by Nate Wooley | October 16, 2012 9:25 am
Bridgepoint Education (NYSE:BPI), a leading operator of for-profit educational institutions, is having a rough year. Earlier, one of its colleges was denied accreditation, and now it’s the subject of a U.S. Department of Justice investigation.
The DOJ inquiry centers around the compensation of Bridgepoint’s admissions personnel, Reuters is reporting. The compensation came under scrutiny in July when the Western Association of Schools and Colleges reported that Ashford University, run by Bridgepoint, spends more money recruiting students than educating them.
In a filing with the Securities & Exchange Commission, Bridgepoint said it was evaluating the letter it received from the DOJ but had no further comment. Federal law prohibits tying employees pay to the number of students an educational institution enrolls.
Shares of Bridgepoint, already down about half this year, declined more than 10% after the bell Monday.
Bridgepoint isn’t alone. For-profit educators Education Management (NASDAQ:EDMC), Apollo Group (NASDAQ:APOL) and Universal Technical Institute (NYSE:UTI) are all under scrutiny for violations of a similar nature.
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