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This is an old revision of this page, as edited by EdiTHORial (talk | contribs) at 15:37, 15 July 2020 (→Bridgepoint Education (2004-2019): Removed outdated statement about BPI stock drop since the figure and citation were no longer valid and BPI is no longer the ticker symbol.). The present address (URL) is a permanent link to this revision, which may differ significantly from the current revision.

Zovio
FormerlyBridgepoint Education
Company typePublic
Nasdaq: ZVO
Russell Microcap Index component
IndustryEducational technology Higher Education
Founded2004[1]
HeadquartersChandler, AZ, US
Key people
Andrew Clark, CEO[2]
RevenueDecrease US$443 million (2018)
Decrease US$4.7 million (2018)
Total assetsDecrease US$116 million (2017)
Number of employees
Faculty: 200 full-time, 3,200 adjunct
2,200 non-faculty staff
SubsidiariesAshford University, Fullstack Academy, TutorMe
Websitezovio.com

Zovio, formerly Bridgepoint Education, Inc. (BPI), is a publicly held, American for-profit education services company. It owns one online accredited university, Ashford University, and owned the former University of the Rockies from 2007 to its merger with Ashford University in 2018. In April 2019, the company changed its name to Zovio, moving its headquarters to Chandler, Arizona.[3]

Zovio also owns Waypoint Outcomes, Fullstack Academy, and TutorMe.

Zovio employs 3,400 faculty and 2,200 non-faculty staff. It trades on NASDAQ under the ticket symbol ZVO.[2]

History

Founding (1999)

Zovio was first incorporated in Delaware in May 1999 under the name TeleUniversity, Inc.[1] Under the leadership of CEO and President Andrew Clark (and with an investment from private equity firm Warburg Pincus[4]), the company changed its name to Bridgepoint Education, Inc. in February 2004.[1]

Bridgepoint Education (2004-2019)

Bridgepoint Education 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.[5]

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.[6]

The following year, the company went public. On April 15, 2009, Bridgepoint Education began trading on the New York Stock Exchange under the ticker symbol BPI.[4]

The London Group was also retained by the Clinton Regional Development Corporation and the Clinton Chamber of Commerce to conduct an economic analysis of Bridgepoint's Ashford University within the state of Iowa. The report stated that, in 2009, Ashford University had an estimated economic impact of $40.9 million in business output, 782 jobs, $12.6 million in employee earnings, and $18.6 million in total value added to the state's GDP.[7]

In 2010, Bridgepoint Education became the title sponsor of the Holiday Bowl postseason college football game.[8] Bridgepoint Education served as the Holiday Bowl title sponsor for three consecutive years.

Year Enrollment
2011 86,642
2012 81,810
2013 63,624
2014 55,823
2015 45,159
2016 45,087
2017 40,730
2018 38,153

In 2012, national economic consulting firm The London Group was retained by the San Diego Regional Economic Corporation to conduct an economic impact and activity analysis of Bridgepoint Education within the San Diego region where BPI was headquartered.[9] The report determined that Bridgepoint Education helped produce, through its operations, $489 million in areas such as travel and capital expenditures, supplies, advertising, and charitable contributions. That helped create 4,505 outside jobs in addition to Bridgepoint's 3,900 local employees. Its operations indirectly brought the region an additional $590 million through increased spending by the contractors and services it hired.[10] According to the analysis, Bridgepoint Education's projected 10-year cumulative impact would bring approximately $10.8 billion in business output to the region.[9]

In 2013, Bridgepoint Education's Ashford University announced an alliance with business publisher Forbes Media. Under the terms of the alliance, Ashford's College of Business and Professional Studies was renamed the Forbes School of Business at Ashford University.[11]

On December 22, 2015, an agreement was made that Clinton Catalyst, LLC would buy the Ashford University campus properties for $1.6 million, according to the Clinton Herald. For the next 12 months afterward, Ashford University planned to lease the campus from Clinton Catalyst, LLC to make sure that the spring semester classes could continue, according to the Herald's report.[12]

Bridgepoint Education has faced and settled several lawsuits. It has been investigated in New York, North Carolina, California, and Massachusetts. A U.S. Department of Education Office of Inspector General probe is ongoing. On December 3, 2014, a lawsuit was filed in Arizona federal court charging that Bridgepoint Education is violating the Telephone Consumer Protection Act by robocalling sales prospects.[13] At the end of 2018, its last full year of operation, Bridgepoint enrollment stood at 38,153.[1][14]

In March 2017, Secretary of Education Betsy DeVos appointed Robert Eitel, a vice president at Bridgepoint, as an advisor.[15]

In July 2017, an Iowa District Court affirmed the withdrawal of Ashford University's online programs from GI Bill approval by the Iowa State Approving Agency. The Veterans Administration immediately sent notification to Ashford's military students about the status of their GI Bill education benefits and warned them that benefits could be interrupted. This ruling was to become final on August 16, 2017, unless Ashford University appealed the decision and the court delayed implementation.[needs update][16][17]

In August 2017, the Department of Veterans Affairs warned Arizona officials about running afoul of federal law after the state approved Ashford University's ability to accept GI Bill education benefits. The VA suggests that the state's decision could put its own compliance with federal rules in jeopardy.[18]

In November 2017, Bridgepoint suspended enrolling GI Bill students for Ashford University after a controversial exposé on the school appeared in the Chronicle of Higher Education.[19] Warburg Pincus also showed its intentions to divest completely from Bridgepoint.[20]

On March 12, 2019, Bridgepoint Education reported to the Securities and Exchange Commission (SEC) that it had made unreliable statements about its earnings and losses. The company estimated an operating loss of $13.6-$14 million loss for the quarter ending in December 2018.[21] The same day, Bridgepoint announced the acquisition of the coding boot camp Fullstack Academy for approximately US$20 million.[22]

Zovio (2019-present)

In April 2019, Bridgepoint changed its name to Zovio and moved its stock listing to the NASDAQ, where it trades under the ticker symbol ZVO[23]

On April 4, 2019, Zovio acquired on-demand tutoring provider TutorMe.[24]

Leadership

Andrew S. Clark co-founded Zovio and has been its CEO since 2003. In 2009, he became the Board President. Clark served on the Board of Trustees of University of the Rockies from 2007 to 2010. From 2005 to 2008, he served on the Board of Trustees of Ashford University. Prior to 2003, he worked for Career Education Corporation as Divisional Vice President of Operations and COO for American InterContinental University. From 1992 to 2001, he served in management positions for University of Phoenix, culminating his work there as Regional Vice President for the Mid-West region. Mr. Clark holds an M.B.A. from the University of Phoenix and a B.A./BS from the Pacific Lutheran University.[25]

Philanthropy

Zovio directs its philanthropic efforts toward three aims: education, youth, and the military. Charitable organizations and programs Zovio has partnered with include After-School All-Stars,[26] Big Brothers Big Sisters of San Diego,[27] Boys & Girls Clubs of Greater San Diego,[28] Computers 2 SD Kids,[29] the Homefront Heroes Scholarship Program,[30] the Jacobs & Cushman San Diego Food Bank,[31] Junior Achievement,[32] Make-A-Wish Foundation,[33] A Salute to Teachers,[34] the San Diego Office of Education,[35] the Teacher Appreciation Scholarship Program,[36] United Way of San Diego,[37] and Warrior Foundation-Freedom Station.[38]

The Bridgepoint Heroes program brought Bridgepoint employees together for large-scale volunteer efforts. Past Bridgepoint Heroes initiatives included cleaning Chollas Lake Park, cleaning Balboa Park, cleaning the San Diego River Garden, revitalizing the Mary Fay Pendleton School on Marine Corps Base, Camp Pendleton, and restoring Ruffin Canyon.[39]

Lawsuits, investigations, and controversies

Zovio faces numerous lawsuits, and is under investigation[when?] in New York, North Carolina, California, and Massachusetts. A US Department of Education Office of Inspector General probe is ongoing.[13] On December 3, 2014, a lawsuit was filed in Arizona federal court charging that the company is violating the Telephone Consumer Protection Act by robocalling sales prospects.[13]

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

Audit focus[40] Audit result[41]
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 and disbursed aid before students were eligible to receive the money
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 or went on leave of absence

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.[40] 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[when?] responded to the findings.[41]

2011 Senate hearings

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.[42][43] 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, Bridgepoint grew from less than 300 students to more than 78,000 students at its peak, 99% of which were online.[44]

Senator Harkin took issue with the fact that despite such growth, student success was lacking. According to information provided by Senator Harkin, 63% of students enrolled at Ashford University during the 2008–2009 school year withdrew before completion of their programs. Senator Harkin noted that Bridgepoint recorded $216 million in profits in 2010—of which 86.5% of its revenues came from federal funds. In reference to these figures, Senator Harkin was 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."[44]

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.[44] 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.[45] Tighe said on a recent report she had seen that Bridgepoint was "sitting on" $130 million in total credit balances.[42]

Bridgepoint chose not to send executives to the HELP committee hearing while engaged in negotiations with Office of Federal Student Aid (FSA).[46] Rather, Bridgepoint published a summary of responses called "Bridgepoint Education Transparency.

Additional lawsuits

In 2014, Bridgepoint Education settled a lawsuit with the State of Iowa for $7.25 million, denying any "wrongdoing but agreed to not use any 'unconscionable or coercive tactics' to encourage students to enroll."[47]

In 2016, a former senior vice president at Ashford University alleged that Bridgepoint falsified its financial reports by inaccurately projecting the student retention rate.[48]

In 2016, the Consumer Financial Protection Bureau took action against the company for “deceiving students into taking out private student loans that cost more than advertised.”[49] Bridgepoint paid a penalty of $8 million to the CFPB and forgave and refunded loans to students totaling $23.5 million.[49]

In November 2017, the California Attorney General brought a lawsuit against Ashford University and its parent company Bridgepoint for engaging in "unlawful marketing, sales and debt collection practices".[50]

Closure of Ashford University campus

The December 2015, agreement with Clinton Catalyst, LLC by Bridgepoint Education to sell the Ashford University campus properties, in Clinton, Iowa, generated controversy in the higher education community.[51] Critics questioned Bridgepoint's original commitment to the on-ground college, especially since it no longer needed a physical presence in the Midwest to keep its accreditation, and they accuse Bridgepoint of having broken promises to maintain the campus.[citation needed] Bridgepoint officials had previously stated that they were committed to retaining the Clinton campus, and had essentially tripled its Iowa enrollment from 2005 to 2011 through investments in facilities (about $40 million), scholarships, and other financial aid of about $10 million a year (subsidized with revenues from online students), as well as expansion of academic and athletics programs.[citation needed] Bridgepoint stated the company could not continue to subsidize the campus operation.[citation needed]

References

  1. ^ a b c d Clark, Andrew; Devine, Daniel (March 10, 2015), ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2014 (PDF), Bridgepoint Education, Inc., pp. 12–50, archived from the original (PDF) on April 16, 2015, retrieved April 13, 2015
  2. ^ a b "bridgepoint education inc (BPI:New York)". Bloomberg Business. Retrieved April 13, 2015.
  3. ^ "Bridgepoint Education Gets a New Name, Office and Online Tutoring Service - EdSurge News". EdSurge. April 4, 2019. Retrieved April 5, 2019.
  4. ^ a b "Portfolio, Bridgepoint Education". Archived from the original on February 19, 2015. Retrieved April 13, 2015.
  5. ^ "Bridgepoint Education, Inc" (PDF). Retrieved April 13, 2015.
  6. ^ "Inc. 5000 The Fasted Growing Private Companies in America". Inc. 5000 List. Retrieved November 7, 2010.
  7. ^ London, Gary; Moeder, Nathan (August 1, 2010), Iowa Economic Impact Study (PDF), The London Group, p. 7, archived from the original (PDF) on March 4, 2016, retrieved April 13, 2015
  8. ^ Schrotenboer, Brent (April 27, 2010). "Bridgepoint takes over as Holiday Bowl sponsor". SignonSanDiego.com. Retrieved March 1, 2011.
  9. ^ a b "San Diego Regional Economic Development Corp. Releases Bridgepoint Economic Impact Analysis" (PDF) (Press release). San Diego Regional Economic Development Corporation. June 18, 2012. Retrieved April 13, 2015.
  10. ^ Horn, Jonathan (June 18, 2012). "EDC report: Bridgepoint had $1B impact in S.D. county". San Diego Union-Tribune. Retrieved April 13, 2015.
  11. ^ "Ashford University and Forbes Media Form Alliance and Name the Forbes School of Business" (Press release). Forbes.com. November 5, 2013. Retrieved April 13, 2015.
  12. ^ Editor, Scott Levine Associate. "Real estate company purchases Ashford properties". Clinton Herald. Retrieved June 3, 2016. {{cite web}}: |last= has generic name (help)
  13. ^ a b c Bauder, Don (December 11, 2014). "Lawsuits attack Bridgepoint's automatic dialing pitches". San Diego Reader. Retrieved April 13, 2015.
  14. ^ "Form 10-K 2019 | Zovio Inc" (PDF). February 20, 2020. Retrieved July 10, 2020.{{cite web}}: CS1 maint: url-status (link)
  15. ^ https://www.nytimes.com/2017/03/17/business/education-for-profit-robert-eitel.html?_r=0
  16. ^ "Court Dismisses Petition from Ashford U on GI Bill Approval - Inside Higher Ed". InsideHigherEd.com. July 25, 2017. Retrieved December 16, 2017.[permanent dead link]
  17. ^ 223D. "Breaking News - Education and Training". www.Benefits.VA.gov. Retrieved December 16, 2017.{{cite web}}: CS1 maint: numeric names: authors list (link)
  18. ^ https://careereducationreview.net/2017/08/va-warned-arizona-regulators-over-approval-of-for-profit-college/?doing_wp_cron=1503767573.8861510753631591796875
  19. ^ "After Chronicle Investigation, Ashford Suspends Enrollment of GI Bill Students". Chronicle.com. November 15, 2017. Retrieved December 16, 2017.
  20. ^ "Bridgepoint Education (BPI) Prices 7.56M Share Secondary Offering by Warburg Pincus LLC; Announces 2.1M Share Buyback". StreetInsider.com. Retrieved December 16, 2017.
  21. ^ https://www.sec.gov/Archives/edgar/data/1305323/000130532319000025/ex-991q42018earningsreleas.htm
  22. ^ "Bridgepoint Education Acquires Coding Boot Camp". InsideHigherEd.com. Retrieved April 4, 2019.
  23. ^ "Bridgepoint Education to change name to Zovio, move to Nasdaq". SeekingAlpha.com. Retrieved April 4, 2019.
  24. ^ "New Acquisition, Name and Headquarters for Bridgepoint". InsideHigherEd.com. Retrieved April 4, 2019.
  25. ^ https://www.bloomberg.com/research/stocks/people/person.asp?personId=30396776&privcapId=20609524
  26. ^ "Keeping At-Risk San Diego Kids in School? It's Science". April 18, 2014. Retrieved April 13, 2015.
  27. ^ "Bridgepoint Education Committed To San Diego". September 12, 2011. Archived from the original on March 5, 2016. Retrieved April 13, 2015.
  28. ^ "Corporate Partner Testimonials". Archived from the original on April 14, 2015. Retrieved April 13, 2015.
  29. ^ "Chamber Computer Challenge". February 19, 2015. Archived from the original on April 15, 2015. Retrieved April 13, 2015.
  30. ^ "Ashford University Online Gives Scholarship to Military Spouses at Holiday Bowl". January 30, 2013. Retrieved April 13, 2015.
  31. ^ Glazer, Joyce (September 16, 2013). "Good News about San Diego non-profits and businesses doing good for your community". San Diego Magazine. Retrieved April 13, 2015.
  32. ^ Sorensen, Emily (November 26, 2014). "It's all business at Pomerado Elementary". Pomerado News. Retrieved April 13, 2015.
  33. ^ "Make-A-Wish Foundation of San Diego Holds 'Walk for Wishes,' Raising Funds for Wish Granting". San Diego Magazine. February 26, 2011. Retrieved April 13, 2015.
  34. ^ "Padres Honor Local Teaching Profession With 9th Annual Teacher Appreciation Nigh". Retrieved April 13, 2015.
  35. ^ "Junior Achievement of San Diego and Imperial Counties, Inc. 2009 Annual Report" (PDF). Retrieved April 13, 2015.
  36. ^ "Online degree provider awards teaching scholarships". May 11, 2011. Archived from the original on April 15, 2015. Retrieved April 13, 2015.
  37. ^ "Top 25 Campaign Partners". Retrieved April 13, 2015.[permanent dead link]
  38. ^ "Warrior Foundation Freedom Station Sponsors". Archived from the original on April 15, 2015. Retrieved April 13, 2015.
  39. ^ "Hardcore Bridgepoint Heroes brave rain to clean up Mission Beach". San Diego Coastkeeper. Archived from the original on April 15, 2015. Retrieved April 13, 2015.
  40. ^ a b "Bridgepoint Education Plunges as U.S. Audit Looms". Bloomberg. September 4, 2009. Retrieved September 4, 2009.
  41. ^ 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.
  42. ^ a b "US Senate Committee on Health, Education, Labor, & Pensions". March 10, 2011. Retrieved March 23, 2011.
  43. ^ Lewin, Tamar (March 10, 2011). "Hearing Sees Financial Success and Education Failures of For-Profit College". New York Times. Retrieved March 23, 2011.
  44. ^ a b c Steiger, Kay (March 11, 2011). "Sen. Harkin Says For-Profit Education Company Bridgepoint Is a 'Scam'". Campus Progress. Archived from the original on December 1, 2012. Retrieved March 23, 2011.
  45. ^ "Statement of Kathleen S. Tighe" (PDF). Retrieved March 23, 2011.
  46. ^ "Why Bridgepoint Education Declined to Attend the HELP Committee Hearing". bpitransparency.com. Archived from the original on August 12, 2011. Retrieved March 23, 2011.
  47. ^ "Bridgepoint and Ashford U. Settle With Iowa Over Enrollment Tactics". Chronicle.com. May 16, 2014. Retrieved December 16, 2017.
  48. ^ "Suit charges Bridgepoint cooked books". SanDiegoReader.com. Retrieved December 16, 2017.
  49. ^ a b "Consumer Financial Protection Bureau Takes Action Against Bridgepoint Education, Inc. for Illegal Student Lending Practices – Consumer Financial Protection Bureau".
  50. ^ Douglas-Gabriel, Danielle (November 29, 2017). "California attorney general sues for-profit Bridgepoint Education". Retrieved December 16, 2017 – via www.WashingtonPost.com.
  51. ^ "Ashford U's closure and what it says about for-profit higher ed". www.InsideHigherEd.com. Retrieved June 3, 2016.
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