Narrative:

My student and I were going to the south practice area to do ground reference maneuvers. I decided that this would be a good introduction to IMC. I asked for and received an IFR block altitude between 3000-5000 ft. We entered the clouds at approximately 3000 ft. We broke out on top approximately 3800-4000 ft. While I was explaining the importance of trusting your instruments and not trying to rely on visual references, I noticed my student seemed uneasy not being able to see the ground. I started down through the clouds. We broke out below the clouds, I glanced at the altimeter. I thought it read 3500 ft. As I continued to descend, I called moline departure to cancel IFR. The controller then advised me that I was at 2500 ft and descending. I immediately pitched to regain the altitude of 3000 ft. In the same transmission, the controller canceled my IFR and I was told to maintain VFR. How the problem arose: I misread the altimeter and inadvertently went below 3000 ft. Contributing factors: my student's uneasiness in IMC distraction my attention from the importance of my 3000 ft assigned altitude. How it was discovered: when I called to cancel IFR, ATC advised me that I was at 2500 ft.

Google
 

Original NASA ASRS Text

Title: WHILE GIVING IMC ORIENTATION TO STUDENT, INSTRUCTOR PLT DSNDS THROUGH ASSIGNED ALT.

Narrative: MY STUDENT AND I WERE GOING TO THE S PRACTICE AREA TO DO GND REF MANEUVERS. I DECIDED THAT THIS WOULD BE A GOOD INTRODUCTION TO IMC. I ASKED FOR AND RECEIVED AN IFR BLOCK ALT BTWN 3000-5000 FT. WE ENTERED THE CLOUDS AT APPROX 3000 FT. WE BROKE OUT ON TOP APPROX 3800-4000 FT. WHILE I WAS EXPLAINING THE IMPORTANCE OF TRUSTING YOUR INSTS AND NOT TRYING TO RELY ON VISUAL REFS, I NOTICED MY STUDENT SEEMED UNEASY NOT BEING ABLE TO SEE THE GND. I STARTED DOWN THROUGH THE CLOUDS. WE BROKE OUT BELOW THE CLOUDS, I GLANCED AT THE ALTIMETER. I THOUGHT IT READ 3500 FT. AS I CONTINUED TO DSND, I CALLED MOLINE DEP TO CANCEL IFR. THE CTLR THEN ADVISED ME THAT I WAS AT 2500 FT AND DSNDING. I IMMEDIATELY PITCHED TO REGAIN THE ALT OF 3000 FT. IN THE SAME XMISSION, THE CTLR CANCELED MY IFR AND I WAS TOLD TO MAINTAIN VFR. HOW THE PROB AROSE: I MISREAD THE ALTIMETER AND INADVERTENTLY WENT BELOW 3000 FT. CONTRIBUTING FACTORS: MY STUDENT'S UNEASINESS IN IMC DISTR MY ATTN FROM THE IMPORTANCE OF MY 3000 FT ASSIGNED ALT. HOW IT WAS DISCOVERED: WHEN I CALLED TO CANCEL IFR, ATC ADVISED ME THAT I WAS AT 2500 FT.

Data retrieved from NASA's ASRS site as of July 2007 and automatically converted to unabbreviated mixed upper/lowercase text. This report is for informational purposes with no guarantee of accuracy. See NASA's ASRS site for official report.