C172 WAS CLRED TO MAINTAIN 4000 FT AND TO HOLD AS PUBLISHED. INST FLT INSTRUCTOR FAILED TO NOTICE THAT THE STUDENT THOUGHT THAT THE MINIMUM ALT DISPLAYED ON THE PROFILE VIEW OF THE CHART WAS THE ALT HE SHOULD HOLD AT. ACCORDINGLY; HE BEGAN DSCNT TO 2500 FT. THEY GOT TO 3300 FT AND CONFLICTED WITH A MOONEY AT 3000 FT. INSTRUCTOR THOUGHT HE HAD MISSED A CLRNC.

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IT WAS MY FIRST IFR FLT WITH STUDENT PLT. I FLEW MY FIRST FLT WITH HIM IN A BE76 A FEW DAYS EARLIER. AFTER GOING MISSED APCH FROM ILS RWY 24 CRQ; SOCAL APCH TOLD US TO CLB AND MAINTAIN 4000 FT. AFTER VECTORING US; SOCAL TOLD US TO FLY DIRECT TO OCN VOR AND 'HOLD AS PUBLISHED.' AS WE CROSSED THE VOR; I NOTICED MY STUDENT STARTED HIS TURN TO THE R; WHICH WAS THE APPROPRIATE DIRECT ENTRY. I THEN TURNED MY HEAD TO LOOK REARWARD FOR TFC. AFTER APPROX 5 SECONDS; I THEN LOOKED FORWARD AND NOTICED WE WERE DSNDING THROUGH 3700 FT AT APPROX 600 FPM. THINKING THAT I MIGHT HAVE MISSED OUR DSCNT CALL; I ASKED MY STUDENT; 'DID SOCAL TELL YOU TO DSND?' AFTER A FEW SECONDS OF INST SCAN; HE GAVE ME A BLANK LOOK AS WE CONTINUED DSCNT. AT THIS POINT; I IMMEDIATELY TOOK THE CTLS AND LEVELED OFF AT APPROX 3300 FT. WHILE CALLING SOCAL TO VERIFY THE HOLDING ALT; APCH REPLIED WITH 4000 FT. AT THIS TIME; AN IFR MOONEY RPTED MISSING US BY APPROX 300 FT. HE WAS INBOUND ON THE APCH AT 3000 FT AS WE WERE ON THE OUTBOUND LEG OF HOLD. AFTER WE LANDED AT CRQ; TWR TOLD US TO TALK TO SOCAL APCH. I ASKED MY STUDENT WHY HE DSNDED. HIS RESPONSE WAS: 'I THOUGHT 'HOLD AS PUBLISHED' MEANT TO HOLD EXACTLY AS CHARTED.' HE WAS USING A GOV APCH PLATE WHICH SHOWED A HOLD ALT OF 2500 FT PRINTED NEXT TO THE HOLD; AND HE THOUGHT 'HOLD AS PUBLISHED' MEANT 2500 FT. MY BELIEF AS TO THE CAUSE OF THIS SIT WAS MY STUDENT'S CONFUSION REGARDING TERM 'HOLD AS PUBLISHED;' AND THE WAY THE GOV CHART WAS PRINTED; AND MY DISTR LOOKING FOR TFC; AND MY NOT LEVELING OFF THINKING I MIGHT HAVE MISSED A DSCNT CALL.