A state board that oversees for-profit colleges would be disbanded, allowing colleges that have come under sharp criticism nationally and in Wisconsin to operate more freely in the state under a proposal in Gov. Scott Walker’s next two-year budget.
The item pales in scope compared to the other higher education news in the budget — cutting $300 million from the 26-campus University of Wisconsin System — but could have a significant impact on select groups of students.
Walker’s proposal to disband the Educational Approval Board, an out-of-the-spotlight agency that decides whether for-profit colleges can operate in the state, comes after the board appeared to conflict in recent years with Republican lawmakers over a proposal to set standards for retention and job placement at for-profit schools.
“I don’t know of any state that simply allows institutions to operate without any type of vetting,” said EAB director David Dies. “That’s, I think, a big step backward.”
An estimated 60,000 Wisconsin students attend 244 for-profit colleges annually, according to Dies. The board has the equivalent of 6½ full-time positions and an annual budget of about $600,000 paid entirely by fees assessed to the schools they oversee.
Some for-profit schools have been sharply criticized in recent years for aggressive marketing practices and unusually low graduation and job-placement rates. Attorneys general in many states, including Wisconsin, have sued individual for-profit colleges on behalf of consumers.
A report by EAB last year found that the average dropout rate between the first and second years was 28 percent among 185 schools surveyed that enroll Wisconsin students. Online out-of-state schools reported the highest dropout rates.
Walker called for the EAB’s ouster “to decrease the regulatory and fiscal burden on private, for-profit schools,” he wrote in a summary of his 2015-17 budget. The Department of Financial Institutions would authorize schools that require state authorization to access federal financial aid.
Complaints against the schools would be handled by the Department of Agriculture, Trade and Consumer Protection.