Bridgepoint shares fall on accreditation denial
July 09, 2012
Shares of Bridgepoint Education Inc. dropped more than 30 percent Monday after the for-profit education provider said a group that certifies schools denied an accreditation for one of its institutions.
THE SPARK: Bridgepoint's Ashford University, which has a campus in Clinton, Iowa, but mostly serves online students, was denied accreditation by the Western Association of Schools and Colleges. Without accreditation, a school can lose its access to federal financial aid, which can comprise as much as 90 percent of for-profit schools' revenue.
THE BIG PICTURE: The Western Association of Schools and Colleges is one of seven regional accrediting commissions. It has jurisdiction over schools located in California. Bridgepoint is based in San Diego.
In its letter to Ashford denying accreditation, the association said it found that the university hadn't shown substantial compliance with its accreditation standards related to student retention and graduation, the alignment of resources with educational objectives and the implementation of a core of full-time faculty that can oversee the university academic policies and ensure the integrity of its programs.
WASC noted that a large number of students who start degree programs at the university drop out, most within a short period of time. It said that over the past five years, 128,000 students have withdrawn from the university, while 240,000 new students have enrolled.
In addition, the university needs to put in place an effective system for assessing student learning and an "empowered and independent" governing board that has an acceptable relationship with Bridgepoint, WASC said in its letter...