Higher-education stocks fell after the U.S. Department of Education said it stood by student loan repayment data released Aug. 13, which showed low payback rates at for-profit college providers.
Lincoln Educational Services Corp., based in West Orange, New Jersey, lost 5.8 percent to $10.31 at 4 p.m. in New York. Strayer Education Inc. shares retreated 0.9 percent to $161.61 after rallying as much as 8.5 percent earlier. Corinthian Colleges Inc. declined 1.9 percent to $4.36. An index of 12 education stocks fell 1.1 percent, reversing an earlier gain of as much as 3.7 percent.
The index sank 7 percent on Aug. 16 as data from the Education Department showed that colleges owned by for-profit education providers have campuses where fewer than 20 percent of federal student loans are being repaid. The government wants to use the data to determine whether programs can remain eligible for aid.
“We’ve got comments from Strayer and other people on the data we published and we’ve gone back and looked at it,” said James Kvaal, deputy undersecretary of education, in a telephone interview today. “We haven’t found anything yet that would make us doubt the repayment rates we’ve calculated.”
The data were released as Congress and the Obama administration are proposing tougher regulation and oversight of for-profit colleges, which can rely on federal financial-aid programs for as much as 90 percent of their revenue.
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