This post from IPE Zone is interesting. This is a US-centric article. In my experience the UK is WAY behind the times in using these methods.
Higher Ed's Int'l Marketing Machine
International education is big money; consequently, a whole industry has sprung up around suck...I mean, persuading foreign students to attend certain universities. The proliferation of "study abroad" programs which earn fees and commissions from universities based on signing up international students--who usually pay significantly higher fees than home students--attests to this phenomena.
A practice which is being questioned here is of doling out various perks to would-be students. To some, it is unethical in the same way that sports programs are banned from offering star high school athletes perks like free cars, albeit on a smaller scale. Worse, students who sign up through these "study abroad" programs end up paying more than if they directly got in touch with these universities. Interesting stuff:
The article then quotes from an International Herald Tribune article. My bold.
In study abroad, gifts and money for universities
As overseas study has become a prized credential of the undergraduate experience, a competitive, even cut throat, 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 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.
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. 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.
Whalen, who is also the executive director of study abroad at Dickinson College in Carlisle, Pennsylvania, 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," 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.
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.