Tiffin University, a small, private non-profit university in northwest Ohio, announced last week that it has been ordered to stop its Ivy Bridge College associate degree program by the university’s regional accreditor, the Higher Learning Commission, leaving thousands of students without a plan to finish their degrees.

Founded in 2008 with just 65 students, Ivy Bridge was a joint venture between Tiffin and Bay Area-based for-profit company Altius Education. The online community college offered an associate degree program that promised students an automatic transfer to one of over 150 traditional four-year institutions, depending on their GPA. Thanks to the program’s termination, about 2,000 students are now scrambling to find other accredited institutions that will allow them to finish their studies.

The Higher Learning Commission began investigating Ivy Bridge after an anonymous tip in 2012 reported that the relationship between Altius and Tiffin violated HLC governance rules. A March 2013 HLC investigation later found that Ivy Bridge was not sufficiently under Tiffin’s control, as required by HLC guidelines. That same HLC report also raised concerns about Ivy Bridge’s retention rates and claimed that the content of some of the online courses reviewed was “very thin.”

Ivy Bridge’s retention rates are low compared to traditional four-year institutions, but they are significantly higher than those at other Ohio community colleges.

Additionally, a 2010 HLC report on Tiffin found evidence “that the university is embracing innovation and change with regard to online programs and Ivy Bridge entrepreneurship ventures. The university has stayed true to its mission in these new opportunities… The concept of the Ivy Bridge partnership is an excellent strategic initiative. It addresses an underserved population through a strong curriculum, efficient and effective academic support, excellent instruction, and a very good online portal for program delivery.”

In October 2012, the Bill and Melinda Gates Foundation recognized Altius’ efforts in the field, awarding the entity a $300,000 grant for providing “scalable access to quality college education” through “a robust student support model, proven pedagogical methods, and groundbreaking learning technologies.”

HLC began cracking down on for-profit entity involvement in the higher education sector after a scathing Department of Education inspector general report faulted the HLC for granting a for-profit university accreditation in 2009.

“To tell you the truth we have never had anything quite like this before,” HLC President Sylvia Manning told the Washington Examiner of her organization’s efforts to shut Ivy Bridge down. “What we have is an institution, Ivy Bridge College, that is essentially an Altius enterprise, being represented as part of Tiffin University and therefore part of Tiffin University’s accreditation. And that is a misrepresentation.”

Accreditation is key for non-profit and for-profit academic institutions alike, because without it, students are not eligible to receive federal benefits like Pell Grants and subsidized student loans. Tiffin and Ivy Bridge both claim Tiffin had complete control over the academic content of Ivy Bridge courses at all times.

Asked to identify the real public harm caused by Ivy Bridge that merited its termination, Manning said, “low quality education.”

But others in the industry are not buying it. “The cited concerns about student success are BS,” an industry source who asked for anonymity for fear of retribution from accreditors told the Examiner. “Ivy Bridge catered to traditionally underserved adult part-time students and did quite well. HLC doesn’t ask for the same ‘success’ metrics from non-profit traditional institutions,” this source said.

Inside Higher Education reported Monday that Ivy Bridge’s termination “could dump cold water on the online aspirations of some colleges, particularly ones that prefer to play it safe with their regional accreditor.”

“People are wondering why tuition has increased faster than purchasing power for 30 years and 50 percent of college graduates can’t get a job,” Altius CEO Paul Freedman told the Examiner. “How is that possible when there are 4300 competing universities… The answer is the system of accreditation that forces universities to adopt out of date high-cost delivery models and prevents competition and innovation.”