The state agency in Wisconsin that oversees for-profit colleges is considering a proposal that would require those institutions to meet certain performance standards—much like a controversial federal rule—in order to be allowed to operate in the state.
Under the proposed regulation, which is rare at the state level, a college would have to ensure that at least 60 percent of its students complete their studies within a certain time frame and that 60 percent of graduates get jobs. The rule would apply to all institutions under the jurisdiction of the Wisconsin Education Approval Board: all for-profit colleges with a physical presence in the state and online distance-education programs offered to Wisconsin residents by any out-of-state institution. Private nonprofit colleges and the state’s public university system are not under the board’s purview.
The board already collects and posts online information about student completion and employment rates at the institutions it oversees. Over the past six years, according to the board’s data, average completion rates have dropped from 82 percent to 59 percent. Similarly, the percentage of graduates who were employed within a given year fell from 44 percent to 22 percent.
In establishing the standards, the agency is considering what “Wisconsin consumers would find ethical, responsible, and acceptable for institutions choosing to enroll them,” according to a staff report describing the proposal (starting on Page 109).
“We look at this as consumer protection,” said David C. Dies, the board’s executive secretary. “It’s about making sure these programs are of good quality and have positive outcomes.”
At the federal level, the U.S. Department of Education has sought to use its “gainful employment” regulation to tie a for-profit college’s receipt of federal financial aid to student outcomes. But efforts to bring a similar regulatory regime to the state level is unusual.
National accreditors often seek information about student outcomes, but their standards tend to be more lenient than the Wisconsin proposal and also are more tailored to the specific missions of programs, according to Gregory Ferenbach, a lawyer at Dow Lohnes who specializes in state education regulations.
Mr. Ferenbach said many states have been revising their laws and regulations on state authorization—in some cases, tightening the standards for institutions—but the Wisconsin proposal was one of the most aggressive.
For-profit colleges have complained about the proposal. In letters to the board and at a conference last month, the colleges argued that the standard was arbitrary and should not be broadly applied to a diverse set of programs, which often enroll underserved populations.
At a meeting on Wednesday the board voted unanimously to table the proposal, forming a group to further study it and make recommendations in June 2013. The group will consist of members of the board and representatives of educational institutions and the State Legislature.