For-Profit Education Company Shares Popped: What You Need to Know

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: For-profit education companies popped today after the Department of Education released new regulations that were not as harsh as the draft version.  

So what: Apollo Group (Nasdaq: APOL  ) popped 14%, Bridgepoint Education (NYSE: BPI  ) popped 15%,  Capella Education (Nasdaq: CPLA  ) popped 14%, Corinthian Colleges (Nasdaq: COCO  ) popped 41%,  DeVry (NYSE: DV  ) popped 15%,  Education Management (Nasdaq: EDMC  ) popped 36%, ITT Educational Services (NYSE: ESI  ) popped 30%, Strayer Education (Nasdaq: STRA  ) popped 26%, Grand Canyon Education (Nasdaq: LOPE  ) popped 18%, American Public Education (Nasdaq: APEI  ) popped 9%, and Washington Post Co. (NYSE: WPO  ) , which owns Kaplan, popped 12%.

Now what: In the draft version of the new regulations, schools with high levels of student loan defaults were slated to lose federal funding in 2012 or 2013. The version issued today pushes the day of reckoning out to 2015. The question for investors now is how these schools will lower their students' loan default rates: by better preparing students to generate income or by turning away more applicants, which would be likely to reduce revenue and profits.

  • Interested in more info on Apollo? Add it to your watchlist by clicking here.
  • Interested in more info on Bridgepoint? Add it to your watchlist by clicking here.
  • Interested in more info on Corinthian? Add it to your watchlist by clicking here.
  • Interested in more info on DeVry? Add it to your watchlist by clicking here.
  • Interested in more info on ITT Educational Services? Add it to your watchlist by clicking here.
  • Interested in more info on Washington Post? Add it to your watchlist by clicking here.
Fool contributor Cindy Johnson owns shares of DeVry. The Motley Fool owns shares of American Public Education and Bridgepoint Education. Motley Fool newsletter services have recommended creating a call spread position in Bridgepoint Education. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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