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For-profit college ordered to stop enrolling students

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Kate Golden
September 20, 2010

A for-profit college that is providing online classes without approval in Wisconsin was ordered Thursday by state regulators to immediately stop enrolling students in the state or face possible fines of up to $500 a day.


The Wisconsin Educational Approval Board, the state regulatory agency that oversees for-profit colleges, told the parent company of Westwood College Online that recent news coverage and a complaint from a Westwood student “make clear that the risk exposure to Wisconsin residents warrants our attention.”


In a complaint filed with the agency on Aug. 26, Stoughton resident Bradley Leikness said that he learned in a report published Aug. 20 in the Wisconsin State Journal that Westwood College Online wasn’t licensed in Wisconsin.


The report, produced by the Wisconsin Center for Investigative Journalism, examined a lawsuit against Westwood filed by a former student and intensifying scrutiny of the fast-growing for-profit college industry.


Leikness dropped out of Westwood on Aug. 24, saying in the complaint that he’d “wasted time in pursuing a degree that is worthless to me.” Leikness said he’d been led to believe that a bachelor’s degree in health care management would allow him to get a higher paying job.


But he said he learned through the news article and his own research that the program lacked accreditation from a key industry council, as well as approval from the EAB.


Leikness said the program has cost him $5,900 in loans since he started in October 2009, and Westwood has refused to refund any money.


Westwood College Online spokeswoman Kristina Yarrington declined to comment Thursday evening on Leikness’s assertions or the state’s action.


Last month, a Westwood spokesman didn’t deny the college lacked official approval in Wisconsin but wrote in an e-mail that the “licensing of online colleges in individual states is an ongoing and developing issue across the country.”


The college notes on its website that “not all colleges offering online courses in Wisconsin are registered in the state.”


Several other large online for-profit colleges, such as Capella University and the University of Phoenix, have applied for and received EAB approval to operate in Wisconsin.


This summer, the for-profit college industry erupted into scandal when a U.S. Government Accountability Office undercover investigation discovered that recruiters were lying to potential students about the value of the programs and, in some cases, encouraging them to commit fraud to get more financial aid. The colleges, including Westwood, pledged to clean up their recruiting and programs in response; Westwood began that process in August.


The Texas Workforce Commission ordered Westwood to stop offering online courses there after a law firm filed a lawsuit in Texas over Westwood’s lack of a license to operate in that state. The law firm has filed similar suits in Wisconsin, California and Colorado.


Wisconsin’s move against Westwood came in a letter from David Dies, executive director of the Educational Approval Board, to James Turner, president of Denver-based Alta Colleges, which is the parent company of Westwood.


In an interview, Dies acknowledged that the state rarely takes such strong action against a for-profit college.


Dies said the agency doesn’t know how many Wisconsin students are enrolled in Westwood’s online programs.


What will happen to such students and to Westwood will depend on Westwood’s response.


If the school defies the state, it may be subject to penalties of up to $500 a day. It could also decide to stop offering its programs to Wisconsin students. Or, Dies said, Westwood could apply for approval from his agency.


The letter could affect Westwood College Online’s national accreditation with the Accrediting Council for Independent Colleges and Schools, according to Anthony Bieda, external affairs director. He said ACICS now would need to open an investigation into the matter.


But Bieda also said it was an open question whether Wisconsin really has the authority to go after Westwood, since the school has no campus or offices in the state.


Before Wisconsin sent its letter, ACICS president Albert Gray had already summoned leaders of Westwood and several other for-profit colleges to his office in Washington, D.C., to answer for the alleged problems at the institutions, Bieda said.


Dies said most states don’t extend their regulatory reach to online-only schools located outside the state.


But he said that the Wisconsin statute quoted in the letter to Westwood explicitly gives EAB that power.


It says a school “whether located within or outside the state,” may not operate in the state unless it is approved or has been determined to be exempt.


Noel Radomski, executive director of the Wisconsin Center for the Advancement of Postsecondary Education, an advocacy and research think-tank based at the University of Wisconsin-Madison, criticized the EAB for being reactive.


“It’s disappointing that this incident took place in Wisconsin, and that a state agency had to wait until there was an article—and until after the student expended $5,900—for them to realize that they’re operating out of compliance,” he said.


“How many other complaints are we not aware of?” Radomski said.


Dies has said a small staff, a flat budget and outdated statutes have hampered the EAB’s ability to oversee this rapidly growing industry.


The nonprofit Wisconsin Center for Investigative Journalism (www.Wisconsin Watch.org) collaborates with its partners—Wisconsin Public Television, Wisconsin Public Radio and the UW-Madison School of Journalism & Mass Communication—and other news media. Kate Golden can be reached at kgolden@wisconsinwatch.org.

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