements is that international students and their families are completely unaware of the different commission amounts an agent stands to earn depending upon where they persuade the student to enrol.

Brute economic logic dictates that these incentives often distort the advice agents provide students, with the latter routinely at risk of being auctioned off to the highest bidder by the former.

Agents benefit from the secrecy inherent in their commercial contracts with universities, which exacerbates what economists call “information asymmetry” – students and agents possess vastly different knowledge. That so many universities compensate agents in this manner, with the advice students receiving thus being ethically fraught, is hard to square with their dedication to the pursuit of truth and to student empowerment.

Meanwhile, as institutions grow ever more dependent on agents for international student enrolments, the balance of power in these relationships shifts in favour of the agent. For example, consider that when Times Higher Education examined the aggregate commissions spent by UK universities some years back, it found that these had increased by 16.5 per cent from 2012 to 2014. Yet over the same period the total number of student enrolments attributed to agents increased just 6.4 per cent. This might fairly be described as a commissions arms race, with a university’s return on investment decreasing as its engagement of agencies increases.

So for both fiscal and ethical reasons, international education professionals ought to seek out and advance lower-cost and more student-centred methods of international recruitment. This doesn’t mean that third party intermediaries can’t be an integral part of a university’s outreach plan. What it does mean, however, is that the incentives ought to change. A fixed, flat fee model of agent earnings can serve as a viable alternative to the variable per capita commissions status quo.

Here’s how that would work: a given agent commits to earning a fixed flat fee no matter the school in which their advisees enrol. Let’s say for the sake of argument that that fee is €1,000. Universities that wish to offer financial incentives greater than €1,000 can do so, but the additional benefit accrues to the student, not the agent.

For example, University A pays its agent partner €2,000 per student enrolment. In the fixed, flat fee model, Agent A receives that €2,000, retains €1,000, and the excess €1,000 is given to the student.

On the other hand, if well-resourced University B happens to also be an Agent A partner, and is willing to offer €2,500 per student, then Agent A keeps €1,000, and €1,500 goes to the student. Functionally this is akin to the US enrolment management practice of tuition discounting, often packaged as merit scholarships.

Lower-cost institutions may not be capable of offering agents €1,000 per enrolment. In today’s ethically challenged recruitment environment, agents often avoid partnerships with such schools even when they might be a better financial fit for a student. The fixed, flat fee model of agent earnings addresses this perverse incentive, too. Schools that can only afford to offer, for example, €500 per student enrolment can do so. If the agent’s flat fee is €1,000 then in this scenario the family is obliged to pay the agent the €500 difference.

At a glance this payment may seem like the fly in the ointment of this model. Experienced practitioners will remark that agents in many countries, for example Germany and Denmark, rarely if ever charge students for advising them. But such “free” advice is in fact hardly free when students are steered towards more expensive institutions. If a €500 fee paid to the agent can pave the way to the student enrolling in a considerably less expensive institution, many families would jump at the option.

This model aligns agents’ interests with those of students, and still allows universities the autonomy to incentivise enrolment outcomes to the degree they desire. As with any proposed policy or practice, the devil is in the implementation details, of course. But as batteries are charged at EAIE by making new friends and reconnecting with old ones, let us also aspire to a more wholesome and, yes, less commercial international student mobility environment. Our students deserve no less.

Eddie West is assistant dean, international strategy and programs, College of Extended Studies, San Diego State University.

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