Accreditor Stalls Bridgepoint Education Plan To Become Non-Profit
In a filing this morning with the Securities and Exchange Commission, predatory for-profit college business Bridgepoint Education discloses that on Monday the accreditor WASC Senior College and University Commission told Bridgepoint’s Ashford University that “pending the receipt and review of additional documents, they are deferring any action on the change of control application filed by Ashford to convert Ashford University to a not-for-profit California public benefit corporation.”
Bridgepoint, acting at a time when the Donald Trump-Betsy DeVos Department of Education is destroying protections for students and taxpayers from abuses by predatory colleges, announced in March that it planned to turn Ashford, whose courses are now entirely online, into a non-profit, while still maintaining a for-profit business that would make money servicing the non-profit. The proposed conversion to non-profit status is part of a wave of similar actions by for-profit college companies seeking to escape the stigma and government scrutiny that their own bad behavior created, while continuing to make big money off low-quality education programs.
In its filing, Bridgepoint says that Ashford “will provide the documentation as soon as possible and upon completion look forward to receiving a final decision” from WASC. There is no additional information yet on the WASC website.
In March 2011, then-Senate HELP committee chairman Tom Harkin (D-IA) held a hearing focusing on Bridgepoint. Harkin presented a series of charts showing that the company had seen rapid growth, with revenues increasing from $33 million in 2008 to $216 million in 2010, while experiencing mounting student loan default rates. Harkin said Bridgepoint was “a scam, an absolute scam … premised on aggressively recruiting largely low-income, disadvantaged students … collecting their federal grants and loans even as the vast majority of students drop out … and lavishly rewarding executives and shareholders with mostly taxpayer dollars.”
Bridgepoint Education has been under investigation for fraud and other abuses by five state attorneys general. In May 2014, Bridgepoint agreed to pay $7.25 million to settle claims by Iowa attorney general Tom Miller that Ashford violated Iowa’s Consumer Fraud Act; Bridgepoint denied the charges. In November 2017, California attorney General Xavier Becerra sued Bridgepoint, alleging false and misleading statements and unfair and fraudulent business practices at Ashford.
In July 2016 Bridgepoint disclosed that the U.S. Justice Department had served Bridgepoint with a civil investigation demand aimed at determining whether the company misrepresented its revenue from private student loans and thus its compliance with the federal 90/10 rule, which requires for-profit colleges to get at least 10 percent of their revenue from sources other than the U.S. Department of Education.
Bridgepoint has also been under investigation in recent years by the Securities and Exchange Commission, and the Consumer Financial Protection Bureau. And earlier this year, the state of California rejected Ashford University’s request to certify it for GI Bill eligibility.
Bridgepoint knows how to fight back, buying friends in high places. Its DC lobbyists have included former senator, presidential candidate, and early-ish Trump supporter Bob Dole. Bridgepoint is where Robert Eitel worked as chief compliance officer before he joined the Department of Education as senior advisor to DeVos and key player on higher education policy. Linda Rawles, an attorney chosen by the DeVos Department to serve on the panel charged with repealing and replacing the Obama rule providing debt relief for defrauded students, also works for Bridgepoint.