U.S. Department of Education publishes amendments to misrepresentation regulations

On September 20, the U.S. Department of Education published final regulations making technical amendments to its misrepresentation regulations.  The amendments were a response to a U.S. Court of Appeals for the D.C. Circuit decision, which held that the Department’s misrepresentation regulations exceeded its authority in three respects.  The court vacated one provision and remanded two others for actions consistent with its opinion.  The Department has now acted to amend or remove those regulatory provisions.

The amendments change in certain limited respects the scope of the misrepresentation regulations and the consequences of non-compliance. The Department of Education acted to:

• Remove the words “or confuse” from the definition of “misrepresentation” in 34 C.F.R. § 668.71.  As a result, the rule includes within its scope only false and misleading, and not simply confusing but non-deceitful, statements.
• Remove the category of misrepresentations “regarding the eligible institution” from 34 C.F.R. § 668.71 and the category of misrepresentations related to an institution’s “relationship with the Department of Education”, previously prohibited by 34 C.F.R. § 668.75.  The amendment limits the rule’s application to only the three categories of misrepresentation specifically identified in the Higher Education Act: misrepresentations about the nature of an institution’s educational programs, its financial charges, and the employability of graduates.
• Modify 34 C.F.R. §§ 668.71(a)(1) and (a)(2) such that they apply only to an institution that is provisionally certified to participate in Title IV programs.  Provisionally certified institutions enjoy fewer due process protections than “fully” certified institutions.  The amendment clarifies that only a provisionally certified institution may have its program participation agreement revoked or its Title IV participation limited without the due process requirements that apply to fully certified institutions, which are set forth in 34 C.F.R. pt. 668, subpt. G.  To fine a fully certified institution, or to limit, suspend, or terminate a fully certified institution’s Title IV participation, based on a substantial misrepresentation, the Department would have to initiate a proceeding under subpt. G.