For-profit college stocks tumble on Apollo warning (AP) {fear of oversight}

[eppur_se_muova]

By TALI ARBEL and JANNA HERRON (AP) – Oct 14, 2010

NEW YORK — Investors fled for-profit college stocks on Thursday after the sector's bellwether predicted a 40-percent drop in student enrollment next quarter and withdrew its forecast for next year. The news chilled an industry facing increased government scrutiny over concerns about soaring student loan defaults.

Enrollments at for-profit schools surged during the recession. Big advertising budgets drew students trying to bolster their resumes as a hedge against high unemployment. But critics claim the schools are not helping students find better jobs and say enrollment counselors sign up many students who are unprepared for higher education. When they drop out, they are still stuck paying back their student loans.

Apollo Group Inc., which runs the University of Phoenix, attributes its expected enrollment decline to changing practices aimed at satisfying new government regulations. Apollo will no longer pay its counselors bonuses based on how many students they enroll. It also will provide new students with a free three-week trial program to see if they are ready for school, weeding out those at risk of leaving school before earning degrees.

Meanwhile, the industry is facing a proposed new rule from the Department of Education that could limit schools' access to federal financial aid — the bulk of their revenue — if graduates' debt levels are too high or too few students repay loans.
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Shares of newspaper publisher Washington Post Co., which owns the Kaplan school chain, slumped $34.61, or 8.1 percent, to $394.
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more: http://www.google.com/hostednews/ap/article/ALeqM5gKqtyRg7rHyINnnPNx_rCuBhUd2gD9IRL5H80?docId=D9IRL5H80




Too bad it's only for-profit COLLEGES affected so far ...

[EC]

1. Good

Get rid of all these match-book cover "schools".