Exhibit
      10.38





EDUCATION
REALTY TRUST, INC.


INCENTIVE
COMPENSATION PLAN


FOR
EXECUTIVE OFFICERS





EDR’s Compensation
Philosophy:  EDR seeks to attract and retain the highest
quality workforce at all levels.  EDR’s compensation programs provide
a mix of salary and incentives appropriate to each area of responsibility and
each employee’s level of expertise and contribution.  Compensation
levels must be competitive in the marketplace and commensurate with peer group
companies. Performance incentives are based on individual achievement as
measured at the business unit level and company wide.  Awards will
consist of an evaluation of operating metrics against plan and a formal
evaluation of the individual in areas of results-based goals, shared values and
leadership competencies. Awards under this plan will be offset by any incentives
earned under the Real Estate Development Bonus program or incentives earned
under a property account bonus plan.





The
annual Incentive Compensation Plan is designed to motivate employees to achieve
departmental and corporate performance objectives, yet be simple to administer,
easy to understand, a measurement of performance and controllable to a large
extent by the participant.  Key features are:





·
            Bonus
      targets are established as a percentage of
  salary.


·
            There
      are two distinct components, each worth 50% of the target
      bonus:


1.
            Corporate
      Achievement- Funds From Operations
(Adjusted)


2.
            Individual
      achievement of predetermined
objectives





1.
            Corporate
      Achievement- Funds From Operations
(Adjusted):





Funds From Operations
(Adjusted) Achievement Level


Threshold
                  
                  Target
                  
                  
                  Maximum80%
                  
                  
                  100
                  %
                  
                  
                  120
                  %





Bonus Range
Multiplier


Threshold
                  
                  Target
                  
                  
                  Maximum25%
                  
                  
                  50
                  %
                  
                  
                  75
                  %





Performance
below 80% of target FFOA results in no bonus being paid for this component of
the plan.





2.
            Individual
      Objective Achievement:





Individual Objectives
Achievement Level


Threshold
                  
                  Target
                  
                  
                  Maximum60%
                  
                  
                  100
                  %
                  
                  
                  100
                  %





Bonus Range
Multiplier


Threshold
                  
                  Target
                  
                  
                  Maximum30%
                  
                  
                  50
                  %
                  
                  
                  50
                  %





Key MBO
type statements, numbering no more than 5-7, are written at the beginning of
each fiscal year.  There is no upside potential; however there is a
downside for individuals who achieve less than 100% of their objectives, as
rated by their supervisor.  An achievement rating of 0% to 100% will
be applied to the target bonus to determine the award for individual
achievement.


1


Exhibit
      10.38


The
organization’s reward philosophy is targeted toward the long-term; therefore
there will be only one payout per year, in March following the close of the
fiscal year.  The base pay of record at the end of the fiscal year
will be the basis for determining the bonus target in that fiscal
year.  Proration for a partial year is acceptable for new hires; since
a new hire is essentially learning the position responsibilities, the
establishment of individual objectives is not feasible during the partial
year.  Therefore, the new hire bonus amount will consist of a
proration of the bonus award attributed to the FFOA with no bonus calculated for
the individual objectives portion. No proration for a partial year is calculated
for a participant who terminates prior to the end of the measurement period
except in the event of death or disability.  A matrix for determining
the multipliers for FFOA and Individual Objective Achievement can be found on
page 3.





FFO shall
be calculated in accordance with the definition promulgated by the National
Association of Real Estate Investment Trusts. Adjustments to the calculation of
FFO may be made by the Compensation Committee of the Board of Directors of EDR
in its sole and absolute discretion.





BONUS


SAMPLE
CALCULATION





Target
Bonus = $100,000


FFOA
Achievement = 90%


Individual
Objectives Achievement = 95%




Plan




Threshold
                        
                        
                        Target
                        
                        
                        Maximum50%
      Corporate
                          Achievement
                        
                        $
                        25,000
                        
                        
                        $
                        50,000
                        
                        
                        $
                        75,00050%
      Individual
                          Achievement
                        
                        $
                        0
                        
                        
                        $
                        50,000
                        
                        
                        $
                        50,000Total
      Bonus Range
                        
                        $
                        25,000
                        
                        
                        $
                        100,000
                        
                        
                        $
                        125,000





Actual




Component
                        
                        Achievement
      Level
                        
                        MultiplierCorporate
      Achievement
                        
                        90%
      of Plan
                        
                        
                        37.5Individual
      Achievement
                        
                        95%
      of Objective
                        
                        
                        47.5Total
      Multiplier
                        
                        
                        
                        
                        85.0


Total
Bonus
Payout                                $100,000
x 85% = $85,000





2


Exhibit
10.38


ANNUAL
BONUS MULTIPLIER MATRICES





Corporate
      Achievement%
      Achieved
                        
                        Multiplier80%
                        
                        25.0%81%
                        
                        26.3%82%
                        
                        27.5%83%
                        
                        28.8%84%
                        
                        30.0%85%
                        
                        31.3%86%
                        
                        32.5%87%
                        
                        33.8%88%
                        
                        35.0%89%
                        
                        36.3%90%
                        
                        37.5%91%
                        
                        38.8%92%
                        
                        40.0%93%
                        
                        41.3%94%
                        
                        42.5%95%
                        
                        43.8%96%
                        
                        45.0%97%
                        
                        46.3%98%
                        
                        47.5%99%
                        
                        48.8%100%
                        
                        50.0%101%
                        
                        51.0%102%
                        
                        52.0%103%
                        
                        53.0%104%
                        
                        54.0%105%
                        
                        55.0%106%
                        
                        56.0%107%
                        
                        57.0%108%
                        
                        58.0%109%
                        
                        59.0%110%
                        
                        60.0%111%
                        
                        61.0%112%
                        
                        62.0%113%
                        
                        63.0%114%
                        
                        64.0%115%
                        
                        65.0%116%
                        
                        67.0%117%
                        
                        69.0%118%
                        
                        71.0%119%
                        
                        73.0%120%
                        
                        75.0%
  Individual Achievement%
      Achieved
                                    
                                    Multiplier60%*
                                    
                                    30.0%61%
                                    
                                    30.5%62%
                                    
                                    31.0%63%
                                    
                                    31.5%64%
                                    
                                    32.0%65%
                                    
                                    32.5%66%
                                    
                                    33.0%67%
                                    
                                    33.5%68%
                                    
                                    34.0%69%
                                    
                                    34.5%70%
                                    
                                    35.0%71%
                                    
                                    35.5%72%
                                    
                                    36.0%73%
                                    
                                    36.5%74%
                                    
                                    37.0%75%
                                    
                                    37.5%76%
                                    
                                    38.0%77%
                                    
                                    38.5%78%
                                    
                                    39.0%79%
                                    
                                    39.5%80%
                                    
                                    40.0%81%
                                    
                                    40.5%82%
                                    
                                    41.0%83%
                                    
                                    41.5%84%
                                    
                                    42.0%85%
                                    
                                    42.5%86%
                                    
                                    43.0%87%
                                    
                                    43.5%88%
                                    
                                    44.0%89%
                                    
                                    44.5%90%
                                    
                                    45.0%91%
                                    
                                    45.5%92%
                                    
                                    46.0%93%
                                    
                                    46.5%94%
                                    
                                    47.0%95%
                                    
                                    47.5%96%
                                    
                                    48.0%97%
                                    
                                    48.5%98%
                                    
                                    49.0%99%
                                    
                                    49.5%100%
                                    
                                    50.0%





*
The multiplier for individual achievement is equal to 1⁄2 of the achievement
level.  Individual achievement below 60% is extremely
rare.