Ashford University, one of the country’s fastest growing online for-profit schools, is fighting to remain accredited while investors are suing the university’s parent company for an elaborate insider trading scheme and alleged violations of financial filings with the federal government.
July hasn’t been a good month for Ashford or its parent company, Bridgepoint Education, and it could get worse for the company if it doesn’t quell concerns about high student dropout rates, academic rigor, and a low number of full-time Ashford faculty members.
The Western Association of Schools and Colleges (WASC) last week rejected Ashford’s bid for accreditation – a public admonition that sent Bridgepoint’s stock prices tumbling by more than 30 percent. The Higher Learning Commission of the North Central Association of Colleges and Schools, another accrediting body, is now giving Ashford a month to comply with basic accreditation criteria, according to a Bridgepoint filing.
The Higher Learning Commission said July 16 that its representatives would conduct site visits sometime before October to make sure the university has made the appropriate changes.
Ashford University has a massive online presence, with 99 percent of its students taking classes on the web.
The university boats enrollment of more than 90,000 students, up from 10,000 in 2007. Ashford had 300 students when Bridgepoint bought the school in 2005. Sky-high dropout rates have plagued the online school: of the 241,000 new students Ashford has enrolled since 2007, 128,000 have dropped out.
That puts Ashford’s dropout rate at about 50 percent. The school receives 85 percent of its revenue from federal student aid, according to the U.S. Department of Education.
Ashford officials are fighting for the university’s accreditation just as a group of Bridgepoint investors on July 16 filed a lawsuit in the U.S. District Court for the Southern District of California, charging that the company withheld critical financial documents related to Ashford’s potential accreditation woes.
WASC officials said this month that they warned Bridgepoint and Ashford of academic shortfalls that could jeopardize the university’s accreditation. The lawsuit claims that investors were never made aware of the accreditors’ early warnings.
The lawsuit alleges that Bridgepoint stock was sold at “artificially inflated prices” from May 3, 2011, until July 6, 2012. It was during that time that Bridgepoint CEO Andrew Clark dumped more than $18 million in company stock, the court filing alleged. Daniel Devine, Bridgepoint’s chief financial officer, sold $6.7 million in Bridgepoint stock during the same timeframe, just as Jane McAuliffe, Bridgepoint’s chief academic officer, dumped $6.2 million in stock.
Bridgepoint shares, after reaching a high of $30.50 in July 2011, plunged to $14.25 on July 9, and $9.45 on July 13.
Ashford University’s accreditation request was denied because the school could not demonstrate an “effective system for assessing and monitoring student learning and assuring academic rigor,” a sufficient number of full-time faculty who would manage the “continuity and integrity” of various Ashford programs, and any method of tracking student progress and retention, WASC President and CEO Elizabeth Tice wrote in a letter to the school.