Trading The Senate Hearing On Bridgepoint Education (BPI, COCO, DV, APOL)

There is a Senate hearing today specifically for Bridgepoint Education, Inc. BPI, which could negatively affect the other for profit education stocks.

The Senate Health, Education, Labor and Pensions (HELP) Committee will hold a hearing today focusing solely on Bridgepoint Education, which is unusual for a hearing to be held on just one company.

Chairman of the committee Tom Harkin in a press release, said “Bridgepoint Education's growth in both enrollment and profits—even as their rates of student withdrawals and loan defaults climb—exemplifies the issues in the for-profit education industry,” said Harkin. “Using Bridgepoint as a case study will help us better understand how the practices of for-profit colleges impact their student's chances for success. I am also eager to learn how these companies justify their record profits in the face of rising student loan default rates. Bridgepoint alone experienced a $135 million increase in profit in a single year—from $81 million to $216 million—as more than 60 percent of their students who enrolled in the Bachelor's program between 2008 and 2009 withdrew by the summer of 2010. These numbers simply don't add up.”

There are concerns whether CEO Andrew Clark, especially after the company said, “On March 1, 2011, we received correspondence from the U.S. Senate Committee on Health, Education, Labor and Pensions (“HELP Committee”) inviting our CEO and President to testify in a hearing scheduled for March 10, 2011 regarding Bridgepoint Education and Ashford University. Bridgepoint Education is reviewing the request.”

Names like Corinthinan Colleges COCO, Apollo Group APOL, DeVry DV, in addition to Bridgepoint could be negatively affected today on the basis of this hearing.