Troubled Bridgepoint runs into GI Bill problems

On May 26, San Diego–based Bridgepoint Education reported more problems: Iowa's Department of Education said the state, beginning June 30, would no longer approve applications for G.I. Bill benefits. Ashford University, the online operation that accounts for most of Bridgepoint, will try to get the benefits through a California approving agency.

The for-profit higher education company, in hot water on several fronts, has 6250 students receiving G.I. Bill benefits. The company made the announcement in a filing with the Securities and Exchange Commission.

Bridgepoint's problems in Iowa are an example of what the publication Inside Higher Education calls the "buying of accreditation."

In 2005, Bridgepoint purchased a tiny Iowa college named Franciscan University of the Prairies, which was in financial difficulties. It had been founded in 1893 as Mount St. Clare Academy, a girls' boarding school. In 1918 it had become Mount St. Clare College.

Bridgepoint changed the name to Ashford University and used it as the base of its online operation, which shortly became 99 percent of the company. Bridgepoint has had troubles with accreditation (although it has it for now), and a number of other matters.

The school's financial controls ran afoul of the Securities and Exchange Commission. The Department of Education has looked into several aspects of the company, including whether or not it is making misrepresentations in recruiting students. It is now under investigation by New York, North Carolina, California, and Massachusetts; earlier, it settled with Iowa.

In a 2011 investigation of Bridgepoint by the United States Senate's Health, Education, Labor, and Pensions Committee, senator Tom Harkin of Iowa called Bridgepoint "an absolute scam."

This month, the company reported that it lost $10.1 million in the first quarter of 2016, compared with a loss of $400,000 in the first quarter of 2015. Revenue and student enrollment also declined.