Gov. Walker’s Budget Plan for Fewer Protections for Students From Predatory For-Profit College Industry Up for Joint Finance Consideration

MADISON, Wis. — Wisconsin students would have fewer protections from the predatory for-profit college industry, subject to increasing scrutiny at the national level and in other states, under a provision in Gov. Scott Walker’s budget to be considered by the Joint Committee on Finance on Friday. Under Walker’s scheme, the Educational Approval Board (EAB) would be eliminated, several state regulatory provisions would be repealed outright and other oversight functions would be split among other state agencies.

“The for-profit college industry has earned additional scrutiny with a track record of abuses that have left hardworking students in Wisconsin and across the nation deep in debt and without marketable degrees,” commented One Wisconsin Now Executive Director Scot Ross. “That Gov. Walker would propose gutting state oversight of the predatory practices all too common in this industry suggests he either doesn’t understand the problem or just doesn’t care.”

Scrutiny of the for-profit college industry has increased in recent years, and what has been uncovered is unsavory. Federal government scrutiny has uncovered how the industry targets veterans, minorities and low income students, encourages them to take on large student debts and oftentimes leaves those who graduate with essentially worthless degrees. States are getting involved too with a coalition of over 30 state Attorneys General investigating deceptive marketing and pressure tactics that lead to students taking on large amounts of debt.

But Walker’s plan would take Wisconsin in the opposite direction. 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be subject to approval, inspection and various reporting requirements to evaluate the quality of services would be repealed.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 a disconnect between regulators and enforcement of state laws.

An analysis of the provision by the nonpartisan Legislative Fiscal Bureau (LFB) also reveals that Walker’s budget 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.

Ross concluded, “Protecting students who are doing the right thing by trying to improve their skills and making sure bad actors are held accountable for abuses is just common sense. It’s appalling that Gov. Walker would gut state oversight of for-profit colleges whose track record here and nationally cry out for more scrutiny.”