Bridgepoint over troubled waters

To survive, school needs "miraculous win" in GI Bill funding court case

"Bridgepoint Education will likely not exist this time next year," wrote research analyst Duane Bair in an October 23 essay for Seeking Alpha. "The same circumstances that bankrupted peers could result in the demise of Bridgepoint."

The bankruptcy of Corinthian Colleges awakened Americans to how corrupt many of these for-profit schools are.

Bridgepoint has hired "an army of prominent lobbyists," but it could still be cut off from the Department of Education and GI Bill funding that provide most of its income, says Bair. Since 2011, attendance at Ashford University, its main institution, has plunged 44 percent.

"The [Securities and Exchange Commission] has opened a formal inquiry into Bridgepoint and the Department of Education has started pulling funds from sub-par accrediting agencies," says Bair.

Getting federal funding is a problem. Ashford closed its tiny Iowa campus (an actual campus, not online, which constitutes more than 90 percent of courses). Bridgepoint dropped its attempt to get GI Bill funding through California. A legal proceeding in Iowa has been stayed, but only short-term.

"Once the stay is lifted and the case resolved, Ashford will likely lose access to GI Bill funding," writes Bair. The GI Bill accounts for 19.1 percent of its funding. The Consumer Financial Protection Bureau found last month that Bridgepoint had committed "illegal student lending practices." The agency said Bridgepoint knowingly instructed staff to lie to current and potential students.

Unless Bridgepoint pulls off a "miraculous win" in the Iowa court case, it will lose GI Bill funding and will not comply with a federal mandate on the percentage of its funds coming from the government. "At that point, it is a mere inevitability that the school will be shuttered," says Bair.

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Yeah! It is about time the Fraudpoint Education was shut down. What a completely useless ripoff providing no benefit to students and stealing hundreds of millions in student loan funds each year..

SportsFan0000: Yes, I have been writing about this company and other for-profit operations since 2010. DOE, DOJ, states and other bodies looking closely, but then they back away or give a wrist slap.

Since 2008, Bridgepoint and other for-profits fleecing students as well as the federal government have been supported by Republicans who think of this as free enterprise. But recently, too much has come into the open -- Corinthian, ITT, etc. to keep the lid on. After this election, regulators may not be so timid.

I think the Consumer Financial Protection Bureau is the best hope for justice. Best, Don Bauder

One thing that bothers me about these "colleges" and "universities" is that they manage to get and keep accreditation. If the agencies that provide that stamp of approval were more demanding, and dug deeper, I think they would deny many more questionable operations. So, after these worst examples like Bridgepunkt and Corinthian are out of the way, some scrutiny of the remaining for-profits would be in order, followed by a hard look at many of the not-for-profit operations that handle all the instruction on-line, have no real home campus, and wretched graduation rates. These for-profits have no monopoly on charging an arm and a leg and delivering little or nothing. This whole industry of granting college degrees needs to be scrutinized, especially now that the value of a degree as a means to guarantee a successful career has badly eroded.

Visduh: You are absolutely right. The accrediting organizations that keep giving these for-profit institutions the go-ahead should be investigated and in some cases shuttered. Best, Don Bauder

Those accrediting agencies are rather self-appointed, aren't they? I'd suppose they started out as a self-policing effort on the part of schools, colleges and universities to weed out fakers and phonies. And for much of the time in the old days, they probably did a good and fair job of it. But are they doing such a good job now? But, know what? I'd rather not see the government get into the task. It would be turned into a super-bureaucracy that accomplishes little, and cost massively to operate. Some self-regulation of a genuine sort is what we need.

Visduh: I would assume there is money in accrediting colleges and universities. I have always thought these accrediting agencies are just like other institutions in our society: smitten with greed. So they are reluctant to tell the truth about some for-profit colleges. Best, Don Bauder

I'm actually a former employee of Ashford (a few years ago I quit). When you're hired, they genuinely make you believe that you're helping the people that enroll with the University. There's definitely a "drink the kool-aid" culture there. Generally people were shown the door when they stopped drinking it.

TommyB: A con artists almost always tells his flunkies that this is all for the good of society.Pathetically, some of the con artists believe it. They con themselves. Best, Don Bauder

Fraud, fraud, FRAUD! Go directly to jail.

Flapper: Fraud? Definitely.Will these frauds lead to criminal charges and incarceration? I doubt it. Best, Don Bauder

The accrediting organizations that keep giving these for-profit institutions the go-ahead should be investigated and in some cases shuttered. Best, Don Bauder

Es todo kaka de toro--or something like that. But dig deeper. There has to be complicity in the government too. What are the totals on tax money gone and obligated for? Anybody who can't tell a horse-apple from a pippin should go to jail for bein' dum--if they can't be convicted for facilitating. Follow the money--all of it.

Flapper: The Department of Education has been very slow to act on these for-profits. Major reason: pressure from politicians and lobbyists. And under-the-table money from lobbyists. Best, Don Bauder

Peter Peters: The fact that for-profit colleges and universities are corrupt does not make nonprofit schools angelic. There is plenty of room for reform at the nonprofits, too. Best, Don Bauder

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