Final regulations on U.S. federal financial aid program integrity issues were published in the Federal Register (84kb ) (75 FR 66832) on October 29, 2010 that prohibit the use of incentive compensation for student recruitment related to federal financial aid. The Department of Education issued a clarification to the regulations on March 17, 2011
In 1992 US law banned payment of compensation that was directly or indirectly based on securing students to attend an eligible institution or receive federal financial aid. From 2002 the Department's regulations included a list of "safe harbors" – activities that were deemed as acceptable under the regulations. Under the new regulations, all of those safe harbors will be eliminated, effective July 1, 2011.
Institutions and study abroad providers should seek legal counsel to advise them on how these regulations affect their specific program contracts and compensation agreements.