Richard Verstegan 5 a.m., March 12
For-Profit College Stocks, Including Bridgepoint, Walloped
Stock of San Diego's Bridgepoint Education, San Diego's highly controversial for-profit, online university, is down 13.24% this morning (Oct. 14) as a negative forecast from the industry's Mr. Big, Apollo Group, reverberated around the whole sector. Apollo, which runs the University of Phoenix, withdrew its outlook for fiscal 2011 and said it expects a "significant" enrollment decline in the current quarter. Apollo cited the "uncertain regulatory environment" in its statement. The Senate recently held hearings, looking into charges that the for-profit colleges rake in federal money while providing an inadequate education, use deceptive sales tactics and fraudulent loan applications, and have high dropout rates and higher tuitions. The Department of Education has proposed a "gainful employment" rule that would slice financing to colleges that turn out students who can't get the jobs necessary to pay off their federal debt. Implementation has been delayed, but the Department of Education expects to have new rules in place in July.
Bridgepoint has been under the Department of Education investigative microscope for some time. The stock is trading at $14.87 this morning; it has been as high as $27.50 in the last 52 weeks and as low as $12.75.