A lot has been published over the past few months about a string of hearings that is taking a closer look at the for-profit higher education industry.
Iowa Sen. Tom Harkin, a Democrat and chairman of the Senate Health, Education, Labor and Pensions Committee, has been spearheading that discussion as he works, in his words, to “ensure hardworking students have the financial resources to pursue higher education” and to make sure that for-profit schools are “benefitting their students, not just their Wall Street shareholders.”
Why do those discussions matter in Clinton, Iowa?
Because Clinton’s Ashford University, owned by Bridgepoint Education, Inc. for the past six years, is one such institution.
There are definitely questions that arise when it comes to for-profit education, such as whether some of these colleges are actually putting people further behind by saddling them with debt they cannot pay. Statistics of high interest rates, increasing for-profit revenue and student default rates have called the combination of student loans and for-profits into the spotlight.
So where does Bridgepoint fit in?
Every four years, the U.S. Department of Education conducts the National Postsecondary Student Aid Study, a national study on how students and families pay for postsecondary education. The most recent NPSAS data, from the 2007-2008 academic year, shows that 96 percent of graduates from private for-profit colleges had student loan debt. The average debt for these students was $33,050.
Since Bridgepoint purchased Ashford, the company’s education enrollment has skyrocketed from 332 students in 2005 to 77,892 students in 2010, according to a graph listing Bridgepoint’s Securities and Exchange Commission statements on end-of-year enrollment. However, the majority of the enrolling students from the 2008-2009 school year had withdrawn as of September 2010, according to Senate-analyzed documents from Bridgepoint. Sixty-three percent of bachelors students had withdrawn while 84 percent of associates students had withdrawn. Only 5.9 percent of the bachelors students completed their degree, while only 1.2 percent of associates students completed their degree.
Meanwhile, Bridgepoint’s profits soared from $3.98 million in 2007 to over $216 million in 2010, according to released graphs of Bridgepoint’s SEC statements.
According to SEC statements analyzed by the HELP Committee, in 2009, Bridgepoint spent $700 per student on instruction, $2,714 per student on recruiting and profitted $1,522 per student.
Even Iowa Gov. Terry Branstad, who visited Clinton a few weeks ago and was asked about his thoughts on Ashford, said that while Ashford has done positive things for Clinton, that the focus in regard to for-profit education must shift off recruiting and onto graduation rates.
We want to point out that Bridgepoint, which also owns Colorado’s University of the Rockies, is not alone. Other for-profit educational institutions with high withdrawal rates listed on Harkin’s web site include Lincoln Educational Services Corp.; Kaplan Higher Education; Corinthian Colleges, Inc.; Apollo Group, Inc.; Keiser; Education Management Corp., Inc.; Rasmussen College; Career Education Corp.; and Westwood College.
We remember the early days of Ashford University well, when in 2005, Bridgepoint, of Poway, Calif., purchased The Franciscan University of the Prairies, which was formerly Mount St. Clare College. Local residents at that time were fearful the college would become a telemarketing hub with its only focus on recruiting online students. Many also wondered what would happen to the college’s campus. Would it be downsized, moved or even shut down?
As time has progressed, many good things have come to pass at Ashford: The university consistently graduates classes that are getting larger every year, thanks to its online component; many residents have been employed not only on campus but also at the call center in the Lyons Business and Technology Park; and Ashford has made investments in our community — a new sports complex on the grounds of the former Clinton Country Club site and the purchase of the former Frontier Motor Inn for student housing among them.
In essence, university officials promised they would bring jobs to Clinton, stay for the long haul and invest here. They have made good on all three of those promises to date.
So when it comes to the ongoing investigation, our hope is that there is a meeting in the middle. After all, the online education segment is rapidly increasing and still new, no doubt leading to growing pains on how to handle students’ needs.
Harkin is calling for either possible reform of the accreditation agencies, or a new regulatory framework that allows the government to ensure that it isn’t giving massive amounts of federal funds to companies that aren’t providing a quality education and strong support for their students.
That is fair.
Our hope is that Ashford can and will work within any legislated framework that emerges out of these hearings and that the university will remain a part of the Clinton community for many years to come.