Sept. 4 (Bloomberg) -- Bridgepoint Education Inc., a for- profit provider of college classes, fell the most in almost five months in New York trading after saying a government audit may assert the company misused federal student aid.

The U.S. Department of Education’s Office of Inspector General will issue findings on Bridgepoint’s compliance with government regulations at its Ashford University campus in the next 30 days, the San Diego-based company said today in a statement. Ashford University got 87 percent of its revenue from federal financial aid in 2008, according to a company filing.

The Inspector General’s findings may cover Bridgepoint’s compensation of enrollment officers; returns and disbursement of U.S. student aid funds; and documentation of students’ leaves of absence, the company said. Investors may be concerned that the agency’s charges will lead to fines or settlement costs, said Ariel Sokol, an analyst with Wedbush Morgan Securities in New York.

“No one knows what the potential issues of noncompliance are,” said Sokol, who recommends investors buy the shares and doesn’t own them, in a telephone interview. “Without knowing what the specific allegations are, how can you quantify it?”

Bridgepoint fell $2.66, or 15 percent, to $15.57 at 4:01 p.m. in New York Stock Exchange composite trading after dropping as low as $13.76. Shelley Pfaendler, a spokeswoman for Bridgepoint at KCSA Strategic Communications in New York, declined to comment.

Ashford University

Bridgepoint bought the Franciscan University of the Prairies in Clinton, Iowa, in March 2005, renaming it Ashford University, according to a company filing. Bridgepoint, which also owns the University of the Rockies, in Colorado Springs, Colorado, has about 46,000 students, most of whom take courses through the Internet.

The inspector general cited Bridgepoint’s compensation of enrollment officers, which has become an issue at other for- profit education providers, including Grand Canyon Education Inc., based in Phoenix, and Apollo Group Inc., also of Phoenix. In 1992, the government banned paying enrollment officers on the basis of the number of students they recruited. President George W. Bush’s administration adopted regulations in 2002 that allowed a portion of enrollment-officer pay to be based on the number of students recruited.

Grand Canyon said on Sept. 2 it was in discussions to settle government charges of violating the enrollment law. Apollo Group, the parent company of the University of Phoenix, paid $9.8 million to settle compliance charges in 2004 and faces a lawsuit in federal court over incentive compensation, according to company filings.

The University of Phoenix is the largest private university in the U.S., with more than 400,000 students, most of them taking online courses.

Grand Canyon fell 67 cents, or 3.8 percent, to $16.95 in Nasdaq Stock Market composite trading. Apollo Group, based in Phoenix, fell 31 cents, or less than 1 percent, to $65.57.

To contact the reporter on this story: John Lauerman in Boston at jlauerman@bloomberg.net.

Last Updated: September 4, 2009 16:20 EDT