Friendly politicians and regulators helped fuel the quick rise of San Diego for-profit higher education company Bridgepoint Education.
On Monday, Bridgepoint saw what happens when regulators make a move against them.
The company’s stock lost as much as a third of its value, the biggest daily loser on the New York Stock Exchange, after Bridgepoint disclosed that its main college, Ashford University, was denied regional accreditation. The stock closed at $14.25 a share, the lowest in 20 months.
Accreditation opens the gates to a college’s ability to collect federal financial aid, which is crucial to Bridgepoint’s business model. Students studying at Ashford, primarily through online programs, received $172 million in federal grants in 2010, according to Department of Education statistics. Bridgepoint’s accreditor cited concerns about student attrition rates and the rigor of classes.
Why Should You Care About Bridgepoint?
It’s become one of the region’s biggest private employers and has become increasingly involved in local politics. Recently, Bridgepoint executives backed Assemblyman Nathan Fletcher’s failed mayoral run and supported the successful Proposition B pension initiative.
Here’s how we put it in our March 2011 story on the company’s rise:
Four years ago, Bridgepoint was barely a blip in San Diego. Today, it’s made itself impossible to miss. Its operating profits have increased 5,000 percent during that time, to $216 million last year, and it’s now the county’s fifth-largest private employer. The latest phase of Bridgepoint’s extraordinary growth has been putting its indelible stamp on the city it calls home.
That story also detailed the scrutiny the company has received from Congress and accreditors over its weak graduation rates and stories of boiler-room style recruiting practices. The whole online for-profit college industry has suffered under the weight of the controversy.
Bridgepoint said it would appeal the accreditor’s decision and also re-file its application.
Liam Dillon is a news reporter for Voice of San Diego. He covers San Diego City Hall, the 2012 mayor’s race and big building projects. What should he write about next?
Please contact him directly at liam.dillon@voiceofsandiego.org or 619.550.5663.
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