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New Rules for Private Colleges and Career Programs – The Share Price of APOL and DV Lower while EDMC Rises
Submitted by Tom Madison on June 5, 2011 - 4:32pm.
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(Best Syndication News) The Obama Administration is proposing new rules to force some private schools to meet certain criteria before they are eligible for student loans. Career programs will need to meet only one of three criteria.
Gainful Employment Criteria:
Criteria #1: At least 35 percent of former students are repaying their loans. This means that students will need to be paying down their balances.
Criteria #2: Schools will also need to show that the typical graduate’s estimated annual loan payment does not exceed 30 percent of his or her discretionary income.
Criteria #3: The estimated annual loan payment of a typical graduate must not exceed 12 percent of his or her total earnings.
The Department of Education estimates that 12 percent of higher-education students are in for-profit institutions and receive 26 percent of the student loans. For-profit schools account for 46 percent of all student loan defaults (in dollars). One quarter of those for-profit schools receive 80 percent of their funding from taxpayer-financed Federal student aid.
The government estimates that five percent of the schools will lose eligibility because of the new requirements. The Obama administration wants these new requirements to take effect on July 1, 2012.
Apollo Group, Inc. (NASDAQ:APOL) was down 0.86 (-1.83%) to $46.04. Apollo owns the University of Phoenix which offers associates, bachelors, masters and doctoral degrees.
DeVry Inc. (NYSE:DV) fell 1.50 (-2.42%) to $60.36. They offer bachelor’s and master’s degree programs in technology; science, business and the arts.
Education Management Corp (NASDAQ:EDMC) was up 0.04 (0.16%) to $24.80.
By: Tom Madison
Business Reporter
Image: Secretary of Education Arne Duncan
| Company name | Symbol | Exchange | Price | Change | Chg % | Earnings per share | P/E ratio |
| Apollo Group, Inc. | APOL | NASDAQ | 46.04 | -0.86 | -1.83% | 2.63 | 17.54 |
| DeVry Inc. | DV | NYSE | 60.36 | -1.5 | -2.42% | 4.59 | 13.15 |
| Education Management | EDMC | NASDAQ | 24.8 | 0.04 | 0.16% | 1.73 | 14.34 |
| ITT Educational Servic... | ESI | NYSE | 86.19 | 0.52 | 0.61% | 11.66 | 7.39 |
| Career Education Corp. | CECO | NASDAQ | 24.59 | 0.49 | 2.03% | 2.3 | 10.67 |
| Strayer Education, Inc. | STRA | NASDAQ | 144.84 | -0.11 | -0.07% | 9.85 | 14.7 |
| Bridgepoint Education,... | BPI | NYSE | 25.22 | 0.74 | 3.02% | 2.56 | 9.84 |
| American Public Educat... | APEI | NASDAQ | 43.9 | -0.31 | -0.70% | 1.61 | 27.22 |
| Grand Canyon Education | LOPE | NASDAQ | 13.8 | -0.17 | -1.22% | 0.95 | 14.47 |
| Corinthian Colleges, Inc. | COCO | NASDAQ | 5.05 | -0.01 | -0.20% | -0.99 | |
| National American Univ... | NAUH | NASDAQ | 8 | -0.1 | -1.23% | 0.61 | 13.08 |
| Company name | Market Cap | Dividend | Total debt to assets | Return on avg assets | Return on avg equity | Operating margin | Net profit margin |
| Apollo Group, Inc. | 6.52B | 0 | 16.23 | 15.65 | 45.19 | 20.52 | 10.9 |
| DeVry Inc. | 4.15B | 0.2 | 0 | 18.29 | 26.58 | 21.46 | 14.62 |
| Education Management | 3.29B | 0 | 34.11 | 3.83 | 9.46 | 14.81 | 6.72 |
| ITT Educational Servic... | 2.44B | 0 | 22.23 | 57.94 | 262.89 | 38.43 | 23.44 |
| Career Education Corp. | 1.91B | 0 | 0.13 | 10.66 | 17.95 | 11.6 | 7.84 |
| Strayer Education, Inc. | 1.77B | 3.25 | 0 | 32.87 | 71.76 | 33.89 | 20.61 |
| Bridgepoint Education,... | 1.33B | 0 | 0 | 33.29 | 68.44 | 30.34 | 17.89 |
| American Public Educat... | 785.05M | 0 | 0 | 23.19 | 33.31 | 25.24 | 15.07 |
| Grand Canyon Education | 619.08M | 0 | 10.01 | 19.33 | 39.84 | 19.06 | 11.5 |
| Corinthian Colleges, Inc. | 427.29M | 0 | 22.62 | 13.34 | 24.15 | 13.65 | 8.28 |
| National American Univ... | 211.50M | 0.06 | 0 | 26.37 | 72.91 | 18.51 | 11.18 |
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