Chair Swearingen and committee members, thank you for the opportunity to offer testimony on the provisions of Assembly Bill 163 (AB 163) related to the elimination of the Educational Approval Board (EAB).
The EAB was established over seventy years ago and has been working to ensure that institutions of higher learning operating in Wisconsin are meeting basic quality standards and that Wisconsin students are protected. Of particular note, is the important work done by this agency to oversee the for-profit college industry.
Scrutiny of the for-profit college industry has increased in recent years, and what has been uncovered is unsavory.
Federal government investigations have uncovered how the industry targets veterans, minorities and low income students, encourages them to take on large student debts and oftentimes leaves graduates with essentially worthless degrees.
At the state level, a coalition of over 30 state Attorneys General are investigating deceptive marketing and pressure tactics that lead to students taking on large amounts of debt.
Yet the provisions related to the EAB in AB 163 and in Gov. Walker’s 2015 budget proposal would take Wisconsin in exactly the opposite direction.
The current law requiring for-profit schools be subject to approval, inspection and various reporting requirements to evaluate the quality of services would be repealed. Remaining regulatory functions would be housed in a newly created Department of Financial Institutions and Professional Standards. However complaints about abuses would be directed to a different agency, the Department of Agriculture, Trade and Consumer Protection, creating an unnecessary and disruptive disconnect between regulators and enforcers of state laws.
The nonpartisan Legislative Fiscal Bureau (LFB) analysis of Gov. Walker’s EAB budget proposal also reveals he would eliminate a student protection fund, established to help students and others impacted in the event of abuses or a sudden closure by a licensed for profit institution. According the the LFB over $380,000 from the fund has been used help students impacted by the sudden closure of Anthem College last year.
This was not been an isolated incident in Wisconsin. In recent years Everest College, a subsidiary of the scandal plagued Corinthian College chain, abruptly closed their operation in Milwaukee. The EAB assisted the state Department of Justice and their efforts resulted in a state lawsuit alleging misleading, false and deceptive trade practices.
Just last week the for-profit DeVry University announced it will close the Milwaukee campus and only offer courses online. The EAB has announced they will be working to ensure students in the midst of programs would have the option to receive refunds if they do not wish to continue with only an online option available to them.
Issues with for profit colleges are only going to increase now that this legislature and Gov. Walker passed a wrong for Wisconsin right to work law that will force even more students into the arms of the for-profit industry. As you may remember, the building trade unions raised a red flag that your actions will force them to close their training programs and leave workers who want to upgrade their skills with for-profit institutions as their only option.
This last Saturday marked the three year anniversary of student loan debt surpassing the one trillion dollar mark in the United States — now more than 40 million Americans have over $1.2 trillion of debt. It is a crisis not just for borrowers but for our entire economy.
Now is not the time to provide less oversight of educational institutions in Wisconsin that are under investigation nationally for predatory practices that drive their students deep into debt. Instead we need to be protecting students who are doing the right thing by trying to improve their skills and making sure bad actors are held accountable for abuses.
That Gov. Walker as part of his budget and legislative Republicans in stand alone legislation would propose gutting state oversight of the predatory practices all too common in this industry suggests a fundamental failure to understand the problem or a failure to care.
I urge you to reject the elimination of the EAB and gutting oversight of the for-profit college industry in AB 163 and the 2015 state budget.