Shares of for-profit colleges down after President Obama's reelection

Dive Summary:

  • For-profit education companies saw their shares fall Wednesday after the reelection of President Barack Obama, whose administration has increased regulations on that sector.
  • Critics of for-profit institutions say the schools provide poor value for the money, don't have high enough graduation rates and don't have enough incentives to ensure student success in the job market, and the Obama administration put new regulations in place requiring the schools to meet certain standards or lose access to federal financial aid, which has made up the majority of the companies' revenue.
  • Leading for-profit chains including Apollo Group Inc., DeVry Inc. and ITT Educational Services Inc. all saw declines in share prices of 6% or more with the exception of Kaplan owner Washington Post Co., whose shares fell 1.6% to $340.

From the article:

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. ...

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