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Bridgepoint Education chief executive Andrew Clark and chief financial officer Daniel Devine have filed trading plans to sell shares that may be acquired upon the exercise of stock options. The filing by the controversy-plagued for-profit college operation was made to the Securities and Exchange Commission late this week. Clark controls 3.2 million shares, or 5.6% of the common stock outstanding. In the plan, he cannot sell more than 100,437 shares per month. On Aug. 5, Clark acquired 50,297 shares that he had received through an option exercise for 31.5 cents each. He sold them the same day for $16.08. On Aug. 6, he got 100,000 shares for 31.5 cents each and immediately sold them for $15.05.

Bridgepoint's shares plunged 5.85% today (Aug. 13) to $13.51-- less than half their $27.50 high of the last 52 weeks. The for-profit sector got beaten up again. Secretary of Education Arne Duncan called for increased oversight of the schools in a letter to Sen. Tom Harkin, whose Health, Education, Labor and Pensions committee has been calling for reforms among these schools, which account for an inordinately large percentage of student loan defaults.

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Comments

Visduh Aug. 13, 2010 @ 3:51 p.m.

When rats begin to desert the ship, it is time to do likewise. A CEO such as Clark cannot be blamed for wanting to cash in on some of his holdings--why else would he have options if not to benefit? But a massive liquidation that comes along just when the seas get choppy for the corporation is a dead giveaway. Any reader who is still holding Bridgepoint stock, or stock in any other similar corporations, now has a late signal to sell. Bail out, pull the ripcord, and settle to earth with your $13 or so per share. The stock could be around 13 CENTS in a few days or weeks.

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nativesd Aug. 13, 2010 @ 4:09 p.m.

What will happen to all the Bridgepoint signs on buildings all over town??

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socal_r32 Aug. 13, 2010 @ 4:26 p.m.

How nice that executives get a bonus yet the employees are told they are not allowed to receive incentives due to DOE regulations, how nice that they do not fall into that category. Why not claim explosive growth, who is going to quit in this economy? This organization is just a big show and not even a year out the bigs are cashing in, lets not forget they are already planning stock buyback, how else are they going to recover the loss and keep the stock artificially high for their own incentives.

Low wages and overhead along with non-competitive salaries, what better time to claim explosive growth in your community? Again, anybody who invests this much in image alone has something up their sleeve.

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Visduh Aug. 13, 2010 @ 4:45 p.m.

Response to post #4:

When there is little or no substance behind the operation, what else can you sell but image. That often explains why corporations that elect to sponsor sports stadia and other such venues are signaling that they don't have anything real to brag about. Pump up the image and keep the corporation afloat as it settles invisibly into the sea. All those buildings, all those signs on the buildings, all the puffery printed in the Light News, and whatever other things it has done to put its name out in the public eye have one goal, and that is to make it look like a success as it heads over the falls.

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Pac17 Aug. 13, 2010 @ 5:52 p.m.

Mgmt selling shares a couple times a year is usually to diversify - especially if it's a small % of their holdings. Obviously govt heat on the for-profit industry and shaky markets have driven the stock down. This stock has one of the highest short interests out there though - that can drive price down significantly short term, especially one with a small market cap like Bridgepoint where shares are thinly traded.

Visduh, are you one of the short sellers or a disgruntled ex-employee? Otherwise, why encourage everyone to sell at this price? A company with good growth, no debt, $200 mil in cash AND that publicly stated it'd already comply with the proposed regulations on for-profit schools isn't going bankrupt. The industry has some bad actors, but nobody in govt wants to see all online educators go under - there's too much demand / need.

My disclosure: I own it and I'm holding it. It's selling at 5x forward earnings - I'll buy more if it gets any cheaper.

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Visduh Aug. 13, 2010 @ 7:09 p.m.

Good luck, Pac17! I'm neither a short seller (my single foray into that sort of thing cost me in the five figures) nor an ex-employee of Bridgepoint. I am a skeptic and have been around the investment world for many decades. What I see here is just what I described in the two previous posts. Read them again.

BTW, your name is a new one. Is your actual last name Clark or Devine?

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SurfPuppy619 Aug. 13, 2010 @ 7:38 p.m.

When there is little or no substance behind the operation, what else can you sell but image.

These "for profit" useless diploma mills spend up to 50% of their revenue on TV and other advertising.... . . BTW, your name is a new one. Is your actual last name Clark or Devine? ===============

LOL...Pac17 just got busted.

Andrew Clark or Daniel Devine, the jig is now up-just post under your real name, you're not fooling anyone.

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Don Bauder Aug. 13, 2010 @ 7:51 p.m.

Response to post #1: I love the way the insiders do it. I have seen it for years. They get founders or early pre-public offering stock for next to nothing. The stock is driven up, often by phony accounting and manipulation. Then comes the announcement: the insiders have filed to sell their stock in "planned" fashion, in an "orderly" way. Best, Don Bauder

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socal_r32 Aug. 13, 2010 @ 7:54 p.m.

To #6

I do agree it is a very lucrative short stock and have taken advantage of it myself. However I would not hold it very long personally. You have to remember those dollars are over 80% government, not actual customer cash and can be taken away at the blink of an eye. These guys are buying @ .30 cents so who is really making money here? They have a very arrogant attitude if you read through their releases, and to me tend to blame. All this company would have to do is admit it, pay up, and take the opportunity to BE the leader in ethical for-profit practices, hell they all worked for UoP so they already knew what could have been changed from the start. Instead they took the best (worst) of what they learned from UoP and used it to prop up and IPO. I left at $18 and am waiting for $12.

So much for agreeing with you. I do agree with your trading, but again remember who supplies that cash flow. They could just as well make an example of BPI. The others have too much Federal money already and they will more then likely leave them alone due to the student populations. I can see lincoln or apollo swooping up Ashford if it really hit the fan so those students are safe as well.

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Don Bauder Aug. 13, 2010 @ 7:55 p.m.

Response to post #2: BK is not necessarily in the cards. It depends on how severely the government punishes this company. Also, Visduh's 13 cents in a short period of time may turn out to be far too pessimistic. (I think Visduh was kidding.) Again, it depends on the outcome of the DOE investigation, and the new investigations being planned by Harkin, etc. Best, Don Bauder

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Don Bauder Aug. 13, 2010 @ 8 p.m.

Response to post #3: What about those 2,900 San Diego employees? Still, though, it is premature to write this company off. It will depend on how hard the DOE's OIG comes down. But keep this in mind: it has already hit the company hard in its findings. Best, Don Bauder

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Don Bauder Aug. 13, 2010 @ 8:04 p.m.

Response to post #4: In sponsoring the Holiday Bowl and paying for a study of how much the company contributes to the local economy, Bridgepoint was calling attention to itself. This timing can be questioned. Best, Don Bauder

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socal_r32 Aug. 13, 2010 @ 8:07 p.m.

To #12

I agree. However remember most of those employees are leftovers from the mortgage brokers. Kinda makes me woozy.

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Don Bauder Aug. 13, 2010 @ 8:08 p.m.

Response to post #5: Companies that pay big bucks for naming rights on pro stadia are usually exactly what you describe: blowhards lacking substance. I would guess the same is true for many companies sponsoring bowl football games. But again, it is premature to write this company off completely. Best, Don Bauder

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Don Bauder Aug. 13, 2010 @ 8:12 p.m.

Response to post #6: Actually, the heavy short position in Bridgepoint could work to your advantage. If the government just slaps the company's wrist, the shorts will rush to cover and the stock should zoom. Best, Don Bauder

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Don Bauder Aug. 13, 2010 @ 8:16 p.m.

Response to post #7: We welcome new names contributing, and we also welcome people disagreeing with us. There is no question: I have grave doubts about this company's modus operandi. Its marketing certainly smacks of boiler rooms I have known. Most of the contributors to this blog, including Visduh, have doubts about this company. But we don't want to denigrate the bulls. Best, Don Bauder

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Don Bauder Aug. 13, 2010 @ 8:21 p.m.

Response to post #8: The Bridgepoint brass may have never read any of the Reader columns or blog items. They just bask in the puffery that the mainstream media pump out about them. I have, however, given the company its chance to respond in the columns I have done about it. The company has responded to my queries. Best, Don Bauder

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Don Bauder Aug. 13, 2010 @ 8:27 p.m.

Response to post #10: Yes, the company's fate is in the hands of the federal government, and there is a lot of pressure to do something because the student loan crisis could billow into another subprime scandal. However, the current administration says it wants more college grads; it remains to be seen whether it cares about the quality of those grads. Best, Don Bauder

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Don Bauder Aug. 13, 2010 @ 8:29 p.m.

Response to post #14: I would hope the DOE's investigators would look into the background of the sales crew. Best, Don Bauder

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Don Bauder Aug. 13, 2010 @ 8:30 p.m.

Response to post #18: Bulls and bears have a symbiotic relationship. Best, Don Bauder

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socal_r32 Aug. 13, 2010 @ 8:58 p.m.

To 21:

Who knows. Would they even know what they are looking for to begin with. Looking at the hearing videos I can see they are only now reacting. These guys are also noticeably separating the call centers throughout SD, like you, I think this is strategic. I always considered it kind of funny they were out here anyways considering the tax shelters in other States (especially the midwest).

I really like the State licensing idea, this would hopefully encourage possible recruiter licensing and/or employee screening:

http://blogs.barrons.com/stockstowatchtoday/2010/08/13/for-profit-trouble-ahead-doe-letter-to-sen-harkin/?mod=rss_BOLBlog

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Pac17 Aug. 13, 2010 @ 10:48 p.m.

Great points all - thanks.

Re: #7/Visduh and Surfpuppy: Thanks for the smile :) but no, my last name won't be found in the 10-Ks. And if any execs spend their time on posting to our local paper, the investors are in a lot of trouble. I'm just an investor and SDR reader, but haven't posted in the past. Guess when my money is at stake, I take more of an interest - go figure.

Re: #10 - agree on the federal funding but look at what the last 6 months of terrible coverage and Eisman testifying produced: proposed regs that Bridgepoint already meets across the board (unlike many programs at the larger companies). The govt will make an example of the company(ies), if any, with the most egregious violations. That of course assumes Harkin is still leading the committee and the investigations have any teeth after the November elections.

Re: #21/Don - I hope so too!

Bottom line, if the mgmt is as bad as you all assume, then we investors are in a lot of trouble. The historians know that the sector has survived oversight before. I'm a contrarian by nature and not only are the company financials solid, but the US economy is in very slow growth (many people still looking for additional education if they aren't working) and I just don't believe in the government's ability to level the for-profit education sector given the demand for (emphasis) quality education and the White House's push to maximize US college graduates.

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SurfPuppy619 Aug. 13, 2010 @ 10:52 p.m.

Re: #7/Visduh and Surfpuppy: Thanks for the smile :) but no, my last name won't be found in the 10-Ks.

There goes our chance for an insider scoop....

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David Dodd Aug. 13, 2010 @ 11:07 p.m.

"...I just don't believe in the government's ability to level the for-profit education sector given the demand for (emphasis) quality education and the White House's push to maximize US college graduates."

That's a very interesting gamble. In an economy where 12 1/2% are unemployed (and that's not including those who are no longer eligible to collect unemployment), college degrees from any school seem to be worth less and less every month.

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Pac17 Aug. 13, 2010 @ 11:20 p.m.

Re: #26/Refried Gringo,

I understand your point, but that's the nature of the education industry - it always picks up in a recession. Unemployed people will spend their time both looking for work and trying to make themselves more appealing to employers through additional training/degrees. It's the nature of capitalism - if you're hiring someone new, will you pay more attention to a high school grad or a college grad? You can ask the same question of someone with demonstrated skills - all else equal, the person with more completed education will be hired. So it's not so much a gamble on the merits of organized education as it is on the actual institution. 95%+ of Ashford grads recommend the program, which contributes to my faith in the program.

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David Dodd Aug. 13, 2010 @ 11:59 p.m.

"It's the nature of capitalism - if you're hiring someone new, will you pay more attention to a high school grad or a college grad?"

Actually, I've intentionally bypassed college grads and hired non-college grads, it equates to what's appropriate for the job. But never mind that, if you've made money from a positive investment in the for-profit education sector good for you, but I'll be damned if I can figure out how you've done it. And if you're still in it and you haven't cashed out your chips, I highly recommend keeping up with Bauder's stuff, his hammer doesn't often miss the head of the nail.

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Pac17 Aug. 14, 2010 @ 12:35 a.m.

"Actually, I've intentionally bypassed college grads and hired non-college grads, it equates to what's appropriate for the job. But never mind that..."

No one says a college degree makes one right for every job. We're on the same page - you want the most qualified person for the position. If you're looking for a delivery truck driver, you'll take the guy with the most experience, not the highest degree. I expect you'd agree that education is the most recognizable way to gain skills. That was my point - the 12.5% unemployed you quoted will look for the best ways to make themselves competitive. If they can't find a job, they'll look for an institution to offer the training needed to get them that job.

Regarding investment success, as with any investment, I've made money on this sector by buying specific stocks when they're undervalued, not chasing them when everyone wants them, and not dumping them when the market is irrational. For those who believe the market is rational in its current valuation of Bridgepoint's stock, I'd love to hear why. Considering its product and the latest share price, I'd say there's a lot of upside for anyone with a 6-12 month investment horizon (enough to ride out the results of education "reform" and see the market recognize the good companies).

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David Dodd Aug. 14, 2010 @ 12:56 a.m.

" ...the 12.5% unemployed you quoted will look for the best ways to make themselves competitive. If they can't find a job, they'll look for an institution to offer the training needed to get them that job."

Well, I reckon that's where we differ in our analysis. You see them as potential students, I see them as potential victims. But that really isn't what my initial comment was all about. We were discussing your investment, and I was surprised that you saw it as a winner.

In other words, I don't bet on the prettiest horse in the race, I bet on the horse I think is going to win, and I don't much care what it looks like otherwise. I'm more interested in why you choose to back that horse that you back when the rest of the betting public seems to be betting on something entirely different. That's the interesting thing I see in your comments.

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Pac17 Aug. 14, 2010 @ 1:49 a.m.

"You see them as potential students, I see them as potential victims."

That's the big debate. I think there's value in the product: the education offered at Ashford. I'd love to hear why anyone would disagree.

"I'm more interested in why you choose to back that horse that you back when the rest of the betting public seems to be betting on something entirely different."

I think negative govt comments on the sector have scared investors off the good stocks along with the bad. The sector won't disappear - the good companies will take market share. I'd mentioned "good growth, no debt, $200 mil in cash AND...publicly stated it'd already comply with the proposed regulations on for-profit schools". Even with no growth, the multiple paid on Bridgepoint earnings would still be less than half of what the market pays for other companies, even in this market. That's the type of buying opportunity that screams at me. Unless enrollments drop by 50%, it's a great value. Ultimately, I like the product - it offers convenient education options for people that wouldn't have them otherwise. Profits at Bridgepoint only dry up if the students no longer believe the education is worthwhile.

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Don Bauder Aug. 14, 2010 @ 6:56 a.m.

Response to post #23: It is certainly possible -- although I have heard no suggestion of it -- that both the sales and online instructor sides could be relocated to other states offering subsidies. The company keeps bragging about its large number of San Diego employees. Best, Don Bauder

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Don Bauder Aug. 14, 2010 @ 7:03 a.m.

Response to post #24: The slow growth of the U.S. economy and the concomitant high unemployment drive the big enrollment gains of the for-profit colleges. There is no doubt about that. It appears there may be two camps at the top in Washington: some, alarmed by the extremely high defaults and the billowing student loan crisis, want reform. That will be bad for the for-profits. But others, for political reasons, want to be able to point to a number and claim that their policies produced more college grads; for them, quality of that education doesn't matter. Best, Don Bauder

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Don Bauder Aug. 14, 2010 @ 7:05 a.m.

Response to post #25: What kind of scoop: ice cream scoop or pooper scooper? Best, Don Bauder

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Don Bauder Aug. 14, 2010 @ 7:07 a.m.

Response to post #26: Again, the high unemployment is driving for-profit enrollments. Best, Don Bauder

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Don Bauder Aug. 14, 2010 @ 7:10 a.m.

Response to post #27: Some government employees get automatic pay raises if they get a college diploma -- no matter how or from where. That helps boost for-profit enrollments. Best, Don Bauder

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Don Bauder Aug. 14, 2010 @ 7:12 a.m.

Response to post #28: Some people don't get hired -- and others lose jobs -- because they are told they are overqualified. Best, Don Bauder

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Don Bauder Aug. 14, 2010 @ 7:18 a.m.

Response to post #29: If you look at just two things -- the company's sales/profit growth and its valuation -- Bridgepoint stock looks cheap. But the market is fearful of reforms slashing for-profits' growth record. If Bridgepoint loses its ability to tap federal money, the game is over. On the other hand, the market over-discounted newspaper stocks during the recent (and ongoing) mayhem. Some gamblers made money buying McClatchy at 35 cents, say, and Gannett at $4. Best, Don Bauder

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Don Bauder Aug. 14, 2010 @ 7:26 a.m.

Response to post #30: It depends, of course, whether you are a short term gambler or an actual investor. The for-profit college stocks are quite volatile -- plunging one day on seemingly bad news, soaring the next on seemingly good news. So a gambler -- say, a day trader -- can make a bundle on Bridgepoint or Apollo (or lose a bundle) just playing that volatility. Keep this in mind: Wall Street is a bunch of day traders -- buying one minute and selling the next. If you're reading the economic tea leaves, don't look at the stock market. It used to be a good indicator of future economic activity. No longer. Best, Don Bauder

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Don Bauder Aug. 14, 2010 @ 7:30 a.m.

Response to post #31: The final report by the DOE's OIG and Harkin's findings will help answer some of the questions you are posing. Actually, the preliminary OIG report on Bridgepoint is already pretty damning. Best, Don Bauder

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SurfPuppy619 Aug. 14, 2010 @ 8:34 a.m.

95%+ of Ashford grads recommend the program, which contributes to my faith in the program.

Says who??? Ashford itself??

Please feel free to back that whopper up with a legit cite.

A 100% bogis claim, in fact I would bet not even 25% have faith in the program after they graduate and cannot find a job but are saddled with $100K of nondischargable SL debt.

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SurfPuppy619 Aug. 14, 2010 @ 8:38 a.m.

the 12.5% unemployed you quoted will look for the best ways to make themselves competitive. If they can't find a job, they'll look for an institution to offer the training needed to get them that job.

The problem is NOT with their education or training-it is the fact THERE ARE NO JOBS-and NO amount of education or training is going to change that fact for the unemployed.

There are PART TIME gov jobs that are receviing 500+ applications, so please tell me how the other 499 applicants who are not hired are going to be better off with an Ashford degree....

BTW-the U-6 UE rate, the true UE rate, is twice the "official" U-3 UE rate.

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SurfPuppy619 Aug. 14, 2010 @ 8:47 a.m.

That's the big debate. I think there's value in the product: the education offered at Ashford. I'd love to hear why anyone would disagree.

There is NO VALUE in for profit dimploma mills like Ashford-none, zero, nada-that is why the default rate on the educational loans at for profit schools was 44% 3 years ago-BEFORE the Great Depression hit, it is probably 75% today;

"In general, all school types included in Table 1-4 experienced the same general trends reflected in Table 1-3, for overall default rates: three-year default rates decrease each year, an increasing percentage of defaulters were defaulting in the third year, and the composition of the three year rates reflects decreased percentages of defaults attributable to the two-year cohort period."

"However, two of these trends are significantly more pronounced for proprietary schools than for public or private schools. "

Cite-See "Tthe Argument" link at bottom of page-hit the link and go to page 17; http://studentloanjustice.org/

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Don Bauder Aug. 14, 2010 @ 9:06 a.m.

Response to post #41: Yes, I would question that 95% stat. A student that has defaulted would not be likely to laud the institution. Nor would one who can't get a job. Best, Don Bauder

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Don Bauder Aug. 14, 2010 @ 9:12 a.m.

Response to post #42: When the Federal Reserve vows that it will continue to give money for free to the big banks as long as unemployment remains high, there is not much chance that unemployment will sink. The big money has an interest in seeing it remain high -- and the big money owns the big pols. High unemployment is becoming woven into our culture, I am afraid. Best, Don Bauder

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Don Bauder Aug. 14, 2010 @ 9:15 a.m.

Response to post #43: I don't know that the default rate has hit 75%, but anything above 40% is quite high, particularly when students at for-profit schools are a small percentage of the total in college. Best, Don Bauder

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Visduh Aug. 15, 2010 @ 9:28 a.m.

Today's edition (Sunday, August 15) of the Light News has a piece, tucked away on Page A-10, headlined (awkwardly) "Lowest loan repay rates at for-profit colleges." It was picked up from the NY Times News Service, and reports on figures released "Friday" by the DOE. To cut to the chase, it reports that over half of the grads of public or private non-profit colleges are paying their loans, whereas the rate for the for-profits is 36%.

Why the reporter chose to report those rates instead of the default rates--which one might note is 100% minus 36% equals 64% for the for-profits--is anybody's guess. But a close look means that overall, just about 2 of every 3 such graduates is in student loan default. And that is sickening, IMO.

In this piece, some institutions mentioned are University of Phoenix, DeVry, and Kaplan. Guess which one is NOT mentioned? Bridgepoint of course. Did the entire syndicate piece have more meat? Probably, and there's a good probability that Bridgepoint, big as it claims to be, was also mentioned, but edited out in Mission valley. We cannot say that the U-T has been ignoring this matter. Why, they ran a piece from the NYT today that went into it in detail(?), didn't they? But there wasn't any attempt to attract much attention to it. Oh, the biggest thing on the front page today was a puff piece on Irwin and Joan Jacobs and their plans to give away half of their considerable fortune.

To change subject slightly, and to add to SurfPup's rants on the value, actually lack of value, of these degrees, one thing the typical student doesn't understand is the word "overqualified." It is a great smokescreen word for hiring managers to use to help them weed out applicants. Achievement oriented people think that the more you know, the more valuable you are to a potential employer. And that would be true, except that businesses and other organizations fear that more qualifications lead to demands for higher pay and to rapid dissatisfaction. So, many attempt to avoid those things by avoiding hiring people whose education or training exceeds the minimums required for the job being filled. A BA didn't get you the dream job? Go for a masters! See three doors close to you for every new one that opens up.

It just ain't fair!

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SurfPuppy619 Aug. 15, 2010 @ 10:39 a.m.

Why the reporter chose to report those rates instead of the default rates--which one might note is 100% minus 36% equals 64% for the for-profits--is anybody's guess.

No, the default rate is different from those not paying-those not paying, and there are millions, could be in either 1) forebearance, or 2) deferement.

But the TRUE test of the education institution and the student loan is how many loans are actually PAID back in FULL?

If the loan is never paid back, then it really does not matter if it is not in default-because the purpose it to have the loan paid back.

With all the scams in student lending that is causing many problems, from the scams, not the students doing the borrowing.

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SanDiegoParrothead Aug. 15, 2010 @ 12:36 p.m.

In the plan, he cannot sell more than 100,437 shares per month. On Aug. 5, Clark acquired 50,297 shares that he had received through an option exercise for 31.5 cents each. He sold them the same day for $16.08. On Aug. 6, he got 100,000 shares for 31.5 cents each and immediately sold them for $15.05

=============================================

Don: I'm confused.
Aug 5 (50,297) + Aug 6 (100,000) = 150297.

I thought he couldn't sell more than 100437 per month?

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Don Bauder Aug. 15, 2010 @ 1:32 p.m.

Response to post #47: I didn't see the NY Times wire story. There were several things happening on the for-profit college front last week. The GAO had a negative report on four of the schools, but Bridgepoint was not one of them. My guess is that whoever edited the NY Times wire story was not even aware that Bridgepoint was a sacred cow at the U-T. But your suspicions certainly may be on the mark. Best, Don Bauder

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Don Bauder Aug. 15, 2010 @ 1:35 p.m.

Response to post #48: Are those data available to the public? They would be interesting. Best, Don Bauder

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Don Bauder Aug. 15, 2010 @ 1:37 p.m.

Response to post #49: Yes, that confused me, too. There must be a loophole of some kind. I should have left out the 100,000 figure and the post wouldn't have been confusing. But he did sell the 150,000. That was clear. Best, Don Bauder

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sdtoyou Aug. 15, 2010 @ 4:05 p.m.

Well I worked their and I can tell you if you are a short seller, your fortunes will be great. I worked there in a manager role, trained other managers and also became a senior manager, and found that, they have top people who play with the hours people work, to limit the overtime they pay... that top person, or (she) name rhymes with Lava, was a Director of the Rockies but got demoted to Asst. Director of Ashford.

One of the Vice Presidents of Ashford is a 27 year old girl that came from U of P and was not very impressive with her numbers and I would venture to say I could speculate how this blonde bombshell went from new hire, manager to VP of admissions in about 1 and half, but I will not, as none of my speculation could be substantiated.

Their talent is always losing out to burn out U of P chicks that claim sexual harrassment when they see someone about to get promoted and it isn´t them. God, I could go on, and I know so much about this place, but sooner or later, the house of cards is going to come down from he boiler room. You see that movie?

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sdtoyou Aug. 15, 2010 @ 4:33 p.m.

I know a lot about what goes on there and a 27 old vp, who doesn´t have the experience for the position is one reason I wouldn´t buy this stock, but short sell it.

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BradleyFikes Aug. 15, 2010 @ 8:28 p.m.

47,

"In this piece, some institutions mentioned are University of Phoenix, DeVry, and Kaplan. Guess which one is NOT mentioned? Bridgepoint of course. Did the entire syndicate piece have more meat? Probably, and there's a good probability that Bridgepoint, big as it claims to be, was also mentioned, but edited out in Mission valley."

I read the article at the NY Times: http://www.nytimes.com/2010/08/14/education/14college.html at the New York Times, and Bridgepoint wasn't mentioned. But it is certainly worthwhile for the U-T and the North County Times (where I work), to look into Bridgepoint's status in this matter.

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David Dodd Aug. 15, 2010 @ 8:35 p.m.

Loving this.

Write it, Don, and they will come.

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Don Bauder Aug. 15, 2010 @ 9:39 p.m.

Response to post #53: For amateur investors, I am not sure there is any such thing as a "good" short. You can know absolutely that a company is headed into BK, but if the bulls keep buying, you will be forced to cover at a loss. And these days, the bulls have high-speed, high-power computers that can be used to manipulate stocks. Best, Don Bauder

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Don Bauder Aug. 15, 2010 @ 9:41 p.m.

Response to post #54: Keep in mind that these stocks are extremely volatile. Your short position may be remunerative, but you will have to be nimble. Best, Don Bauder

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Don Bauder Aug. 15, 2010 @ 9:45 p.m.

Response to post #55: The U-T would have to eat a lot of humble pie if it actually began covering Bridgepoint honestly. Best, Don Bauder

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Don Bauder Aug. 15, 2010 @ 9:46 p.m.

Response to post #56: I hope so. Best, Don Bauder

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Don Bauder Aug. 16, 2010 @ 8:04 a.m.

NOTE: If you go to www.tigersoftware.com, which is run by a San Diegan, you will find that there is a lot of insider selling among brass of for-profit colleges. Best, Don Bauder

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MURPHYJUNK Aug. 16, 2010 @ 9:42 a.m.

this may have been their plan along.

make a huge profit in both directions.

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Pac17 Aug. 16, 2010 @ 10:31 a.m.

Re: #41 & 44:

Regarding the 95% recommendation rate: It's actually 97% (of AU students who would recommend AU to others) and conducted by / in conjunction with Noel Levitz Adult Learner Inventory survey of student satisfaction. Per their site, Noel Levitz conducts independent surveys (but yes, paid as a consultant) and has worked with 2,600 institutions. The 97% is quoted in the December 2009 Wedbush "10th Annual California Dreamin’ Management Access Conference" slides. I have the pdf - happy to send to anyone interested - but don't have the link. If you have it, slide 7 has the numbers I quoted. Could this all have been made up by management? Depends on how low your opinion of management is...

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David Dodd Aug. 16, 2010 @ 10:52 a.m.

Noel Levitz was once a subsidiary of Sallie Mae. You're going to have a tough time getting that "independent" survey past this crowd, Pac.

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Don Bauder Aug. 16, 2010 @ 11:48 a.m.

Response to post #62: It's usually the plan of insiders in an IPO to run the stock up and dump as much as legally permitted and as soon as possible. Best, Don Bauder

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Pac17 Aug. 16, 2010 @ 11:50 a.m.

Re: #64

I noted they were paid as a consultant – not trying to get anything by anyone. Former affiliation with Sallie Mae is one thing, assuming they made up all numbers for the 2,600 schools they worked with is another. Kraft was once a subsidiary of Philip Morris, but I don't question every statement it makes on health or nutrition.

The sector has bad actors and misdeeds. However, assuming each for-profit education company is a Countrywide in disguise and about to collapse means you’ll miss out on the chance to buy the eventual government oversight survivors at historically cheap levels.

For investments, I'm looking for the ones who will get a slap on the wrist and avoiding those most at risk of losing funding. That’ll be based on loan repayment, gainful employment levels and adhering to new legislation – so far Bridgepoint is among the best positioned. If you think all Title IV funding will be shut down, short them all. If you think the govt will punish the worst actors but keep for-profit education options open, I’d argue Bridgepoint’s stock is undervalued at current levels. Today’s price moves support that, though the volatility may remain through November at least.

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Don Bauder Aug. 16, 2010 @ 11:51 a.m.

Response to post #63: I find it hard to believe that a person in default of his/her loan would heap so much praise on the institution. Best, Don Bauder

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Don Bauder Aug. 16, 2010 @ 11:53 a.m.

Response to post #64: If true, that may explain some things. Best, Don Bauder

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David Dodd Aug. 16, 2010 @ 11:54 a.m.

Re #68: It's true. Links upon request, but likely not necessary.

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Don Bauder Aug. 16, 2010 @ 11:55 a.m.

Response to post #66: The definition of gainful employment will be key. Best, Don Bauder

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David Dodd Aug. 16, 2010 @ noon

Re #66: I'm not accusing you of pulling one on us, simply pointing out something obvious, it's sort of easy to connect those two dots. So far as investing, I'm clueless, but I look at it as I look at horse racing. I bet value. When I look at short-selling, it's difficult for me to define a certain amount of value in that. When you go to the track, you can't bet against a horse, only for a different one. That makes it impossible for me to see value in short-selling.

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socal_r32 Aug. 16, 2010 @ 1:17 p.m.

What is really noticeable is who flipped their options. What is suspicious in the long run to me is who cashed in and who did not. Looks like the former UoP guys have their own opinion on their stock.

http://finance.yahoo.com/q/it?s=BPI+Insider+Transactions

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SurfPuppy619 Aug. 16, 2010 @ 1:36 p.m.

However, assuming each for-profit education company is a Countrywide in disguise and about to collapse means you’ll miss out on the chance to buy the eventual government oversight survivors at historically cheap levels.

The default rate for "for profit" schools was 44% before the financial meltdown of 2008, it is probably double that today.

You're in denial if you think for profit education is a winner with those stats.

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SurfPuppy619 Aug. 16, 2010 @ 1:38 p.m.

Noel Levitz was once a subsidiary of Sallie Mae.

SLM Lie- say it anit so!!!!

The Same SLM that has 3 class actions currently pending against it for fraud in federal court!!!!!!!!

Yes, Pac17 has some solid evidence there :)

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SurfPuppy619 Aug. 16, 2010 @ 3:04 p.m.

"Someone with experience in the for-profit college marketing business told me that the same online sales geniuses who used to work for mortgage brokers are now employed by for-profit colleges. Their business is the same: fill out the forms, get the money, consequences be damned. Will we stop them this time? "

http://www.investingcontrarian.com/financial-news-network/anya-kamenetz-830-billion-in-student-loans-the-new-mortgage-bubble/#comment-9091

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Pac17 Aug. 16, 2010 @ 3:39 p.m.

Re: #73

"The default rate for "for profit" schools was 44% before the financial meltdown of 2008, it is probably double that today.

You're in denial if you think for profit education is a winner with those stats."


Appreciate the enthusiasm, but I never said the industry as a whole is a winner. It's going through a massive shakeup with additional legislation likely. Which means the companies best positioned will gain market share as others fall off.

Per the Dept of Ed's release on Friday, Bridgepoint's Ashford students are among the few for-profits that repay at a rate above the 45% hurdle that the Dept considers to be acceptable. "Nonprofit" schools average in the mid 50%s. Ashford students are almost 20% active military (minimal default) and a larger portion of students are completing degrees, not beginning them with no understanding of financial aid. Sure, some still default, but you're kidding yourself if you think the govt is shutting down the entire sector. All of which contributes to the big rebound in share price today. Consider the low multiples paid for its earnings and there's a lot of upside.

Surfpuppy, this one's for you:

http://www.streetauthority.com/news/new-federal-report-reveals-which-these-stocks-buy-456466

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Don Bauder Aug. 16, 2010 @ 3:51 p.m.

Response to post #71: When you go to the race track, bet against a horse that has been drugged. But don't tell anybody that you know which horse has been drugged. You might wind up in the slammer. Best, Don Bauder

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Don Bauder Aug. 16, 2010 @ 3:56 p.m.

Response to post #72: I suspect you will see a lot of executives in the for-profit college business exercising options and immediately dumping their stock. They know what's coming. Best, Don Bauder

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Don Bauder Aug. 16, 2010 @ 4:39 p.m.

Response to post #73: The most recent default rate I've seen is 44%. Best, Don Bauder

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Don Bauder Aug. 16, 2010 @ 4:42 p.m.

Response to post #74: Femme fatales: Fannie and Sallie. Best, Don Bauder

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Don Bauder Aug. 16, 2010 @ 4:46 p.m.

Response to post #75: Bridgepoint stock jumped more than 10% today (Aug. 16). Best, Don Bauder

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Don Bauder Aug. 16, 2010 @ 4:50 p.m.

Response to post #76: The bears and bulls are in a real battle here. Best, Don Bauder

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Don Bauder Aug. 16, 2010 @ 4:53 p.m.

Response to post #77: Motley Fool had a piece on Bridgepoint today. Looked like a puff piece, but I haven't read it. Best, Don Bauder

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sdsocialdiary Aug. 17, 2010 @ 10:54 a.m.

We met Andrew Clark at a fun 'Tux 'n Tennies San Diego Symphony event a few months ago....Bridgepoint was a big sponsor... he seemed very cordial, his picture is on page 3 of http://www.thesocialdiary.com/symphonytuxntennies2010.html ....It seems Bridgepoint has appeared at a number of charitable events.... support that is much needed.

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Don Bauder Aug. 17, 2010 @ 11:57 a.m.

Response to post #85: Oh yes. How many times do you see someone wearing a tuxedo top with a pair of Levi's? You can expect Bridgepoint to sponsor many more such events. Best, Don Bauder

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Don Bauder Aug. 17, 2010 @ 12:32 p.m.

BRIDGEPOINT STOCK GETTING WHACKED TODAY DESPITE SEEMINGLY GOOD NEWS. Stock of Bridgepoint Education is down 11.82% today (Aug. 17) to $13.13, giving up the big gains it made yesterday. Both Motley Fool and the Wall Street Journal reported that Bridgepoint has a 45% loan repayment rate. It sounds low, but it's better than many for-profit colleges' rates, such as at Kaplan, the Washington Post subsidiary, which is at a mere 28%. Best, Don Bauder

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SurfPuppy619 Aug. 17, 2010 @ 1:01 p.m.

We met Andrew Clark at a fun 'Tux 'n Tennies San Diego Symphony event a few months ago....Bridgepoint was a big sponsor...

By sdsocialdiary 10

Margo- I want a date with that beauty Kima.

Make it happen.

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Don Bauder Aug. 17, 2010 @ 7:04 p.m.

Response to post #88: Margo is a social columnist, not a matchmaker. Best, Don Bauder

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Burwell Aug. 17, 2010 @ 7:10 p.m.

Response to post #88: Margo is a social columnist, not a matchmaker. Best, Don Bauder

=======

Kima is a dog.

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David Dodd Aug. 17, 2010 @ 7:20 p.m.

Kima is a dog.


I thought, "Man, Burwell, that's a rude statement."

And then I hit the website to decide for myself, and I have to agree with Burwell, Kima is, in fact, a dog.

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Don Bauder Aug. 17, 2010 @ 9:31 p.m.

Response to post #90: "Dog" can be taken two ways. Best, Don Bauder

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Don Bauder Aug. 17, 2010 @ 9:33 p.m.

Response to post #91: Let's clear up this ambiguity: in what sense is she a dog? Best, Don Bauder

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Don Bauder Aug. 17, 2010 @ 9:37 p.m.

Response to post #92: Oh, I get it. Kima is one of those dogs on the New York Stock Exchange that dress up in flashy garb, then go into the tank. That's three meanings of "dog" now and this still isn't clarified. I could see SurfPup pursuing two of the three. Best, Don Bauder

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Burwell Aug. 17, 2010 @ 9:47 p.m.

Response to post #91: Let's clear up this ambiguity: in what sense is she a dog? Best, Bud Bauder

====================

Kima is a real bowwowser. Kima has a face only a mother could love.

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sdsocialdiary Aug. 18, 2010 @ 6:47 a.m.

Kima is a rescue German Boxer... sorry guys she has a boyfriend... a 150 pound Newfoundland named Oz...he's a Therapy Dog... before you make too many quips on that... Kima is fixed and fixed on him... Kima by the by has been the Arthritis Foundation Dog Honoree for their annual walk for 2 years... they credited her with helping to bring in an extra 50% Net ... a good thing since arthritis costs the U.S. billions... ... a face only a mother could love... did you notice the 'cindy crawford' beauty mark by her lips?

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Don Bauder Aug. 18, 2010 @ 8:11 a.m.

Response to post #96: And I'll bet her mother doesn't even love her anymore. Best, Don Bauder

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Don Bauder Aug. 18, 2010 @ 8:14 a.m.

Response to post #97: A German Boxer taking up with a Newfoundland smacks of miscegenation that won't go over well in Berlin. Best, Don Bauder

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Don Bauder Aug. 18, 2010 @ 8:16 a.m.

Response to post #98: Agreed. Best, Don Bauder

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SurfPuppy619 Aug. 18, 2010 @ 8:55 a.m.

Kima is a rescue German Boxer... sorry guys she has a boyfriend... a 150 pound Newfoundland named Oz...he's a Therapy Dog... before you make too many quips on that... Kima is fixed and fixed on him......... a face only a mother could love... did you notice the 'cindy crawford' beauty mark by her lips?

By sdsocialdiary 6

You just destroyed my puppy hope and future Margo...........

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sdsocialdiary Aug. 18, 2010 @ 9:36 a.m.

SurfPuppy.... Kima says no ring yet so ....

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Don Bauder Aug. 18, 2010 @ 2:05 p.m.

Response to post #102: Response to post #102: It's a bitch, SurfPuppy. Best, Don Bauder

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Don Bauder Aug. 18, 2010 @ 2:06 p.m.

Response to post #103: It's not the first time SP has lost a round. Best, Don Bauder

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jham88 Sept. 24, 2010 @ 9:26 p.m.

I liked what i read today about Secretary Duncan's viewpoint on for profits.

In light of the enormous lobbying effort aimed at diluting or derailing rule changes, perhaps the most important part of the announcement was Education Secretary Arne Duncan’s language.

“We’re moving forward on gainful employment regulations," he said. "While a majority of career colleges play a vital role in training our workforce to be globally competitive, some bad actors are saddling students with debt they cannot afford, in exchange for degrees and certificates they can’t use.”

Next up: On Thursday, the Senate’s Health, Education, Labor and Pensions committee will hold yet another hearing on for-profits.

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