NEW YORK (AP) — Shares of for-profit education companies tumbled Wednesday after President Barack Obama was re-elected. His administration has tightened federal regulations over their schools.
Student populations at for-profit schools and universities soared during the recession as job-seekers tried to beef up their skills, but have dropped in recent years, partially because the Obama administration put in place new regulations requiring the schools to meet certain performance targets or risk losing their access to federal student loans. Federal financial aid has made up the bulk of the chains' revenues.
Recent data released by the Department of Education shows that students at for-profit schools have the highest default rates on student loans. Critics charge that such schools provide poor value for the money, have poor graduation rates, and have too few incentives to ensure their students succeed in the job market. For-profit schools say that they're working to improve and argue higher default rates are to be expected because they serve lower-income students.
Industry observers had said that a win by Mitt Romney would have likely led to new leadership at the Department of Education and possibly policy changes.
Here's how some education companies are faring in Wednesday trading. Broader markets also slid, with the Standard & Poor's 500 index down more than 2 percent by late morning.
– University of Phoenix owner Apollo Group Inc. fell $1.52, or 7 percent, to $19.68.
– Washington Post Co., which owns the Kaplan chain, fell $5.40, or 1.6 percent, to $340.
– DeVry Inc. fell $1.56, or 6 percent, to $25.24.
– ITT Educational Services Inc. fell $2.45, or 12 percent, to $18.41.
– Strayer Education Inc. dropped $3.67, or 6 percent, to $56.69.
– Education Management Corp. dropped 33 cents, or 9.5 percent, to $3.16.
– Career Education Corp. lost 34 cents, or 9 percent, to $3.58.
– Corinthian Colleges Inc. gave up 19 cents, or 7 percent, to $2.44.