The Huffington Post reports that "a Senate panel set its sights on the tremendous growth of a tiny Iowa college that had become one of the nation's largest for-profit universities in just six years."
That college, Ashford University, once a "near-bankrupt college run by a group of Franciscan nuns in rural Iowa" has since "mushroomed from fewer than 400 students in 2005 to more than 76,000 at the end of last year, after the Iowa school was purchased by a San Diego corporation." That company, the article informs us, is Bridgepoint Education Inc.
Though Ashford University is still sorting out problems concerning the misappropriation of federal student aid money, it has a larger question to answer: How exactly did a tiny university grow seemingly overnight into a giant online institution of more than 76,000 students?
The HuffPo article goes on to report that the answer to this question "lies with the process of regional accreditation, an obscure realm of oversight in higher education that gives a de facto seal of approval to universities, allowing accredited institutions access to billions of dollars in federal student aid money."
Easy access to federal student aid money has encouraged Ashford and its ilk to emphasize student recruitment over student instruction. In fact, the school spends $2,714 for every student recruited. Yet it spends only $700 per student for instructional costs.
Some pundits point out that these same for-profits that now face scrutiny and regulation blazed the very trail that state universities took when initiating their own distance education programs. The Forbes.com blog suggests that "instead of attempting to shut down an industry that has opened the doors for people to better their lives," federal legislators ought to "work with the state universities to offer more of these programs that have displayed high graduation rates, low cohort default rates and other positive statistics."
State universities, however, appear unwilling to partner with politicians in this way. "If the state universities and enrollment management companies are too 'fearful' to go into the red for a couple years -- maybe the government should be forcing them to hand over a portion of their revenue and allow the marketing geniuses at the for-profit schools take a stab at branding and developing them," the Forbes.com blog post continues. "It's not the for-profit schools that are the problem; it's the state schools lack of motivation and understanding of how online education will better the lives of millions."
For-profit universities provide an important service. That much is indisputable. If regulators are going to hamper their ability to operate, then they need to make sure there are state and private institutions ready to step in and fill the vacuum.