The U.S. government is going to war with pay-for education companies, targeting their business models due to low repayment rates on government loans.
Essentially, pay-for education companies are having individuals pay for college degrees funded by U.S. federal student loan programs. Those federal student loans account for a large part of pay-for education companies' profits.
Now the U.S. government, seeing less than 36% of those loans repaid, is considering not allowing government loans for those institutions under new regulations.
As a result, stocks in the pay-for education sector are sinking dramatically today.
Strayer Education (STRA), down 15.42%
Education Management Corp (EDMC), down 17.56%
Capella Education Company (CPLA), down 13.28%
ITT Educational Services (ESI), down 13.01%
DeVry Inc (DV), down 9.04%
And The Washington Post Company (WPO), owner of Kaplan, down 8.21%:
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