This is the first of a series of posts on common legal and regulatory pitfalls that alternative education providers must proactively avoid. Today’s topic is avoiding sloppy or overly aggressive marketing.
The rapid growth of accelerated learning programs providing training to aspiring high-tech professionals – the best known being the coding academies or “boot camps” – has been the subject of plenty of attention in the last couple years. Given the high cost of traditional higher education and the need to train a new generation of workers for the tech economy, we expect that trend to continue. But while the education market is ripe for this kind of disruption, it remains a regulated space. Alternative providers may not look or feel like conventional colleges, but they are often similarly regulated.
The marketing practices of all schools are currently a hot button issue in the education business. Highly visible, provocative ads may attract the attention of potential students, but they also attract the attention of myriad state and federal regulators, including potentially the Federal Trade Commission (FTC) and the Consumer Finance Protection Bureau (CFPB) and, more often, state attorneys general, consumer protection agencies and an army of consumer advocates specifically focused on protecting students.
At the federal level, the FTC has issued guidance for marketing to students, titled Guides for Private Vocational and Distance Education Schools. The Guides apply to any for-profit entity that provides educational courses and programs (not just institutions offering vocational or distance education) and outline conduct that the FTC considers to be an unfair or deceptive practice. Conduct inconsistent with the Guides may result in investigations and actions by the FTC seeking injunctive relief and consumer payments. And although the FTC Act does not create a private right of action, most states have a consumer protection code modeled after the FTC Act that allows for private claims or investigations by the state’s attorney general.