Stocks of for-profit colleges got slaughtered again today (Aug. 6) as the federal government appeared to be making bold steps to do something about the huge default rates at such schools. San Diego's Bridgepoint Education plunged 5.25% to $14.98. It was $27.22 on April 20. Washington Post stock plummeted $31.05 or 7.6% to $377.56. The Post's Kaplan for-profit education operation accounts for two-thirds of the company's revenue and operating income. The U.S. Senate heard testimony about a General Accounting Office investigation finding dubious recruiting tactics, high default rates and low graduation and job placement rates at Kaplan and 14 other institutions, according to Yahoo! Post Chief Executive Officer saw video shot by undercover investigators of misrepresentations by Kaplan's admissions representatives. Graham found them "sickening" and vowed reform.

A Congressional committee headed by Sen. Tom Harkin asked 30 for-profits for information. Bridgepoint said it was among them. It has been investigated by the Department of Education's Office of Inspector General. There has been no final report on that probe.

Former San Diegan Charles Jajdelski is suing Kaplan in Nevada federal court. He began working at Kaplan-owned Maric College in San Diego, then transferred to Vegas when Kaplan bought an institution there. Among many things, Jajdelski says that he saw Kaplan officials destroying diplomas "because the students were phantom," says San Diego attorney Mike Aguirre, one of three lawyers representing Jajdelski. He reported findings of massive irregularities to Kaplan officials and was fired. He also turned over his findings to the federal government. He is suing on employment-related claims.