For-profit and online colleges continued to lose about a third of Wisconsin students in their first year of studies, according to a new report by a state agency that will be eliminated under Gov. Scott Walker’s 2015-17 budget.
The Educational Approval Board looked at a new round of student outcome information gathered from 213 schools it oversees. Under the current model, schools need to apply for approval and pay a fee to the board to operate in Wisconsin. They would no longer need that approval once the board is eliminated.
“This proposal removes a costly and overly burdensome regulatory process and puts in place enhanced consumer protections for students,” Laurel Patrick, a Walker spokeswoman, said in an email. The state’s Department of Agriculture, Trade and Consumer Protection would handle student complaints.
Overall, 30 percent of Wisconsin students who started at the schools in 2013 didn’t advance to their second year, according to data included in the report that was provided by the schools. The number of schools with at least a 40 percent dropout rate increased from 22 in 2012 to 27 in 2013. One was Madison Media Institute, which was found to have a 40.5 percent one-year dropout rate.
The Southeast Side school had 338 students enter in 2013, with 137 dropping out, the report found. Stephen Tave, CEO and president of the New Jersey company that owns Madison Media Institute, said the numbers are misleading because they don’t take into account that schools like his tend to enroll nontraditional, typically older students who have a harder time focusing on school because of tight finances and demands from family and jobs.
“I think it’s sort of gut-punching them again,” he said of the report’s findings and the impact on students.
“Their desire to succeed is great. The dialogue should be more on how these kids are really suffering and they’re still trying.”
The schools, which receive no public funding, tend to charge higher tuition than public colleges and rely heavily on federal financial aid to operate. Their students have higher default rates on student loans, which leaves taxpayers to pick up the tab.
University of Wisconsin System schools, where students tend to rely on other funding sources that result in lower student debt loads, see about 80 percent of students return to campus after their freshman year.
Tave said he understands the burden placed on students who take on significant loan debt and aren’t able to parlay their college experience into gainful employment. He said he and others in the industry would prefer changes to the way loans are given by the federal government so that schools would be able to limit how much students borrow and there would be forgiveness of unpaid loan debt for students who don’t graduate.
“I think we should change that,” he said of the refund policies. “Don’t make it punitive on a student. We’d love to be able to manage how much they can take out and we’re not allowed to.”
The industry has been widely criticized in recent years, coming under congressional scrutiny and seeing numerous individual schools sued by state attorneys general for practices including inflated promises about job placement and overly aggressive marketing tactics.
In November, former Wisconsin attorney general J.B. Van Hollen sued Corinthian Colleges, the parent company of a for-profit college in Milwaukee, for misleading students about job placement rates and other outcomes.
Everest campus closed
Everest College operated a campus briefly in Milwaukee before closing in 2013 after revelations that, in just two years, more than 60 percent of its students left without a degree and more than half of graduates were unemployed. The Educational Approval Board closed the school’s physical campus.
Everest University, an online college with the same corporate parent, continues to be approved by the board although its enrollment of Wisconsin students has been suspended since last year by the board.
Overall, the average dropout rate among all 213 schools surveyed was 30 percent, up from 28 percent among students who entered in 2012, the data show.
Online schools reported the same one-year dropout rate of 30 percent as in 2012, the first year data was collected in this way. Schools with on-the-ground locations in the state got worse, with 30 percent of students dropping out within a year of starting in 2013, up from 26 percent the prior year.
“Similar to the January 2014 report on student outcomes, the data consistently point out that few students attending for-profit, degree-granting, online schools are completing,” the report’s authors wrote.
Of the 27 schools that lost more than 40 percent of their students in the first year, 16 were for-profit online schools based out of state. Nine were for-profits with a physical campus in the state. Two were nonprofit colleges.
Everest University again topped the list, losing 61 percent. Art Institute of Pittsburgh, Full Sail University and Strayer University lost 58 percent. American Intercontinental University lost 53 percent. South University lost 51 percent. Colorado Technical University lost exactly half its students.
The report also found that, of the students who entered in 2012, 36 percent overall had dropped out within the first two years.
The agency will keep tracking dropout rates over four years and six years, the traditional measuring sticks applied to colleges, “if we’re still around,” said Educational Approval Board director David Dies.