— The Legislature's budget committee is expected to
decide Friday whether to approve language in Republican
Gov. Scott Walker's budget that would eliminate a
71-year-old state board that regulates for-profit colleges
and investigates student complaints.
proposed budget would get rid of the Educational Approval
Board. A new Department of Financial Institutions and
Professional Standards would authorize for-profits only if
they need such approval to collect federal aid and state
consumer protection officials would field complaints.
administration says eliminating the board would reduce the
financial and regulatory burden on for-profit schools.
Critics contend that the move would create a free-for-all
that would ultimately hurt students.
puts the credibility of all schools at the mercy of the
fly-by-night, or profit-first schools," Jerry
Kablacka, president of the Diesel Truck Driver Training
School in Sun Prairie, said in a March letter to state
Senate Majority Leader Scott Fitzgerald, R-Juneau.
"Transferring duties that are performed by EAB to a
bureaucracy unfamiliar with the business of proprietary
schools will do nothing but increase costs to taxpayers
and dilutes accountability."
colleges offer training in areas such as auto repair and
nursing and have been popular with nontraditional
students. However, the industry has some of the highest
student loan default rates and lowest graduation rates in
higher education, and some veterans advocates say the
schools aggressively recruit veterans in hopes of getting
their federal G.I. Bill money. The Obama administration
has waged a yearslong fight to improve outcomes and end
aggressive recruiting at the colleges.
colleges contend that they provide opportunities to
students who have been left out of higher education.
in 1944, the seven-member Educational Approval Board
approves and oversees for-profit colleges in Wisconsin as
well as out-of-state nonprofit colleges operating here. It
currently oversees 252 institutions, according to the
Legislative Fiscal Bureau.
charges initial approval fees ranging from $2,000 for one
non-degree program to $5,100 dollars for one doctoral
program. Annual renewal costs $500 plus a second payment
of $1.31 per each $1,000 of revenue in 2014-15.
also issues permits for college recruiters who work off
the school's premises, investigates student complaints,
mandates schools have admissions, dismissal, tuition
policies and program outlines and maintains a fund built
with fees collected from schools to help students
following a school's unexpected closure or refusal to
issue a refund. Schools pay 50 cents per $1,000 of their
adjusted gross annual revenue if the fund drops below $1
million. The account currently stands at $1.4 million; the
fund has paid out $383,900 since August as a result of the
closure of Anthem College in Brookfield.
board's director, David Dies, said the budget language has
left him perplexed. He said he doesn't understand the
Walker administration's argument that the board imposes a
financial burden on schools, noting that for every $1,000
of revenue Wisconsin students give the schools the board
takes only about $1.70.
entirely program-revenue funded. There's no cost to
taxpayers," he said.
board's regulatory requirements are designed to prevent
problems. Once those mandates are gone, state consumer
protection officials can expect a deluge of complaints, he
vast majority of institutions recognize the value of the
EAB's oversight," Dies said. "They recognize
what happens when you create this vacuum and just throw
out the rulebook."
spokeswoman, Laurel Patrick, said eliminating the board
advances the governor's goal of streamlining government.
insisted the plan would relieve the financial burden on
for-profit schools, pointing out the board can charge them
up to $5,100 for authorizing a doctoral program now. The
two agencies taking over for the board would have the
authority to expand regulations as necessary, she added.
Legislature's Joint Finance Committee started revising
Walker's budget language this week ahead of full votes in
the Assembly and Senate later this summer. The
Republican-controlled panel is set to consider whether to
keep the EAB elimination in the spending plan during an
executive session Friday.