* Bridgepoint spending on students down sharply
* Two lawmakers question Senate committee's fairness
* Harkin says Bridgepoint is emblematic of problem
* Bridgepoint shares down 5.4 pct (Updates share price, adds comments by U.S. senator, industry background)
By Diane Bartz
WASHINGTON, March 10 (Reuters) - Bridgepoint Education (BPI.N) students dropped out at a rate of more than 60 percent within two years, while the for-profit school's spending on students plunged, according to data analyzed by the Senate Health, Education, Labor and Pensions Committee.
The committee, which has been critical of the for-profit education sector, is using Bridgepoint as a case study of for-profit schools that have grown quickly even as their students drop out or emerge with little education and lots of debt.
In Bridgepoint's two-year program, 84.4 percent of students enrolled in the 2008-2009 academic year had dropped out by September 2010. Just 1.2 percent had finished the program, according to the Bridgepoint data analyzed by the committee.
Bridgepoint shares were down 5.4 percent at $17.03 in early afternoon trading. The company owns Ashford University and the University of the Rockies.
"Today's hearing will examine not only Bridgepoint, but also the regulatory environment that allowed a school of just 300 students to grow into (a) big business with a student body of 78,000 students, capturing more than $600 million in federal subsidies annually," said Sen. Tom Harkin, chairman of the committee.
Sen. Mike Enzi, the top Republican on the committee, said the panel's proceedings had been heavy-handed and unfair and called the hearings "three of the most biased and poorly executed hearings in my nearly 15 years in the Senate."
Another committee member, Sen. Johnny Isakson, questioned whether they were being too aggressive in pursuing the for-profit schools sector. "I do think the committee needs to have a pretty even balance," he said.
The HELP committee also released data showing spending by Bridgepoint on its students dropped to $377 per student in December 2008 from $1,133 in January 2007.
That data also showed 63.4 percent of students in Bridgepoint's four-year bachelor's program in the 2008-2009 academic year had dropped out by September 2010, while 30.7 percent were still enrolled and 5.9 percent graduated.
A total of 21.7 percent of Ashford University's former students default on their loans within three years, according to Education Department data.
Ashford, which is in Harkin's home state of Iowa, is also under investigation by the Iowa attorney general's office.
On March 1, Bridgepoint Education posted better-than-expected quarterly results helped by strong student enrollment growth.
Bridgepoint CEO Andrew Clark had been invited to speak at the hearing but declined, although the school noted it had cooperated with the committee and would continue to do so.
Harkin, who has called for tougher regulation of the sector, has criticized many schools in the for-profit education sector for being pricier than their competitors while delivering an inferior product.
Under proposed regulations from the Education Department, which is cracking down on the sector, schools' students would be ineligible for aid if fewer than 35 percent of former students are paying back loans despite being capable of doing so after three years. The rule -- which could become final this month -- is slated to take effect in mid-2012.
For-profit schools have filed a lawsuit to stop the rule, which could cripple some for-profit schools. (Reporting by Diane Bartz, editing by Derek Caney, John Wallace and Matthew Lewis)