BRIDGEPOINT EDUCATION INC BPI S
March 03, 2011 - 3:48pm EST by
Affton1
2011 2012
Price: 19.40 EPS $2.14 $0.00
Shares Out. (in M): 60 P/E 0.0x 0.0x
Market Cap (in $M): 1,156 P/FCF 0.0x 0.0x
Net Debt (in $M): -280 EBIT 216 0
TEV ($): 876 TEV/EBIT 4x 0.0x
Borrow Cost: NA

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  • For Profit Education
 

Description

We had been considering posting BPI for some time, but have been hesitant given the numerous other short write-ups on for-profit education companies on this board.  Yet, when we saw the Health Education Labor & Pensions (HELP) committee announce today that they will be conducting a hearing entitled "Bridgepoint Education, Inc: A Case Study in For-Profit Education and Oversight" we have decided to go ahead and post our thoughts as we have long thought that BPI was a compelling short idea and believe now is an excellent opportunity to add to the short position. 
-
THESIS:  We believe that BPI has serious risk of losing access to Title IV funding.  If this were to happen, it would be devastating to its business model.  In light of this HELP committee announcement, the risk that they may lose eligibility is more real than ever. 

SUMMARY:  The for-profit education space has garnered significant investor attention over the past year and a half; there are many bulls, but probably more bears as it has become a crowded short trade.  The long or short theses have hinged on potential regulatory changes with many focused on gainful employment.  As Arne Duncan, the current Secretary of Education, has stated that there is a place for proprietary schools, but bad actors must be weeded out.  We believe that Bridgepoint Education is an ideal example of exactly that: a bad actor.  In our opinion, management and backers of Bridgepoint have cleverly acquired regional accreditation to access Title IV dollars.  Bridgepoint has aggressively marketed (successfully) to prospective students spending more on marketing than on instructional costs.  The underlying problem with this dynamic is that roughly 90% of Bridgepoint revenues are generated from federal taxpayer funds.  We find this pattern very troubling and, given the scale of Bridgepoint's current operations, in need of intense scrutiny.  Apparently, the HELP committee agrees, as they will be focused on its business merits at its hearing next week.

BACKGROUND: Bridgepoint Education, Inc (BPI) is the holding company for Ashford University and the University of the Rockies.  The company was formed in 2004 and funded by Warburg Pincus.  In February of 2005, BPI acquired the Franciscan University of the Prairies in Clinton, Iowa.  At the time of the acquisition, Franciscan's enrollment was a mere 332 students, consisting of 312 on-ground students and 20 online students.  Franciscan provided Bridgepoint an entity with regional accreditation from the Higher Learning Commission of the North Central Association of Colleges and Schools (HLC).  Regional accreditation is vital as it enables eligibility for Title IV funding, the engine which drives profits for Bridgepoint and maximizes compensation for corporate management.  Shortly after the acquisition, BPI renamed the Clinton, IA-based school Ashford University.  In September of 2007 BPI acquired the Colorado School of Professional Psychology (which is also accredited by the HLC) and renamed it the University of the Rockies.  After the acquisitions, BPI immediately began aggressively marketing and has grown combined enrollment to over 77,000 students as of December 31, 2010, 99% of which are online.  In April 2009 Bridgepoint became a public company.

Enrollment:  The growth of Ashford University is quite impressive (Note: the majority of growth has been at Ashford; enrollment at University of the Rockies was only 1,925 students at 12/31/10).  Bridgepoint's total enrollment growth is shown below.

  1/1/2005 12/31/2005 12/31/2006 12/31/2007 12/31/2008 12/31/2009 12/31/2010
Doctoral                       -                       -                      60                 113                 428                 618
Master's                   236                 358                 905              2,266              5,350              8,414
Bachelor's                   827              3,980           11,071           26,340           41,571           57,905
Associate's                       -                      68                 533              2,699              6,117           10,720
Other                       -                      65                    54                 140                 222                 235
Total 332              1,063              4,471           12,623           31,558           53,688           77,892
               
Online 20                 729              4,111           12,104           30,921           53,048           77,033
Ground 312                 334                 360                 519                 637                 640                 859

The increased enrollment has translated into explosive growth in revenues and profits at BPI.  In fact, in 2010 BPI generated over $713mn in revenues and $127mn in after-tax profits.  This is up from just $28mn in revenue five years ago.  Pre-tax and after-tax margins jumped to 30% and 18% in 2010.  The company's net cash position is approaching $300mn.  BPI income statement is shown below.

 

BPI    INCOME STATEMENT

2005

2006

2007

2008

2009

2010

Revenue

           7,951

         28,619

         85,709

   218,290

   454,324

      713,233

Costs and Expenses

 

 

 

 

 

 

Instruction Costs and Services

           5,498

         12,510

         29,837

      62,822

   120,089

      187,399

Marketing and Promotional

           4,078

         12,214

         35,997

      81,036

   145,721

      211,550

General and Administrative

           6,190

           8,704

         15,892

      41,012

   106,784

        97,863

Total Costs and Expenses

         15,766

         33,428

         81,726

   184,870

   372,594

      496,812

Operating Income

         (7,815)

         (4,809)

           3,983

      33,420

      81,730

      216,421

Net Interest Income

            (190)

            (341)

            (532)

              82

            510

          1,358

PreTax Income

         (8,005)

         (5,150)

           3,451

      33,502

      82,240

      217,779

Income Tax Expense

                  -  

                  -  

               164

        7,071

      35,135

        90,199

Net Income

         (8,005)

         (5,150)

           3,287

      26,431

      47,105

      127,580

Notably, Title IV dollars comprise the lion share of BPI revenues.  Additionally, BPI markets to the military.  Funds provided by Title IV and via military programs (which is also federally funded) make-up approximately 90% of reported revenues.  Per BPI 10K filed yesterday, 18.6% of total enrollment is comprised of students affiliated with the military.

 

% of Revenues derived from:

 

 

 

 

Title IV Programs

2007

2008

2009

2010

Ashford

83.9%

86.8%

85.5%

85.0%

University of the Rockies

61.9%

80.8%

84.6%

80.8%

 

 

 

 

 

Military Aid

2007

2008

2009

2010

Ashford

1.9%

2.2%

4.9%

NA

University of the Rockies

1.3%

0.0%

2.1%

NA

 

 

 

 

 

Total Title IV and Military Funding

2007

2008

2009

2010

Ashford

85.8%

89.0%

90.4%

NA

University of the Rockies

63.2%

80.8%

86.7%

NA

When analyzing BPI revenues generated from federal sources, we were surprised that Ashford University is the 4th largest recipient of Pell Grants and the 9th largest recipient of military students via the GI bill.  Given Ashford University did not exist prior to 2005, it strikes us as troubling that such a large portion of federal money is being used to attend an online university with limited history of providing reasonable outcomes for students.  It also strikes us as troubling that since 2005 over $486mn has been spent on marketing to prospective students at Bridgepoint schools.  In that same timespan, the company has spent $412mn in instructional costs, $74mn less than what was spent on marketing to these students.  A quick look at BPI 10K filing shows that BPI employs 1,175 enrollment counselors as of 12/31/2009.  This is up from 749 in 2008 and 479 in 2007.  Is that how we want to spend federal money: marketing to drive enrollment at Ashford University?  We'd note that an updated enrollment counselor figure was not made available in the 10k filed yesterday.

  

Largest Pell Grant Recipients 2010 academic year (ended June 30, 2010)

School

State

School Type

YTD Recipients

YTD Disbursements

UNIVERSITY OF PHOENIX

AZ

PROPRIETARY

304583

$1,042,372,699.50

KAPLAN UNIVERSITY

IA

PROPRIETARY

63660

$211,302,730.24

DEVRY UNIVERSITY

IL

PROPRIETARY

57339

$207,064,910.00

ASHFORD UNIVERSITY

IA

PROPRIETARY

47096

$162,195,319.73

BAKER COLLEGE

MI

PRIVATE-NONPROFIT

33351

$102,992,682.00

VIRGINIA COLLEGE

AL

PROPRIETARY

22904

$92,495,763.00

STRAYER UNIVERSITY

DC

PROPRIETARY

29586

$88,078,567.87

INSTITUTO DE BANCA Y COMERCIO

PR

PROPRIETARY

20866

$86,890,443.30

AMERICAN INTERCONTINENTAL UNIVERSITY

IL

PROPRIETARY

23239

$83,139,588.96

COLORADO TECHNICAL UNIVERSITY

CO

PROPRIETARY

27650

$81,615,603.75

Source: Dept of Education

Who Enrolls the Most Students with Post-9/11 GI Benefits?
  October 1, 2009- May 1, 2010  
  University of Phoenix          10,872
  Devry University            4,428
  U. of Maryland University College            3,002
  Tidewater Community College            2,405
  American Public U. System            1,773
  American Intercontinental Univ            1,757
  Colorado Technical University            1,711
  Kaplan Univ            1,655
  Ashford University            1,577
  Troy University            1,473
  Source: Chronicle of Higher Education  
 

 

Questionable Insider transactions:

 

Despite the extraordinary growth and upbeat tone from management, insiders have been selling stock at a rapid clip.  The timing of some of these sales is particularly interesting given they were done the two days after Senator Harkin's HELP committee hearings on August 3, 2010 and two days after Bridgepoint boosted guidance and announced a $60mn share buyback.  Sales just after that hearing were:

 

Andrew Clark, CEO, sold 150,297 shares on 8/5/10-8/6/10

Daniel Devine, CFO, sold 59,583 shares on 8/5/10-8/6/10

Ross Woodard, SVP/Chief Marketing Officer, sold 87,697 shares on 8/5/6/10

Jane Mcauliffe, SVP/Chief Academic Officer, sold 90,000 shares on 8/5/10

Rodney Sheng, SVP /Chief Administrative Officer, sold 100,000 shares on 8/5/10-8/6/10

Christopher Spohn, SVP and Chief Admissions Officer, sold 37,116 shares on 8/5/10

 

Post the Harkin hearings, BPI on August 6th  acknowledged they received a letter requesting a plethora of data to provide Senator Harkin and the HELP committee (Note: all publicly traded for-profits received this request).  Given the BPI press release was issued at 6am on August 6th, one would figure they had received it before most of their insider sales? 

So management signals to the market that the stock is cheap and announces it intends to buy-back stock, yet offloads it themselves two days later?  We note that at the time of insider sales, the stock was trading between $15 and $17, much lower than its recent highs.  Why sell stock now when it was recently at $25?

 

Department of Education Office of Inspector General (OIG) Investigation

Ashford University has had an ongoing audit of its operations by the OIG since May 2008.  On January 21, 2011 BPI noted that the audit contained the following findings:

 

  • Finding 1-The university designed a compensation plan for enrollment advisors that provided incentive payments based on success in securing enrollments and did not  establish that its plan and practices qualified for the regulatory safe harbors.
  • Finding 2-The university did not always perform return of Title IV aid calculations properly, resulting in the improper retention of a total of $29,036 of Title IV program funds for 38 students in the OIG's sample sets of 85 students.
  • Finding 3-The university did not in all instances return Title IV program funds timely for Title IV students who withdrew or went on a leave of absence from school.
  • Finding 4-The form formerly used by the university to obtain authorizations to retain student credit balances did not comply with applicable regulations.
  • Finding 5-The university did not in all instances disburse Title IV program funds in accordance with applicable regulations or university policy because they were made prior to the students being eligible to receive them.
  • Finding 6-The university did not in all instances maintain documentation to support online students' leaves of absence due to the lack of support for the start dates for 19 leaves of absence. 

The findings were accompanied by recommendations to the Department of Education's Office of Federal Student Aid and are shown on P36 of BPI 10kBPI notes that for Findings 2, 3 and 5 the OIG recommended that the FSA consider appropriate action which may include "a fine against the university or to limit, suspend or terminate the university's participation in Title IV programs." 

ACCREDITATION:  Is Ashford at risk at losing accreditation?  We think yes.

 It is important to note the reasoning behind Bridgepoint's decision to acquire a tiny rural religious university in Iowa.  Franciscan University was regionally accredited by the Higher Learning Commission (HLC).  Regional accreditation is considered more prestigious than national accreditation and it is more difficult for a new institution to obtain.  The acquisition of Franciscan provided Bridgepoint a regionally accredited institution that had marketability and access to Title IV. 

 

Given how important regional accreditation was to Bridgepoint, we find very interesting that Bridgepoint announced on 9/23/10 that it was looking to migrate to another regional accreditor, the Western Association of Schools and Colleges (WASC).  Per Bridgepoint's press release: 

 

"BRIDGEPOINT EDUCATION'S ASHFORD UNIVERSITY INITIATES WASC ACCREDITATION PROCESS"  SAN DIEGO, CA (September 23, 2010) - Bridgepoint Education, Inc. (NYSE:BPI), a provider of postsecondary education services, today announced that Ashford University has recently initiated the process of seeking regional accreditation from the Accrediting Commission for Senior Colleges and Universities of the Western Association of Schools and Colleges (WASC, http://www.wascsenior.org). Ashford University is working collaboratively with the Higher Learning Commission of the North Central Association of Colleges and Schools (HLC, http://www.ncahlc.org) and WASC to facilitate the migration. During the process, Ashford will continue to maintain its current regional accreditation with HLC. Bridgepoint Education's University of the Rockies has not applied for WASC accreditation.

In 2006 Ashford University stated that it had received re-accreditation from the HLC for ten years.  So, the question we ask is: why change accreditors now?  The answer lies within the HLC.  In June 2010, the Board of Trustees of the HLC adopted revised bylaws:

 "...which outline the basis on which an institution may claim that it is within the commission's jurisdiction.  The revised bylaws stated that an institution must be incorporated within a state in the 19-state north central region and also have a "substantial" presence in the north central region to be considered within the commission's jurisdiction... The institution must provide evidence that the majority of its educational administration and activity, business operations and executive and administrative leadership are located or operating within the north central region." 

Ashford's headquarters are based in San Diego and 99% of its student population is online (or outside the Clinton, IA campus).  Its enrollment counselor call center is based in San Diego.  The company technology which hosts the online university is based in San Diego as well.  Essentially, Ashford University does not meet HLC guidelines.  Thus, they are being asked to seek accreditation elsewhere

MANAGEMENT COMPENSATION:  Per Bridgepoint's proxy, Andrew Clark, the President and Chief Executive Officer, earned $20.5mn in total compensation in 2009.  Collectively, the five named executive officers earned over $36.7mn in total compensation. 
-
CONCLUSION: We believe that next week's hearing will expose Bridgepoint's business model as one that abuses Title IV and offers very little value to students.  We view this additional exposure as significantly decreasing BPI chances of gaining WASC accreditation.  Also, given the outcome of the OIG audit, BPI is at significant risk of potentially losing access to Title IV.  This hearing may lead to a harsher reaction by the FSA when determining its action on BPI.  In Senator Harkin's commentary today he states that "Bridgepoint Education's growth in both enrollment and profits- even as their rates of student withdrawals and loan defaults climb- exemplifies the issues in the for-profit education industry.  Using Bridgepoint as a case study will help us better understand how the practices of for-profit colleges impact their student's chances for success." 

 

Commentary available on Senator Tom Harkin's website is likely a preview of next week's hearing. 

From Harkin's December 2010 statement"Let me focus, for a moment, on Bridgepoint. Bridgepoint operates Ashford University and is based, sort of, in Clinton, IA. A group of private equity investors purchased a small Catholic school in 2004, when it had about 375 students. In 2004, this small Catholic school in Clinton, IA, had 375 students. They transformed it into a for-profit school. It now has 67,000 students, a 17,000-percent increase in student population in 6 years, 17,000 percent.

Ashford still operates the small campus in Iowa. About 600 students go there. The other 67,000 take classes online. I, obviously, was very interested to know how the heck they can be doing such a good job for students with that kind of growth. What the data we have collected for our investigation can tell us, for the first time, is they are not doing a very good job for their students.

Eighty-four percent of the students seeking an associate's degree and 63 percent of bachelor's degree-seeking students leave Ashford within 1 year, without finishing their programs.

But look at the growth--17,000 percent growth. This is not terribly surprising because Bridgepoint offers no tutoring or other student services. If a student starts to have difficulties at Ashford online, they have two options: talk to their part-time teacher online or ask the computer avatar, who is the online student resource center.

Should a student succeed in completing a degree at Ashford, they had best not expect a lot of help finding a job. While Bridgepoint employs 1,703 recruiters, they employ just one person to handle career planning. They employ 1,703 recruiters, and one person to handle career planning for the entire student body of 67,000 students. According to a recent study, 60 percent of all community college students need extra help to succeed in school. They need tutoring and classes to make up for what they may not have learned in middle school and high school. For-profit colleges have served a similar population with similar needs. As they often remind us, the for-profit sector serves a group of students that traditionally lack access to higher education. Their students are the ones who are the most vulnerable, the ones who didn't have parents who went to college, who didn't grow up in a fairly wealthy household. And to make it through college, they require a significant support structure that is not available at these for-profit schools."

Catalyst

1)  HELP hearing next week
2)  FSA report regarding audit
3)  WASC accreditation decision
    sort by    

    Description

    We had been considering posting BPI for some time, but have been hesitant given the numerous other short write-ups on for-profit education companies on this board.  Yet, when we saw the Health Education Labor & Pensions (HELP) committee announce today that they will be conducting a hearing entitled "Bridgepoint Education, Inc: A Case Study in For-Profit Education and Oversight" we have decided to go ahead and post our thoughts as we have long thought that BPI was a compelling short idea and believe now is an excellent opportunity to add to the short position. 
    -
    THESIS:  We believe that BPI has serious risk of losing access to Title IV funding.  If this were to happen, it would be devastating to its business model.  In light of this HELP committee announcement, the risk that they may lose eligibility is more real than ever. 

    SUMMARY:  The for-profit education space has garnered significant investor attention over the past year and a half; there are many bulls, but probably more bears as it has become a crowded short trade.  The long or short theses have hinged on potential regulatory changes with many focused on gainful employment.  As Arne Duncan, the current Secretary of Education, has stated that there is a place for proprietary schools, but bad actors must be weeded out.  We believe that Bridgepoint Education is an ideal example of exactly that: a bad actor.  In our opinion, management and backers of Bridgepoint have cleverly acquired regional accreditation to access Title IV dollars.  Bridgepoint has aggressively marketed (successfully) to prospective students spending more on marketing than on instructional costs.  The underlying problem with this dynamic is that roughly 90% of Bridgepoint revenues are generated from federal taxpayer funds.  We find this pattern very troubling and, given the scale of Bridgepoint's current operations, in need of intense scrutiny.  Apparently, the HELP committee agrees, as they will be focused on its business merits at its hearing next week.

    BACKGROUND: Bridgepoint Education, Inc (BPI) is the holding company for Ashford University and the University of the Rockies.  The company was formed in 2004 and funded by Warburg Pincus.  In February of 2005, BPI acquired the Franciscan University of the Prairies in Clinton, Iowa.  At the time of the acquisition, Franciscan's enrollment was a mere 332 students, consisting of 312 on-ground students and 20 online students.  Franciscan provided Bridgepoint an entity with regional accreditation from the Higher Learning Commission of the North Central Association of Colleges and Schools (HLC).  Regional accreditation is vital as it enables eligibility for Title IV funding, the engine which drives profits for Bridgepoint and maximizes compensation for corporate management.  Shortly after the acquisition, BPI renamed the Clinton, IA-based school Ashford University.  In September of 2007 BPI acquired the Colorado School of Professional Psychology (which is also accredited by the HLC) and renamed it the University of the Rockies.  After the acquisitions, BPI immediately began aggressively marketing and has grown combined enrollment to over 77,000 students as of December 31, 2010, 99% of which are online.  In April 2009 Bridgepoint became a public company.

    Enrollment:  The growth of Ashford University is quite impressive (Note: the majority of growth has been at Ashford; enrollment at University of the Rockies was only 1,925 students at 12/31/10).  Bridgepoint's total enrollment growth is shown below.

      1/1/2005 12/31/2005 12/31/2006 12/31/2007 12/31/2008 12/31/2009 12/31/2010
    Doctoral                       -                       -                      60                 113                 428                 618
    Master's                   236                 358                 905              2,266              5,350              8,414
    Bachelor's                   827              3,980           11,071           26,340           41,571           57,905
    Associate's                       -                      68                 533              2,699              6,117           10,720
    Other                       -                      65                    54                 140                 222                 235
    Total 332              1,063              4,471           12,623           31,558           53,688           77,892
                   
    Online 20                 729              4,111           12,104           30,921           53,048           77,033
    Ground 312                 334                 360                 519                 637                 640                 859

    The increased enrollment has translated into explosive growth in revenues and profits at BPI.  In fact, in 2010 BPI generated over $713mn in revenues and $127mn in after-tax profits.  This is up from just $28mn in revenue five years ago.  Pre-tax and after-tax margins jumped to 30% and 18% in 2010.  The company's net cash position is approaching $300mn.  BPI income statement is shown below.

     

    BPI    INCOME STATEMENT

    2005

    2006

    2007

    2008

    2009

    2010

    Revenue

               7,951

             28,619

             85,709

       218,290

       454,324

          713,233

    Costs and Expenses

     

     

     

     

     

     

    Instruction Costs and Services

               5,498

             12,510

             29,837

          62,822

       120,089

          187,399

    Marketing and Promotional

               4,078

             12,214

             35,997

          81,036

       145,721

          211,550

    General and Administrative

               6,190

               8,704

             15,892

          41,012

       106,784

            97,863

    Total Costs and Expenses

             15,766

             33,428

             81,726

       184,870

       372,594

          496,812

    Operating Income

             (7,815)

             (4,809)

               3,983

          33,420

          81,730

          216,421

    Net Interest Income

                (190)

                (341)

                (532)

                  82

                510

              1,358

    PreTax Income

             (8,005)

             (5,150)

               3,451

          33,502

          82,240

          217,779

    Income Tax Expense

                      -  

                      -  

                   164

            7,071

          35,135

            90,199

    Net Income

             (8,005)

             (5,150)

               3,287

          26,431

          47,105

          127,580

    Notably, Title IV dollars comprise the lion share of BPI revenues.  Additionally, BPI markets to the military.  Funds provided by Title IV and via military programs (which is also federally funded) make-up approximately 90% of reported revenues.  Per BPI 10K filed yesterday, 18.6% of total enrollment is comprised of students affiliated with the military.

     

    % of Revenues derived from:

     

     

     

     

    Title IV Programs

    2007

    2008

    2009

    2010

    Ashford

    83.9%

    86.8%

    85.5%

    85.0%

    University of the Rockies

    61.9%

    80.8%

    84.6%

    80.8%

     

     

     

     

     

    Military Aid

    2007

    2008

    2009

    2010

    Ashford

    1.9%

    2.2%

    4.9%

    NA

    University of the Rockies

    1.3%

    0.0%

    2.1%

    NA

     

     

     

     

     

    Total Title IV and Military Funding

    2007

    2008

    2009

    2010

    Ashford

    85.8%

    89.0%

    90.4%

    NA

    University of the Rockies

    63.2%

    80.8%

    86.7%

    NA

    When analyzing BPI revenues generated from federal sources, we were surprised that Ashford University is the 4th largest recipient of Pell Grants and the 9th largest recipient of military students via the GI bill.  Given Ashford University did not exist prior to 2005, it strikes us as troubling that such a large portion of federal money is being used to attend an online university with limited history of providing reasonable outcomes for students.  It also strikes us as troubling that since 2005 over $486mn has been spent on marketing to prospective students at Bridgepoint schools.  In that same timespan, the company has spent $412mn in instructional costs, $74mn less than what was spent on marketing to these students.  A quick look at BPI 10K filing shows that BPI employs 1,175 enrollment counselors as of 12/31/2009.  This is up from 749 in 2008 and 479 in 2007.  Is that how we want to spend federal money: marketing to drive enrollment at Ashford University?  We'd note that an updated enrollment counselor figure was not made available in the 10k filed yesterday.

      

    Largest Pell Grant Recipients 2010 academic year (ended June 30, 2010)

    School

    State

    School Type

    YTD Recipients

    YTD Disbursements

    UNIVERSITY OF PHOENIX

    AZ

    PROPRIETARY

    304583

    $1,042,372,699.50

    KAPLAN UNIVERSITY

    IA

    PROPRIETARY

    63660

    $211,302,730.24

    DEVRY UNIVERSITY

    IL

    PROPRIETARY

    57339

    $207,064,910.00

    ASHFORD UNIVERSITY

    IA

    PROPRIETARY

    47096

    $162,195,319.73

    BAKER COLLEGE

    MI

    PRIVATE-NONPROFIT

    33351

    $102,992,682.00

    VIRGINIA COLLEGE

    AL

    PROPRIETARY

    22904

    $92,495,763.00

    STRAYER UNIVERSITY

    DC

    PROPRIETARY

    29586

    $88,078,567.87

    INSTITUTO DE BANCA Y COMERCIO

    PR

    PROPRIETARY

    20866

    $86,890,443.30

    AMERICAN INTERCONTINENTAL UNIVERSITY

    IL

    PROPRIETARY

    23239

    $83,139,588.96

    COLORADO TECHNICAL UNIVERSITY

    CO

    PROPRIETARY

    27650

    $81,615,603.75

    Source: Dept of Education

    Who Enrolls the Most Students with Post-9/11 GI Benefits?
      October 1, 2009- May 1, 2010  
      University of Phoenix          10,872
      Devry University            4,428
      U. of Maryland University College            3,002
      Tidewater Community College            2,405
      American Public U. System            1,773
      American Intercontinental Univ            1,757
      Colorado Technical University            1,711
      Kaplan Univ            1,655
      Ashford University            1,577
      Troy University            1,473
      Source: Chronicle of Higher Education  
     

     

    Questionable Insider transactions:

     

    Despite the extraordinary growth and upbeat tone from management, insiders have been selling stock at a rapid clip.  The timing of some of these sales is particularly interesting given they were done the two days after Senator Harkin's HELP committee hearings on August 3, 2010 and two days after Bridgepoint boosted guidance and announced a $60mn share buyback.  Sales just after that hearing were:

     

    Andrew Clark, CEO, sold 150,297 shares on 8/5/10-8/6/10

    Daniel Devine, CFO, sold 59,583 shares on 8/5/10-8/6/10

    Ross Woodard, SVP/Chief Marketing Officer, sold 87,697 shares on 8/5/6/10

    Jane Mcauliffe, SVP/Chief Academic Officer, sold 90,000 shares on 8/5/10

    Rodney Sheng, SVP /Chief Administrative Officer, sold 100,000 shares on 8/5/10-8/6/10

    Christopher Spohn, SVP and Chief Admissions Officer, sold 37,116 shares on 8/5/10

     

    Post the Harkin hearings, BPI on August 6th  acknowledged they received a letter requesting a plethora of data to provide Senator Harkin and the HELP committee (Note: all publicly traded for-profits received this request).  Given the BPI press release was issued at 6am on August 6th, one would figure they had received it before most of their insider sales? 

    So management signals to the market that the stock is cheap and announces it intends to buy-back stock, yet offloads it themselves two days later?  We note that at the time of insider sales, the stock was trading between $15 and $17, much lower than its recent highs.  Why sell stock now when it was recently at $25?

     

    Department of Education Office of Inspector General (OIG) Investigation

    Ashford University has had an ongoing audit of its operations by the OIG since May 2008.  On January 21, 2011 BPI noted that the audit contained the following findings:

     

    • Finding 1-The university designed a compensation plan for enrollment advisors that provided incentive payments based on success in securing enrollments and did not  establish that its plan and practices qualified for the regulatory safe harbors.
    • Finding 2-The university did not always perform return of Title IV aid calculations properly, resulting in the improper retention of a total of $29,036 of Title IV program funds for 38 students in the OIG's sample sets of 85 students.
    • Finding 3-The university did not in all instances return Title IV program funds timely for Title IV students who withdrew or went on a leave of absence from school.
    • Finding 4-The form formerly used by the university to obtain authorizations to retain student credit balances did not comply with applicable regulations.
    • Finding 5-The university did not in all instances disburse Title IV program funds in accordance with applicable regulations or university policy because they were made prior to the students being eligible to receive them.
    • Finding 6-The university did not in all instances maintain documentation to support online students' leaves of absence due to the lack of support for the start dates for 19 leaves of absence. 

    The findings were accompanied by recommendations to the Department of Education's Office of Federal Student Aid and are shown on P36 of BPI 10kBPI notes that for Findings 2, 3 and 5 the OIG recommended that the FSA consider appropriate action which may include "a fine against the university or to limit, suspend or terminate the university's participation in Title IV programs." 

    ACCREDITATION:  Is Ashford at risk at losing accreditation?  We think yes.

     It is important to note the reasoning behind Bridgepoint's decision to acquire a tiny rural religious university in Iowa.  Franciscan University was regionally accredited by the Higher Learning Commission (HLC).  Regional accreditation is considered more prestigious than national accreditation and it is more difficult for a new institution to obtain.  The acquisition of Franciscan provided Bridgepoint a regionally accredited institution that had marketability and access to Title IV. 

     

    Given how important regional accreditation was to Bridgepoint, we find very interesting that Bridgepoint announced on 9/23/10 that it was looking to migrate to another regional accreditor, the Western Association of Schools and Colleges (WASC).  Per Bridgepoint's press release: 

     

    "BRIDGEPOINT EDUCATION'S ASHFORD UNIVERSITY INITIATES WASC ACCREDITATION PROCESS"  SAN DIEGO, CA (September 23, 2010) - Bridgepoint Education, Inc. (NYSE:BPI), a provider of postsecondary education services, today announced that Ashford University has recently initiated the process of seeking regional accreditation from the Accrediting Commission for Senior Colleges and Universities of the Western Association of Schools and Colleges (WASC, http://www.wascsenior.org). Ashford University is working collaboratively with the Higher Learning Commission of the North Central Association of Colleges and Schools (HLC, http://www.ncahlc.org) and WASC to facilitate the migration. During the process, Ashford will continue to maintain its current regional accreditation with HLC. Bridgepoint Education's University of the Rockies has not applied for WASC accreditation.

    In 2006 Ashford University stated that it had received re-accreditation from the HLC for ten years.  So, the question we ask is: why change accreditors now?  The answer lies within the HLC.  In June 2010, the Board of Trustees of the HLC adopted revised bylaws:

     "...which outline the basis on which an institution may claim that it is within the commission's jurisdiction.  The revised bylaws stated that an institution must be incorporated within a state in the 19-state north central region and also have a "substantial" presence in the north central region to be considered within the commission's jurisdiction... The institution must provide evidence that the majority of its educational administration and activity, business operations and executive and administrative leadership are located or operating within the north central region." 

    Ashford's headquarters are based in San Diego and 99% of its student population is online (or outside the Clinton, IA campus).  Its enrollment counselor call center is based in San Diego.  The company technology which hosts the online university is based in San Diego as well.  Essentially, Ashford University does not meet HLC guidelines.  Thus, they are being asked to seek accreditation elsewhere

    MANAGEMENT COMPENSATION:  Per Bridgepoint's proxy, Andrew Clark, the President and Chief Executive Officer, earned $20.5mn in total compensation in 2009.  Collectively, the five named executive officers earned over $36.7mn in total compensation. 
    -
    CONCLUSION: We believe that next week's hearing will expose Bridgepoint's business model as one that abuses Title IV and offers very little value to students.  We view this additional exposure as significantly decreasing BPI chances of gaining WASC accreditation.  Also, given the outcome of the OIG audit, BPI is at significant risk of potentially losing access to Title IV.  This hearing may lead to a harsher reaction by the FSA when determining its action on BPI.  In Senator Harkin's commentary today he states that "Bridgepoint Education's growth in both enrollment and profits- even as their rates of student withdrawals and loan defaults climb- exemplifies the issues in the for-profit education industry.  Using Bridgepoint as a case study will help us better understand how the practices of for-profit colleges impact their student's chances for success." 

     

    Commentary available on Senator Tom Harkin's website is likely a preview of next week's hearing. 

    From Harkin's December 2010 statement"Let me focus, for a moment, on Bridgepoint. Bridgepoint operates Ashford University and is based, sort of, in Clinton, IA. A group of private equity investors purchased a small Catholic school in 2004, when it had about 375 students. In 2004, this small Catholic school in Clinton, IA, had 375 students. They transformed it into a for-profit school. It now has 67,000 students, a 17,000-percent increase in student population in 6 years, 17,000 percent.

    Ashford still operates the small campus in Iowa. About 600 students go there. The other 67,000 take classes online. I, obviously, was very interested to know how the heck they can be doing such a good job for students with that kind of growth. What the data we have collected for our investigation can tell us, for the first time, is they are not doing a very good job for their students.

    Eighty-four percent of the students seeking an associate's degree and 63 percent of bachelor's degree-seeking students leave Ashford within 1 year, without finishing their programs.

    But look at the growth--17,000 percent growth. This is not terribly surprising because Bridgepoint offers no tutoring or other student services. If a student starts to have difficulties at Ashford online, they have two options: talk to their part-time teacher online or ask the computer avatar, who is the online student resource center.

    Should a student succeed in completing a degree at Ashford, they had best not expect a lot of help finding a job. While Bridgepoint employs 1,703 recruiters, they employ just one person to handle career planning. They employ 1,703 recruiters, and one person to handle career planning for the entire student body of 67,000 students. According to a recent study, 60 percent of all community college students need extra help to succeed in school. They need tutoring and classes to make up for what they may not have learned in middle school and high school. For-profit colleges have served a similar population with similar needs. As they often remind us, the for-profit sector serves a group of students that traditionally lack access to higher education. Their students are the ones who are the most vulnerable, the ones who didn't have parents who went to college, who didn't grow up in a fairly wealthy household. And to make it through college, they require a significant support structure that is not available at these for-profit schools."

    Catalyst

    1)  HELP hearing next week
    2)  FSA report regarding audit
    3)  WASC accreditation decision

    Messages


    SubjectBPI is a better long than a short
    Entry03/03/2011 06:11 PM
    Memberconway968
    Company has $5 of cash per share and has sand-bagged earnings guidance of $2.20 per share.  They have been quiet on the buyback of late, but are set to ramp it back up at anytime.  They bought back $45mm in stock in 3Q10 alone.  They have zero use for excess capital and could easily buy back at that pace for a year.   If they did so, that would reduce the float to 8mm shares vs 9.5mm shares currently shorted.  Why would you want to risk that?

    Most of the write-up seems consistent with a good business plan on the part of BPI.   They are offering a product of comparable quality to their competion at a discount of 30-40%.  Until recently, industry conditions have been great.  Why is this evidence of a bad actor and not someone with a good product offering in a hot industry?  There is no question that they market aggressively, but where is the evidence that they market deceptively or that their practices are different than other industry players?
     
    Here is the link to the OIG report: http://www2.ed.gov/about/offices/list/oig/auditreports/fy2011/a05i0014.pdf
     
    Some slaps on the risk, but no evidence of a bad actor.
     
     
     
     

    SubjectRE: BPI is a better long than a short
    Entry03/03/2011 06:43 PM
    Memberbondo119
    One problem with the loss of accreditation argument is that, unless the feds step in to regulate all the accreditors, then there is always going to be someone willing to accredit these schools, even if you do believe that they are generally bad actors.  So in a sense, BPI's move is really just proving the point, i.e., if your accreditor starts to give you problems, then you can just move to the most lax accreditor.  The accreditors are regional, but an on-line school can simply open up an office in the proper region, and then all their on-line programs can be accredited by that regional accreditor.  
     
    It certainly seems possible that there will be some federal oversight here with regards to accreditation, but as far as I know it isn't in the pipeline, and as Conway says, it won't take too many years of earnings in order to make it a bad short.  

    SubjectRE: BPI is a better long than a short
    Entry03/03/2011 07:39 PM
    MemberAffton1
    conway968, I appreciate your comments.  However, I find it hard to believe that BPI has a "good business plan" and " a good product in a hot industry."  Do you think the HELP committee is having a hearing to commend BPI for their good business practices in this hot industry?  I certainly don't.  I think the HELP committee is going to make an example of BPI as a bad actor for aggressive marketing, delivering poor outcomes for students and for abusing Title IV.    
    Bridgepoint had a 1.2% completion rate (see link above) for associates students and an 84.4% dropout rate.  Is that a good product?  60% of bachelor's dropped out in the first year.  Their default rates are soaring (3 year rate over 21% and I'd note Ashford now has more than 70k students and the cohorts for those default calculations were a fraction of today's student body, ie it will only get worse). 
    Admittedly, I do have pause regarding the short float and the net cash position.  Yet, I feel the near-term catalyst may be closer than one might think.  I'd also point out that I believe the reason the float is so tight is that Warburg Pincus can't liquidate its position due to change in control provisions.  If a change in control were to occur BPI would have to have approval from their accreditor- which is clearly a sensitive subject these days.  Warburg Pincus is stuck.  If this thought is incorrect, someone please reply and let me know.
    While you may think that BPI is not a good short, I think it is an incredibly dangerous long.   Some of that $5 in cash may be going to the FSA in fines and that sandbagged guidance might change if their access to Title IV is no longer there.
      

    SubjectRE: RE: BPI is a better long than a short
    Entry03/03/2011 07:56 PM
    MemberAffton1
    bondo119, thanks for the comments.  I'd encourage you to re-read the section of this write-up related to the HLC changing its guidelines.  HLC has been the most lax regional accreditor, a point which is well-documented as the Dept threatened to take their accreditation ability away (very unlikely I know).  However, Ashford no longer meets HLC's criteria... and to assume WASC will accredit them is naive in my opinion.  I'd note that WASC last summer created a for-profit task force to address the HELP committee and Dept of Ed concerns on proprietary schools.
    -
    I'd also note the for-profit schools have become a hot button in California.  See:
    -
    -
    WASC will be under increased pressure to accredit Ashford if the hearing next week is very negative, which I expect it will be.

    SubjectRE: RE: BPI is a better long than a short
    Entry03/03/2011 10:25 PM
    Memberconway968
    Tom Harkin is as much an education expert as Sarah Palin is an energy expert, but I recognize his influence and ability to create headline risk.  The stats reported by Harkin are cooked.  For instance, they consider as drop outs students that withdraw before paying (or borrowing) a dime.  
     
    The data demonstrate that drop out rates can almost entirely be predicted by risk factors measured at the time of enrollment.  That is, the quality of the program is trumped by socioeconomic factors.  To argue that schools with high drop out rates should be shut down is to argue that millions of poor, irresponsible, and unintelligent people should not receive federal loans for education.  People don't feel so good about making that argument, so they instead blame the schools.  

    SubjectRE: RE: RE: BPI is a better long than a short
    Entry03/04/2011 10:18 AM
    Memberfinn520

    Thanks for the writeup.

    BPI and its financial and operational history are fascinating.

    A few questions:

    1) If BPI has such a lousy offering, why has it been able to show such spectacular growth and profitability, even in relation to other online education companies?

    2) Is there anything that is preventing another company from coming in and playing the "low-cost operator" card and accepting a much lower margin?  It appears this business requires almost no invested capital.  Why couldn't someone undercut BPI on price by some huge amount (say, 50%) and then spend minimal amounts on marketing and still have high returns on invested capital?  There are several precedents for this in online business models and I don't see immediately why it couldn't work.  If there is no barrier, any guesses on why this hasn't happened?

    3) I find the idea that a company spends too much on marketing and is too profitable as a kind of theoretical concept is kind of weird.  Is this a non-competitive market?  Are there regulatory forces that are uniquely protecting BPI?


    SubjectRE: RE: RE: RE: BPI is a better long than a short
    Entry03/04/2011 11:02 AM
    MemberToby24
    Thanks for the write-up.  I have some questions I'm hoping you could answer.
     
    1.  Can you elaborate as to why you think their CDRs will deteriorate?  From my understanding CDRs correspond to the demographic served and the efficiency of the loan servicers.  The demographic BPI serves hasn't significantly changed (which would be evidenced by a significant % change in students enrolled in diploma, associates, bach, or masters programs relative to their total program offering) and multiple for-profits have said recent CDR data is infalted by poorly serviced "put" loans from '08 & '09.  In fact, Corinthian even quantified it by saying "put" loans defaulted at 2x the rate of other loans.  Since those loans are rolling off, shouldn't CDRs actually improve?  If demographics havent' changed and there is ample evidence that current CDR data is inflated by "put" loans, why do you believe BPIs CDRs will continue to deteriorate? 
     
    2.  Can you explain why you think it is naive to believe BPI should obtain regional accreditation status from WASC?  Also, what probability would you assing to BPI failing to obtain regional accrediation status from WASC?  Both the HLC and WASC publish materials on what they consider when reviewing an institution for regional accrediation and the criteria is nearly identical.  It appears BPIs decision to pursue accrediation status from WASC is simply due to geographical reasons.
     
    Thanks.

    SubjectRE: RE: RE: RE: BPI is a better long than a short
    Entry03/07/2011 05:49 PM
    MemberAffton1
    finn250, apologies for not replying sooner.  You pose fair questions. 
    -
    To question 1, I'd counter to you w "if BPI's offering was so great, why do so many students withdraw?"  While growth is very impressive, I think it's partly a function of highly incentivized enrollment advisors.  Also, Ashford accepts the most transfer credits of any school- I think that does provide additional demand.  Yet, I'd note other for-profits don't accept Ashford credits... which is telling in my opinion.  Up until the last 2 quarters all for profit companies were showing "spectacular growth".  While I've been surprised that BPI has continued to grow while others have been reporting declining new starts, I'm not sure that one can conclude that BPI's superior offering is driving that relative performance.
    -
    To question 2, there are barriers to entry more so today than a few years ago.  It has become almost impossible for someone to acquire accreditation like BPI did in '05.  As for being a low-cost operator, it is true that BPI has lower tuition than say a UofP or Strayer.  But, the entire group has rich margins and I see no reason why Capella or Phoenix can't match their tuition levels... quite frankly, I'm surprised others haven't lowered tuition levels...
    -
    To question 3, all for-profits spend enormously on marketing and are very profitable.  This is not unique to BPI.

    SubjectRE: BPI is a better long than a short
    Entry03/07/2011 06:08 PM
    MemberAffton1
    Toby24, sorry for not replying quicker.
    -
    To question 1, I do think CDRs will deteriorate as the portion of Ashford on-campus students is diluted from the cohort.  The 2 year rates have trended from 4.1% in FY06 (which had only 411 students in cohort) to 13.3% in FY08 (4032 students in cohort).  Admittedly, what you write about COCO is interesting and I haven't put much focus on that, and I should.  The 3-year rate was over 21%...
    -
    To question 2, while HLC and WASC may publish similar criteria for accreditation, it is well documented that most of the for-profits go to HLC for accreditation because they are deemed the most lenient (I think Strayer is the only one that doesn't).  See the following link for evidence on HLC and AIU. 
    -
    -
    And it is true BPI decision is geographical as Ashford no longer meets HLC criteria due to its presence in San Diego.  But it is also true that WASC will be intensely scrutinizing Ashford in light of audit report and this week's hearing.  I don't know what probability I'd put on it, maybe 50/50?
    -
    I'd note that the witnesses for Thursday were announced today and the list included Sylvia Manning from the HLC as well as Kathleen Tighe the Inspector General of the Dept of Ed. 

    SubjectRE: BPI is a better long than a short
    Entry03/07/2011 10:55 PM
    Memberconway968

    APOL can never compete with BPI on tuition price because they are wed to a brick and mortar cost structure which makes their cost to educate significantly higher than that of BPI and other purely online platforms.  When APOL was building its business, convenience for working adult students meant having classrooms located right off the highway and having flexible class hours geared toward people with jobs and families.  Now convenience means a 100% online offering where classes can be taken at any hour.  Working adults who prefer the face-to-face learning experience to the convenience of online are very quickly becoming a niche.  APOL has no practical way to shed its brick and mortar footprint.  

    Apart from cost structure, APOL cannot cut tuition because it has a serious 90/10 problem that would only get worse if tuition is cut.  For those who don't know, schools are only allowed to receive 90% of revenues from federal loans.  APOL is close to violating this rule and has said they will have to make changes, potentially including tuition INCREASES, in order to comply.  

    BPI is not the only for-profit school to charge low tuition.  LOPE and APEI both charge similar low rates, and both have been unusually successful at attracting students for that reason.  In a competitive environment, there is no question that new schools would be started to copy BPI's low-cost, easy credit transfer positioning.  In that situation, eventually the schools would compete intensely on tuition and quality of education, and students would benefit immensely.  Because government has scared away / blocked new entrants and encumbants do not have the flexibility to copy, BPI should have strong profits for the foreseeable future. 


    SubjectRE: RE: BPI is a better long than a short
    Entry03/08/2011 11:02 AM
    Memberbondo119
    I'm not sure I follow that a 90/10 problem means that tuition CAN'T be decreased, in fact it seems like the most easily accomplished way of getting into compliance.  E.g., you charge $100 tuition, $90 of this comes from federal loans and $10 from the student's pocket.  OK, you have a 90/10 problem.  So you reduce tuition to $80, $70 comes from student loans and $10 from the student's pocket.  Now you are at 87.5%, instead of 90%.  The same amount comes out-of-pocket, but the outcome for the students will be a lot better since they will be in less debt.  
     
    Sure, you can try to fix the 90/10 problem by increasing tuition, but that requires that you increase the amount that comes out of student's pockets, which is probably going to be tough to do, considering the segment of the population that takes classes from these schools.  For example, you charge $100 tuition with $90 from loans and $10 out-of-pocket.  If you want to decrease the ratio to the same 87.5% as above, you could increase tution to about $103, with all of the increase coming out of student pockets.  It's only a 3% increase in tuition, but a 30% increase in out-of-pocket costs.  The students at these schools probably aren't very knowledgable about the perils of taking on debt, but they'll feel it if they are asked to actually pay more money upfront.  

    SubjectRE: RE: RE: BPI is a better long than a short
    Entry03/08/2011 12:20 PM
    MemberToby24
    Bondo, students borrow the maximum amount of federal aid available to them, regardless of the cost of tuition.  Furthermore, the institution (BPI for example) has no authority to prevent them from overborrowing and has an obligation to provide accurate information as to what they are entitled to receive in federal financial aid.  Your example doesn't work because even if tuition was reduced to $80, students would still borrow the $90 and the institution would be at risk of breaching 90/10.  90/10 is the reason these schools keep increasing tuition.  Pell Grants fall into the 90% bucket and as they are increased schools are FORCED to raise tuition to comply with 90/10.  Despite increasing tuition every year, if you account for the subsidies provided to community colleges, these schools are STILL cheaper and on an apples-to-apples basis (comparing colleges that serve similar socio-demographics, which have the highest predictive power when it comes to CDRs, completion rates, etc. Note: not ALL community colleges serve the same demographic so aggregate data Harkin provides is misleading) for-profits are in many cases more effective and in nearly all cases, comparably effective. 
     
    You are right that the gap created from increasing tuition to comply with 90/10 has to be fed by the student (or the school's own lending program) and that is a problem for institutions where the cost/credit is at the high-end, but the cost/credit hour at BPI is one of the lowest in the industry, so they have ample headroom to raise prices if 90/10 was ever an issue for them.
     

    SubjectRE: RE: RE: RE: BPI is a better long than a short
    Entry03/08/2011 12:55 PM
    Memberbondo119
    Toby, the 90/10 rule measures a school's sources of revenues, it doesn't measure the amount of federal loans going to students at that school.  In your example, if tuition was $80 and the student borrowed $90, the school has $80 of revenue from federal loans(reduced by any amount paid out-of-pocker by the student).  The remainder is being used by the student for living expenses.

    SubjectBPI not going to show up Thursday?
    Entry03/08/2011 02:01 PM
    MemberAffton1
    IR told me this morning that Andrew Clark has not yet decided if he'll attend on Thursday and his tone seemed to lean toward not attending... If this is true, conway968 and Toby24 I'm curious your thoughts as to why BPI would not attend such a hearing?  In my opinion, it's bad form... close to 90% of their revenues are generated from taxpayer dollars and they're not going to attend a public hearing?  If they had nothing to hide, why not go and tell the committee about their low tuition, high quality offering?

    SubjectRE: RE: RE: RE: BPI is a better long than a short
    Entry03/08/2011 02:53 PM
    Memberconway968
    I would just say that empirically, schools have raised tuition to comply with 90/10.  This is because no one wants to pay out of pocket when they don't have to. 
     
    Here is APOL in their Oct 2010 call:
     
    Based on currently available information, we expect the 90/10 percentage, net
    of temporary relief, will approach but not exceed 90% for fiscal 2011
    principally due to the expanded eligibility for and increases in the amount
    of Pell grants. We have implemented various measures intended to reduce the
    percentage of University of Phoenix's cash basis revenue attributable to
    Title IV funds including emphasizing employer paid and other direct pay
    education programs, encouraging students to carefully evaluate the amount of
    necessary Title IV borrowings and continued focus on professional development
    and continuing education programs.
    Although we believe these measures will favorably impact the 90/10
    calculation, they have had only a limited impact to date. We also intend to
    consider other measures including tuition price increases. However, we
    believe that absent a change in recent trends or the implementation of
    additional effective measures to reduce the percentage, the percentage for
    University of Phoenix is likely to exceed 90% in fiscal year 2012 due to the
    expiration of temporary relief in July of 2011.

    SubjectRE: BPI not going to show up Thursday?
    Entry03/08/2011 03:01 PM
    Memberconway968
    What is the upside in showing up?  You think that the Senators are going to change their mind?  Have you ever watched a Senate hearing examining, for instance, the non-existant gasoline conspiracy that drove prices high during Hurricane Katrina? 
     
    BPI has not been charged or formally accused of any wrong doing.  They have been invited, not subpoenaed.  I would be as likely to accept that invitation as I would be to accept an "invitation" to Salem to be examined as a witch.  I told the company as much.

    SubjectLenthy article...includes some video
    Entry03/10/2011 10:51 AM
    Memberzzz007
    http://www.huffingtonpost.com/2011/03/09/ashford-university-for-profit-college_n_833735.html

    SubjectBPI Response
    Entry03/10/2011 04:43 PM
    MemberToby24
    http://bpitransparency.com/ 
     
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