NEW YORK, NY--(Marketwire -02/03/12)- For profit education companies reported mixed results this earnings season. Due in part to their reputation for being unable to place alumni into the workforce, most for-profit schools have been posting a decline in student enrollment in recent quarters. For-profit educators are expected to face continued decline in student numbers as they tighten admission standards to comply with new education rules. Five Star Equities examines the outlook for companies in the Education & Training Services Industry and provides equity research on Corinthian Colleges, Inc. (NASDAQ: COCO - News) and Career Education Corporation (NASDAQ: CECO - News). Access to the full company reports can be found at:
A House committee approved a bill recently that would create an independent commission to increase oversight of the for-profit college industry amid allegations that some are taking advantage of students. House Bill 308 calls for the commission to replace the 11-member panel (that includes six members from for-profit schools), known as The State Board for Proprietary Education. Bill 308 would also strengthen the complaint process for students and establish a student protection fund.
Last year, the U.S. Department of Education tightened financial aid standards for for-profit schools in an attempt to improve graduation rates.
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Earlier this week, shares of Corinthian Colleges skyrocketed after the company announced that it returned to a profit in its fiscal second quarter as it slashed expenses in the face of slowing enrollment. Corinthian's October-December net income was $1.8 million, or 2 cents a share, compared with a net loss of $163.7 million, or $1.94 a share, a year ago. Corinthian cut its operating expenses by about $150 million over the past 18 months to help offset a decline in student enrollment, which fell almost 10 percent to 94,860 on Dec. 31, compared with 105,210 a year earlier.
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