Wisconsin Bills Take Aim at Predatory For-Profit Colleges

Incemirra Pole graduated from a Wisconsin branch of Sanford-Brown College, a defunct for-profit school, more than a decade ago with thousands of dollars of student loan debt—and credits a local community college wouldn’t recognize, as she discovered when she tried to enroll there.

Sanford-Brown had lured Pole with promises of a quick, affordable track to a lucrative career, a tantalizing prospect for a single mother like her. But her education was ultimately useless. Years later, in 2019, Sanford-Brown’s parent company, Career Education Corporation, would forgive $493 million in student loans amid allegations it was deceitful in its recruiting practices. This was one of several legal settlements involving Sanford-Brown and the overarching company, now known as Perdoceo.

“My experiences have fueled my determination to advocate for fair access to education and accountability for predatory institutions that take advantage of working adults and parents like me,” Pole said at a recent public event.

Pole’s saga is emblematic of the dangers of for-profit colleges, which, broadly, often leave their graduates defaulting on student loans and struggling to find jobs. It’s one of the stories a contingent of Wisconsin lawmakers are invoking as they seek stronger state oversight of these colleges.

The legislators have put forth four bills that would either restrict Wisconsin for-profit institutions that may be poor performing or bolster consumer protections for students attending them.

The proposals reinforce common-sense safeguards, which have taken on greater importance as the Trump administration systematically hollows out the U.S. Department of Education and sheds staff once responsible for policing predatory or fraudulent colleges.

One bill would forge a new legal path for students to sue Wisconsin for-profit schools. They would be able to file a lawsuit against any school that provided them with “materially false, fraudulent or misleading information,” according to the legislation text. This is similar to Education Department regulations that allow the agency to bar colleges from federal aid if they misrepresent their programs.

For-profit colleges have long come under fire for misrepresenting their efficacy, including graduation and job placement rates. In 2019, for example, one of the most notorious for-profit schools in the country, the University of Phoenix, settled for $191 million over Federal Trade Commission allegations it had misled students about career connections with major tech employers like Microsoft and Adobe. The fallout of that case persists today—just a couple of years ago, the federal government forgave $37 million in loans for students the school had allegedly defrauded.

Another of the Wisconsin bills would build on a federal rule designed to identify exploitative colleges.

The 90/10 rule dictates for-profit colleges must derive at least 10% of their revenue from areas other than federal financial aid. The rule rests on the premise that colleges genuinely committed to student success, rather than just aggressive marketing, should be able to draw some tuition from students, employers, private scholarship funds, or others willing to pay out of pocket.

The bill would essentially enforce an 80/20 rule in Wisconsin. For-profit colleges would not be able to enroll Wisconsin students if, in two of the past three fiscal years, less than 20% of their revenue stemmed from nonfederal sources.

At least one other state, New York, proposed a similar 80/20 rule in 2019, requiring for-profit colleges to draw at least 20% of their revenue from nonpublic sources, but the state’s for-profit lobby, now known as the Association of Private Colleges, fiercely opposed the measure and it failed.

Beyond an 80/20 rule, Wisconsin would also collect more money from for-profit colleges under one of the bills. The state charges for-profit colleges “protection” fees, which it places in a fund it can dip into to help students, including those who were defrauded or saw their institution close. The bill would lift the cap on that reserve from $1 million to $5 million, and would force for-profit schools to create their own individual funds to assist students who suffer financial losses.

The final piece of legislation would require for-profit colleges to report to the state the number of veterans they enroll, as these institutions tend to target military populations.

Legislators rolled out the bill package last month at a news conference held at the Milwaukee location of the Arizona School of Nursing, a for-profit college. The event’s setting was a pointed metaphor, placing the announcement on the same grounds where consumer protection advocates and lawmakers had led a years-long fight.

Arizona College of Nursing rattled local advocates when it announced plans to expand into Milwaukee and Madison over the next couple of years. The school has come under accusations of fraud and mismanagement, including in its home state, where Arizona officials in 2022 put its main campus in Tempe on probation for a few violations of state law. In one instance, just two weeks before the fall 2021 semester, the Tempe school dismissed nearly three dozen faculty members and canceled roughly 20 percent of clinical placements between late August and mid-October. It nonetheless told state officials that students met all required clinical hours.

The school is no longer on probation as of February.

The Milwaukee branch opened in January this year, drawing the attention of a state lawmaker who represents the area, Democrat Rep. Angelito Tenorio.

In an interview, Tenorio said he had grown up with some of the for-profit colleges of yesteryear, including the failed ITT Technical Institute, bombarding him and his peers with advertisements. When he researched the issue himself, he discovered stories of “working-class folks, communities of color, veterans spending so much of their money, only to be sold false promises and really victimized.”

Tenorio worked with a local coalition called the Committee for Equity in Nursing Education to draft the bills. The group had flagged for him problems with the Arizona College of Nursing, and for-profits broadly.

Tenorio said he even reached out to the Arizona college to hear its perspective—but was met with silence.

“These for-profit colleges just don’t have the same level of oversight as public institutions,” he said. “Without that level of oversight, they are taking advantage of constituents.”

A Committee for Equity in Nursing Education representative, Michael Rosen, said in an interview he was inspired to take on for-profit colleges after observing how they took advantage of students.

Rosen was formerly a longtime instructor and union leader at Milwaukee Area Technical College, a two-year school that, because of its geography, attracted many students of color and those who were first in their family to attend college.

He saw how hard these vulnerable students worked to achieve their dream, and at the same time heard anecdotes of how their peers had fallen prey to for-profit colleges.

“It’s unconscionable, it’s immoral, what these schools are doing,” Rosen said. “Because of my position as an instructor working with these students and as someone who cares deeply about the community I live in, it was imperative to take this on.”

He, Tenorio and the bills’ supporters are hopeful the Republican-led legislature will take them up. Because the GOP holds the majority, Republican committee chairs would need to decide whether to grant the bills public hearings.

“Republicans haven’t said much,” Tenorio said. “But this shouldn't be a partisan issue.”