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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.

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Comments

JustWondering Sept. 19, 2017 @ 5:48 a.m.

Reading the last paragraph which contains a list, most likely incomplete of investigations, leads to only one question - why would an intelligent person ever enroll in anything Bridgepoint Education offers?

While I'm sure other academic institutions, for profit or not, run afoul of state and federal regulations from time to time, the vast number of concurrent investigations against Bridgepoint is overwhelming. I'm just wondering, is Bridgepoint required to disclose these investigations to those who are considering to enroll?

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Don Bauder Sept. 19, 2017 @ 7:22 a.m.

JustWondering: You are right that the list is not complete; there are other transgressions that seem minor.

Does Bridgepoint have to disclose all this to potential students? I can't imagine that it does. Over the years, it has been investigated for aggressive marketing to potential students, many of them unqualified for advanced education. It has used a high-pressure spiel that could not include all the investigations on its table. At one point it was spending more on marketing than on education. Maybe this has to be disclosed in fine print in some document the students sign before enrolling, but I strongly doubt it. Best, Don Bauder

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Don Bauder Sept. 19, 2017 @ 8:46 p.m.

Shimizu Randall: No, you couldn't turn the for-profits into non-profits because the managements of the for-profits by and large don't give a hoot about education. They are in it strictly for the money. If they announced they were going non-profit, look out. There are a lot of bandits in so-called non-profits. Best, Don Bauder

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