For-Profit Schools: Trump Delays Enforcing New Rules, Lifting Shares Education Department delays ‘gainful employment’ rule to resolve industry concerns
It isn’t exactly 2006 again, but for-profit colleges are riding high on Wall Street.
Stocks in the industry, some left for dead five months ago, have climbed rapidly since November as investors cheer President Donald Trump’s talk of easing regulations. Last week, for-profit schools got an inkling he might deliver on the promise when the Education Department announced it would delay enforcing rules drafted under the Obama administration.
Those rules, known as “gainful employment,” threatened to shut down hundreds of for-profit campuses in the next two years due to high debt levels among former students.
Investors have taken note. Grand Canyon Education Inc. gained 2.7% last week and has rallied 38% since November. George Soros’ fund added DeVry Education Group Inc. during the fourth quarter, filings with the Securities and Exchange Commission show. The stock has risen 41% since the election.
“These stocks have been on fire,” said Jeff Silber, an analyst at BMO Capital Markets.
The Education Department said the delay would allow it to resolve industry concerns about the integrity of graduate-earnings data underpinning the regulations. But many investors interpreted it as a broader shift from former President Barack Obama’s aggressive oversight.