For-Profit Educator Bridegepoint Education Under Investigation Over Federal Funding

Bridgepoint Education, the operator of for-profit colleges Ashford University and the University of the Rockies, added its name to the long list of higher education companies to find themselves on the receiving end of a federal investigation, as the Department of Justice has opened a probe into the organization’s federal student aid funding. 

According to a regulatory filing [PDF] released by Bridgepoint on Tuesday, the DOJ probe centers on whether or not the education company violated the so-called “90/10 Rule,” which prohibits for-profit colleges from getting more than 90% of their operating revenue from federal student aid funding.

Bridgepoint explains that the investigation arose as a result of allegations that the company misstated the amount of money it received from government loans and grants provided to students, or overstated revenue tied to private loan program. If either scenario is accurate, that could mean a violation of the 90/10 Rule.

“The DOJ has requested from the company documents and information for fiscal years 2011-2014,” the filing states. “The company is evaluating the request and intends to fully cooperate with the DOJ on this matter.”

In addition to revealing the Dept. of Justice probe on Tuesday, Bridgepoint’s regulatory filing also announced that Ashford University would be party to a Department of Education review by the end of July.

The review, scheduled to begin July 25, will assess Ashford’s administration of Title IV programs in which it participates.

“The Program Review initially will cover students identified in the 2009 to 2012 calendar year data already provided by Ashford to the Department, but may be expanded if appropriate,” the filing states.

The Washington Post reports that this isn’t the first time Bridgepoint has found itself under scrutiny from federal regulators.

In 2011, the Department of Justice launched an inquiry into the way the company compensated its admissions staff after an audit found that Ashford may have violated a ban on incentive pay for college recruiters.

Additionally, last year, the Post reports that the Dept. of Education began looking into Ashford’s marketing practices to determine whether the school made false representations to potential and enrolled students.

[via The Washington Post]