Avoid Misrepresentations to Prospective and Current Students

Students and parents increasingly view higher education as a commodity and want “value” from their college experience. United Educators (UE) has seen an uptick in claims alleging factual misrepresentations made to applicants and students for failing to provide the value expected or causing other harm. These claims, which arise in many contexts ranging from institution or program accreditation to student discipline, create potential liability (including costly class actions) and reputational risk for schools.  

Mitigate risks at your college or university with a comprehensive approach to minimizing opportunities for misrepresentations — including in marketing, promotional, and other written materials — and correcting misrepresentations that occur.  

Legal Issues 

Claims of factual misrepresentation may arise from many “promises” educational institutions make, and students typically challenge them under state law.  

Common legal theories include:  

• Consumer protection or unfair/deceptive trade practices laws. State statutes protect purchasers of goods or services from defective products or fraudulent business practices.
• Fraudulent or negligent misrepresentation. One party might make a representation knowing it was false or without exercising reasonable care, intending to induce the other to rely on it.  
• Unjust enrichment. One party receives a benefit from the other without appropriate compensation.  
• Breach of contract. This is a violation of agreed terms and conditions binding both parties.  

Defending such claims can be difficult because they’re highly fact specific. Resolution often depends on parsing statements carefully and comparing them to applicable legal definitions.  

 In addition to suing (or threatening to sue) their schools, dissatisfied students frequently complain to accreditors or the Department of Education (ED) about misrepresentations.  

Problem Areas 

Problematic statements on which students rely can be written or verbal and tend to occur in these areas:  

Institutional Websites and Promotional Materials  

Colleges and universities market themselves using many formats, starting with their websites and digital advertising. Most have active social media accounts and contact prospects and applicants through email and text. Many also still rely on traditional methods — advertising in print and broadcast media, mailing brochures, and meeting high school students personally.  

Misleading or false statements about your institution and its offerings can occur in any format. If a student enrolls in reliance on these representations and suffers damage, misstatements that might have seemed innocuous when made could come back to haunt your school through litigation, scrutiny from ED, or adverse accreditor action.  

Disciplinary Procedures and Handbooks  

Students dissatisfied by the outcome of a Title IX or discipline process frequently claim written disciplinary procedures or handbooks created an enforceable contract. Students allege a breach of this contract through major or minor deviations from the process described.  

Public institutions may face due process violation claims. Looking at specific language, courts may agree.  

Safety and Security  

Websites and marketing materials frequently tout an institution’s safety, which particularly appeals to parents. However, these materials may not note the school’s Clery Act statistics or its Title IX office.  

If students who were led to believe campus was “safe” are victimized, they and their families may blame the institution for failing to warn or protect them.  

Recruiting 

As competition for students increases, recruiters, who sometimes have quotas, can make intentional or inadvertent misrepresentations. Common statements, if made without qualification, can create problems.  

Examples include: 

• Completing a degree or program qualifies students for certification or a licensing examination 
• The school or program has full accreditation and instructors are experts in the field 
• A high percentage of graduates quickly land well-paying jobs  
• Students will complete their degree in four years  
• Academic credits are transferrable to other institutions  
• Generous financial aid is available with easy loan repayment terms  

Admissions 

Staff may oversell applicants (and their parents) on facilities like a campus counseling center — which, if understaffed and unable to meet students’ increasing mental health needs, may have to refer people elsewhere.  

Or admissions staff might describe the school’s extensive study abroad opportunities without explaining the programs are run by third-party providers, not the school.   

Accreditation

Institutions may land in hot water over inaccurate accreditation statements. For example, a representative might say a school is “fully accredited” when accreditation is pending or provisional — and perhaps eventually denied.  

Sometimes accreditation doesn’t materialize after institutions tell applicants it is expected. Accreditation problems may be most common with programs preparing students for professional certification or licensure, including teaching, nursing, or law. Since a degree from an accredited institution is typically necessary to apply for a license, disappointed students may demand tuition refunds and claim lost income and reduced earning capacity. 

Schools facing financial difficulty also are vulnerable. Statements about accreditation could be true when made but if the institution later must reduce or eliminate programs or faculty, students may be left in limbo or need to transfer.  

Borrower Defense to Repayment 

Borrower Defense to Repayment (BDR) means full or partial federal student loan discharge for people who show their schools engaged in certain misconduct — such as making misrepresentations about high job placement rates — or closed before students could graduate. ED created the program in the 1990s but first used it on a wide scale when for-profit chain Corinthian Colleges closed in 2015, a result of federal and state investigations of Corinthian’s deceptive recruitment practices. 

While BDR has been used primarily in connection with for-profits (including the University of Phoenix), students at traditional nonprofit institutions also are eligible. Students typically must apply for discharge, although it was granted automatically in the Corinthian case.  

ED announced new BDR regulations making it easier to qualify for debt relief. Changes took effect July 1, 2023, but an association of for-profit colleges sued. In April 2024, a federal appeals court ordered a nationwide injunction against the new regulations and postponed their effective date until final resolution of the case, characterizing some of the regulations’ provisions as “almost certainly unlawful.”

Regardless of the litigation’s status, promptly consult counsel about options for response to any Borrower Defense to Repayment Application you receive from ED alleging misconduct.  

Take These Actions to Help Reduce Liability 

• Check for written misstatements. Review your institution’s website, brochures, social media accounts, handbooks, and other materials for factual statements on which applicants might rely when making enrollment decisions. Ensure statements about certification or licensing eligibility, for example, explicitly describe limitations.  
• Use disclaimers. Include prominent, clear disclaimers on your website and hard copy materials. State that student handbooks and disciplinary procedures aren’t contracts.  
• Review recruiter practices. If your institution employs its own recruiters, observe and evaluate their practices, including verbal statements to prospective students. Mandate training if you discover misrepresentations. If you outsource recruiting, your options may be limited, depending on contractual language and length. For example, contracts with for-profit online program managers (OPMs) may bundle other services like recruiting. Some contracts give OPMs control over recruiting activities, so institutions with these contracts can do little about aggressive tactics. Affected institutions should consult counsel and carefully evaluate language in current or prospective contracts with OPMs. 
• Monitor admissions. Examine your admissions process, particularly regarding promises staff might make about campus programs, facilities, or services. Provide training on the type of statements to avoid.  
• Assess accreditation issues. Review digital and hard copy promotional materials, bulletins, and statements to determine what representations students received (and if any disclaimers were included) about accreditation before enrolling, especially if potential accreditation loss is an issue. If your review reveals significant misstatements, consult counsel and take corrective action with their guidance. Also, if you ultimately reduce or close programs for financial reasons, prioritize student interests in that process.