higher education compliance survey results: what are schools really doing

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RESULTS OF THE 2012 HIGHER EDUCATION COMPLIANCE SURVEY Steve Smith, Managing Director of Product Management Jeff Herz, Director of Compliance & Internal Operations Reach, Recruit & Enroll the Right Students

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Page 1: Higher Education Compliance Survey Results: What Are Schools Really Doing

RESULTS OF THE 2012 HIGHER EDUCATION COMPLIANCE SURVEY

Steve Smith, Managing Director of Product Management

Jeff Herz, Director of Compliance & Internal Operations

Reach, Recruit & Enroll the Right Students

Page 2: Higher Education Compliance Survey Results: What Are Schools Really Doing
Page 3: Higher Education Compliance Survey Results: What Are Schools Really Doing

July 1: ED Program Integrity Regulations

• Broad Misrepresentation rules cover any inaccurate content

• Any company that directly or indirectly has a relationship with the school is affected

• Serious Ramifications for schools

• Title IV eligibility suspended/revoked

• Heavy fines

• Reputational risks

Page 4: Higher Education Compliance Survey Results: What Are Schools Really Doing

CUnet Compliance Survey Methodology

• GOAL = Benchmark how schools are dealing with the regulations

• Conducted in October-November 2011 among 51 professionals working in for-profit schools

• Average online student enrollment was 6,222;average on-campus student enrollment was 5,744

12.0%

88.0%

Publicly Traded

Not Publicly Traded

Page 5: Higher Education Compliance Survey Results: What Are Schools Really Doing

Survey Results – Compliance Guidelines

• Not everyone is ready to deal with the regulations; nearly 1 in 5 schools has not even updated their compliance guidelines

Page 6: Higher Education Compliance Survey Results: What Are Schools Really Doing

Survey Results – Staffing Changes

• Nearly all schools (96%) have added new staffing resources to address compliance

0%

20%

40%

60%

80%

100%

Hired internal compliance staff

Hired third-party/agency

Increased your reliance on agency/partner

64%

40% 29%

11%

18%

18%

18% 36%

38%

7% 7% 16%

What Staffing Changes Have You Made to Deal with Regulatory Compliance?

Don't Know/ Not Applicable

No plans

In process

Completed

Page 7: Higher Education Compliance Survey Results: What Are Schools Really Doing

Survey Results: Contract Changes

• Schools (86%) are holding their vendors accountable through their pocketbooks, demanding transparency and exerting more control

52.0%

54.0%

56.0%

58.0%

60.0%

62.0%

64.0%

66.0%

Indemnification Liability Creative approval process

Transparency

57.1%

65.7%

57.1%

62.9%

If your school renegotiated contracts with vendors, which terms were impacted?

Page 8: Higher Education Compliance Survey Results: What Are Schools Really Doing

Survey Results: Vendor Response Times

• Schools are demanding that vendors respond quickly to violations

• 69% require major violations to be resolved in under 24 hours; 10 percent allowing up to 48 hours for resolution.

61.1% 19.4%

19.4%

Do you treat major and minor violations differently?

Yes

No

Not sure

Page 9: Higher Education Compliance Survey Results: What Are Schools Really Doing

Survey Results: Vendor Changes

• Schools are not afraid to eliminate vendors that represent a higher risk

40%

24%

29%

7%

Percentage of schools that have stopped working with vendors due to compliance concerns

Completed

In process

No plans

Don't Know/ Not Applicable

Page 10: Higher Education Compliance Survey Results: What Are Schools Really Doing

Survey Results: Compliance Monitoring

• Nearly everyone recognizes the need for compliance monitoring, yet fewer than 1/3 of respondents (31%) have both manual & automated monitoring in place

0%

20%

40%

60%

80%

100%

Added manual compliance monitoring

Added automated compliance monitoring

71%

42%

20%

22%

4%

18%

4%

18%

Have you implemented compliance monitoring?

Don't Know/ Not Applicable

No plans

In process

Completed

Page 11: Higher Education Compliance Survey Results: What Are Schools Really Doing

Survey Results: Overall Impressions

• Now that much of the dust has settled, it seems that most in the industry see the regulatory changes as good for the sector at large

67% agreed the regulations have been unfairly punitive to non-profits

73% agreed the regulations represent necessary changes for the sector, despite the challenges

56% agreed that the regulations will ultimately have a positive impact on the quality of prospective inquiries from vendors

Page 12: Higher Education Compliance Survey Results: What Are Schools Really Doing

Key Takeaways

Schools are relying heavily on shifting accountability over to vendors….

AND YET….

At the end of the day, schools are ultimately the ones with the most to lose

in the case of a compliance breach.

Page 13: Higher Education Compliance Survey Results: What Are Schools Really Doing

Key Takeaways: What Should You Do Now?

1. The regulations are broad; simply renegotiating vendor contracts may not be enough to mitigate risk.

2. Schools should invest in tools and strategies to ensure their partners remain compliant.

3. The best defense is a comprehensive compliance monitoring strategy consisting of tools, people & processes.

Page 14: Higher Education Compliance Survey Results: What Are Schools Really Doing

CUnet’s Compliance Statement

• Committed to leadership in the quickly-evolving area of compliance through significant investments in:

• People: Dedicated internal team of compliance experts (MOQC)

• Processes: Clearly defined set of operational processes to monitor, enforce and address misrepresentation

• Technology: Significant investments in technology solutions, backed by our industry-leading Sparkroom platform

• View CUnet’s complete compliance statement here: http://cunet.co/compliance_statement

Page 16: Higher Education Compliance Survey Results: What Are Schools Really Doing

What is the Enforce Process?

FULLY MANAGED COMPLIANCE MONITORING

Page 17: Higher Education Compliance Survey Results: What Are Schools Really Doing

Major Violations Examples

• Nature of educational program.

• Nature of financial charges.

• Employability of graduates.

• Relationship with the Department of Education.

Violation Resolution: Example Timeline

Penalties • Affiliate paused immediately,

causing all inquiries sent to be non-billable

• IO cancelled if violation is not remedied within 5 days

The term “Fast Track” is in use without the additional content that has to follow the phrase “in as little as 20 months”

The ad below implies that the gvt is providing grants for getting a degree

Page 18: Higher Education Compliance Survey Results: What Are Schools Really Doing

Minor Violations Examples

• Vague Language

• Unauthorized Creative

• Missing Accreditation

• “Science – Master’s Degree” where the degree is “Masters of Science Degree”

• Outdated Logos

Violation Resolution: Example Timeline

Penalties

• 5 days to get issue resolved before affiliate is paused

• Campaign paused after 10 days until issue is resolved

Page 19: Higher Education Compliance Survey Results: What Are Schools Really Doing

Our Technology: Sparkroom Monitor

Software that supports the compliance experts by:

• Storing URL information for monitoring

• Crawling the URLs nightly and comparing against previous records

• When different, take an image snapshot and copy HTML for change analysis

• Recording when manual audits are performed

Page 20: Higher Education Compliance Survey Results: What Are Schools Really Doing

Enforce: Case Study

CUnet Enforce Case Study Count Pages Reviewed and Audited 5459

Total number of unique URL’s monitored 1259

New URL's proactively found with Violations 165

Total Violations Identified 604

Open Violations 91

Major Violations identified 19

Minor Violations identified 72

Page 21: Higher Education Compliance Survey Results: What Are Schools Really Doing

Enforce: Case Study Violations

Nature of Education Program

65%

Missing Accreditation / Disclaimer

14%

Missing required field 14%

Unauthorized Client branded copy or creative

7%

Breakdown Of Violations

Page 22: Higher Education Compliance Survey Results: What Are Schools Really Doing

Special Offer for LeadsCon Attendees

Get a Free Compliance Review from CUnet

• Reviewing existing compliance process

• CUnet will run your URL list through Sparkroom Monitor, identifying areas of risk

• CUnet will provide overall page scores, list of banned terms found and an overall risk assessment

• If you are interested, please contact:

• Jeff Herz ([email protected]) 201-477-7793

Page 23: Higher Education Compliance Survey Results: What Are Schools Really Doing

Questions?

For additional questions:

Jeff Herz

[email protected]

201.477.7793

Steve Smith

steve. [email protected]

416.323.1366 x 41224