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Stock of Bridgepoint Education plunged 7.49% to $17.53 today (Aug. 3) despite a big jump in second quarter profits to 58 cents a share, up from 2 cents in the same quarter a year ago. Revenues rose 57%. (The stock, was up 4.39% in after-hours trading.) The for-profit, online university filed its quarterly report to the Securities and Exchange Commission. That report appeared to expand on previously-revealed information. Bridgepoint's Ashford University has been under investigation by the Department of Education's Office of Inspector General. In May, the OIG said it needed more information. The quarterly report reveals that the university's compensation plan for enrollment advisors provides incentive payments for securing enrollments. The OIG wants more information to see whether the plan is in compliance with safe harbor provisions that would permit this.
The quarterly statement reveals that the university didn't always calculate the amount of funds it was required to return to the federal government's Title IV programs, and did not return Title IV funds in a timely fashion. Also, the university did not always disburse Title IV funds in accordance with regulations, and didn't always provide documentation to account for online students' absences.
The final resolution of the OIG investigation may not come for awhile.
Stock of Bridgepoint Education plunged 7.49% to $17.53 today (Aug. 3) despite a big jump in second quarter profits to 58 cents a share, up from 2 cents in the same quarter a year ago. Revenues rose 57%. (The stock, was up 4.39% in after-hours trading.) The for-profit, online university filed its quarterly report to the Securities and Exchange Commission. That report appeared to expand on previously-revealed information. Bridgepoint's Ashford University has been under investigation by the Department of Education's Office of Inspector General. In May, the OIG said it needed more information. The quarterly report reveals that the university's compensation plan for enrollment advisors provides incentive payments for securing enrollments. The OIG wants more information to see whether the plan is in compliance with safe harbor provisions that would permit this.
The quarterly statement reveals that the university didn't always calculate the amount of funds it was required to return to the federal government's Title IV programs, and did not return Title IV funds in a timely fashion. Also, the university did not always disburse Title IV funds in accordance with regulations, and didn't always provide documentation to account for online students' absences.
The final resolution of the OIG investigation may not come for awhile.