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Proposed Rule

Private Vocational and Distance Education Schools

Action

Request For Public Comments.

Summary

As part of the Commission’s systematic review of all current FTC rules and guides, the Commission requests public comment on the overall costs, benefits, necessity, and regulatory and economic impact of the FTC’s guides for “Private Vocational and Distance Education Schools” (“Vocational School Guides” or “Guides”).

 

Table of Contents Back to Top

DATES: Back to Top

Written comments must be received by October 16, 2009.

ADDRESSES: Back to Top

Interested parties are invited to submit written comments electronically or in paper form. Comments should refer to “Vocational School Guides Review, Matter No. P097701” to facilitate the organization of comments. Please note that your comment - including your name and your state - will be placed on the public record of this proceeding, including on the publicly accessible FTC Website, at (http://www.ftc.gov/os/publiccomments.shtm).

Because comments will be made public, they should not include any sensitive personal information, such as an individual’s Social Security Number; date of birth; driver’s license number or other state identification number, or foreign country equivalent; passport number; financial account number; or credit or debit card number. Comments also should not include any sensitive health information, such as medical records or other individually identifiable health information. In addition, comments should not include any “[t]rade secret or any commercial or financial information which is obtained from any person and which is privileged or confidential . . .” as provided in Section 6(f) of the Federal Trade Commission Act (“FTC Act”), 15 U.S.C. 46(f), and FTC Rule 4.10(a)(2), 16 CFR 4.10(a)(2). Comments containing material for which confidential treatment is requested must be filed in paper form, must be clearly labeled “Confidential,” and must comply with FTC Rule 4.9(c), 16 CFR 4.9(c). [1]

Because paper mail addressed to the FTC is subject to delay due to heightened security screening, please consider submitting your comments in electronic form. Comments filed in electronic form should be submitted by using the following weblink: (https://secure.commentworks.com/ftc-VocationalSchoolGuides), and following the instructions on the web-based form. To ensure that the Commission considers an electronic comment, you must file it on the web-based form at the weblink (https://secure.commentworks.com/ftc-VocationalSchoolGuides). If this Notice appears at (http://www.regulations.gov/search/index.jsp), you may also file an electronic comment through that website. The Commission will consider all comments that regulations.gov forwards to it. You may also visit the FTC Website at (http://www.ftc.gov) to read the Notice and the news release describing it.

A comment filed in paper form should include the “Vocational School Guides Review, Matter No. P097701” reference both in the text and on the envelope, and should be mailed or delivered to the following address: Federal Trade Commission, Office of the Secretary, Room H-135 (Annex V), 600 Pennsylvania Avenue, NW, Washington, DC 20580. The FTC is requesting that any comment filed in paper form be sent by courier or overnight service, if possible, because U.S. postal mail in the Washington area and at the Commission is subject to delay due to heightened security precautions.

The FTC Act and other laws the Commission administers permit the collection of public comments to consider and use in this proceeding as appropriate. The Commission will consider all timely and responsive public comments that it receives, whether filed in paper or electronic form. Comments received will be available to the public on the FTC Website, to the extent practicable, at (http://www.ftc.gov/os/publiccomments.shtm). As a matter of discretion, the Commission makes every effort to remove home contact information for individuals from the public comments it receives before placing those comments on the FTC Website. More information, including routine uses permitted by the Privacy Act, may be found in the FTC’s privacy policy, at (http://www.ftc.gov/ftc/privacy.shtm).

FOR FURTHER INFORMATION CONTACT: Back to Top

Julie A. Lady, (216) 263-3409, Staff Attorney, East Central Region, Federal Trade Commission, 1111 Superior Avenue, Suite 200, Cleveland, Ohio 44114.

SUPPLEMENTARY INFORMATION: Back to Top

I. Background Back to Top

The Vocational School Guides are intended to advise proprietary businesses offering vocational training courses, either on the school’s premises or through distance education, how to avoid unfair or deceptive practices in connection with the advertising, promotion, marketing, or sale of their courses or programs. The Commission promulgated the Guides (then titled the “Guides for Private Vocational and Home Study Schools”) in May 1972. The guides 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 post-graduation employment. In order to streamline the Guides, certain provisions not specific to vocational schools and a section suggesting affirmative disclosures were deleted. [2] (62 FR 19703 (Aug. 10, 1998) as amended at 63 FR 72350 (Dec. 31, 1998)).

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. Schools are cautioned against misrepresenting the qualifications of teachers, the nature of the courses, the availability of employment after graduation, the availability of financial assistance, and enrollment qualifications. Also addressed is the use of deceptive diplomas or certificates. Finally, the Guides warn against using deceptive sales practices such as using classified ads that appear to be “help-wanted” ads.

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. Regulatory Review Program Back to Top

The Commission reviews all current 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. Therefore, the Commission solicits comments on, among other things, the economic impact of, and the continuing need for the Vocational School Guides; the benefits of the Guides to purchasers of vocational education; and the burdens the Guides place on businesses.

III. Request for Comment Back to Top

The Commission solicits comments on the following specific questions related to the Vocational School Guides:

(1) Is there a continuing need for the Guides as currently promulgated? Why or why not?

(2) What benefits have the Guides provided to consumers? What evidence supports the asserted benefits?

(3) What modifications, if any, should the Commission make to the Guides to increase their benefits to consumers?

(a) What evidence supports your proposed modifications?

(b) How would these modifications affect the costs and benefits of the Guides for consumers?

(c) How would these modifications affect the costs and benefits of the Guides for businesses, particularly small businesses?

(4) Should the Guides define “clearly and conspicuously,” given the guidance that industry members should make certain disclosures clearly and conspicuously? If so, why, and how? If not, why not?

(5) What impact have the Guides had on the flow of truthful information to consumers and on the flow of deceptive information to consumers? What evidence supports the asserted impact?

(6) What significant costs have the Guides imposed on consumers? What evidence supports the asserted costs?

(7) What modifications, if any, should be made to the Guides to reduce the costs imposed on consumers?

(a) What evidence supports your proposed modifications?

(b) How would these modifications affect the costs and benefits of the Guides for consumers?

(c) How would these modifications affect the costs and benefits of the Guides for businesses, particularly small businesses?

(8) Please provide any evidence that has become available since 1998 concerning consumer perception of or experience with private vocational and distance education schools. Does this new information indicate that the Guides should be modified? If so, why, and how? If not, why not?

(9) What benefits, if any, have the Guides provided to businesses, and in particular to small businesses? What evidence supports the asserted benefits?

(10) What modifications, if any, should be made to the Guides to increase their benefits to businesses, and particularly to small businesses?

(a) What evidence supports your proposed modifications?

(b) How would these modifications affect the costs and benefits of the Guides for consumers?

(c) How would these modifications affect the costs and benefits of the Guides for businesses, particularly small businesses?

(11) What significant costs, including costs of compliance, have the Guides imposed on businesses, particularly small businesses? What evidence supports the asserted costs?

(12) What modifications, if any, should be made to the Guides to reduce the costs imposed on businesses, and particularly on small businesses?

(a) What evidence supports your proposed modifications?

(b) How would these modifications affect the costs and benefits of the Guides for consumers?

(c) How would these modifications affect the costs and benefits of the Guides for businesses, particularly small businesses?

(13) What evidence is available concerning the degree of industry compliance with the Guides? Does this evidence indicate that the Guides should be modified? If so, why, and how? If not, why not?

(14) Is any of the guidance provided in the Guides no longer needed? If so, explain. Please provide supporting evidence.

(15) What potentially unfair or deceptive practices involving the advertising and promotional claims used by vocational and distance education schools in the advertising, promotion, marketing, and sale of courses or programs of instruction offered by private vocational or distance education schools, if any, are not covered or are not adequately covered by the Guides?

(a) What evidence demonstrates the existence of such practices? Please provide specific examples and indicate how and where such potentially unfair or deceptive practices occur.

(b) With reference to such practices, should the Guides be modified? If so, why, and how? If not, why not?

(16) What modifications, if any, should be made to the Guides to account for changes in relevant technology or economic conditions?

(a) What evidence supports the proposed modifications?

(b) How would these modifications affect the costs and benefits of the Guides for consumers and businesses, particularly small businesses?

(17) Do the Guides overlap or conflict with other federal, state, or local laws or regulations? If so, how?

(a) What evidence supports the asserted conflicts?

(b) With reference to the asserted conflicts, should the Guides be modified? If so, why, and how? If not, why not?

(c) Is there evidence concerning whether the Guides have assisted in promoting national consistency with respect to the advertising and promotional claims used by vocational and distance education schools to recruit students? If so, please provide that evidence.

(18) Are there foreign or international laws, regulations, or standards with respect to the advertising and promotional claims used by vocational and distance education schools to recruit students that the Commission should consider as it reviews the Guides? If so, what are they?

(a) Should the Guides be modified in order to harmonize with these foreign or international laws, regulations, or standards? If so, why, and how? If not, why not?

(b) How would such harmonization affect the costs and benefits of the Guides for consumers and businesses, particularly small businesses?

List of Subjects in 16 CFR Part 254 Back to Top

Authority: Back to Top

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

By direction of the Commission.

Donald S. Clark,

Secretary

[FR Doc. E9-18194 Filed 7-29-09: 9:56 am]

BILLING CODE: 6750-01-S

Footnotes Back to Top

1. The comment must be accompanied by an explicit request for confidential treatment, including the factual and legal basis for the request, and must identify the specific portions of the comment to be withheld from the public record. The request will be granted or denied by the Commission’s General Counsel, consistent with applicable law and the public interest. See FTC Rule 4.9(c), 16 CFR 4.9(c).

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2. 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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