Shawshank, VA 7/13/12 (StreetBeat) – Bridgepoint Education (NYSE: BPI) is trading sharply down 24%, or $3.15, at $9.82 as its accreditation problems are getting worse. Its shares have lost 40% of their value since the company said the Western Association of Schools and Colleges (WASC) denied its accreditation application.
The issue here is that for-profit schools rely as much as 90% of their revenues from federal financial aid, and the schools must have accreditation to continue access to this financial aid.
Bridgepoint has been trying to switch its Ashford University’s accreditation from the Higher Learning Commission of the North Central Association of Colleges and Schools (HLC) to the Accrediting Commission for Senior Colleges and Universities of the WASC, which has jurisdiction over California. The WASC denied Ashford accreditation earlier this month, listing problems with student outcomes.
Ashford says it believes it is in substantial compliance with the HLC accreditation criteria and plans to cooperate fully with the HLC on the matter.
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