[10] It was first proposed by then-governor of Utah Mike Leavitt at the annual meeting of the Western Governors Association in June 1995.

It was formally proposed the following November, and in June 1996 each signing state governor committed $100,000 toward the launch of the new competency-based university.

While the seed money was provided from government sources, the school was established as a self-supporting private, nonprofit institution.

[11] In 2001, the United States Department of Education awarded $10 million to found the Teachers College, and the first programs were offered in Information Technology.

[15] An audit by the Department of Education's Office of Inspector General, released on September 21, 2017, "concluded that Western Governors University did not comply with the institutional eligibility requirement that limits the percentage of regular students who may enroll in correspondence courses" and that "at least 69 of the 102 courses were not designed to offer regular and substantive interaction with an instructor and, therefore, did not meet the regulatory definition of distance education."

[18][19] The U.S. Department of Education's Office of Inspector General recommended that WGU repay the federal government more than $712 million.

[20] Liz Hill, a spokeswoman for the Department of Education, said in a statement to the Salt Lake Tribune that they were reviewing the Inspector General's report, while also saying "the innovative student-first model used by this school and others like it has garnered bipartisan support over the last decade.

He said "The OIG has applied an arbitrary definition and antiquated interpretation of instruction and faculty roles" that "is not aligned with law nor consistent with today's online- and technology-enabled model".

[18] Paul Fain, the news editor for Inside Higher Ed, said the "much anticipated high-stakes audit" had begun more than four years earlier and the findings were "not a surprise to most observers", due to their reliance on a 1992 law that defines aid eligibility for distance education programs.

[19] He noted that the Inspector General had previously criticized accreditation assessments for competency-based education programs in 2015, partly due to concerns about the amount of interaction between faculty and students.

[23] In making its final determination, FSA reviewed the Department's Office of Inspector General's (OIG) report, examined WGU's records regarding interactions between students and academic staff during the year audited, and also reviewed the favorable findings of WGU's accrediting agency regarding the institution's academic model.

FSA determined that, particularly in light of a lack of clear guidance from the Department at the time of the audit period, WGU's efforts to comply with the governing law and regulations were reasonable and undertaken in good faith.

[30] Students will primarily interact with three types of faculty at WGU: program mentors, course instructors, and evaluators.

These subject matter experts have advanced degrees such as a doctorate or other significant post-graduate work in the courses they instruct.

Military Advanced Education & Transition and Viqtory Media have repeatedly named WGU as a military-friendly institution in their yearly reports.

The initial accreditation, which had a five-year term, was awarded following a process that included a site visit as well as a review of WGU's nursing curriculum.

[43] In 2015, the National Council on Teacher Quality (NCTQ) rated WGU's secondary teaching program highest in best value in teacher education[44] and the National League for Nursing named WGU's College of Health Professions a Center of Excellence.

[8] In July 2018, WGU launched the Center for Applied Learning Science (CALS), a laboratory which focuses on innovation.

[49] In October 2018, Carnegie Mellon University and WGU's CALS teamed up to work on an artificial intelligence professional development project.

Students progress through courses as soon as they can prove they’ve mastered the material, rather than advancing only when the semester or term ends.

Additionally, WGU competencies are geared toward understanding the course material at a level equivalent to a 3.0 (on a 4.0) GPA scale.

The university states that "learning resources come in a variety of forms, including textbooks, web-based tutorials, simulations, [and] online classes.

Objective assessments usually consist of exams created by the university which contain multiple-choice, multiple-answer, true-false and/or matching questions.

[62] To qualify for the general graduate admission requirement the applicant must have earned a bachelor's degree from an accredited institution and complete an interview with the enrollment office.

Undergraduate programs require the student to possess a high school diploma or GED and pass the school's Collegiate Readiness Assessment, and admission into all programs requires an interview with a WGU enrollment counselor to determine whether the competency-based approach is appropriate for the student.

[75][76] The WGU Career and Professional Development Center offers student resources, individual support, and a job board.

Staff also counsel students and alumni regarding resumes and portfolios, interviewing tactics, cover letters, job strategies, and other potential leads for finding employment in the corporate, academic and government sectors.

Students graduating from Ivy Tech, the state's community college system, can take advantage of an articulation agreement which allows them to transfer all credits, waive the application fee, and receive a 5% discount on tuition.

Richard Cummins, Ph.D., who was President of Columbia Basin College, served as Chancellor for a year before retiring in April 2017.

The school was started with a grant from the Bill and Melinda Gates Foundation and $5 million in one-time state funds.