For-profit education companies finally seem to be winning their fight against the Obama-era regulations that pushed two behemoths, Corinthian Colleges and ITT Tech, into bankruptcy, while the others saw their stock prices and enrollment plunging.
The Department of Education under Education Secretary Betsy DeVos has delayed implementation of gainful employment rules, withdrawn key federal student loan servicing reforms, and signaled a less arduous regulatory environment for the industry. DeVos defends her decisions to relax a number of Obama policies in an effort to keep for-profit schools as an option for non-traditional students. However, many industry pandits claim that it will trap students with false promises, burdens them with debt and finally leave them without any skills required to secure decent jobs.
Investors are also taking notice of the positive changes in the industry and for-profit school stocks are witnessing a strong lift under Trump’s presidency and DeVos’ control. The Zacks School Industry rallied 48.1% year to date, outperforming the S&P 500’s gain of 11.1%. The industry has every reason to celebrate as it appears to have received everything it had lobbied for.