[Federal Register Volume 78, Number 222 (Monday, November 18, 2013)]
[Rules and Regulations]
[Pages 68987-68991]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-27195]


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FEDERAL TRADE COMMISSION

16 CFR Part 254


Guides for Private Vocational and Distance Education Schools

AGENCY: Federal Trade Commission.

ACTION: Final rule; revisions to Guides.

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SUMMARY: The Federal Trade Commission (``FTC'' or ``Commission'') has 
completed its regulatory review of the Guides for Private Vocational 
and Distance Education Schools (``Vocational School Guides'' or 
``Guides'') as part of its systematic review of all current FTC rules 
and guides and issues its revisions.

DATES: This action is effective as of November 18, 2013.

ADDRESSES: Requests for copies of this rule should be sent to the 
Public Reference Branch, Room 130, Federal Trade Commission, 600 
Pennsylvania Avenue NW., Washington, DC 20580. The notice is also 
available on the Commission's Web site, http://www.ftc.gov.

FOR FURTHER INFORMATION CONTACT: Maria Del Monaco, Attorney, East 
Central Region, Federal Trade Commission, (216) 263-3405, 1111

[[Page 68988]]

Superior Avenue, Suite 200, Cleveland, Ohio 44114.

SUPPLEMENTARY INFORMATION:

I. Introduction

    The Commission reviews all Commission rules and guides 
periodically. These reviews seek information about the costs and 
benefits of the Commission's rules and guides as well as their 
regulatory and economic impact. The information obtained assists the 
Commission in identifying rules and guides that warrant modification or 
rescission. These Guides, like other industry guides issued by the 
Commission, are ``administrative interpretations of laws administered 
by the Commission for the guidance of the public in conducting its 
affairs in conformity with legal requirements.'' 16 CFR 1.5. Conduct 
inconsistent with the Guides may result in corrective action by the 
Commission under applicable statutory provisions.

II. Background

    The Commission promulgated the Guides (then titled the ``Guides for 
Private Vocational and Home Study Schools'') in May 1972, and they 
became effective on August 14, 1972 (37 FR 9665 (May 16, 1972)). The 
Commission amended the Guides effective October 9, 1998. These 
amendments added a provision addressing misrepresentations related to 
postgraduation employment. In order to streamline the Guides, certain 
provisions not specific to vocational schools and a section suggesting 
affirmative disclosures were deleted (63 FR 42570 (Aug. 10, 1998), as 
amended at 63 FR 72350 (Dec. 31, 1998)).\1\
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    \1\ The deleted affirmative disclosures included the school's 
make-up work policy, costs of purchasing the textbooks and equipment 
needed for the courses, a description of the school's physical 
facilities, and a description of the school's placement service.
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    On July 30, 2009, the Commission published a Federal Register 
Notice (``FRN'') seeking comment on the Guides as part of the 
Commission's ongoing periodic review of its rules and guides to 
determine their current effectiveness and impact (74 FR 37973).\2\ The 
FRN listed eighteen questions, with additional subparts, on which 
comments were solicited. Generally, the FRN sought comments regarding 
the Guides' benefits to consumers and burdens on businesses. In 
addition, the FRN's questions addressed whether modifications are 
needed to increase the Guides' benefits, reduce their costs, or address 
changes in relevant technology, economic conditions, or other 
applicable law.
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    \2\ Previously, a Notice of Intent to Request Public Comments 
gave notice that the Commission would initiate a review of, and 
solicit public comments on, the Guides during 2009 (74 FR 6129 (Feb. 
5, 2009)).
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    The Guides are intended to advise proprietary businesses that offer 
vocational training courses, either on the school's premises or through 
distance education, how to avoid deceptive practices in connection with 
the advertising, promotion, marketing, or sale of their courses or 
programs. Specifically, the Vocational School Guides address 
misrepresentations in the description of a school, including 
misrepresentations that the school is affiliated with the government or 
is an employment agency. The Guides also address misleading 
representations related to the accreditation and approval of the 
school, the transferability of credit received at the school to other 
institutions, and the use of testimonials and endorsements. The Guides 
caution schools against misrepresenting the qualifications of teachers, 
the nature of courses, the availability of employment after graduation, 
the availability of financial assistance, and enrollment 
qualifications. They also address the use of deceptive diplomas or 
certificates. Finally, the Guides warn against using deceptive sales 
practices, such as placing classified ads that appear to be ``help 
wanted'' ads. The Guides make clear that practices inconsistent with 
them may violate section 5 of the FTC Act.

III. Regulatory Review Comments and Responses

    The Commission received eight comments in response to the FRN.\3\ 
They were submitted by the U.S. Department of Education (``DOE''); the 
National Consumer Law Center (``NCLC''); the National Association for 
College Admission Counseling (``NACAC''); the American Association of 
Collegiate Registrars and Admissions Officers (``AACRAO''); the Career 
College Association (now known as the Association of Private Sector 
Colleges and Universities, hereinafter ``APSCU''); the Council of 
Recognized National Accrediting Agencies (``CRNAA''); Consumers Union; 
and Professor George Gollin of the University of Illinois, Urbana-
Champaign, who is a board member of the Council for Higher Education 
Accreditation (``CHEA'').\4\
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    \3\ All comments are in the public record and available for 
inspection at the Commission's Web site, http://www.ftc.gov/os/comments/vocationalschoolguides/.
    \4\ NCLC is a nonprofit organization specializing in issues 
commonly faced by low income consumers. NACAC is a nonprofit 
association of high school counselors and college admissions 
officers, and AACRAO is a nonprofit association of higher education 
admissions and registration professionals. APSCU is a membership 
organization representing for-profit higher education institutions. 
CRNAA is an alliance of six accrediting bodies which are recognized 
by the Secretary of DOE as reliable authorities on the quality of 
education and training offered by the institutions they accredit. 
Consumers Union is the nonprofit publisher of Consumer Reports, and 
CHEA is an organization of colleges and universities that advocates 
for self-regulation of academic quality through accreditation.
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    Seven of the eight comments stated that the Guides should be 
retained.\5\ Commenters described the Guides as filling a critical 
need, providing clear instruction regarding acceptable practices in the 
vocational schools sector. The comments noted the many instances of 
fraud in the industry and urged that the Guides be strengthened and 
enforced more vigorously.
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    \5\ This FRN discusses the comments received by topic, not 
question number, because most of the comments responded by topic 
rather than by question number.
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    APSCU, the sole dissenter, would retain the Guides only for 
unaccredited and unlicensed vocational schools. It believes the Guides 
are unnecessary and create additional burdens for institutions that are 
licensed by a state or accredited by a DOE-recognized accrediting 
agency. The Commission disagrees with this statement for at least three 
reasons. First, APSCU identified no material inconsistencies between 
the Guides and the standards of any accrediting agencies or state 
licensing bodies and thus failed to identify how the Guides impose 
additional burdens. Second, the Guides simply identify deceptive 
practices that are unlawful under the FTC Act and, therefore, do not 
impose any burden beyond that already associated with complying with 
section 5 of the FTC Act. Third, exempting accredited and licensed 
vocational schools from the Guides could be read as implying that 
circumstances have changed since the Guides were adopted, when, in 
fact, law enforcement actions targeting deceptive practices of 
accredited and licensed vocational schools indicate that some of these 
entities have continued to engage in such practices.\6\
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    \6\ E.g, United States ex rel. Washington v. Educ. Mgmt. Corp., 
871 F. Supp.2d 433 (W.D. Pa. 2012); Settlement in United States ex 
rel. Goodstein v Kaplan, Inc., et al., E.D. Pa. Civ. Action No. 2:07 
cv 1491 (July 15, 2011), available at http://www.justice.gov/usao/pae/News/2011/Jul/chi_settlementagreement.pdf, and News Release, 
$1.6 Million Settlement Agreement Announced with CHI Institute For 
Alleged Failures to Comply with Federal Student Financial Aid 
Requirements, available at http://www.justice.gov/usao/pae/News/2011/Jul/chi_release.pdf (July 22, 2011); GAO, For-Profit Colleges: 
Undercover Testing Finds Colleges Encouraged Fraud and Engaged in 
Deceptive and Questionable Marketing Practices, GAO-10-948T (Aug. 4, 
2010), available at http://www.gao.gov/products/GAO-10-948T.

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[[Page 68989]]

    Many of the comments urging retention of the Guides also focused 
heavily on the recruitment practices and representations of vocational 
schools. In response, the Commission proposes to modify the Guides in 
four respects. These changes address the practices highlighted in the 
comments, and advise against use of particular types of misleading 
representations.
    First, DOE, NCLC, and Consumers Union urged that the Guides address 
with greater specificity misrepresentations, frequently used in 
recruitment, on such topics as salaries, job placement, and completion 
rates and time frames. Accordingly, the Commission has revised the 
scope and application section of the Guides in section 254.0(b) to 
reference specifically the recruitment process. The revised Guides also 
address misrepresentations about completion and dropout rates and 
postgraduation employment prospects.
    Second, DOE suggested that the Guides address misleading statements 
indicating that a program of instruction would render a student 
eligible to take a licensing exam. The Commission believes that doing 
so is warranted, and has modified section 254.3 of the Guides to 
address instances in which institutions misrepresent that completion of 
a program will qualify students to take a licensing exam.
    Third, NCLC and Consumers Union recommended that the Guides be 
modified to cover representations relating to admissions testing and 
students' suitability for particular courses. In this regard, the 
Commission has amended section 254.5 of the Guides to state more 
explicitly that misrepresenting a student's score on an admission test 
is a deceptive practice. In addition, the revised Guides specify in 
subsections (c) and (d) of section 254.5 that it is a deceptive 
practice to provide inaccurate information regarding the time required 
to complete a course or program of instruction or a student's 
likelihood of success in a school or program of instruction.
    Finally, DOE urged that the Guides address representations 
regarding transfer of course credit from another school, assistance 
provided to students facing language or other barriers to learning, the 
source of funding for student loans, and security policies and crime 
statistics. In response to these comments, the Commission has amended 
section 254.4(a) of the Guides to address specific misrepresentations 
relating to student financial assistance, assistance overcoming 
language barriers or learning disabilities, the extent to which 
students will receive credit for courses completed at other 
institutions, security policies, and crime statistics.
    The Commission has decided not to adopt two other changes to the 
Guides which were suggested in the comments. First, NCLC, Consumers 
Union, and NACAC opined that the Guides should define ``clearly and 
conspicuously.'' Only NACAC, however, provided a reason for doing so, 
which was to increase the public's awareness of the Guides. We do not 
believe that adding a definition to the Guides would significantly 
advance that goal. The Guides have included the words ``clearly and 
conspicuously'' for forty years without defining the term. Many FTC 
guides and rules employ this phrase without a detailed definition.\7\ 
As in other contexts where we have declined to adopt a definition, the 
Commission believes it is unnecessary to define this phrase in the 
Guides because the concept is well developed in Commission case law and 
policy statements, and mandating rigid ``clear and conspicuous'' 
criteria would undermine the flexibility that this standard 
provides.\8\
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    \7\ See, e.g., Guides for the Jewelry, Precious Metals, and 
Pewter Industries, 16 CFR 23.7(b)(4); Telemarketing Sales Rule, 16 
CFR 310.3(a)(1), 310.3(a)(3)(iii), 310.4(b)(1)(v)(A)(i), 310.4(d), 
310.4(e), & 310.6(b)(6); Trade Regulation Rule on Mail or Telephone 
Order Merchandise, 16 CFR 435.2(a)(1)(i), 435.2(b)(1), & 
435.2(b)(2); Business Opportunity Rule, 16 CFR 437.1(e), 
437.3(a)(5)(ii); but see Privacy of Consumer Financial Information, 
16 CFR 313.3(b) (defining clear and conspicuous); Trade Regulation 
Rule Pursuant to the Telephone Disclosure and Dispute Resolution Act 
of 1992, 16 CFR 308.3(d)(2) (same).
    \8\ 60 FR 43842, 43843-44 (1995) (rejecting comments that 
``clear and conspicuous'' should be defined in the Telemarketing 
Sales Rule); 74 FR 53124, 53130 n.55 (2009) (the Commission 
frequently adopts ``clear and conspicuous'' standard for disclosures 
because of its flexibility).
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    Finally, DOE recommended expanding the scope of the Guides to 
include resident primary and secondary schools and institutions of 
higher education offering at least a two-year program of accredited 
college level studies generally acceptable for credit toward a 
bachelor's degree. Presently the Guides exclude such schools and 
institutions.\9\ The Commission declines to expand the scope of the 
Guides because this proposal raises issues that are not addressed by 
the record before the Commission. For example, resident primary and 
secondary schools are unlike institutions of higher education in many 
respects, and those differences may result in different considerations 
with respect to the guidance provided by the Guides. Because the record 
does not address these issues, the Commission has decided not to expand 
the Guides. However, the scope of the Guides does not alter the scope 
of section 5 of the FTC Act, and resident primary and secondary schools 
and institutions of higher education within the scope of the Act are 
covered by its proscription of deceptive and unfair conduct. 
Consequently, the Commission may use its enforcement authority to 
remedy deceptive acts and practices by such schools, including 
deceptive conduct described in the Guides.\10\
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    \9\ 16 CFR 254.0(a). Independent of the Guides, true nonprofit 
corporations are outside the scope of the FTC Act. 15 U.S.C. 44. See 
California Dental Ass'n v. FTC, 526 U.S. 756, 766 (1999).
    \10\ The Commission notes that there have been reports of 
problematic practices by a range of for-profit colleges. See, e.g., 
S. Comm. on Health, Education, Labor and Pensions, 112th Cong., For 
Profit Higher Education: The Failure to Safeguard the Federal 
Investment and Ensure Student Success (Comm. Print 2012), available 
at http://www.gpo.gov/fdsys/pkg/CPRT-112SPRT74931/pdf/CPRT-112SPRT74931.pdf. Although the Guides specifically address only for-
profit institutions that provide vocational and distance education, 
as described in section 254.0, the Commission believes that the 
Guides can also provide useful guidance to any for-profit colleges 
that engage in similar practices. As noted above, the Commission has 
authority to bring law enforcement actions to curb deceptive or 
unfair practices in this area regardless of whether an institution 
that is covered by section 5 of the FTC Act also falls within 
section 254.0.
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IV. Conclusion

    For the reasons described above, the Commission has determined to 
retain the Guides, with the revisions indicated below.

List of Subjects in 16 CFR Part 254

    Advertising, Trade practices.

Text of Amendments

    For the reasons set forth in the preamble, the Federal Trade 
Commission amends 16 CFR Part 254 as follows:

PART 254--GUIDES FOR PRIVATE VOCATIONAL AND DISTANCE EDUCATION 
SCHOOLS

0
1. The authority citation for part 254 continues to read as follows:

    Authority: 38 Stat. 717, as amended; 15 U.S.C. 41-58.

0
2. Amend Sec.  254.0 by revising paragraph (b) to read as follows:


Sec.  254.0  Scope and application.

* * * * *
    (b) These Guides represent administrative interpretations of laws 
administered by the Federal Trade Commission for the guidance of the 
public in conducting its affairs in conformity with legal requirements. 
These Guides specifically address the application of section 5 of the 
FTC Act

[[Page 68990]]

(15 U.S.C. 45) to the advertising, promotion, marketing, and sale of, 
and the recruitment of students for, courses or programs of instruction 
offered by private vocational or distance education schools. The Guides 
provide the basis for voluntary compliance with the law by members of 
the industry. Practices inconsistent with these Guides may result in 
corrective action by the Commission under section 5 of the FTC Act if, 
after investigation, the Commission has reason to believe that the 
practices fall within the scope of conduct declared unlawful by the 
statute.

0
3. Revise Sec.  254.1 to read as follows:


Sec.  254.1  Definitions.

    (a) Accredited. A school or program of instruction that has been 
evaluated and found to meet established criteria by an accrediting 
agency or association recognized for such purposes by the U.S. 
Department of Education.
    (b) Approved. A school or program of instruction that has been 
recognized by a State or Federal agency as meeting educational 
standards or other related qualifications as prescribed by that agency 
for the school or program of instruction to which the term is applied. 
The term is not and should not be used interchangeably with 
``Accredited.'' The term ``Approved'' is not justified by the mere 
grant of a corporate charter to operate or license to do business as a 
school and should not be used unless the represented ``approval'' has 
been affirmatively required or authorized by State or Federal law.
    (c) Industry Member. Industry Members are the persons, firms, 
corporations, or organizations covered by these Guides, as explained in 
Sec.  254.0(a).

0
4. Revise Sec.  254.2 to read as follows:


Sec.  254.2  Deceptive trade or business names.

    (a) It is deceptive for an Industry Member to misrepresent, 
directly or indirectly, expressly or by implication, the nature of the 
school, its Accreditation, programs of instruction, methods of 
teaching, or any other material fact through the use of any trade or 
business name, label, insignia, or designation, or in any other manner.
    (b) It is deceptive for an Industry Member to deceptively conceal 
in any way the fact that it is a school or to misrepresent, directly or 
indirectly, expressly or by implication, through the use of a trade or 
business name or in any other manner that:
    (1) It is a part of or connected with a branch, bureau, or agency 
of the U.S. Government, including, but not limited to, the U.S. 
Department of Education, or of any State, or civil service commission; 
or
    (2) It is an employment agency or an employment agent or authorized 
training facility for any industry or business.

0
5. Revise Sec.  254.3 to read as follows:


Sec.  254.3  Misrepresentation of extent or nature of Accreditation or 
Approval.

    (a) It is deceptive for an Industry Member to misrepresent, 
directly or indirectly, expressly or by implication, the nature, 
extent, or purpose of any Approval by a State or Federal agency or 
Accreditation by an accrediting agency or association. For example, an 
Industry Member should not:
    (1) Represent, without qualification, that its school is Accredited 
unless all courses and programs of instruction have been Accredited by 
an accrediting agency recognized by the U.S. Department of Education. 
If an Accredited school offers courses or programs of instruction that 
are not Accredited, all advertisements or promotional materials 
pertaining to those courses or programs, and making reference to the 
Accreditation of the school, should clearly and conspicuously disclose 
that those particular courses or programs are not Accredited.
    (2) Represent that its school or program of instruction is 
Approved, unless the nature, extent, and purpose of that Approval are 
disclosed.
    (3) Misrepresent the extent to which a student successfully 
completing a course or program of instruction will be able to transfer 
any credits the student earns to any other postsecondary institution.
    (b) It is deceptive for an Industry Member to misrepresent, 
directly or indirectly, expressly or by implication, that a school or 
program of instruction has been Approved by a particular industry, or 
that successful completion of a course or program of instruction 
qualifies the student for admission to a labor union or similar 
organization or for receiving a State or Federal license to perform 
certain functions.
    (c) It is deceptive for an Industry Member to misrepresent, 
directly or indirectly, expressly or by implication, that its courses 
or programs of instruction are recommended by vocational counselors, 
high schools, colleges, educational organizations, employment agencies, 
or members of a particular industry, or that it has been the subject of 
unsolicited testimonials or endorsements from former students. It is 
deceptive for an Industry Member to use testimonials or endorsements 
that do not accurately reflect current practices of the school or 
current conditions or employment opportunities in the industry or 
occupation for which students are being trained.

    Note to paragraph (c): The Commission's Guides Concerning Use of 
Endorsements and Testimonials in Advertising (part 255 of this 
chapter) provide further guidance in this area.

    (d) It is deceptive for an Industry Member to misrepresent, 
directly or indirectly, expressly or by implication, that its courses 
or programs of instruction fulfill a requirement that must be completed 
prior to taking a licensing examination.
0
6. Amend Sec.  254.4 by:
0
a. Revising paragraphs (a) introductory text, (a)(2), and (a)(4) 
through (7).
0
b. Adding paragraphs (a)(8) through (11).
0
c. Revising paragraphs (b) through (d).
0
d. Adding paragraph (e).
    The revisions and additions read as follows:


Sec.  254.4  Misrepresentation of facilities, services, qualifications 
of staff, status, and employment prospects for students after training.

    (a) It is deceptive for an Industry Member to misrepresent, 
directly or indirectly, expressly or by implication, in advertising, 
promotional materials, recruitment sessions, or in any other manner, 
the size, location, services, facilities, curriculum, books and 
materials, or equipment of its school or the number or educational 
qualifications of its faculty and other personnel. For example, an 
Industry Member should not:
* * * * *
    (2) Misrepresent, through statements or pictures, or in any other 
manner, the nature or efficacy of its courses, training devices, 
methods, or equipment.
* * * * *
    (4) Misrepresent the availability, amount, or nature of any 
financial assistance available to students, including any Federal 
student financial assistance. If the cost of training is financed in 
whole or in part by loans, students should be informed that loans must 
be repaid whether or not they are successful in completing the program 
and obtaining employment.
    (5) Misrepresent that a private entity providing any financial 
assistance to the students is part of the Federal government or that 
loans from the private entity have the same interest rate or repayment 
terms as loans received from the U.S. Department of Education.
    (6) Misrepresent the nature of any relationship between the school 
or its

[[Page 68991]]

personnel and any government agency, or that students of the school 
will receive preferred consideration for employment with any government 
agency.
    (7) Misrepresent that certain individuals or classes of individuals 
are members of its faculty or advisory board, have prepared 
instructional materials, or are otherwise affiliated with the school.
    (8) Misrepresent the nature and extent of any personal instruction, 
guidance, assistance, or other service, including placement assistance 
and assistance overcoming language barriers or learning disabilities, 
it will provide students either during or after completion of a course.
    (9) Misrepresent the extent to which a prospective student will 
receive credit for courses or a program of instruction already 
completed at other postsecondary institutions.
    (10) Misrepresent the percentage of students who withdraw from a 
course or program of instruction, or the percentage of students who 
complete or graduate from a course or program of instruction.
    (11) Misrepresent security policies or crime statistics that the 
school must maintain.
    (b) It is deceptive for an Industry Member to misrepresent, 
directly or indirectly, expressly or by implication, that it is a 
nonprofit organization or that it is affiliated or otherwise connected 
with any public institution or private religious or charitable 
organization.
    (c) It is deceptive for an Industry Member that conducts its 
instruction by correspondence, or other form of distance education, to 
fail to clearly and conspicuously disclose that fact in all promotional 
materials.
    (d) It is deceptive for an Industry Member to misrepresent, 
directly or indirectly, expressly or by implication, that a course or 
program of instruction has been recently revised or instructional 
equipment is up-to-date, or misrepresent its ability to keep a course 
or program of instruction current and up-to-date.
    (e) It is deceptive for an Industry Member, in promoting any course 
or program of instruction in its advertising, promotional materials, or 
in any other manner, to misrepresent, directly or indirectly, expressly 
or by implication, whether through the use of text, images, 
endorsements, or by other means, the availability of employment after 
graduation from a school or program of instruction, the specific type 
of employment available to a student after graduation from a school or 
program of instruction, the success that the Industry Member's 
graduates have realized in obtaining such employment, including the 
percentage of graduates who have received employment, or the salary or 
salary range that the Industry Member's graduates have received, or can 
be expected to receive, in such employment.
    Note to paragraph (e): The Commission's Guides Concerning Use of 
Endorsements and Testimonials in Advertising (part 255 of this chapter) 
provide further guidance in this area.


0
7. Revise Sec.  254.5 to read as follows:


Sec.  254.5  Misrepresentations of enrollment qualifications or 
limitations.

    (a) It is deceptive for an Industry Member to misrepresent, 
directly or indirectly, expressly or by implication, the nature or 
extent of any prerequisites or qualifications for enrollment in a 
school or program of instruction.
    (b) It is deceptive for an Industry Member to misrepresent, 
directly or indirectly, expressly or by implication, that the lack of a 
high school education or prior training or experience is not an 
impediment to successful completion of a course or program of 
instruction or obtaining employment in the field for which the course 
or program of instruction provides training.
    (c) It is deceptive for an Industry Member to misrepresent, 
directly or indirectly, expressly or by implication, the time required 
to complete a course or program of instruction.
    (d) It is deceptive for an Industry Member to misrepresent, 
directly or indirectly, expressly or by implication, a student's 
likelihood of success in a school or program of instruction, including, 
but not limited to, misrepresenting the student's score on any 
admissions test.

0
8. Revise Sec.  254.6 to read as follows:


Sec.  254.6  Deceptive use of diplomas, degrees, or certificates.

    (a) It is deceptive for an Industry Member to issue a degree, 
diploma, certificate of completion, or any similar document, that 
misrepresents, directly or indirectly, expressly or by implication, the 
subject matter, substance, or content of the course or program of 
instruction or any other material fact concerning the course or program 
of instruction for which it was awarded or the accomplishments of the 
student to whom it was awarded.
    (b) It is deceptive for an Industry Member to offer or confer an 
academic, professional, or occupational degree, if the award of such 
degree has not been Approved by the appropriate State educational 
agency or Accredited by a nationally recognized accrediting agency, 
unless it clearly and conspicuously discloses, in all advertising and 
promotional materials that contain a reference to such degree, that its 
award has not been Approved or Accredited by such an agency.
    (c) It is deceptive for an Industry Member to offer or confer a 
high school diploma unless the program of instruction to which it 
pertains is substantially equivalent to that offered by a resident 
secondary school, and unless the student is informed, by a clear and 
conspicuous disclosure in writing prior to enrollment, that the 
Industry Member cannot guarantee or otherwise control the recognition 
that will be accorded the diploma by institutions of higher education, 
other schools, or prospective employers, and that such recognition is a 
matter solely within the discretion of those entities.
0
9. Revise Sec.  254.7 to read as follows:


Sec.  254.7  Deceptive sales practices.

    (a) It is deceptive for an Industry Member to use advertisements or 
promotional materials that misrepresent, directly or indirectly, 
expressly or by implication, that employment is being offered or that a 
talent hunt or contest is being conducted. For example, captions such 
as, ``Men/women wanted to train for * * * ,'' ``Help Wanted,'' 
``Employment,'' ``Business Opportunities,'' and words or terms of 
similar import, may falsely convey that employment is being offered and 
therefore should be avoided.
    (b) It is deceptive for an Industry Member to fail to disclose to a 
prospective student, prior to enrollment, the total cost of the program 
of instruction and the school's refund policy if the student does not 
complete the program of instruction.
    (c) It is deceptive for an Industry Member to fail to disclose to a 
prospective student, prior to enrollment, all requirements for 
successfully completing the course or program of instruction and the 
circumstances that would constitute grounds for terminating the 
student's enrollment prior to completion of the program of instruction.

    By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 2013-27195 Filed 11-15-13; 8:45 am]
BILLING CODE 6750-01-P