THRIVE Act Veterans Benefits Provision Poses Unexpected Challenge to Use of Incentive-Based Agents for International Student Recruitment

A provision nestled within a new veterans benefits law called the THRIVE Act could impact institutions that receive U.S. Department of Veterans Affairs funding if they also use incentive-based arrangements to compensate agents for the recruitment of international students. The THRIVE Act, signed into law on June 8, 2021, instructs the State agencies that approve courses of study for GI Bill purposes to take action that could include not approving a school's new programs of study or disapproving previously-approved programs of study, if it is determined that the school, "or any person with whom the institution has an agreement to provide educational programs, marketing, advertising, recruiting or admissions services... [p]rovides a commission, bonus, or other incentive payment based directly or indirectly on success in securing enrollments or financial aid to any persons or entities engaged in any student recruiting or admission activities or in making decisions regarding the award of student financial assistance."

A similar restriction on the use of incentive-based recruiting exists in the Higher Education Act (HEA) for Federal financial aid purposes, but the HEA provision includes an important exception that allows incentive-based arrangements for recruiting "foreign students residing in foreign countries who are not eligible to receive Federal student assistance." The THRIVE Act, however, contains no such exception, which could impact school's eligibility to participate in GI Bill programs if they also use incentive-based arrangements in their international student recruiting efforts.

NAFSA is in dialogue with a number of associations that are actively seeking a resolution. NAFSA is also engaged with Hill staff, advocating for quick adoption of a technical correction.

Engagement with Congress on This Issue

  • NAFSA Letter. (September 20, 2021). In a letter to Senate and House Veterans’ Affairs Committee leadership, NAFSA's executive director and CEO, Esther D. Brimmer, urged the committee to quickly enact a legislative fix resulting from the THRIVE Act and a related provision in the Isakson Roe Act, which omitted long-standing language explicitly allowing U.S. institutions of higher education to use incentive-based agents when recruiting international students abroad.

  • ACE-Led Sign-On Letter. (September 22, 2021). NAFSA joined an ACE-led sign on letter sent to the chairs and ranking members of the House and Senate Veterans’ Affairs Committee, flagging several necessary technical corrections for Isakson-Roe and THRIVE, including the incentive compensation fix. The letter reiterates many of the issues/asks raised in the July 19, 2021 ACE letter.

  • ACE-Higher Education Letter to House Leadership. (July 19, 2021) A letter from the American Council on Education (ACE) and 11 higher education associations, sent to House leadership outlines concerns with some unintended consequences of the THRIVE Act and requests several corrections, including restoring U.S. institutions ability to use incentive-based arrangements in its international student recruiting efforts.

Background

The Training in High-demand Roles to Improve Veteran Employment (THRIVE) Act, Public Law 117-16 (06/08/2021), amended the Isakson Roe Act [Public Law 116–315 (01/05/2021)], which sets conditions for an institution of higher education's programs of study to be approved to receive U.S. Department of Veterans Affairs (VA) funding under various veterans benefits programs that are often collectively referred to as the "GI Bill."

Laws governing the administration of educational benefits under the various veterans benefits programs are generally codified in the United States Code at 38 USC Chapter 36. Under the basic process, a State approving agency makes a determination that an educational institution has complied with the requirements of law, and the State agency then issues a letter of approval for the school's programs. An eligible veteran may then enroll in such programs using GI Bill benefits. Veterans who wishes to attend a school without State agency approval, or a school whose programs have been disapproved by the State agency, would not be eligible to seek GI Bill benefits, and may decide to enroll elsewhere. If a State does not create a State approving agency, the VA Secretary can act in the role of a State approving agency.

Section 6 of the THRIVE Act makes changes that could impact institutions that receive VA funding and use incentive-based recruitment agents for the recruitment of international students. That section amends 38 USC 3679(f)(2) to provide:

(2) Except as provided by paragraph (5), a State approving agency, or the Secretary when acting in the role of the State approving agency, shall take an action described in paragraph (4)(A) if the State approving agency, the Secretary, or any Federal agency, determines that an educational institution, or any person with whom the institution has an agreement to provide educational programs, marketing, advertising, recruiting or admissions services, does any of the following:

(A) Carries out deceptive or persistent recruiting techniques, including on military installations, that may include-

(i) misrepresentation (as defined in section 3696(e)(2)(B) of this title) or payment of incentive compensation;

(ii) during any one-month period making three or more unsolicited contacts to a covered individual, including contacts by phone, email, or in-person; or

(iii) engaging in same-day recruitment and registration

(B) Provides a commission, bonus, or other incentive payment based directly or indirectly on success in securing enrollments or financial aid to any persons or entities engaged in any student recruiting or admission activities or in making decisions regarding the award of student financial assistance.

Paragraph (B) used to provide:

(B) Pays inducements, including any gratuity, favor, discount, entertainment, hospitality, loan, transportation, lodging, meals, or other item having a monetary value of more than a de minimis amount, to any individual or entity, or its agents including third party lead generators or marketing firms other than salaries paid to employees or fees paid to contractors in conformity with all applicable laws for the purpose of securing enrollments of covered individuals or obtaining access to educational assistance under this title, with the exception of scholarships, grants, and tuition reductions provided by the educational institution.

The VA used to align its interpretation of the prior provision with the Department of Education statute and regulations regarding school eligibility to participate in Title IV programs, which contain an explicit exception that allows use of incentive-based arrangements for "the recruitment of foreign students residing in foreign countries who are not eligible to receive Federal student assistance," which the VA had been honoring.

Another law passed earlier in 2021, the Johnny Isakson and David P. Roe, M.D. Veterans Health Care and Benefits Improvement Act of 2020 (Public Law 116-315, 01/05/2021) removed a provision at 38 USC 3696 that had instructed the VA to interpret the ban on incentive based compensation. Then the THRIVE Act amendment to the veterans benefits provision at 38 USC 3679(f)(2)(B), although it uses language seemingly borrowed from the Higher Education Act provision at 20 USC 1094(a)(20), likewise does not include the HEA's exception for international student recruitment. Because of this, the VA is expected to issue a broad "plain meaning" interpretation of the THRIVE Act that would no longer recognize an exception to the restriction for GI Bill purposes. Under such an interpretation, a school that continues to use incentive-based arrangements in its international student recruiting efforts could put in jeopardy its GI Bill approvals, thereby impacting its ability to attract and serve GI Bill eligible students.

Note also that the new THRIVE Act revisions could trigger State approving agency actions such as program disapprovals not only after a determination by the State approving agency, but by the VA Secretary "or any Federal agency" as well.

38 USC 3679(f)(5) does provide for possible one-year waivers of the paragraph (2) conditions, stating:

(5)(A) The Secretary may waive the requirements of paragraph (1) or waive the requirements of paragraph (2) with respect to an educational institution for a one-academic-year period beginning in August of the year in which the waiver is made. A single educational institution may not receive waivers under this paragraph for more than 2 consecutive academic years.

(B) To be considered for a waiver under this paragraph, an educational institution shall submit to the Secretary an application prior to the first day of the academic year for which the waiver is sought.

A final note about the scope of the program disapproval provisions. 38 USC 3679(c)(6) specifies that "Disapproval under paragraph (1) shall apply only with respect to educational assistance under chapters 30, 31, and 33 of this title." Those titles are as follows:

  • CHAPTER 30—ALL-VOLUNTEER FORCE EDUCATIONAL ASSISTANCE PROGRAM (sections 3001 to 3036)
  • CHAPTER 31—TRAINING AND REHABILITATION FOR VETERANS WITH SERVICE-CONNECTED DISABILITIES (sections 3100 to 3122)
  • CHAPTER 33—POST-9/11 EDUCATIONAL ASSISTANCE (sections 3311 to 3327)

Although disapproval is limited to veterans benefits programs established under these three chapters, most benefits programs in use today fall within these three chapters.