It may be too late for shuttered Corinthian Colleges, ITT Technical Institute or even Trump University, but Wall Street is betting the potential rollback of Obama-era initiatives to hold for-profit colleges accountable may lead to a resurgence of the beleaguered industry.
Rebounding from what some analysts saw as an existential threat during the Obama administration, for-profit college stocks are up sharply since Donald Trump’s November election amid renewed investor optimism — and growing concern from education watchdogs.
“The perception of investors has been that the prior administration was really out to get the sector,” said Trace Urdan, a research analyst at Credit Suisse. “Trump helps make these companies more investable because there is less concern that the government is trying to drive them out of business.”
Less than 100 days into Trump’s presidency, the Department of Education under Secretary Betsy DeVos has delayed implementation of gainful employment rules, withdrawn key federal student loan servicing reforms, and signaled a less onerous regulatory environment for the essentially taxpayer-financed career education sector.