The U.S. Senate's Committee on Health, Education, Labor and Pensions issued a report today (July 30) on the massive failures of for-profit universities, and San Diego's Bridgepoint Education comes out on the short end once again. (The committee had a special report on Bridgepoint alone last year, and the chairman, Sen. Tom Harkin, declared that the company was simply "a scam.")
Statistics in the new report certainly bear that out. In 2010, Bridgepoint spent 30.3% of its revenue on marketing. That was the highest percentage of all the schools studied. A two-year degree in business at Ashford, Bridgepoint's major operation, costs $30,574; a two-year business degree at East Iowa Community College costs $7,936. Ashford charges a "technology services fee" of $1,290 and students bitterly complain that they were never told about it when the company made its pitch, says the committee. A full 98% of Bridgepoint faculty members are part-time, versus a collective 80% of the 30 schools under study. Students find belatedly that an education degree from Ashford is not accepted by American states for a teaching position. There is another step in the process, and graduates say they were not told of that.
But the moneybags behind the company are doing fine. Management salaries are comparatively high. Wall Street's Warburg Pincus, which owns two-thirds of the stock, will sell it all over the next 36 months. That should net the firm $773.1 million (although the recent selloff in the stock could dent that figure.)
Importantly, students and faculty members continue to complain about the company's practices to the Senate committee. "Student complaints document multiple examples of deceptive and misleading recruiting practices," says the committee. There is "serious doubt" that Bridgepoint students receive an education of "adequate value," says the committee, noting that in 2010, American taxpayers pumped $1.2 billion into the company.
Bridgepoint remains a darling of the San Diego business establishment, such as the Chamber of Commerce and U-T editorial page.