MADISON (AP) - State officials who regulate for-profit colleges urged Republican legislators Wednesday to drop plans to eliminate their board, warning that without it the industry will become a free-for-all in Wisconsin.
Donald Madelung, chairman of the Educational Approval Board, told the state Senate's workforce development committee that if the board vanishes out-of-state for-profit colleges will swoop in and operate with next to no oversight.
"They will see the state of Wisconsin has let its guard down," Madelung said. "It would be a Pandora's box opening and a long time before we could put a lid on it."
For-profit 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. The Obama administration has fought for years to improve outcomes and end aggressive recruiting at the colleges. The industry contends it provides opportunities to students left out of higher education.
Wisconsin Republicans introduced a bill last week that would merge the departments of Financial Institutions and Safety and Professional Standards into a new agency that would be known as the Department of Financial Institutions and Professional Standards. The bill would eliminate the EAB and leave authorizing for-profit colleges up to the new agency. State consumer protection officials would handle student complaints. Most of the regulations governing the industry and student protections the EAB guarantees would disappear.
Republican Gov. Scott Walker included the proposal in his state budget plan, saying it would reduce the regulatory burden on for-profit colleges, but then asked GOP lawmakers to introduce it as a separate bill to facilitate more debate. Committee chair Sen. Roger Roth, R-Appleton, obliged.
DFI Secretary Ray Allen and DSPS Secretary David Cross joined Department of Agriculture, Trade and Consumer Protection Assistant Deputy Secretary Sandy Chalmers in touting the bill before the committee, saying it would create a more efficient hybrid agency and save taxpayer dollars.
Ross said he was confident the new agency could authorize for-profit colleges responsibly and insisted DATCP could protect students from bad actors. Chalmers said many student complaints deal with deceptive marketing, a specialty area for DATCP.
All three secretaries are Walker appointees. Sen. Chris Larson, D-Milwaukee, called their remarks "flowery" and expressed skepticism that the merger could happen smoothly.
The EAB's Madelung, a former president of Herzing University, said the board keeps schools honest and protects students. He pointed to a board fund that compensates students if their schools close unexpectedly.
Board Director David Dies told the committee that the board operates completely through fees from regulated schools and costs taxpayers nothing. It actually pays 10 percent of its revenue back to the state's general fund - and expects to ship $106,500 back to the state by July 1, he said.
He ticked off the board's duties, ranging from the student protection fund to permitting off-campus recruiters to mandating schools develop admissions and tuition policies and program outlines. Without the board, he said, "it would be a buyer-beware free-for-all."
Sen. Julie Lassa, D-Stevens Point, implored Roth to remove the EAB elimination language for the bill.
"They're giving us such a clear warning," she said. "These institutions could rob students of hundreds of thousands of dollars."
Donald Madelung, chairman of the Educational Approval Board, told the state Senate's workforce development committee that if the board vanishes out-of-state for-profit colleges will swoop in and operate with next to no oversight.
"They will see the state of Wisconsin has let its guard down," Madelung said. "It would be a Pandora's box opening and a long time before we could put a lid on it."
For-profit 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. The Obama administration has fought for years to improve outcomes and end aggressive recruiting at the colleges. The industry contends it provides opportunities to students left out of higher education.
Wisconsin Republicans introduced a bill last week that would merge the departments of Financial Institutions and Safety and Professional Standards into a new agency that would be known as the Department of Financial Institutions and Professional Standards. The bill would eliminate the EAB and leave authorizing for-profit colleges up to the new agency. State consumer protection officials would handle student complaints. Most of the regulations governing the industry and student protections the EAB guarantees would disappear.
Republican Gov. Scott Walker included the proposal in his state budget plan, saying it would reduce the regulatory burden on for-profit colleges, but then asked GOP lawmakers to introduce it as a separate bill to facilitate more debate. Committee chair Sen. Roger Roth, R-Appleton, obliged.
DFI Secretary Ray Allen and DSPS Secretary David Cross joined Department of Agriculture, Trade and Consumer Protection Assistant Deputy Secretary Sandy Chalmers in touting the bill before the committee, saying it would create a more efficient hybrid agency and save taxpayer dollars.
Ross said he was confident the new agency could authorize for-profit colleges responsibly and insisted DATCP could protect students from bad actors. Chalmers said many student complaints deal with deceptive marketing, a specialty area for DATCP.
All three secretaries are Walker appointees. Sen. Chris Larson, D-Milwaukee, called their remarks "flowery" and expressed skepticism that the merger could happen smoothly.
The EAB's Madelung, a former president of Herzing University, said the board keeps schools honest and protects students. He pointed to a board fund that compensates students if their schools close unexpectedly.
Board Director David Dies told the committee that the board operates completely through fees from regulated schools and costs taxpayers nothing. It actually pays 10 percent of its revenue back to the state's general fund - and expects to ship $106,500 back to the state by July 1, he said.
He ticked off the board's duties, ranging from the student protection fund to permitting off-campus recruiters to mandating schools develop admissions and tuition policies and program outlines. Without the board, he said, "it would be a buyer-beware free-for-all."
Sen. Julie Lassa, D-Stevens Point, implored Roth to remove the EAB elimination language for the bill.
"They're giving us such a clear warning," she said. "These institutions could rob students of hundreds of thousands of dollars."