Previously, Federal regulations provided that if a misrepresentation was minor and could be readily corrected, a school could avoid the threat of a punishment by agreeing to an “informal, voluntary correction.” As of July 1, 2011, this so-called “safe harbor” provision was removed from the law.
The law now prohibits any misrepresentation, even if it is not intended to be false, erroneous or misleading. If the statement has the “likelihood or tendency to confuse or deceive”—even if the statement was made innocently and without any intent to confuse or deceive—it is still a misleading statement, which might jeopardize a school’s eligibility to participate in financial assistance programs under Title IV.