Bridgepoint Education

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Bridgepoint Education
Type Public
Traded as NYSEBPI
Industry Higher Education
Founded 1999
Headquarters San Diego, CA, US
Key people Andrew Clark, CEO
Revenue Increase US$968.2 million (2012)[1]
Operating income Decrease US$202.7 million (2012)[1]
Net income Decrease US$128.0 million (2012)[1]
Total assets Increase US$755.3 million (2012)[1]
Total equity Increase US$496.1 million (2012)[1]
Employees 3,900 Faculty
5,000 Staff (2011)[2]
Website www.bridgepointeducation.com

Bridgepoint Education is a San Diego, California-based publicly held, for-profit education services holding company which owns for-profit, online and land-based Ashford University and University of the Rockies, a continuing education school Denver Learning Institute and proprietary technologies, such as Constellation, Thuze and Waypoint Outcomes.

History[edit]

Bridgepoint Education was founded in 1999. It purchased The Franciscan University of the Prairies in 2005 and changed its name to Ashford University. In September 2007, Bridgepoint obtained the Colorado School of Professional Psychology, changing its name to University of the Rockies.

In 2008, Bridgepoint Education was named the fastest-growing private education company in the United States, as well as the fastest-growing private company in San Diego by Inc. Magazine.[3]

In 2010, it became the title sponsor of the Holiday Bowl postseason college football game.[4]

In March 2011, Bridgepoint Education was the subject of Senatorial hearings by the Health, Education, Labor, and Pensions Committee.

Controversy[edit]

In May 2008, the U.S. Department of Education's Office of Inspector General (OIG) audit services division commenced a compliance audit of Bridgepoint-owned Ashford University covering the period March 10, 2005, through June 30, 2009. The OIG audit reached the following conclusions:

Audit focus[5] Audit result[6]
Compensation policies and practices relating to enrollment advisers Rewarded recruiters based on their success in securing enrollments
Calculation, timeliness, and disbursement accuracy of Title IV program funds Improperly retained at least $1.1-million during the 2006-7 period
Student Authorizations to retain credit balances Kept credit balances without the proper authorization
Maintenance of supporting documentation for a student's leave of absence Took too long to return money awarded to students who withdrew

The stock of Bridgepoint Education fell the most in almost five months when the misuse of federal student aid was first publicly disclosed in 2009.[5] When the official results were released in 2011, Senator Tom Harkin said this audit "reveals the same troubling pattern of for-profit colleges' taking advantage of students and taxpayers." The Department of Education has not yet responded to the findings.[6]

2011 Senate Hearings[edit]

On March 10, 2011, Senator Tom Harkin (D-Iowa) chaired a hearing of the Health, Education, Labor, and Pensions Committee that examined a "case study" of Bridgepoint Education, Inc., which has experienced near-exponential profit growth in the last few years despite low graduation rates.[7][8] Bridgepoint owns two universities that it purchased when both were near bankruptcy, Ashford University in Iowa and the University of the Rockies in Colorado. When it purchased Ashford University in 2005, the university had less than 300 students but today has over 78,000 students, 99% of which are online.[9]

Senator Harkin took issue with the fact that despite such growth of the company, student success was lacking. According to information provided by Senator Harkin in the committee hearing, 63% of students who enrolled at Ashford University during the 2008–2009 school year withdrew before completion of their respective programs. Senator Harkin pointed out that Bridgepoint recorded more than $216 million in profits in 2010—of which 86.5% of its revenues come from federal funds. In reference to these figures, Senator Harkin is on record as saying, "In the world of for-profit higher education, spectacular business success is possible despite an equally spectacular record of student failure. Bridgepoint is a private company, but it is almost entirely dependent upon public funds ... I think this is a scam, an absolute scam."[9]

Kathleen Tighe, Inspector General with the U.S. Department of Education, testified at the hearing that in an audit of Ashford, she discovered the university was improperly distributing federal financial aid to students. "Seventy-five percent of the improper disbursements to students in our sample were made to students who never became eligible," Tighe said.[9] For the 2006–2007 award year during which the audit was performed, it is estimated Bridgepoint had not returned $1.1 million in improperly obtained student aid to the federal government.[10] Tighe said on a recent report she had seen that Bridgepoint was "sitting on" $130 million in total credit balances.[7]

Due to the ongoing Office of Federal Student Aid (FSA) proceedings, and in order to preserve due process, Bridgepoint chose not to send executives to the HELP committee hearing while engaged in negotiations with FSA. [9] Rather, Bridgepoint published a summary of responses called "Bridgepoint Education Transparency".

References[edit]

  1. ^ a b c d e "Bridgepoint Education Reports Full Year 2012 Results". Retrieved March 25, 2013. 
  2. ^ "Investor FAQ". Retrieved March 25, 2013. 
  3. ^ "Inc. 5000 The Fasted Growing Private Companies in America". Inc. 5000 List. Retrieved November 7, 2010. 
  4. ^ Schrotenboer, Brent (April 27, 2010). "Bridgepoint takes over as Holiday Bowl sponsor". SignonSanDiego.com. Retrieved March 1, 2011. 
  5. ^ a b "Bridgepoint Education Plunges as U.S. Audit Looms". Bloomberg. September 4, 2009. Retrieved September 4, 2009. 
  6. ^ a b Field, Kelly (January 24, 2011). "Audit Finds Ashford U. Kept Student-Aid Money It Should Have Returned to Government". The Chronicle of Higher Education. Retrieved January 25, 2011. 
  7. ^ a b "US Senate Committee on Health, Education, Labor, & Pensions". March 10, 2011. Retrieved March 23, 2011. 
  8. ^ Lewin, Tamar (March 10, 2011). "Hearing Sees Financial Success and Education Failures of For-Profit College". New York Times. Retrieved March 23, 2011. 
  9. ^ a b c d Steiger, Kay (March 11, 2011). "Sen. Harkin Says For-Profit Education Company Bridgepoint Is a 'Scam'". Campus Progress. Retrieved March 23, 2011. 
  10. ^ "Statement of Kathleen S. Tighe". Retrieved March 23, 2011. 

UPDATE: Ashford, Bridgepoint will pay $7.25 million fraud settlement By Brenden West Assistant Editor May 16, 2014 http://www.clintonherald.com/local/x611378440/UPDATE-Ashford-Bridgepoint-will-pay-7-25-million-fraud-settlement

Woes at Bridgepoint, United States University by Don Bauder, June 18, 2014 http://www.sandiegoreader.com/news/2014/jun/18/citylights1-bridgepoint-united-states-university/

External links[edit]