July 11, 2012- One of San Diego’s largest employers is headed for financial and legal troubles that could have a serious impact on the region. Bridgepoint Education took a bath in the stock market Monday, losing one third of its value and continuing downward on Tuesday. Over the past year the company’s stock price has dropped by more than 50%. This week’s sharp drop in value at the stock exchange happened after its flagship school, Ashford University, was denied accreditation by the Western Association of Schools. The upshot of this ruling is that the company will need to relocate hundreds, perhaps even thousands, of employees out of the San Diego region.
The for profit education company depends on the status of the Ashford campus to give it credibility with its on-line students, who make up 99% of its enrollment, and the financial organizations that loan them money for tuition. Standing in the way of certification is Bridgepoint’s drop out rate; of the nearly quarter million students enrolled over the past four years (2007-2011), 127,879 withdrew from the school. Also troubling for the Western Association was the fact that the school spends 31% of its operating costs on recruitment, well above the amount it spends on actual instruction or student services like job counseling. Just 22% of Ashford students graduate; the actual campus in Iowa has a mere 1,000 students taking classes, 85,000 are studying online. [Read more…]