Bridgepoint Education, San Diego’s troubled and controversial for-profit education company, on March 13 said it will split into two parts — and one part will be non-profit. Bridgepoint’s Ashford University and University of the Rockies will merge with the expectation of going non-profit.
Bridgepoint will become a publicly-traded Online Program Management company.
Although Bridgeport now considers itself a for-profit enterprise, it has been acting more like a negative-profit one. Bridgepoint lost $70 million in 2015 and $30 million in 2016, before attaining a profit of $10.5 million last year.
In dividing the company, Bridgepoint is following industry trends. Grand Canyon University plans to become a nonprofit and Purdue University, a major nonprofit, bought the struggling Kaplan University, a for-profit. Also, there have been spectacular failures among for-profits: Corinthian Colleges and ITT Technical Institute failed ignominously in recent years, “while other big for-profits merged, went private, or concentrated more on offerings in other countries,” says Inside Higher Ed.
“The structures of for-profit conversions have been controversial,” says Inside Higher Ed. “The Century Foundation, for example, has criticized some of these moves as being attempted by for-profit owners to escape federal regulations."
Bridgepoint Education was a high-flying stock until the Obama administration cracked down on for-profits. Students paid more than at non-profits, carried inordinately high debts, and couldn’t get jobs if they graduated. (In Bridgepoint’s case, a disappointing percentage actually graduated.)
Bridgepoint has been sued by several states and is still under federal investigation. Late last year, California sued Ashford, accusing it of unlawful marketing, sales and debt collection practices. “Ashford University preyed on veterans and people of modest means. This for-profit college illegally misled students about their educational prospects and unfairly saddled them with debt,” said California Attorney General Xavier Becerra in announcing the charges.
In a sense, the big changes among the for-profits is a surprise. When Donald Trump was elected, the stocks of the for-profit companies soared. Both Trump and his Secretary of Education Betsy DeVos are sympathetic to for-profit universities, which were expected to thrive iin the Trump years.
Bridgepoint’s plans of a split have to be approved by state and federal regulators and Ashford’s accreditation operation.