July 9 (Bloomberg) -- Bridgepoint Education Inc., the for-profit college company that owns Ashford University, lost a third of its value in New York trading after Ashford’s accreditation application was denied by a regional accreditor.
Bridgepoint slid 34 percent to $14.25 at the close, its biggest decline since April 2009. The shares have slumped 38 percent this year.
Ashford didn’t comply with “multiple aspects” of the accreditor’s standards in areas related to student retention, maintaining a core of full-time faculty and having an independent governing board, the Western Association of Schools and Colleges said in a letter posted on its website today.
Ashford, which has a campus in Iowa, has grown 10-fold since Bridgepoint purchased it in 2005 and became primarily an online university, according to the association. The rapid expansion has led to large numbers of students dropping out, with 128,000 leaving in the past five years compared with new enrollment of 240,000, WASC said.
“This level of attrition is, on its face, not acceptable,” according to WASC’s letter. “Serious concerns also exist about the rigor of the coursework.”
Ashford will appeal the WASC report and reapply for accreditation, San Diego-based Bridgepoint said today in a statement.
Ashford applied to WASC after its regional accrediting agency, the Higher Learning Commission of the North Central Association of Schools and Colleges, said that the school has until Dec. 1 to prove it has a “substantial presence” in HLC’s 19-state region, according to Bridgepoint. Ashford applied to the WASC for accreditation because much of its student body is now online and supported from outside HLC’s region, Bridgepoint said.
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