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December 6, 2015: Blurred Lines

By Susan Chiaramonte

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In 2010, the U.S. Department of Education published regulations strengthening its misrepresentation rules (see 34 CFR § 668.71). Whether the public or the education sector knew it, these revised regulations expanded the Department’s scope of reach to cover any misleading information made by an institution, its employees, its agents (such as lead generation firms and education technology vendors) and any third party. Not only does the DOE regulation cover actual misleading statements, but also any statements that are likely to mislead students or the public. A violation of these regulations can lead to severe fines up to and including the loss of Title IV eligibility for institutions.

While the Department has not overtly expanded the use of this extended authority, mounting tensions are bringing change. The Department is facing increasing criticism regarding its oversight of the higher education sector which is trickling down to accrediting organizations and ultimately, institutions. For years this attention has been focused on for-profit institutions, but the recent Federal Trade Commission workshop that took place in Washington D.C. in October paints a different future.

Some may ask, “What does the Federal Trade Commission have to do with the Department’s 2010 regulations?” Well, the story continues in 2013 when the Federal Trade Commission updated their official guidance on deceptive marketing practices in the education sector. You may hear these guidelines commonly referred to as the Guides. To avoid any incorrect interpretations of the Guides, the following is an excerpt from FTC Focuses on Lead Generation Practices in Higher Education and Ed Tech:

…the Guides identified particular conduct that constitutes a deceptive practice, including any representation without qualification that a school is accredited, unless all courses and programs are accredited and any misrepresentation through pictures about facilities, training methods, or equipment.

Initially, the Guides were focused on vocational and distance education institutions, but with its publication, the FTC made it clear that it would enforce regulations against for-profit corporations in education which include lead generation companies and other related service providers. While every story has a villain, the antagonist in this tale is a little less clear.

Many in the education sector would like to point fingers at the increasing Federal oversight; however, the mounting complaints from students would indicate that institutions are also at fault for taking marketing liberties. As a society, we have found ways to entice consumers through effective marketing practices that may stretch the boundaries of truth-in-advertising.

Over the years, education has become a growing competitive market. Advancements in technology have allowed educational opportunities across geographic borders. The increase in accessibility provides challenges for institutions as they struggle to differentiate themselves from their competitors. While the struggles are real, there are three reasons institutions should take this heightened scrutiny seriously, the least of which centers on the Department’s and the FTC’s renewed focus.

  1. Do the Right Thing: Sometimes the answer is as simple as just doing the right thing. No one likes to be lied to, no matter how insignificant the consequences. Many students enroll in programs without understanding the “ins and outs” of higher education. Institutions have the responsibility to clearly communicate program benefits, requirements and costs. No games. Just the truth.
  2. Mirror, Mirror: Students can see through the façade. People want authenticity. They want the good, bad and the ugly, as long as it’s honest. They want to believe in something bigger and have respect for institutions that take responsibility for their actions. While deceptive marketing practices may initially lead to increased enrollments, they are not likely to turn into increased retention and completion rates. At the very least these deceptive marketing practices will leave a bad taste in students’ mouth, and at most, it will lead to negative word-of-mouth advertising. Institutions need to focus advertising and promotional efforts on the truth. Stand behind your “why” and students will believe and buy in too.
  3. Culture Club: Creating a culture that focuses on students and their success is the key to building honest relationships. A culture that focuses on the best interests of its students has built-in mechanisms to guard against the need for perceived innocent exaggeration. When serving students becomes the focus, institutions work harder to innovate and deliver programs and services that enable students to achieve their goals.

Institutions can take proactive steps to protect themselves, but more importantly they can implement practices that place student interests first. Students are looking for honesty, authenticity and sincerity. In a highly competitive and hostile environment, institutions can survive by avoiding blurred lines and doing the right thing. How does your institution focus on the truth-in-advertising and avoid blurring the lines? Join the conversation.

Susan Chiaramonte is President of EduCred Services. EduCred Services is a higher education consulting firm. EduCred Services mentors clients to adapt their unique strengths, programs, and organizational structures in support of educational options that are recognized for their value by meeting the needs of the 21st century student.