For-profit college accused of operating illegally in Wisconsin
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Melissa Willes is class representative in a class action law suit with Westwood College Online. She is seated with her husband Eric Willes at their Janesville, Wisconsin home.
JANESVILLE — Now that she knows Westwood College was never authorized to operate in Wisconsin, Janesville resident Melissa Willes wants her $25,000 back.
“The biggest mistake of my life was attending college,” said Willes, 23, one of at least 200 Wisconsin students who have taken online classes through Westwood.
The major for-profit college based in Denver is coming under intensified federal scrutiny since a recent government report documented improper recruiting practices within the nation’s fast-growing for-profit college sector.
Willes said a Westwood recruiter assured her the $75,000 online bachelor’s degree in interior design she was considering wasn’t approved yet in Wisconsin, but it would be by the end of her three-year program.
Willes never finished the degree after maxing out her borrowing limit for federal student loans. Westwood credits generally aren’t transferable to other schools, the college acknowledges.
On July 7, Willes sued Westwood in Rock County Court, and on Aug. 6 Westwood moved the case to U.S. District Court in Madison. Willes charged that the college was operating without the required state approval, which is designed to ensure educational quality and protect students from fraud. She has asked the court to certify her suit as a class action.
In her lawsuit, Willes claimed that misleading marketing tactics by Westwood enticed her to enroll in a substandard program and take on excessive tuition debt in pursuit of a “largely useless” degree.
State regulators confirm Westwood never applied for approval.
Other major for-profit online colleges, such as Capella University, are licensed in Wisconsin by the Educational Approval Board, which oversees for-profit colleges and technical schools, out-of-state nonprofits, and Wisconsin nonprofit colleges incorporated since 1992. Among those exempt from its oversight are the University of Wisconsin system and schools regulated by other agencies, such as cosmetology or real estate.
David Dies, executive secretary of the Educational Approval Board, said that “technically speaking,” thousands of schools such as Westwood could violate state statutes by signing up Wisconsin students without board approval. However, Dies said, the board doesn’t have the means or the will to oversee them all.
In response to questions from the Wisconsin Center for Investigative Journalism, Westwood spokesman Gil Rudawsky 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 Texas Workforce Commission ordered Westwood to stop offering online courses there after the law firm representing Willes filed a similar lawsuit in Texas over Westwood’s lack of a license to operate in that state.
For-profit schools have grown dramatically across the country in recent years, and taxpayer-funded student loans are their bread and butter. The $25 billion they raked in from federal grants and loans in 2009 had doubled over 10 years, according to a U.S. Senate report.
Under fire
Willes’ lawsuit came as the nationwide for-profit college industry was exposed for widespread aggressive and deceptive recruiting in a scathing U.S. Government Accountability Office report. That report prompted U.S. Education Secretary Arne Duncan to promise a crackdown on for-profits’ recruiting practices.
David Hawkins, director of public policy and research at the National Association of College Admission Counseling, testified Aug. 4 before a U.S. Senate committee that recruiters have hidden the true cost of their programs, the quality of the courses and the transferability of credits to other colleges, and have made “false statements or misrepresentations about employment prospects and earnings potential.”
“These do not appear to be isolated incidents of bad actors or rogue officers,” Hawkins said. “This appears to be a fairly standard practice.”
Westwood has pledged to clean up its recruiting practices—paying recruiters salaries instead of commissions, increasing admissions requirements and investigating its own financial aid and recruitment processes—but stands by its schooling.
“We are proud of the work by our 40,000 students and graduates, many of whom are working at businesses throughout Wisconsin. We will continue to defend their hard work and the opportunities we provide them through our online program,” Rudawsky wrote in response to an interview request from the Wisconsin Center for Investigative Journalism.
Westwood has filed a motion to force Willes’ lawsuit out of court and into arbitration, citing an agreement she signed upon enrollment that any disputes would be resolved that way.
Westwood has 17 brick-and-mortar campuses nationwide. In Wisconsin, it offers only online programs, according to court filings. The college has more than 15,000 students in 27 degree programs and is owned by Denver-based Alta College Inc.
Recruiting problems
At the Senate hearing, the GAO showed hidden-camera videos of Westwood and other for-profit college recruiters using what appeared to be aggressive and deceptive tactics on undercover agents posing as potential students.
Of the 12 for-profits in the probe—including Westwood, the University of Phoenix and Kaplan University, all of which enroll Wisconsin students—each one used deceptive practices, GAO director of forensic audits Gregory Kutz told Congress. And recruiters at four appeared to encourage would-be students to commit fraud to get federal student loans, Kutz said.
To one agent who claimed to have a $250,000 inheritance in the bank, a recruiter in the GAO video said, “Frankly, in my opinion, they don’t need to know how much cash you have.”
GAO agents didn’t identify the college, but George Burnett, chief executive officer of Westwood, confirmed to the Denver Post that the recruiter was one of his and said he was “shaken and appalled.”
Westwood is facing three other lawsuits in California, Colorado and Texas from the same Florida consumer law firm—James, Hoyer, Newcomer, Smiljanich & Yanchunis—that is representing Willes.
In turn, Westwood has sued the “predatory” law firm for allegedly defaming Westwood, in part by creating a website called westwoodscammed.me and through “derogatory Twitter messages.”
Seeking approval
Willes’ lawsuit claims Westwood should have sought approval from the state’s Educational Approval Board, which regulates educational programs ranging from certificates to teach belly dancing to doctorates in psychology. The board also helps students resolve disputes with colleges.
According to state law, the board’s charge is to “protect students, prevent fraud … and encourage schools to maintain courses consistent in quality, content and length with generally accepted educational standards.”
“Unapproved schools are breaking the law,” the board’s website states.
But the website also acknowledges that “many” online schools don’t seek its approval. It recommends that potential students check with the board to see if schools are approved.
Unapproved schools face $500-per-day fines, according to the board’s website. But Westwood has never been cited for operating without state approval. The board’s response to unapproved online schools is not to punish them, but to try to get them to apply for approval, according to Dies.
Such a school triggers the board’s interest, Dies said, only if the board gets several complaints. Then the board asks how many Wisconsin students the school has enrolled. If it’s at least 10 or 12, Dies said, the board will prod the school to apply for approval.
The board has known about Westwood since at least 2006, when it resolved a student’s billing complaint in favor of the school. But Westwood’s status in Wisconsin apparently didn’t come up then, and Dies said one complaint wasn’t enough to concern the board.
Dies called allegations about Westwood and other for-profits’ deceptive recruiting “clearly troubling” and the sort of problem that his board would handle. But he also said the board requires a complaint to act, and it hasn’t gotten any recently from Westwood students or employers.
“We respond to situations that are brought to our attention,” he said.
Dies said the Educational Approval Board isn’t fully equipped to regulate the burgeoning for-profit college industry. Its budget of about $500,000 has been nearly flat over the past decade, while the number of approved institutions has grown 46 percent, from 112 to 164.
Out thousands
Willes said her husband also feels betrayed by Westwood. Eric Willes signed up for a video-game design program at Westwood while living in Illinois—but never finished after his federal loans ran out.
After that, he made the mistake of accepting Westwood’s offer of an additional loan—at a whopping interest rate of 18 percent. That loan covered three months of schooling and accounts for half of the total $25,000 he now owes.
Now he’s making $12.50 an hour at a furniture store. Melissa Willes is making $11 an hour as an insurance agent’s assistant.
The couple cannot afford the minimum $1,200 a month to repay their student loans, so those are on hold, some accruing interest. Because of their credit problems, they needed co-signers even to rent a home. They would like to have children but say they must wait until they have more money.
“Once they’re done milking you for all you’re worth, they drop you like a hot potato,” Melissa Willes said. “And then, to boot, to find out they’re not even registered in the state of Wisconsin? It’s a double whammy.”
The nonprofit Wisconsin Center for Investigative Journalism (www.WisconsinWatch.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.
Aug 23, 2010 at 11:25 a.m.
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I went to BTC in the early 90's and ALL of my credits transfered to my online school. I now have more than 90 credits of which 48 came from my schooling in the early 90's. Sandman, will you please give up this thing you have on people being overweight? These people look fine to me, it is the obese that let it all hang out that are nasty. If you carry a few extra pounds, so what? When a woman gets older it is nice to have a few extra pounds then the wrinkles don't show as bad as Ms. Twiggy's do!
Aug 21, 2010 at 5:45 p.m.
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Lessons learned. Too bad it was so expensive. At least others are aware of this now that otherwise may not have known.
Aug 21, 2010 at 3:39 p.m.
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I am a student at a UW school, and I do alot of sitting on my butt. I sit in a classroom, in front of a book, and at my computer. There are nights I dont even get off my butt to go to bed. I am up till it's time to get my daughter ready for school>>>then back to class...ect...ect..ect. An education is work, and also costly. Just dont understand the "fly by night" college, when there are so many great schools so close by.
Aug 21, 2010 at 1:52 p.m.
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Sandman, I agree with you completely. Couch potatoes can expect many things sitting on their a** but a good education is not one of those things. Besides,$75,000 for an education where you never have to leave your house, seems like someone is winning here and it is not the couch potatoes.
Aug 21, 2010 at 12:31 p.m.
Aug 21, 2010 at 10:50 a.m.
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Just because someone goes for a certain degree doesn't mean they won't get a job. Most people are moving away after finishing school so they can find or have already found a job that fits them. I take it that Woman Studies in Interior Design would mean you learn about women and how they make the decisions (most of the time) on what is done to their homes or businesses.
Aug 21, 2010 at 10:37 a.m.
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Are there employers seeking Interior Designers?
What is the potential return on investment in obtaining this degree?
I always wonder about these degree offerings where there is no discernable demand for the skill.
Another is 'Womans Studies'. What the heck is that?
Aug 21, 2010 at 9:49 a.m.
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This is so sad. This couple was working to better themselves. Hindsight is always 20/20. Hopefully this lawsuit will help!
Aug 21, 2010 at 8:46 a.m.
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I commend Kate Golden and The Gazette for this article. All of the comments have been good, too. What saddens me most about this story is that it shows how we, as a society today, have so horribly failed our young people at almost every possible level. If they could fully appreciate how seemingly boundless the opportunity and optimism was fifty years ago, they just might start a "Nuke the Boomers" movement. Not that I'd blame them.
Aug 21, 2010 at 8:17 a.m.
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My online classes I took at UW-Madison were run by many of the professors who also had campus classes. The UW and most credible schools require any online instructor to have a Ph.D or be a current Ph.D candidate. I strongly disagree with these schools who claim you can finish a whole smester of work online in 5 weeks! I also dont agree with being able to do an ENTIRE degree online. I believe it is in the students best interest to have at least 60 credits worth of campus classes where you can interact with people on a more personal level.
Aug 21, 2010 at 7:28 a.m.
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A major point of this story is this: We have a board that is in place, paid by taxpayers and should be on top of this. Why no fines or publicity? They should be advertising their services so prospective students would investigate a school.
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This is what really turns my crank!
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"David Dies, executive secretary of the Educational Approval Board, said that “technically speaking,” thousands of schools such as Westwood could violate state statutes by signing up Wisconsin students without board approval. However, Dies said, the board doesn’t have the means or the will to oversee them all."
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The means or will! Then what the heck are you for? Let's just get rid of the board! $500 a day fine should help pay for some enforcement of state statute. They are breaking the law and the board has no "will", ye gads!
Aug 21, 2010 at 7:25 a.m.
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I think anyone that puts their faith in a college that does not have a brick and mortar basis is an idiot. There are many colleges that start as normal buildings and add internet classes as an option to their programs, but if you think that all of your classes online are credible in the real world when it comes time to look for a job you are sadly mistaken.
Aug 21, 2010 at 7:07 a.m.
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1. If it walks like a duck, quacks like a duck,it must be a duck.
Aug 21, 2010 at 2:19 a.m.
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I think David Dies and his Educational Approval Board should be more proactive and vocal about their duties to protect Wisconsin students from predatory recruitment.
"David Dies, executive secretary of the Educational Approval Board, said that “technically speaking,” thousands of schools such as Westwood could violate state statutes by signing up Wisconsin students without board approval. However, Dies said, the board doesn’t have the means or the will to oversee them all."
Become an advocate for better laws, David! WTF - if you can't protect students with the way things are... change the freaking laws. Is it really so hard to actually do more than just the minimum or are you just another cake eater living off the taxes I pay?
Aug 21, 2010 at 1:57 a.m.
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Seventy five thousand dollars for a four year degree online? Wow - where do I sign up... for the stock in that school? They obviously can sell snowballs to Eskimos.
And yes, online classes are a killer deal for schools. Not having to pay for classrooms, computers, etc. And being able to pick from a larger pool of teachers give you a great way to cut costs.
Although it's also good for students. Attending class online allows you to participate and learn even if you work strange hours or are taking a large number of classes.
Wow... $75k... really?
Aug 20, 2010 at 11:54 p.m.
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ozzman,
I think you are 100% correct, online courses are not for the average student by any means but universities push them. My guess is they make huge profit on them.
Aug 20, 2010 at 11:51 p.m.
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Unidentified,
I read your post and one point really hit home. Regardless of what you go to school for, or what you do for work, you must have some sort of skill to sell. Whether it be teacher, electrician, lawyer, carpenter, or whatever. I know people with masters degrees who have poor marketability because their chosen field of study does not benefit the market in any way and this is a shame. A little forethought could have avoided this.
Aug 20, 2010 at 11:35 p.m.
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Honestly, although I agree that some of these "For profit" schools are a ripoff, the same can be said for many colleges. People are graduating with debt that will take them twenty years to pay back if they're lucky. All that for a whopping job as an administrative assistant. In this economy, experience is everything. Barring a degree in some form of engineering, the best ROI are for those who pursued a skilled trade. People don't want to work with there hands anymore these days.
Aug 20, 2010 at 11:14 p.m.
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I just can't get over the fact that they took out loans to pay these insane tuition amounts for these two programs. I have three degrees, including a graduate degree, and my student loans are less than $40,000, even after paying out of state tuition for one of my undergraduate degrees. Wasn't anyone giving these kids advice? Kids, do your research! These for-profit universities just want your money, they don't care about your academic goals. And in all honesty, a lot employers will not be impressed by degrees from Univ of Phoenix and similar for-profits. I hope your lawsuit will lead to some changes in this shady industry, so I wish you luck.
Aug 20, 2010 at 10:56 p.m.
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I agree Jv92 that many of these colleges are just glorified diploma mills. howver when I was a UW student I did take a hybrid mixture of online and campus classes especially when the campus class interferred with my work schedule. True online classes are harder than campus classes due to the lack of support and independent learning they require. I dont recommend online classes to anyone in the traditional college age group.
Aug 20, 2010 at 10:53 p.m.
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I don't think that for profit necessarily means poor quality, but in the case of both Westwood and their equally shady nursing school Everest, it is a sad and costly scam.
I have a number of friends in the trades who attended a brick and mortar campus in the Chicago area in pursuit of a construction management degree. The line that they were fed when asking about accreditation was "Some schools are regionally accredited, but we are nationally accredited." Sounds good, but four year universities ARE regionally accredited and trade schools are nationally accredited.
It saddens me that so many people will spent so much time and energy to peruse a completely worthless degree. I'm also stunned that the regulatory agencies allow federal student loans to be used at completely sham universities.
Aug 20, 2010 at 10:16 p.m.
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http://www.collegeinpjs.com
Aug 20, 2010 at 10:04 p.m.
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What these schools play on is the get a degree for not much work or investment. Did you know that right now there is a website that markets by saying you can attend college and not even leave your bedroom? This type of "education" is geared toward people who want maximum return for the least work and the lowest possible inconvenience. College was a huge inconvenience. As a matter of fact it was a downright pain in the tail. I busted my hump for years making no money but spending tons. Trudging through rain, sleet, snow and whatever else. In the end it was worth it, in spades. The take home point is this, if it sounds easy, is easy, is totally convenient, and cheap? It ain't worth the paper it was written on. Education is not the situation where you want to take the path of least resistance.
Aug 20, 2010 at 9:08 p.m.
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http://www.e-referencedesk.com/education...
Aug 20, 2010 at 8:50 p.m.
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in regards to chelleandlou's response about "facilitators". Yes, the one I attended had the same thing. No certified teachers or professors. The only requirement to teach was a bachelors degree in the field you were teaching in.
I had a few really, really good ones. Most of them, however, were non-existent or poor.
Aug 20, 2010 at 7:59 p.m.
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Does anyone know if there a link anywhere that someone can easily find out easily if a college is "state approved"?
Aug 20, 2010 at 7:59 p.m.
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I once went on a job interview for an "academic advisor" position for a business like this. I call it a business, because they're for profit and only care about taking yours or the government's money. At a traditional college, academic advisors have your best interests in mind as far what you want to do with your life, how the classes fit into your schedule, or how you are doing on a personal level. At this place, they wanted to know if I would be able to make 200 calls a day and keep up a quota of signing new students. They made it quite clear the job was more about getting people to sign the dotted line by any means possible not truly about helping anyone with their education goals. About twenty minutes into the interview I stood up and walked out. Having gone to a real college, I knew this wasn't what it was about. I would have felt terrible using my actual college degree to defraud people who just want to change their position in life. I don't necessarily feel that bad for the people profiled in this article because anyone knows you don't want to get a degree from a school that is not accredited. It would be like buying an autograph with no authentication card. It has no value to people in the field you are interested in entering.
Aug 20, 2010 at 7:14 p.m.
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Stay far away from the for-profit schools. I did get involved in one and regret it. Run, far away.
Aug 20, 2010 at 7:05 p.m.
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I took 8 classes and spent over $10k on tuition at Univ of Phoenix. I did it online. I did learn, however I do not feel I got what I paid for and I transferred to Upper Iowa University @ Blackhawk Tech.
UOP is accredited, as it has to be in order to get federal financial aid. I was concerned and I asked several people I knew who completed their degrees at UOP how they liked it, etc. All the reviews were positive so I enrolled. The focus of UOP is learning teams, and in my experience both in education and workforce I have never relied on teamwork to the extent that they force on students at UOP. Of the 8 classes, my grade in 7 went down due to grades of the learning team.
Not only that but I question the people who "facilitate" the online courses. They are people from various industries; I had a couple of attorneys, a couple of police officers, a lady with a PhD in Music (she facilitated the World Religions course I took), and a gentleman who's primary job was that of professor at another school.
TO MELISSA: If you learned anything it was not a mistake. It was not a waste of time or of money. It was however wrong for the school to even allow you to begin classes without the financial aid. Chalk it up as a lesson learned, but do not let it deter you from your goal of obtaining your degree. The interest rate alone is your tip that something is off as Federal Student Loans are low in comparison (5-6% give or take) and have a 10-year repayment plan.
Aug 20, 2010 at 5:57 p.m.
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I'm with Bella. Buyer beware in everything you do, but "it would be by the end of her three-year program." Are you kidding me? What a huge warning sign that was.
I sincerely wish this young couple the very best and I am sorry someone was not there to help them decide on this whopper, a little good advice could have saved them a boatload.
Aug 20, 2010 at 5:40 p.m.
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Hey people! Get a clue! The words "for profit" mean they want to make money! How come people have become so stupid they can't think for themselves and then want to sue somebody because they didn't think things through. Boo freakin' hoo!
Aug 20, 2010 at 5:23 p.m.
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I considered attending one of these for-profit colleges. The admissions "counselor" tried every tactic she could think of to get me to sign on the dotted line. First, she said attending their college would be cheaper than attending my current school. After I showed her the per-credit cost of their school compared to mine ($350/credit at for-profit, $110/credit at current school) she attempted to guilt-trip me into signing up. She was saying that I would receive a better education their, and if I was serious about my education, I would attend their school.
I was called 4+ times a day for over a month. It took many emails for them to finally remove my name off their list.
I do not recommend these for-profit schools to anyone. Fact is, many employers will toss your resume if your education is from one of these schools.
Aug 20, 2010 at 5:06 p.m.
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Face it, these so called institutions are the PT Barnum's of the new day and age. Then of course you factor in the recent academic test scores in this area . . .
Aug 20, 2010 at 4:58 p.m.
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Bella, when you first locate these colleges online they make it seem like you will have one heck of a degree and get a well paying job when finished or even while still attending. All of us nowadays, in this economy, are looking for any way we can to get a good education to secure a good job in the future. Education is key to landing that job and some of us, such as this couple, are yearning for any kind of help we can get. When you borrow student loans, it doesn't seem real til the bill comes. These colleges often tell you grants will pay then when you are enrolled and just getting started, WHAM, they sock you with needing more money so people take out student loans rather than drop out of school. JMO
Aug 20, 2010 at 4:54 p.m.
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Especially when you can look everything up on google and learn it for free.
Aug 20, 2010 at 4:54 p.m.
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Willes said a Westwood recruiter assured her the $75,000 online bachelor’s degree in interior design she was considering wasn’t approved yet in Wisconsin, but it would be by the end of her three-year program.
$75,000 for an online degree? Wouldn't a real Community College be a better option?
Aug 20, 2010 at 4:26 p.m.
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seriously - that much in tuition for interior design and "video game design"??? wow, they saw you coming....
Aug 20, 2010 at 4:22 p.m.
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I agree that these for-profit universities are shady, but I can't for the life of me understand why someone would be willing to pay so much in tuition and not do their due diligence in researching what kind of education they are getting? "My biggest mistake in life was going to college". No. Your biggest mistake was not going to an accredited college or university.
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