APOL Apollo Education Grp., Inc.

Shares of for-profit educators have been on the upswing this month as the controversial "gainful employment" rules were finally published. Although short term sentiment has brightened in the industry, analysts remain concerned about the sector in the long run. The Bedford Report examines the outlook for companies in the Education & Training Services industry and provides equity research on Corinthian Colleges, Inc. (NASDAQ: COCO) and Apollo Group, Inc. (NASDAQ: APOL). Access to the full company reports can be found at:

www.bedfordreport.com/2011-06-07/STOCK-RESEARCH-ON-COCO www.bedfordreport.com/2011-06-07/STOCK-RESEARCH-ON-APOL

Last week the Education Department released its final rule prohibiting for-profit and professional certificate programs from accessing student-loan money if their former students aren't able to repay the loans. If graduates owe too much relative to their income, or too few former students are paying back their tuition loans on time, schools stand to lose access to Pell grants and federal student aid. The regulations come in reaction to reports of high tuition charges, high pressure sales tactics, high dropout rates and job placements that don't pay enough for students to pay back federally insured loans.

The DOE said it expects 18 percent of for-profit schools' programs to fail its tests at some point, and 5 percent of programs to lose eligibility under the new law.

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Analysts at UBS claim that the DOE's guidelines are "significantly more relaxed than originally feared." Analysts at the firm added that they expect "all listed for-profit education companies to comply with the new requirements and for their shares to re-rate sharply."

With the possibility of several schools losing eligibility, Citigroup analyst James Samford claimed that "the bears in the space will say this is a smaller addressable market, with more competition. There's still a fundamental slowdown in the industry."

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