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Why Ashford U. Closed Its Iowa Campus

By  Eric Kelderman
July 13, 2015
The library at Ashford U. The institution is closing the doors of its physical campus in Iowa but will maintain its online presence.
Chronicle photograph by Eric Kelderman
The library at Ashford U. The institution is closing the doors of its physical campus in Iowa but will maintain its online presence.

The Sisters of St. Francis, in Clinton, Iowa, managed to keep Mount St. Clare College open for 87 years, until flagging enrollment forced the nuns to sell it, in 2005.

Bridgepoint Education announced on Thursday that the campus would close in the spring of 2016, slightly more than a decade after the company bought it to secure accreditation for its for-profit Ashford University, which enrolls the vast majority of its 50,000 students online.

The company decided to close the small campus in eastern Iowa because of a “significant and ongoing enrollment shortfall, a trend that is especially troubling in today’s highly competitive environment,” according to a statement by Gregory L. Geoffroy, chairman of Ashford’s Board of Trustees.

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The Sisters of St. Francis, in Clinton, Iowa, managed to keep Mount St. Clare College open for 87 years, until flagging enrollment forced the nuns to sell it, in 2005.

Bridgepoint Education announced on Thursday that the campus would close in the spring of 2016, slightly more than a decade after the company bought it to secure accreditation for its for-profit Ashford University, which enrolls the vast majority of its 50,000 students online.

The company decided to close the small campus in eastern Iowa because of a “significant and ongoing enrollment shortfall, a trend that is especially troubling in today’s highly competitive environment,” according to a statement by Gregory L. Geoffroy, chairman of Ashford’s Board of Trustees.

“This decision was thoughtfully and carefully considered, and we are deeply saddened to close a campus that is so rich in history and committed to providing its students with a quality academic experience,” Mr. Geoffroy said.

Enrollment had fallen from nearly a thousand three years ago to just 500 this past academic year, and the university was not expected to meet its goal of 110 freshmen for the fall, let alone the long-term goal of a campus with several thousand students, said Richard L. Pattenaude, president and chief executive of Ashford.

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Enrollment did not drop because of a lack of investment or effort, Mr. Pattenaude said. In 2012 as many as three-quarters of the students at the physical campus received scholarships covering most or all of the tuition, which was priced at about $16,000 at the time. The full price of tuition is now a little more than $17,000.

And the company had spent some $40 million on campus improvements, including refurbished classrooms and science labs, a local hotel converted to a dormitory, the purchase of a golf course and indoor tennis courts, and construction of an all-season athletic field.

But without more paying students, Mr. Pattenaude said, the campus needed an annual subsidy of more than $10 millon, which came from the students paying for online courses.

And because online enrollment at Ashford has fallen from a peak of nearly 90,000 students to 50,000, the company has to look for ways to cut costs to preserve the value of its stock, Mr. Pattenaude said: “We have a responsibility to shareholders.”

So far, news of the campus closing has had little effect on the company’s share price.

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The day after Ashford’s announcement, its stock value was flat, said Trace Urdan, a financial analyst who follows the for-profit-college sector.

Closing the campus is “an acknowledgment of what most investors have already known,” Mr. Urdan said, meaning that Ashford no longer needed the physical campus as part of its identity.

In the beginning, the company needed to have a campus as a marketing tool and to build credibility with accreditors, he said. “They haven’t marketed like that for years.”

A Duty to Sell

While Ashford’s bottom line may benefit from the sale, it’s less clear how the campus’s 130 faculty members and its staff will fare.

Faculty members may be able to move to teaching online courses, said Mr. Pattenaude, who was in Iowa last week to meet with the university’s employees.

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Some staff members may be able to work in the nearby student-services site, which supports online students, he said.

Several faculty members contacted by The Chronicle did not respond to requests for comment.

The overwhelming concern expressed by the faculty, Mr. Pattenaude said, was for students. In a news release, Ashford said that 60 percent of those enrolled at the Iowa campus were pursuing academic programs available wholly online and that more than a third of the students in Clinton could complete their academic programs before the university shut its doors.

And the university is working with 17 other nearby colleges to negotiate transfer agreements for students who may wish to complete their degrees at a physical campus, Mr. Pattenaude said.

On Facebook, students and alumni alike expressed disappointment at the announcement, with many online students upset that they would not be able to attend a graduation ceremony at the campus.

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Graduation ceremonies for online students are being held in San Diego, where the company’s headquarters are, said Mr. Pattenaude. Those events have had better attendance than the graduations in Iowa, he said.

Even the fate of the campus buildings is uncertain. As a publicly held company, Ashford has a duty to try to sell the campus, Mr. Pattenaude said, or to consider philanthropic opportunities.

Clinton’s mayor did not return requests for comment, nor did the president of the Sisters of St. Francis.

“This is emblematic of the struggle of small, liberal-arts colleges” that are not in a destination site, said Mr. Pattenaude, who compared the campus’s closing to the shuttering of a branch site of a large university.

“One of the advantages,” he said, “is that we have a large, healthy online institution.”

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Eric Kelderman writes about money and accountability in higher education, including such areas as state policy, accreditation, and legal affairs. You can find him on Twitter @etkeld, or email him at eric.kelderman@chronicle.com.

We welcome your thoughts and questions about this article. Please email the editors or submit a letter for publication.
Eric Kelderman
Eric Kelderman covers issues of power, politics, and purse strings in higher education. You can email him at eric.kelderman@chronicle.com, or find him on Twitter @etkeld.
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