Office of Postsecondary Education - U.S. Department of Education

WReier-Aviles on DSKGBLS3C1PROD with RULES266918 Federal Register / Vol. 75, No. 209 / Friday, October 29, 2010 / Rules and Regulationsinstitution to make a number ofdisclosures to students and to the extentthat any of these disclosures areinaccurate and constitute substantialmisrepresentation, they are actionable.The Department believes that thetotality of its regulations provides asufficient basis to protect against themaking of substantialmisrepresentations without creatinganother category of misrepresentationsthat are more logically covered withinthe context of disclosures.In addition, we disagree with thecommenter who argued that oralstatements should not be included inthe definition of the termmisrepresentation. We have seen andheard clear and unambiguous examplesof oral statements that we view asmisrepresentations in the GAO’s videoof its undercover testing.With respect to the commenters whoexpressed concern about how theseregulations may affect an institution’sability to use the Internet for marketingpurposes, we note that it should notmatter where a misrepresentation takesplace. What is important is to curb thepractice of misleading studentsregarding an eligible institution,including about the nature of itseducational program, its financialcharges, or the employability of itsgraduates. We strongly believe thatinstitutions should be able to find a wayto comply with these regulations whenusing the Internet for marketing.Finally, we understand the manycomplexities of domain nameownership, trademark infringement andthe like and will ensure that we aretargeting the correct entities in anyenforcement action we take under theseregulations.Changes: None.Comment: Several commentersobjected to including testimonials andendorsements in the definition ofmisrepresentation, because doing soholds institutions responsible forunsolicited testimonials orendorsements of any kind. Thecommenters noted that testimonials arewidely used as the most relevant formof marketing. One commenter suggestedthat we modify the regulations to referto testimonials that the institution‘‘requested’’ a student to make ‘‘as partof the student’s program’’ as opposed to‘‘required’’ the student to make ‘‘toparticipate in a program.’’ Anothercommenter believed we should expandthe definition of the termmisrepresentation to includeendorsements or testimonials for whichstudents are given incentives orrewards.Discussion: The Department disagreesthat changes to the definition ofmisrepresentation are needed. First,with respect to the commenters whostated that the definition is too broad,we note that the thrust of the definitionis that the statement must be false,erroneous, or misleading. The inclusionwithin the definition of certain studentendorsements or testimonials (i.e., thosethat are given under duress or arerequired for participation in a program)establishes the circumstances underwhich endorsements or testimonials arenecessarily considered to be false,erroneous, or misleading. We believethat including these types ofendorsements and testimonials in thedefinition of misrepresentation isappropriate because endorsements ortestimonials provided under thesecircumstances are suspect, at best.Second, we do not believe it isnecessary to expand the definition ofmisrepresentation to includeendorsements or testimonials for whichstudents are given incentives orrewards. We do not believe that anendorsement or testimonial for which astudent was given a token reward suchas a mug or t-shirt should automaticallybe considered false, erroneous, ormisleading.Changes: None.Nature of Educational Program(§ 668.72)Comment: One commenter supportedthe proposed changes to § 668.72 statingthat the changes will reduce themotivation for institutions to useaggressive and misleading recruitmenttactics to increase enrollment. Thecommenter noted that the requirementsin this section align with theirassociation’s principles of good practiceunder which members represent andpromote their schools, institutions orservices by providing preciseinformation about their academic majorand degree programs.Discussion: The Departmentappreciates this support.Changes: None.Comment: One commenter stated that§ 668.72 was inherently unclear andasked for additional clarificationwithout providing any specifics.Discussion: The Department disagreeswith this commenter and believes thatthe language in this section is clear.Moreover, because only false, erroneous,or misleading statements that constitutesubstantial misrepresentations arepotentially actionable, institutions areon notice as to what they need to do toassure themselves of compliance.Changes: None.VerDate Mar2010 14:10 Oct 28, 2010 Jkt 223001 PO 00000 Frm 00088 Fmt 4701 Sfmt 4700 E:\FR\FM\29OCR2.SGM 29OCR2Comment: Some commentersrecommended that we add language tothis section to address specific concernsabout clinical experience. Onecommenter argued that institutionsshould be required to inform students ofany clinical experience the studentneeds to obtain a required license orcertification, whether the institution orthe student secures the appropriateclinical placement, and how the clinicalexperience relates to the ability toobtain employment. The commenterargued that the failure to inform astudent of this information shouldconstitute misrepresentation.Discussion: We believe that thelanguage in § 668.72 sufficiently coversfalse, erroneous, or misleadingstatements made by institutionsconcerning their educational programs.We further note that information such asthat suggested by the commenter ismore appropriately addressed in thestudent consumer informationdisclosures contained in subpart D ofpart 668 and note that institutions arerequired to disclose information aboutthe academic program of the institution,which would include information aboutany required clinical experience.Changes: None.Comment: One commenter suggestedthat we add language to § 668.72 tospecifically address misrepresentationrelated to whether course credits earnedat the institution are transferable towarda substantially similar degree. Thiscommenter noted that, in some cases,courses may be accepted but not counttoward a degree at the new institution.Discussion: We believe that thelanguage in § 668.72(b)(1), whichprohibits false, erroneous, or misleadingstatements about whether a student maytransfer course credits earned at theinstitution to any other institution, issufficient and provides more protectionfor students than the commenter’ssuggestion to limit the coverage tostatements related to whether coursecredits are transferable toward asubstantially similar degree.Changes: None.Comment: A few commenterssuggested that we expand § 668.72(c)(2)to include ‘‘States in which the programis offered’’ rather than merely ‘‘the Statein which the institution is located’’ sothat the requirement reaches studentswho are enrolled through distancelearning. One commenter noted thatinstitutions that offer courses onlineshould have additional responsibilitiesto students who take these courses. Thecommenter also asserted that theseinstitutions should know andcommunicate to students what theState’s requirements are to be employed