Student pilots have come to expect simulated emergencies, and instructors understand that those practice emergencies are a necessary evil. The problem arises when the line between simulated and real is crossed, endangering lives.
On April 13, 2003, a student and his instructor entered the downwind leg of the traffic pattern for Runway 18 at the Olive Branch, MS airport. The student expected this to be a normal pattern with a full-stop landing. When their Cessna 152 was abeam the numbers, the instructor turned the fuel selector to the "off" position to simulate an engine failure. About five seconds after turning base, the engine lost power. The student recognized the loss of power and properly completed the engine failure checklist, including repositioning the fuel selector to the "on" position.
Despite the student's corrective actions, the engine continued to lose rpm and eventually quit. The CFI confirmed that the fuel selector was on, and took control of the airplane. He pitched for best glide, turned towards the runway, and declared an emergency. The CFI then attempted to restart the engine, but was unsuccessful. The airplane was landed short of the runway, damaging the nose wheel strut because of uneven terrain. Neither the flight instructor nor the student was injured, but the Cessna 152 was substantially damaged.
The NTSB determined the cause of this accident to be the CFI's improper positioning of the fuel selector valve to the "off" position, which resulted in fuel starvation and a subsequent loss of engine power.
An Air Safety Institute Special Report on instructional safety found that 38 percent of dual instruction maneuvering accidents were a result of practicing emergency procedures at low altitudes. ASF recommends that instructors set a "hard deck" (altitude) where recovery from a simulated emergency will be made, and always leave an "out". Simulate an engine failure with the throttle, not the mixture control or fuel selector. That way, if a go-around is required, at least the engine is still running.
Numerous other helpful studies and resources for both students and instructors - including free online interactive courses.
This accident report as well as others can be found in ASI's Online Database.