Closing a small agency that oversees for-profit colleges, as Gov. Scott Walker has proposed, would actually cost the state money because the agency gets no state funds and puts 10 percent of the fees it collects from the colleges — about $70,000 — into the state’s coffers, according to the agency’s director.
The Educational Approval Board will meet Friday morning to discuss Walker’s proposal, which the governor’s spokeswoman said will remove a costly and overly burdensome regulatory process for the schools and put in place enhanced consumer protections for students.
The board, established under a different name just after World War II, is fighting back, insisting that leaving no oversight of for-profit colleges will ultimately hurt students who won’t have information about retention and job-placement rates at the schools. It also argued the proposal could harm more traditional schools in the University of Wisconsin and Wisconsin Technical College systems.
“By eliminating the current rules by which for-profit institutions must comply, it will open the door for them to more aggressively compete both on-ground and online with the state’s public and nonprofit institutions absent any checks and balances,” board director David Dies wrote in a summary statement.
It’s unclear how the proposal to end the board came about although the board has run into strong opposition from top Republican lawmakers in recent years.
An effort by the board to set basic accountability standards for the schools died in 2013 when Walker replaced three members of the seven-member board and then-Rep. Steve Nass, R-Whitewater, suggested the board table the accountability plan. It’s gone nowhere since.
In legislative drafting notes related to the proposal, there appeared to be significant confusion about what the board does.
“Apparently, the thinking is that all this board does is approve in-state schools for barbering and cosmetology, and perhaps a couple of other professions,” wrote Michael Gallagher, a lawyer with the Legislative Reference Bureau, in a Dec. 11 email obtained by the State Journal. Gallagher wrote to other LRB lawyers and was referencing the Walker administration.
The board doesn’t approve barbering or cosmetology schools, but does oversee the approval of more than 250 online and for-profit schools, the majority of them based out-of-state. They range from national giants such as University of Phoenix to one-campus truck-driver training schools.
A request for comment from Gallagher and Aaron Gary, another reference bureau lawyer involved in drafting the proposal, was not answered Thursday.
High debt loads
Dies told the State Journal in 2013 that the economic consequences of students not succeeding at for-profit schools can be far more dire than at state-funded public colleges and private nonprofit colleges because students tend to take on much bigger debt loads.
A federal report in 2012 looked at 30 for-profit higher education companies and found they charge students up to four times the cost for some programs as publicly funded community colleges, resulting in heavy debt loads and spotty graduation and job placement outcomes.
The top-ranking Democrat on the state Assembly’s higher education committee said he doesn’t support eliminating the board, as it doesn’t take any taxpayer money and provides oversight of schools that have shown they need it.
“I don’t see the downside,” said Rep. Dana Wachs, D-Eau Claire.
“In fact it’s nothing but upside. It seems like there should be some form of protection for these students. We should be interested in making sure they’re getting a good quality education with that money,” Wachs said.
High dropout rate
A recent board survey of 213 schools it oversees found that 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.
Nass and Rep. David Murphy, chairman of the Assembly higher education committee, could not be reached for comment on Thursday.