Stock of controversial for-profit education company Bridgepoint Education has been taking a big hit in the past couple of months. On July 7, it was selling for $14.07; today (September 18) it closed at $8.85, down 60 percent since July 7.
Along with other for-profit schools, the stock got a huge ride after the election of Donald Trump as president. One of Bridgepoint's top executives went to work for Betsy DeVos, Trump's education secretary.
The Obama administration had correctly been trying to rein in the for-profits for dubious recruitment, poor education, and inability of grads to get jobs, among many things. In 2011, the United States Senate's Health, Education, Labor, and Pensions Committee (often called HELP) did a big study of Bridgepoint and its major institution, Ashford University, which operates almost entirely online. Then-senator Tom Harkin of Iowa called Bridgepoint "an absolute scam."
On August 15 of last year, Wall Street's Warburg Pincus, which financed Bridgepoint from the outset, said it was selling 2.1 million shares of the stock, bringing its holdings from 33 percent to 26 percent. At the end of 2016, it had 59.8 percent of Bridgepoint stock.
Bridgepoint's latest report to the Securities and Exchange Commission, filed July 26, pointed out that: 1) California's Franchise Tax Board continues to challenge the company's tax filings for the 2008–2015 years; 2) the Oregon Department of Revenue issued a notice of deficiencies statement against the company, which challenged it; 3) the company is under Internal Revenue Service audit for tax returns for 2013–2015; 4) the Department of Education's federal student-aid operation is looking into the company's advertising and marketing, among other things; 5) the attorney general of New York is investigating the company; 6) so is the attorney general of North Carolina; 7) the California attorney general is looking into the company for possible unfair business practices, and the investigation could cost Bridgepoint $8 million to $20 million; 8) the company paid the Securities and Exchange Commission $8 million in penalties and $5 million for restitution to students; and 9) the Department of Justice has an ongoing investigation into the company's Title IV (student aid) programs.