LETTER TO SHAREHOLDERS


In 2016, we continued our work on the turn-around plan for the business that we began in the prior year, including stabilizing and restarting enrollment growth, improving admissions and marketing efficiency, and increasing shareholder value. Our work in these three areas, combined with our ongoing operating principles of product differentiation and strong operational excellence, showed continued progress throughout the fourth quarter of 2016. I am pleased with both what we accomplished last year and the exciting new focus areas that we have planned for 2017 and beyond.

We remain committed to initiatives that assist in ensuring student preparedness, raising academic quality, improving student outcomes, and supporting alumni. Our 2016 Ashford Alumni Survey shows that our efforts are resulting in strong, quality outcomes and consistent satisfaction from our students. The following results reflect over 5,100 students who responded to the survey. Of the 73% of alumni who reported having previously attended a traditional institution, 89% feel the quality of education at Ashford is the same as or higher than a traditional college or university. Also, 89% of our graduates said they would recommend Ashford to others and 86% indicated they were satisfied or very satisfied with their Ashford experience. The percentage of our alumni who agreed that earning their degree from Ashford gave them confidence in pursuing new job opportunities is 86%. Lastly, 88% agreed that earning their Ashford degree was worth the time commitment required to fulfill their educational goals. The consistency of the survey results from both 2015 and 2016 continue to affirm the quality education an Ashford degree is providing and the positive return on investment it is creating for alumni. We are pleased with the value our alumni are seeing in attending Ashford and are proud of the benefits an Ashford degree is bringing to the lives of our alumni and their families.

We continue to place a strong emphasis on increasing student retention. We are currently in the process of enhancing our student experience through the implementation of a new learning management system, or “LMS.” This new, state-of-the-art LMS will allow us to further enhance our ability to deliver knowledge and engage students in a dynamic online learning environment. It also offers a robust mobile platform, allowing students and faculty to access the system from their phone or tablet anywhere, at any time. In addition, we have been running pilot programs on a number of online, on-demand tutoring solutions aimed at helping students become more successful in the classroom; we believe these programs will improve both student learning outcomes and retention. Finally, we moved our financial aid processing in-house in order to improve the process, making it easier for students to know when to expect their financial aid. We believe this will improve our students’ on-boarding process and enhance the overall student experience.

Over this past year, we modified our mix of advertising spend in our various advertising channels, and concentrated less of our advertising spend in the affiliate channel. As we continue to refine the mix of our advertising spend, we expect admissions, advertising, and marketing expense as a percentage of net revenue to gradually decline throughout the year. At the same time, we expect to attract high quality, better prepared students, who are more likely to be successful in achieving their academic goals.

Our Leadership Development Grant program, or LDG program, saw continued growth and success in 2016. This program is designed to leverage tuition assistance benefits provided by our corporate partners and provide a debt-free education to their employees. We added a total of 30 new partners to the program in 2016, for a total of 94 partners at the end of 2016, and student enrollment in the LDG program continues to increase.

Areas of Focus for 2017 and Beyond
As we look forward, we have several new focus areas for 2017 and beyond. The past decade has seen major policy and regulatory changes in higher education, driven in part by the needs of the changing economy and pressure on the system to respond in areas of costs, quality, innovation, funding and the needs of the growing non-traditional student demographic.

During this period, workforce development needs in America have also seen enormous change. The shift to a knowledge-based economy is changing what is being demanded and required by today’s employers. Almost half of employers in the United States report they are not able to find individuals with the skills and education they need to fill open positions, leading to a skills gap of over 5 million jobs.

The question remains – what must be done to help more individuals attend college and obtain the skills they need to be competitive in the global marketplace and improve their lives?

As a country, it is more important than ever that we meet these challenges by focusing our efforts on assisting all learners seeking to further their education. It will be critical that we customize learning and develop educational strategies to boost success for adult, non-traditional learners in order to help narrow the skilled worker shortage our nation is facing.

Bridgepoint Education, and our institutions, Ashford University and University of the Rockies, remain committed to advancing economic opportunity for all those we serve. To help the needs of today’s non-traditional learner, we have identified three primary areas of focus that will be our priorities going forward.

1. Closing the Skills Gap
Today’s jobs require new skills and education. We will work with employers and industries to create a new talent pipeline that aligns education and program outcomes with the skills students will truly need to be successful. This new talent pipeline will provide the means for the growing and diverse population of students to attain degrees, certificates, and industry-recognized credentials in order to help close the skills gap.

We will also continue to develop new programs at Ashford University, focusing on those programs in critical areas of need, leading to credentials that matter and will help promote both an individual’s and our country’s competitiveness. We understand the importance of offering programs that create value and opportunity for our students. For example, our roadmap for new programs includes multiple STEM programs, and will support the need for increased diversity and innovation in these fields. Over 70% of our students are women, and these programs will provide opportunities for women studying at our universities to pursue degrees in STEM areas.

2. Closing the Learning Gap
There has been an ongoing focus on improving access to education for individuals who want to attend college, and these efforts must now be accompanied by new approaches to help all students achieve success in learning and degree completion. National studies show that while access and participation in higher education have increased over the last few decades, major gaps in college attainment for minorities and low-income students continue. It’s incumbent upon all institutions of higher education to prioritize inclusion and diversity of their student bodies, creating economic opportunities for all, not just a chosen few.

We will work to innovate services, intervention techniques, and strategies to help improve the student experience and support student success. A special focus is required on responding to the needs of learners who move in and out of postsecondary education. We will also strive to provide students with new forms of learning that move beyond traditional education and degrees, and ultimately enable them to succeed in the workforce and close the income gap.

3. Closing the Transparency Gap
The higher education landscape in the United States is complex; its stakeholders include taxpayers, accreditors, federal and state governments, and what should be the most important group, students and families.

The data commonly used to describe and compare the performance of higher education institutions is outdated and designed for traditional students, attending traditional institutions. Most state and federal data collections used to characterize student success do not take into account adult and returning students, but rather only focus on first-time, full-time students, which in today’s world is not the majority of students. Inconsistent measures with varying levels of data quality create more confusion and can actually mislead, not inform, consumers. To be truly transparent, the consumer information currently available for all institutions must be updated and reflect the needs of today’s society and the types of students an institution serves.

We will work with a cross section of stakeholders to help identify new consumer information that can be provided to students regarding all institutions in a consistent format so they can make informed decisions. We will also focus on continuing to increase transparency for students on other important measures, including the cost of education and student debt; employer satisfaction with our graduates; student satisfaction; metrics that measure the advancement in opportunity for students; as well as retention and graduation rates calculated in ways both consistent with national approaches and reflective of our student demographics.

These three focus areas will drive our efforts going forward and will provide the framework for evaluating and sharing our results with our stakeholders. As always, we will also remain focused on creating a student experience that supports student goals and outcomes, innovating in ways that lead to more differentiated institutions, and attracting and retaining students with the best possibility of achieving their academic goals. It is our belief that these priorities will provide long-term benefits to our students and our stakeholders.



Sincerely,
Andrew S. Clark
President and Chief Executive Officer
March 2017

LETTER TO SHAREHOLDERS


In 2016, we continued our work on the turn-around plan for the business that we began in the prior year, including stabilizing and restarting enrollment growth, improving admissions and marketing efficiency, and increasing shareholder value. Our work in these three areas, combined with our ongoing operating principles of product differentiation and strong operational excellence, showed continued progress throughout the fourth quarter of 2016. I am pleased with both what we accomplished last year and the exciting new focus areas that we have planned for 2017 and beyond.

We remain committed to initiatives that assist in ensuring student preparedness, raising academic quality, improving student outcomes, and supporting alumni. Our 2016 Ashford Alumni Survey shows that our efforts are resulting in strong, quality outcomes and consistent satisfaction from our students. The following results reflect over 5,100 students who responded to the survey. Of the 73% of alumni who reported having previously attended a traditional institution, 89% feel the quality of education at Ashford is the same as or higher than a traditional college or university. Also, 89% of our graduates said they would recommend Ashford to others and 86% indicated they were satisfied or very satisfied with their Ashford experience. The percentage of our alumni who agreed that earning their degree from Ashford gave them confidence in pursuing new job opportunities is 86%. Lastly, 88% agreed that earning their Ashford degree was worth the time commitment required to fulfill their educational goals. The consistency of the survey results from both 2015 and 2016 continue to affirm the quality education an Ashford degree is providing and the positive return on investment it is creating for alumni. We are pleased with the value our alumni are seeing in attending Ashford and are proud of the benefits an Ashford degree is bringing to the lives of our alumni and their families.

We continue to place a strong emphasis on increasing student retention. We are currently in the process of enhancing our student experience through the implementation of a new learning management system, or “LMS.” This new, state-of-the-art LMS will allow us to further enhance our ability to deliver knowledge and engage students in a dynamic online learning environment. It also offers a robust mobile platform, allowing students and faculty to access the system from their phone or tablet anywhere, at any time. In addition, we have been running pilot programs on a number of online, on-demand tutoring solutions aimed at helping students become more successful in the classroom; we believe these programs will improve both student learning outcomes and retention. Finally, we moved our financial aid processing in-house in order to improve the process, making it easier for students to know when to expect their financial aid. We believe this will improve our students’ on-boarding process and enhance the overall student experience.

Over this past year, we modified our mix of advertising spend in our various advertising channels, and concentrated less of our advertising spend in the affiliate channel. As we continue to refine the mix of our advertising spend, we expect admissions, advertising, and marketing expense as a percentage of net revenue to gradually decline throughout the year. At the same time, we expect to attract high quality, better prepared students, who are more likely to be successful in achieving their academic goals.

Our Leadership Development Grant program, or LDG program, saw continued growth and success in 2016. This program is designed to leverage tuition assistance benefits provided by our corporate partners and provide a debt-free education to their employees. We added a total of 30 new partners to the program in 2016, for a total of 94 partners at the end of 2016, and student enrollment in the LDG program continues to increase.

Areas of Focus for 2017 and Beyond
As we look forward, we have several new focus areas for 2017 and beyond. The past decade has seen major policy and regulatory changes in higher education, driven in part by the needs of the changing economy and pressure on the system to respond in areas of costs, quality, innovation, funding and the needs of the growing non-traditional student demographic.

During this period, workforce development needs in America have also seen enormous change. The shift to a knowledge-based economy is changing what is being demanded and required by today’s employers. Almost half of employers in the United States report they are not able to find individuals with the skills and education they need to fill open positions, leading to a skills gap of over 5 million jobs.

The question remains – what must be done to help more individuals attend college and obtain the skills they need to be competitive in the global marketplace and improve their lives?

As a country, it is more important than ever that we meet these challenges by focusing our efforts on assisting all learners seeking to further their education. It will be critical that we customize learning and develop educational strategies to boost success for adult, non-traditional learners in order to help narrow the skilled worker shortage our nation is facing.

Bridgepoint Education, and our institutions, Ashford University and University of the Rockies, remain committed to advancing economic opportunity for all those we serve. To help the needs of today’s non-traditional learner, we have identified three primary areas of focus that will be our priorities going forward.

1. Closing the Skills Gap
Today’s jobs require new skills and education. We will work with employers and industries to create a new talent pipeline that aligns education and program outcomes with the skills students will truly need to be successful. This new talent pipeline will provide the means for the growing and diverse population of students to attain degrees, certificates, and industry-recognized credentials in order to help close the skills gap.

We will also continue to develop new programs at Ashford University, focusing on those programs in critical areas of need, leading to credentials that matter and will help promote both an individual’s and our country’s competitiveness. We understand the importance of offering programs that create value and opportunity for our students. For example, our roadmap for new programs includes multiple STEM programs, and will support the need for increased diversity and innovation in these fields. Over 70% of our students are women, and these programs will provide opportunities for women studying at our universities to pursue degrees in STEM areas.

2. Closing the Learning Gap
There has been an ongoing focus on improving access to education for individuals who want to attend college, and these efforts must now be accompanied by new approaches to help all students achieve success in learning and degree completion. National studies show that while access and participation in higher education have increased over the last few decades, major gaps in college attainment for minorities and low-income students continue. It’s incumbent upon all institutions of higher education to prioritize inclusion and diversity of their student bodies, creating economic opportunities for all, not just a chosen few.

We will work to innovate services, intervention techniques, and strategies to help improve the student experience and support student success. A special focus is required on responding to the needs of learners who move in and out of postsecondary education. We will also strive to provide students with new forms of learning that move beyond traditional education and degrees, and ultimately enable them to succeed in the workforce and close the income gap.

3. Closing the Transparency Gap
The higher education landscape in the United States is complex; its stakeholders include taxpayers, accreditors, federal and state governments, and what should be the most important group, students and families.

The data commonly used to describe and compare the performance of higher education institutions is outdated and designed for traditional students, attending traditional institutions. Most state and federal data collections used to characterize student success do not take into account adult and returning students, but rather only focus on first-time, full-time students, which in today’s world is not the majority of students. Inconsistent measures with varying levels of data quality create more confusion and can actually mislead, not inform, consumers. To be truly transparent, the consumer information currently available for all institutions must be updated and reflect the needs of today’s society and the types of students an institution serves.

We will work with a cross section of stakeholders to help identify new consumer information that can be provided to students regarding all institutions in a consistent format so they can make informed decisions. We will also focus on continuing to increase transparency for students on other important measures, including the cost of education and student debt; employer satisfaction with our graduates; student satisfaction; metrics that measure the advancement in opportunity for students; as well as retention and graduation rates calculated in ways both consistent with national approaches and reflective of our student demographics.

These three focus areas will drive our efforts going forward and will provide the framework for evaluating and sharing our results with our stakeholders. As always, we will also remain focused on creating a student experience that supports student goals and outcomes, innovating in ways that lead to more differentiated institutions, and attracting and retaining students with the best possibility of achieving their academic goals. It is our belief that these priorities will provide long-term benefits to our students and our stakeholders.



Sincerely,
Andrew S. Clark
President and Chief Executive Officer
March 2017

MANAGEMENT


Andrew S. Clark

President and
Chief Executive Officer

Chris Henn

Executive Vice President,
Chief Operating Officer

Marc Brown

Senior Vice President,
Chief Human Resources Officer

Kevin Royal

Executive Vice President,
Chief Financial Officer

Jane McAuliffe

Executive Vice President
of External Affairs,
Chief Academic Officer

Vickie Schray

Senior Vice President of
Regulatory Affairs and Public Policy

Diane L. Thompson

Executive Vice President,
Secretary and General Counsel

Anurag Malik

Senior Vice President,
Chief Information Officer

Tom McCarty

Senior Vice President,
Chief Marketing Officer


Corporate Address

Bridgepoint Education
8620 Spectrum Center Blvd.
San Diego, CA 92123

Ticker Symbol

NYSE: BPI

Transfer Agent

Wells Fargo Shareowner Services
Telephone: 800.468.9716
Fax: 651.552.6942

Mail

Wells Fargo Shareowner Services
PO Box 64854
St. Paul, MN 55164-0854

Courier

Wells Fargo Shareowner Services
1110 Centre Pointe Curve, Suite 101
Mendota Heights, MN 55120

Contact Us

Kevin Royal
Chief Financial Officer
866.475.0317, ext.11120
investorrelations@bridgepointeducation.com

BOARD OF DIRECTORS


Andrew S. Clark

President and
Chief Executive Officer
Bridgepoint Education

Patrick T. Hackett

Chairman of the Board
Bridgepoint Education
Managing Director
Warburg Pincus LLC

Robert Hartman

Former President, Chief Executive
Officer and Chairman of the Board
Universal Technical Institute

Ryan Craig

Founding Partner
University Ventures

Dale Crandall

Founder and President
Piedmont Corporate
Advisors, Inc.

Victor Nichols

Chief Executive Officer
Valassis