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In Study Abroad, Gifts and Money for Universities

Overseas Universities August: As overseas study has become a prized credential of the undergraduate experience, a competitive, even cutthroat, industry has emerged, with an army of vendors vying for student money and universities moving to profit from the boom.

At many campuses, study abroad programs are run by multiple companies and nonprofit institutes that offer colleges generous perks to sign up students: free and subsidized travel overseas for officials, back-office services to defray operating expenses, stipends to market the programs to students, unpaid membership on advisory councils and boards, and even cash bonuses and commissions on student-paid fees. This money generally goes directly to colleges, not always to the students who take the trips.

Critics say that these and similar arrangements, which are seldom disclosed, typically limit student options and drive up prices for gaining international credentials compared with the most economical alternative - enrolling directly in a foreign university, paying generally lower tuition to that institution and having the credits transferred. Some campuses require students to use one of several affiliated providers, but some even have exclusive arrangements with study-abroad agents, further limiting options.

Many of these perks are similar, if not identical, to ones uncovered in multiple investigations into the student loan industry, where lenders gave colleges bonuses tied to loan volume, seats on advisory boards and free travel to conferences in the race to get on so-called preferred lender lists. The similarities raise questions about how many aspects of higher education involve such little-known incentives that may have large impacts on the college experience.

For example, the American Institute for Foreign Study offers college officials a free trip to one of its overseas sites for every 15 students that sign on and a 5 percent share of the fees that students pay, according to a copy of its agreement with the University of Mary Washington; if fewer than 15 sign on, the payback is 2 percent. According to its Web site, the institute has deals with universities nationwide, including the University of California, Berkeley; Fordham and Pace in New York, and Rice in Houston.

Amy Bartnick-Blume, a vice president of the nonprofit Institute for Study Abroad, which is affiliated with Butler University in Indiana, said the institute gave colleges with which it has "exclusive agreements" up to $500 per student for restricting them to the institute's programs in a given region. The practice in effect shuts out the competition. Ms. Bartnick-Blume said that the colleges decide whether to pass the savings on to students and that the institute had no way of knowing how many do.

"We're all wringing our hands about how to make it possible for lower income kids to participate in study abroad," said Barmak Nassirian, associate executive director at the American Association of Collegiate Registrars and Admissions Officers. "But one of the reasons it costs so much is all this institutional mediation."

No regulations govern study abroad programs, except a voluntary code of ethics from an industry trade group that limits members to "gifts that are of nominal value and that do not seem intended to influence professional decisions."

But Brian Whalen, the president of the Forum on Education Abroad, another industry group that is charged with creating standards for study abroad programs, said more transparency was needed so that students knew about arrangements with outside providers that had an impact on their costs or options.

Dr. Whalen, who is also the executive director of study abroad at Dickinson College in Carlisle, Pa., said overseas site visits for educators, when given in exchange for student participation in a program, crossed an ethical line. As for payments from outside providers, he said, the danger is that colleges may come to rely on the money. Then, he said, study abroad officials may think, "If it goes away, we're going to be in trouble with our office."

"It creates an incentive to bring up the numbers of students using a certain organization," Dr. Whalen said.

Officials at universities and study abroad agencies, though, defend the system, saying the perks are relatively minor, do not obligate a college to choose a particular program and are so common that they do not sway decisions.

Ms. Bartnick-Blume of the Butler institute described the financial incentives as recognition for helping the institute do its job better. When colleges promote Butler exclusively or as a major program in certain countries, she said, the institute can spend less time and money recruiting students on the campus "since we know we have a very captured audience for those students."

Students, while cherishing their overseas experience, are sometimes the system's most bitter critics. Few, if any, are aware of the perks dispensed by study abroad providers, but they complain generally of the high costs of studying overseas and do not understand how providers get selected by universities.

Partly in the hope of saving money, Brendan Jones, a former student at Columbia and now a contractor specializing in architectural salvage, studied at Oxford University several years ago through an outside company, rather than through a program approved by Columbia.

Though he was warned beforehand that Columbia would not grant credit, he was surprised when it did not relent because the college he attended at Oxford, Magdalen, was ranked higher than the one where Columbia sent students.

Columbia said it only allowed students to go on programs it had vetted and approved.

"I went crazy trying to find a way to make it work," Mr. Jones said. Faced with the prospect of repeating his junior year at Columbia, he graduated, instead, from Oxford.

More than 200,000 American students flock to foreign universities a year, an increase of nearly 150 percent over the last decade.

The industry lacks a central registry of study abroad providers, but experts put the number of major players at just under 100. Nor does any group track which universities use outside study abroad providers and which contract directly with a foreign institution; colleges often do both, depending on the location.

Many public universities, especially, encourage students to deal directly with the foreign institution to lower costs, even if they also have arrangements with outside providers. Experts in the field say private colleges are increasingly taking the opposite tack, charging full at-home tuition and doling out a fraction to an outside provider or university abroad, pocketing the difference.

Many colleges are also moving to build direct relations with overseas universities, in effect cutting out the middleman and increasing their revenue.

Still, arrangements with outside agencies carry many advantages. They allow universities to feature programs at far-flung corners of the globe and provide services to students on-site, even where the university itself has no presence. They ease the transition to foreign cultures, provide guided tours and a ready social network, and help in emergencies. They also protect the university in case of liability.

To promote their preferred providers, many colleges require students to use them, sometimes denying financial aid or credit to students taking alternate routes, even at top-tier universities.

Officials at universities and study abroad agencies see the perks as part of their normal business.

Kathleen McDermott, director of global programs for liberal arts undergraduates at Columbia, said trips subsidized by outside providers posed no conflict because "our business is to evaluate programs."

"You get real access," she said, "in a way you wouldn't necessarily have done if I were on my own."

Recalling a flood and an earthquake in Tanzania and a water shortage in Uganda during one trip, she said lodgings were typically spartan and schedules packed. "This is an important part of the process of understanding what's going on," she said.

Since 1998, Dr. McDermott said she had taken six such trips: one to Argentina and Chile, another to Uganda and Tanzania, and visits to Cuba, western China, Jordan and Morocco. The trips were sponsored, she said, by various providers.

The Butler institute sponsored one of Dr. McDermott's trips; Columbia, along with about 120 other institutions, is a member of the its national advisory council.

Ms. Bartnick-Blume of the Butler institute said subsidized trips were not a conflict because they did not formally oblige colleges to send students to institute programs. While exclusivity agreements may limit student choices, she said, universities also restrict the programs they approve for other reasons, like liability issues or a preference for dealing with a few, trusted providers.

In offering cash back, she added, providers are responding to demands from study abroad officials, who are under increasing pressure not only to cover their office's expenses, but also to generate revenue. "They're going to the competition, asking for these things," she said.

Even college officials who participate in the system acknowledge a thicket of issues. Christopher Musick, who directs study abroad programs at the University of Mary Washington, in Fredericksburg, Va., said he urged students at his public institution to apply directly to a foreign university and save money. But Mary Washington also signs affiliation agreements with providers, receiving help with marketing and back-office expenses.

Officials at Rice and Berkeley said they accepted money from providers, including the American Institute for Foreign Study, to use as scholarships, disbursed at their discretion but not necessarily to those whose business earned the money. The institute decline to comment.

Ronald Mendez-Clark, who runs study abroad at Fordham, said the university had agreements with many providers, including the American Institute, but did not choose any programs because of incentives.

Some critics come from within the industry. Robert Schuettinger, president of the Washington International Studies Council, which operates study abroad programs with many colleges, said subsidized travel and other perks were unethical and stifled competition. His company does not offer trips abroad, and he said he feared that this caused it to lose business. But his company does give discounts to universities for volume, which he called the industry norm.

Mr. Nassirian, of the registrars association, said colleges could have legitimate reasons for restricting students to only some overseas institutions. "But what is objectionable," he said, "is, if the student decides at his or her own risk to go overseas, the outright refusal to take credit from a legitimate foreign institution."

The New York Times
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