A school is deemed to have engaged in substantial misrepresentation when the school itself, one of its representatives, or other related parties (see below), makes a substantial misrepresentation regarding the school, including about the nature of its educational program, its financial charges, or the employability of its graduates.

Misrepresentation

Misrepresentation is defined as," A false, erroneous or misleading statement made directly or indirectly to

• a student, prospective student, or any member of the public, or an accrediting agency, a state agency, or the Department.

A misleading statement includes any statement that has the likelihood or tendency to deceive or confuse. A statement is any communication made in writing, visually, orally, or through other means. This definition applies to statements made by

• an eligible school

• one of its representatives, or

• any ineligible institution, organization, or person with whom the eligible institution has an agreement to provide educational programs, or to provide marketing, advertising, recruiting or admissions services.

Misrepresentation includes the dissemination of a student endorsement or testimonial that a student gives either under duress or because the school required the student to make such an endorsement or testimonial to participate in a program.

Substantial Misrepresentation

Substantial misrepresentation is defined as any misrepresentation on which the person to whom it was made could reasonably be expected to rely, or has reasonably relied, to that person's detriment.

Substantial misrepresentations are prohibited in all forms, including those made in any advertising, promotional materials, or in the marketing or sale of courses or programs of instruction offered by the institution.

Misrepresentation Sanctions

If the Department of Education determines that an eligible institution has engaged in substantial misrepresentation, it may

• revoke the eligible institution's Program Participation Agreement;

• impose limitations on the institution's participation in the FSA programs;

• deny participation applications made on behalf of the institution; or

• initiate a proceeding against the eligible institution under subpart G of 34 CFR 668.

Relationship with the Department of Education 34 CFR 668.75

An eligible institution, its representatives, or any ineligible institution, organization, or person with whom the eligible institution has an agreement may not describe the eligible institution’s participation in the Title IV, HEA programs in a manner that suggests approval or endorsement by the U.S. Department of Education of the quality of its educational programs.