Senate Bill 631 aims to enhance student financial protection at private for-profit colleges in Wisconsin by increasing the student protection fee and establishing a reserve account requirement for these institutions. The bill sets the student protection fee at $3 per $1,000 of adjusted gross annual school revenue and raises the threshold for discontinuing the collection of these fees from $1,000,000 to $5,000,000. Additionally, it mandates that private postsecondary schools maintain a reserve account to indemnify students who experience loss or damage due to fraud, false representation, or the school's failure to fulfill its contractual obligations, including closure. The reserve account must hold at least 25% of the school's highest annual revenue from the past five years, with a provision for new schools based on projected revenue.

The bill also amends existing statutes to reflect these changes, specifically modifying the language regarding the student protection fee and the conditions under which the Department of Safety and Professional Services (DSPS) can approve proprietary schools. Notably, the bill prohibits DSPS from granting approval unless the school meets the reserve account requirement, ensuring that students are better protected against potential financial losses. The new provisions will apply to initial and renewal applications for school approval received on or after the effective date of the bill.

Statutes affected:
Bill Text: 440.52(10)(c)4, 440.52, 440.52(10)(cm)