DOJ investigates Bridgepoint Education
The Justice Department is investigating compensation paid to Bridgepoint Education Inc.'s admissions staff, the for-profit education company disclosed in a regulatory filing Monday.
Shares plunged nearly 9 percent to $10 in after-hours trading on the news.
Bridgepoint, based in San Diego, operates schools such as Ashford University and University of the Rockies. The company did not disclose all the details of the investigation, but said the DOJ is seeking further information about staff pay that was part of an earlier review and audit by the U.S. Department of Education.
Bridgepoint is struggling to secure necessary accreditation for Ashford over various concerns, including "assuring academic vigor." Without certain accreditation, a school can lose its access to federal financial aid, which makes up the bulk of most for-profit schools' revenue.
Critics accuse for-profit universities like Ashford of putting profit ahead of student achievement, with many of their students not graduating, or finding that they can't get a job with their degree if they do, leaving them saddled with thousands of dollars in student loan debt.
The Justice Department said in its letter that it is considering a formal process to obtain evidence, but is open to the company volunteering the information it is seeking.
Bridgepoint said in its filing that it is evaluating the letter and intends to cooperate with the request. The company said it won't comment further on this matter at this time.