For-profit college stocks fell after the U.S. Department of Education released data that said fewer than 36 percent of the colleges’ students repaid federal loans, compared with 54 percent at public universities.
Corinthian Colleges Inc, based in Santa Ana, California, plunged 25 percent to $4.97 at 11:06 a.m. in Nasdaq Stock Market composite trading after the data said one of its campuses had a repayment rate of less than 20 percent. Washington Post Co., which owns Kaplan Inc., tumbled 13 percent to $299.81 in New York Stock Exchange composite trading. An index of 12 education stocks fell 5.4 percent.
Nationally, for-profit colleges have a 36 percent student- loan repayment rate, compared with 54 percent at public universities and 56 percent at private nonprofits, according to an analysis of the Education Department data by the Institute for College Access & Success, an Oakland, California nonprofit research and advocacy group. The Aug. 13 data release continues a run of bad news for education stocks, said Gary Bisbee, an analyst at Barclays Capital in New York.
A 36% repayment rate!!???!!! Wow! And a whopping 54% repayment rate for public universities?? The weakest link is going down hard hard hard. By summer of 2012 things will be getting red hot out there. The education bubble is bursting!