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I suppose it was inevitable that the Union-Tribune would pen a fluff piece this morning (April 30) on Bridgepoint Education, the for-profit, online school that is the new sponsor of the Holiday Bowl, has signs hanging in Petco Park, and sports a stock that has been hot since its public offering last spring. Alas, it was probably also inevitable that the U-T would not do its homework on this company – particularly reading and absorbing its March 2 annual report to the Securities and Exchange Commission.
That report shows that between 2005 and 2009, the Department of Education’s Office of Inspector General probed this company’s major operation, Ashford University. Bottom line: Bridgepoint openly expects that the government will find that the company may have been seriously out of compliance with regulations, and the penalties could be quite severe – threatening the company’s major source of funding, which is the federal government.
Other homework could have been done. Ashford has a C-minus rating, and no accreditation, from the Better Business Bureau in Iowa, where the tiny school is based. (Bridgepoint and Ashford have A-plus ratings in San Diego, and the BBB is checking the discrepancy.) Also, online operations such as consumeraffairs.com are full of complaints about Ashford.
Since the late 1980s, the DOE’s Office of Inspector General has been studying for-profit schools, looking for fraud and abuse such as misleading recruitment practices, false assertions to prospective students, falsification of admission and financial aid records, and the providing of aid to ineligible students. To keep their stocks flying, the companies need growth. They will cut corners to get students.
The Higher Education Act was passed in 1965 and is re-tuned every few years by Congress. The key to the for-profit institutions is Title IV, under which students can get grants and loans. Bridgepoint has two campuses but 99 percent of students are online. Here’s the key: 85 percent of the money from students comes from Title IV.
In its March 2 report, Bridgepoint says that the OIG is tentatively considering findings of non-compliance with provisions of the Higher Education Act and regulations governing Ashford’s administration of Title IV programs. Possible areas of non-compliance: compensation policies regarding enrollment advisors; calculation of Title IV funds; timeliness of returns of Title IV funds, and disbursement of unearned Title IV funds. Here’s the key line: “We expect that the OIG’s draft report will assert findings of noncompliance, “ and the company could be subject to fines, liabilities and/or adverse actions. Ashford could be forced to modify its procedures, possibly severely. Here’s the important statement: the government could “limit, suspend, or terminate Ashford University’s Title IV participation.” That would knock out most of Bridgepoint’s income.
It is essential that any report on Bridgepoint contain this information from its own public filing.
I suppose it was inevitable that the Union-Tribune would pen a fluff piece this morning (April 30) on Bridgepoint Education, the for-profit, online school that is the new sponsor of the Holiday Bowl, has signs hanging in Petco Park, and sports a stock that has been hot since its public offering last spring. Alas, it was probably also inevitable that the U-T would not do its homework on this company – particularly reading and absorbing its March 2 annual report to the Securities and Exchange Commission.
That report shows that between 2005 and 2009, the Department of Education’s Office of Inspector General probed this company’s major operation, Ashford University. Bottom line: Bridgepoint openly expects that the government will find that the company may have been seriously out of compliance with regulations, and the penalties could be quite severe – threatening the company’s major source of funding, which is the federal government.
Other homework could have been done. Ashford has a C-minus rating, and no accreditation, from the Better Business Bureau in Iowa, where the tiny school is based. (Bridgepoint and Ashford have A-plus ratings in San Diego, and the BBB is checking the discrepancy.) Also, online operations such as consumeraffairs.com are full of complaints about Ashford.
Since the late 1980s, the DOE’s Office of Inspector General has been studying for-profit schools, looking for fraud and abuse such as misleading recruitment practices, false assertions to prospective students, falsification of admission and financial aid records, and the providing of aid to ineligible students. To keep their stocks flying, the companies need growth. They will cut corners to get students.
The Higher Education Act was passed in 1965 and is re-tuned every few years by Congress. The key to the for-profit institutions is Title IV, under which students can get grants and loans. Bridgepoint has two campuses but 99 percent of students are online. Here’s the key: 85 percent of the money from students comes from Title IV.
In its March 2 report, Bridgepoint says that the OIG is tentatively considering findings of non-compliance with provisions of the Higher Education Act and regulations governing Ashford’s administration of Title IV programs. Possible areas of non-compliance: compensation policies regarding enrollment advisors; calculation of Title IV funds; timeliness of returns of Title IV funds, and disbursement of unearned Title IV funds. Here’s the key line: “We expect that the OIG’s draft report will assert findings of noncompliance, “ and the company could be subject to fines, liabilities and/or adverse actions. Ashford could be forced to modify its procedures, possibly severely. Here’s the important statement: the government could “limit, suspend, or terminate Ashford University’s Title IV participation.” That would knock out most of Bridgepoint’s income.
It is essential that any report on Bridgepoint contain this information from its own public filing.