Posted Date: September 24, 2009

Author: David A. Bergeron, Acting Deputy Assistant Secretary for Policy, Planning and Innovation, Office of Postsecondary Education

Subject: Federal Trade Commission (FTC) seeking public comments on its guides for Private Vocational and Distance Education Schools

The Federal Trade Commission (FTC) recently published a request for public comments as part of its review of all current FTC rules and guides. Specifically, the FTC is seeking public input on the overall costs, benefits, necessity, and regulatory and economic impact of the FTC’s guides for “Private Vocational and Distance Education Schools” (Guides), which apply to institutions of higher education that do not offer at least a two-year program of accredited college level studies that is generally acceptable for credit towards a bachelor’s degree. These Guides, most recently revised in October 1998, are intended to advise proprietary businesses, particularly institutions offering vocational training courses, on how to avoid deceptive advertising, promotional, marketing, and sale practices of their courses or programs. The Guides are considered administrative interpretations of the statutes that the FTC is charged with implementing. Conduct that is inconsistent with the Guides may result in corrective action by the FTC if a school is found to be in violation of the law. For example, the provisions caution industry members against engaging in any of the following:

  • Using any name, label, logo, etc. that would mislead a student as to the nature of the school, its accreditation, programs, or methods of teaching;
  • Misleading a student to think that the school is part of or connected to a government or employment agency;
  • Failing to make it abundantly clear to a student the extent to which a program is offered via distance education or correspondence;
  • Misrepresenting the extent or nature of the school’s accreditation or approval status;
  • Misrepresenting the extent to which the completion of a course or program of instruction may be transferable for credit at an accredited institution of higher education;
  • Misrepresenting endorsements by a specific industry or misleading students to think that the successful completion of the course qualifies the student for admission to a union or other organization, or for receiving a State or Federal license to perform certain functions;
  • Deceiving students to think that its courses are recommended by vocational counselors, high schools, colleges, employment agencies, etc., or that it has been the subject of unsolicited testimonials or endorsements by former students;
  • Using testimonials or endorsements that do not accurately reflect the current practices of the schools or current conditions in the job market for the industry or occupation for which students are being trained;
  • Misrepresenting the resources of the school (size, location, facilities, student services, equipment, etc), the educational qualifications of its faculty and other personnel, or the availability of financial assistance;
  • Misrepresenting the nature or extent of any prerequisites or qualifications for enrollment in a course or program of instruction;
  • Misrepresenting that the lack of a high school education or prior training or experience is not an impediment to successful completion of a course or obtaining employment in the field for which the course provides training;
  • Issuing a degree, diploma, certificate of completion, or similar document that misrepresents the subject matter, substance, or content of the course of study for which it was awarded;
  • Conferring an academic, professional, or occupational degree that has not been authorized by the appropriate State educational agency or approved by a nationally recognized accrediting agency, unless it has clearly and conspicuously disclosed that this is the case;
  • Offering a high school diploma, unless the program of instruction is substantially equivalent to that offered by a resident secondary school, and unless the student is informed in writing prior to enrollment that the there is no guarantee that institutions of higher education, other schools, or prospective employers will recognize the diploma;
  • Falsely implying that employment is being offered;
  • Failing to disclose to the student, prior to enrollment, the full cost of the program and the school’s refund policy if the student does not complete the program; and
  • Failing to disclose to a student, prior to enrollment, all of the requirements for completion of the program and the circumstances that would constitute grounds for terminating the student’s enrollment prior to completion.

(For the full list of provisions, please see 16 CFR Part 254)

The FTC hopes to receive comments in response to a variety of questions. In particular, the FTC would like information regarding the costs and benefits for consumers under the current Guides; any evidence of the impact of the current Guides; the continuing need for the Guides, the anticipated costs and benefits for consumers and businesses as a result of potential modifications to the Guides; any recommended modifications; and any evidence of the degree of industry compliance with the Guides. More information from the FTC on this issue is available at: http://www.ftc.gov/opa/2009/07/schools.shtm or at http://www.ftc.gov/os/2009/07/P097701vocationalschool.pdf.

Given the relationship between these FTC Guides and the Department of Education’s regulations governing the misrepresentation by an institution of its educational program, financial charges, or employability of its graduates in 34 CFR 668.71-75, we encourage you to read and comment on the FTC’s notice. As announced in the September 9, 2009 Federal Register, we anticipate that issues regarding misrepresentations of consumer information will be discussed during the upcoming round of negotiated rulemaking, which we will begin before the end of the year.

The FTC is accepting comments on “Vocational School Guides Review, Matter No. P097791” through October 16th, 2009. Comments may be submitted electronically through either https://secure.commentworks.com/ftc-VocationalSchoolGuides or http://www.regulations.gov/search. Comments are also accepted in paper form and should be addressed to: Federal Trade Commission, Office of the Secretary, Room H-135 (Annex V), 600 Pennsylvania Avenue, NW, Washington, DC 20580. Paper submissions should indicate “Vocational School Guides Review, Matter No. P097701” in both the text and on the envelope.

   

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