Shares of Bridgepoint Education Inc. (NYSE: BPI) are collapsing today following the company’s disclosure that the for-profit school’s accrediting agency has asked for a report from Bridgepoint’s Ashford University, which has been placed under the agency’s ‘special monitoring’ status. Ashford, which enrolls about 90,000 students, must also host an ‘advisory visit’ from the agency, the Higher Learning Commission of the North Central Association of Schools and Colleges (HLC), within 60 days of the filing the report, which is due by August 10th.

Ashford was denied accreditation earlier this week by the Western Association of Schools and Colleges (WASC), to which the school had applied because its accreditation by HLC is being reviewed for compliance with HLC’s requirement that a school have a “substantial presence” in the agency’s region. Much of Ashford’s activity has moved to the Northwest, in WASC’s jurisdiction, and out of HLC’s region.

At stake is Ashford’s eligibility for federal student aid, which accounts for the bulk of the school’s revenue. WASC denied accreditation to the school because the agency said it spent more money on recruiting students than educating them. Now HLC wants to review Ashford’s operations for the same reasons.

Bridgepoint’s shares are down -24% at $9.83 after posting a new 52-week low of $9.53 earlier this morning. The previous 52-week range was $12.80-$30.62.

Paul Ausick