Canary in the College?
While it may just be a matter of coincidental timing, the recent announcements in the last week of retrenchments at both Bridgepoint Education Inc. and Kaplan Education (two of the largest for-profit higher education institutions) may be an augur of what is to come for the for-profit sector, at least for the near future. Interestingly enough, it appears that both moves were driven in no small part by concerns about accreditation. With respect to Bridgepoint, it appears that the cuts in admissions are focused on dealing with addressing student success problems that lie at the heart of a challenge to its accreditation while in the case of Kaplan, the decision to close campuses evidently stems from the threat of loss of accreditation at several campuses. In both of these instances, of course, the underlying importance is that the accreditation agencies function as gatekeepers for federal financial aid dollars (a role which has its problems, as CCAP points out in our report on accreditation, but that is a topic for another day), so a lose of accreditation would place these institutions in a difficult financial posture. It will be interesting to see if these trends in cutbacks continue or if other companies will take similar action or if these measures that have been taken will be sufficient and adequate.