Gov. Scott Walker’s budget plans to cut or consolidate state agencies includes the elimination of an obscure board that mainly regulates for-profit schools and some nonprofit institutions from out of state.
The budget item is minor compared to the significant changes Walker’s proposed for the University of Wisconsin System, but David Dies, the executive secretary for the Educational Approval Board, said the proposal would amount to significant deregulation of for-profit schools.
“Wisconsin would be the only state in the nation that would allow institutions to operation without any type, any checks and balances in place,” Dies said.
The proposal would shift the EAB’s responsibilities to other state agencies, such as the agency that oversees consumer complaints.
That part of the proposal drew concern from Sen. Steve Nass, R-Whitewater, because the agency might be unable to properly deal with students’ complaints, especially in larger problems such as schools closing and leaving students uncertain about their educational future.
“This isn’t like your TV going on the blitz or having some bad business dealing over $50,” Mike Mikalsen, Nass’ spokesperson, said. “These are students who in many cases may have a disagreement over thousands of dollars they paid and the school hasn’t followed through.”
Dies said much of the organization’s tasks are focused on making suggestions to help the schools run more smoothly and offer services that will be useful to participating students. Most of the EAB’s members are school administration consultants, rather than auditors looking to shut these institutions down, he said.
Walker’s budget-in-brief document says the change will “reduce the regulatory and fiscal burden on private for-profit education entities” by eliminating the fees these institutions are required to pay the EAB. The EAB currently oversees 244 institutions in the state.
Mikalsen said many have argued the EAB is too small to carry out its mission, and the fees it requires from schools are inhibitory to their growth.
“Because it is a fee-supported agency, meaning the schools that register pay for their activities, it was seen as cost prohibitive to expand the agency,” Mikalsen said.
Dies said the fees are inconsequential compared to the revenue the schools make and the services the board provides.
“For every $1,000 in tuition revenue that institutions collectively generate they end up paying $1.70 back to the EAB in order for us to carry out our activities,” Dies said. “I don’t know where you can get that kind of return on investment anywhere.”
Dies said most institutions are certificate-granting programs such as massage therapy schools, welding programs and training. Others offer higher levels of education, such as associates, bachelors and masters degrees — and even PhD programs and are becoming more common, he said. Dies said only a handful of these institutions are nonprofit.
Allen Phelps, a University of Wisconsin professor of educational leadership and policy analysis, said less regulation of for-profit institutions would be a disservice to consumers.
Phelps said people who are young and in the labor market looking for new career opportunities need some protection from the state to make sure the information that’s out there on the Internet is reliable, and the EAB currently provides that protection.
“The EAB is there to help protect the consumer so that the consumer knows who’s reputable and who’s operating in a grey area and which schools are bad,” Phelps said.
Dies said elimination of the board would likely result in an influx of for-profit schools in the state. He said the intense recruiting efforts of these institutions will compete directly with the state’s existing technical colleges and even the UW System.
