Education Department Releases OPM Guidance on Misrepresentation
The Department of Education issued guidance that clarifies when certain statements that are made by institutions or their external service providers, including online program management companies (OPMs), may qualify as unlawful misrepresentation.
Under the Higher Education Act, colleges and universities are prohibited from providing false, misleading, or inaccurate information about their educational programs, financial charges, or employability of their graduates. These same requirements apply to third-party entities – referred to in the guidance as “external service providers” – contracted by the institution. Institutions are ultimately responsible for statements made by such providers and may be subject to fines or loss of Title IV eligibility if violations occur.
The guidance provides three examples of the types of statements that, depending on the circumstances, are likely to qualify as misrepresentation when made by an institution or an external services provider like an OPM:
- Inaccurately identifying an individual employed by an external servicer provider as being employed by the eligible institution;
- Inaccurately presenting a sales representative or recruiter employed by an eligible institution or an external service provider as an academic advisor, such as by referring to them as a “counselor;” and
- Describing a program, or any of its components or resources, provided in substantial part by the external service provider as “the same as” a corollary residential or campus-based version of the program provided by the eligible institution.
According to the guidance, misrepresentation may occur if an OPM’s employees use school-associated email addresses or signatures that imply they are employees of the institution or if such employees fail to inform students that they are not directly employed by the college or university. Similarly, use of certain titles, such as “student success advisor,” “student support specialist,” or “admissions counselor” may lead to an inference of misrepresentation. If there are substantive differences between the programs offered by OPMs and those offered by the institution, such as different admissions criteria, faculty qualifications, or degree awarded, then describing OPM programs as equivalent to the campus-based programs offered by the institution is highly likely to constitute misrepresentation.
This week’s guidance on misrepresentation appears to be a more modest effort to target specific concerns with certain OPM practices than was the case in 2023, when the Department released controversial guidance on third-party servicers that appeared to be designed primarily to further limit OPMs. That guidance, which was broadly criticized due to its potentially devastating impact on campus operations, was eventually withdrawn.
For more information, please contact:
Jody Feder