By Matthew Ulmer
Many institutions are beginning to enlist the support of international student placement services, or “agents.” While this can be an effective method for expanding international outreach and increasing admissions from multiple areas of the world, improper budgeting can hinder recruitment efforts, and even cause a department to be punished for too much success.
Problems are most likely to occur when institutions treat agent fees as a marketing expense. For example, if an institution paid an agent $4,500 commission per student, and enrolled five students through that agent, the marketing budget would be depleted by $22,500. Though this may be considered a worthwhile return for a marketing campaign, the remaining budget may then not be able to support as much direct recruiting, exhibitions or overseas travel for international recruitment staff. If too many agent-directed students enroll, what may have once been cause for celebration now becomes a concern, as the university struggles to find funds to support the placement fees.
The best approach to budgetting for agent fees is one that complements, rather than competes with, existing recruitment efforts.
Commission costs paid to the agent can be calculated as a percentage of student tuition. This practice is common in advertising and real estate, where the net after sales commission is realized as income. A few of our partners have told us that for their budgeting, the placement fee is treated as if it were a one-time scholarship awarded to the student and subtracted from the total tuition.
By way of example, if the aforementioned agent fee is based on a 15 percent commission for $30,000 a year tuition, and the student retains for all four years of an undergraduate program, the institution will pay $4,500 for that student, but will earn $115,500 remaining from four year’s worth of tuition.
In this model, colleges and universities can maintain their existing marketing efforts even if they decide to enlist the support of student placement firms, and they can be assured that every successfully placed student will add to the global diversity of the campus and to the revenue stream.
By Matthew Ulmer, Manager of Communications, IDP Education