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Disruption and the CEPP: Next Steps for the Association

By Joyce Smith, NACAC CEO

Headshot of Joyce Smith, NACAC CEODisruption.

NACAC began last year with a proposal to change our membership model. We heard and learned a great deal from members about the model and have made adjustments. Members will be asked in Louisville to act on Bylaw Article III. Membership to approve the advancement of a new model and categories for 2021.

Now, NACAC’s Code of Ethics and Professional Practices (CEPP) must change. The latest news on the Department of Justice (DOJ) investigation and NACAC’s proposed response for membership action, has started a groundswell of speculation. Members desire to understand legal terminology and the association’s obligations to comply. They also want to know the potential for redefined admission terms and deadlines and whether admission chaos will ensue without mandatory oversight, and gain a stronger understanding of association governance. That last one is a good thing. We recognize that members need time to think out loud, process possibilities, and mourn the potential loss of long-standing principles that protected students, but we also need to take advantage of the best consequence of this disruption—being forced to contemplate our future as admission counseling professionals.

Since its founding in 1937, NACAC has maintained statements governing how we work with students, schools, and professionals in admission counseling. As membership expanded beyond postsecondary admission professionals, the statements evolved to include our expanding membership of secondary schools and counselors, and later independent educational consultants, individuals, organizations, and community-based groups. Our statements were once framed as “wills,” which meant they were mandatory, and “should,” which meant they were best practices not monitored or enforced by Admission Practices Committees at the national and affiliate levels.

NACAC’s CEPP has been under investigation by the Antitrust Division of the DOJ since 2017, and during that time we have cooperated fully with them. After close to two years of legal reviews, depositions, and providing thousands of emails and documents for the review by DOJ, we were informed that a consent decree is likely pending. The decree may require NACAC to address the antitrust statements in the CEPP. As such, NACAC proposed changes to the CEPP and the NACAC Bylaws last week. Members have been speculating about what these changes might mean for our admission practices. Additionally, the use of some legal terms has at times made it difficult to understand the ramifications of what is being proposed.

The notion of “restraint of trade” among colleges and universities in their recruitment of students is the key issue for NACAC members to keep in mind when thinking about the investigation by DOJ and proposed actions for membership. It is important to become familiar with the Sherman Antitrust Act, which outlaws all contracts, combinations, and conspiracies that unreasonably restrain interstate and foreign trade, also referred to as antitrust activities. This includes agreements among competitors to fix prices, rig bids, and allocate customers, crimes punishable as felonies. Pursuant to the Sherman Act, the DOJ has, on certain occasions, applied restraint of trade scrutiny to collaborative agreements among colleges and universities collectively pertaining to student recruitment and financial aid. In such cases, colleges and universities collectively comprise the “market.” Agreements among competitors in the market to abide by voluntary rules, limitations, or procedures may be considered as restraining trade, and subject to antitrust review. I am no lawyer, but an understanding of this helped me move from “why are they investigating us” to “how must we address the DOJ’s antitrust concerns” in order to move forward.

NACAC has maintained our CEPP “in the best interest of students”to offer some consistency in deadlines, terminology, and procedures. The application process is stressful and complex for some already, without the potential for major changes. We are not giving up on needed protections for students, but we now must consider identified antitrust concerns and act accordingly.

Disruptive actions certainly change what is known, understood, and honored in the ways NACAC has operated. Disruption can also bring about new thoughts, ideas, strategies, procedures, definitions, and protocols. It is up to us to envision a new future for NACAC, using disruption to bring about fresh perspectives on the association’s work.

Next Steps: The Assembly and Annual Membership Meeting

Although all members are asked to support and comply with the statements in the CEPP, some members are unclear about who acts on motions. The NACAC Bylaws state that the Assembly is charged to:

(a)    Elect association officers and directors as defined by these bylaws

(b)    Amend the Code of Ethics and Professional Practices

(c)     Make recommendations to the Board of Directors on Association-related matters.

The Assembly is comprised of representatives or delegates from the 23 affiliates. The number of delegates per affiliate is based on a formula, giving consideration to the number of NACAC national members located and working within each affiliate.

In response to the DOJ investigation, the 2019 Assembly has been asked to prepare to act on the following motions:

Motion #1: On behalf of the Board of Directors, it is moved and seconded that the procedural rules be suspended, so that no amendments to the Code of Ethics and Professional Practices are permitted by the delegates of the 2019 Assembly, except those mandated or recommended by NACAC’s antitrust legal counsel handling the US Department of Justice Antitrust Division investigation.

Motion #2: On behalf of the Board of Directors, it is moved and seconded that the following statements be deleted from the Code of Ethics and Professional practices as recommended by NACAC’s legal counsel handling the Department of Justice Antitrust Division Investigation.

Delete Section II.A.3.a.vi. “Colleges must not offer incentives exclusive to students applying ED…”         

Delete Section II.B. Introduction sentence “Once students have committed themselves to a college, other colleges respect that choice and cease recruiting them….”

Delete Section II.B.5 “Colleges will not knowingly recruit or offer enrollment incentives to students who have already enrolled, registered, have declared their intent…”

Delete Section II.D.5. “Colleges must not solicit transfer applications from a previous year’s applicant or prospect pool unless the students themselves initiated a transfer inquiry…”

Motion #3: On behalf of the Board of Directors, it is moved and seconded to extend the moratorium on enforcement of the Code of Ethics and Professional Practices (CEPP), effectively immediately, and for a period of up to one year or until legal review is resolved with the Antitrust Division of the Department of Justice. The association will continue pursuing a resolution with amendments to the CEPP that might be appropriate under the terms of this inquiry.

In addition, NACAC members will be asked to grant a limited extension of authority to the NACAC Board of Directors to make changes to the association’s bylaws. The vote will take place at the Annual Membership Meeting and, if passed, will allow the board to act on behalf of the membership in extreme situations, such as in response to a government investigation, court order, action, or litigation. Members must also act on a proposal to change membership categories. Please join us! Member* voices and votes are critical for the success of NACAC’s future.

*NACAC’s Bylaws state that only voting members in good standing on the 60th day (4:30 p.m. ET, July 30, 2019) prior to the Annual Membership meeting are eligible to vote.

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