After the Gold Rush

The Art Institute’s closing marks the end of a heyday for for-profit colleges.

The Milwaukee campus of the Art Institute of Wisconsin opened in 2010, a prominent building Downtown touted as a trendy place to receive an education and entrée into a creative discipline. Charging about $15,000 a year in tuition and fees, the for-profit college enrolled hundreds. Then, when financial troubles arose with its parent company, Education Management Corp., the towering art school announced plans to eventually close, along with 15 other Art Institutes around the country. As required by state regulation, the company has submitted a “teach-out” plan explaining how the school will keep enough staff on hand to graduate the approximately 400 students who remain. “We are urging students to complete their programs of study,” says Chris Hardman, spokesman for Education Management.

But questions remain about whether the school can entice enough teachers to work at the sunsetting school. Hardman wouldn’t say what measures will be taken to retain instructors, only that the school “has an obligation to our students.” David Dies, executive secretary of the Educational Approval Board – the state agency that regulates for-profit colleges – notes that schools in similar situations have offered additional compensation or cash bonuses to keep sufficient faculty on hand. “Things will get a bit more complicated a year from now,” Dies says, “when a student on a certain pathway can’t continue courses or needs a break.” Hardman says phasing out the school could take three years, at which point, Dies says, “There will be no more time.”

The closing, due in large part to below-average enrollment, is only the latest planned for a for-profit college in the area. DeVry University hopes to close its Downtown campus by Dec. 31, joining Anthem, Sanford-Brown, Kaplan and the University of Phoenix, which have all chosen to shutter Milwaukee-area locations since 2012. In that same year, the EAB ordered Everest College to shut down its campus on the northern edge of the Park East area due to poor performance. For-profit colleges have come under intense scrutiny in recent years due to what some say is a legacy of leaving students stranded with heavy debt and few job prospects.

Gov. Scott Walker attempted to disband the EAB as part of the state’s 2015-17 budget, but the Joint Finance Committee voted down the proposal in May. State Rep. Jonathan Brostoff, D-Milwaukee, who supported keeping the EAB, says it “helps protect students” from “fly-by-night student debt mills.” For-profit enrollment has declined as Wisconsin recovers from the Great Recession. “People run to get more education when the economy is down,” Dies says. “You’re seeing a natural correction.”

‘After the Gold Rush’ appears in the August 2015 issue of Milwaukee Magazine.

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Rich Rovito is a freelance writer for Milwaukee Magazine.