“Education Management Corporation Urges Department of Education to Reconsider Gainful Employment Rule” plus 2 more |
- Education Management Corporation Urges Department of Education to Reconsider Gainful Employment Rule
- American Public Education to Present at Upcoming Investor Conferences
- Morgan Stanley Securities Analyst Sees Regulatory Risks In Education Sector; Discover Which Stocks To Be Affected ...
| Education Management Corporation Urges Department of Education to Reconsider Gainful Employment Rule Posted: 09 Sep 2010 03:55 PM PDT Press Release Source: Education Management Corporation On Thursday September 9, 2010, 6:55 pm EDT PITTSBURGH, Sept. 9 /PRNewswire/ -- Education Management Corporation (Nasdaq:EDMC - News), one of the largest providers of post-secondary education in North America, today provided an official response to the U.S. Department of Education's (the "Department") proposed rule defining "Gainful Employment." The Company's response suggests that the Department does not have the statutory authority to enact the proposed regulations and requests that, if the Department chooses to proceed with a definition of gainful employment, it postpone issuance of a final rule in order to collect and consider more appropriate and comprehensive data. In the event that the Department proceeds with the current proposed rulemaking, the Company suggests modest modifications to the proposed regulations to address legal, policy, and fairness concerns. Todd S. Nelson, Chief Executive Officer of Education Management Corporation, said, "We believe that the proposed rule is counter to President Obama's goal of the United States becoming the world leader in college graduates by 2020, and impacts quality institutions rather than the 'bad actors,' as stated by the Department." "Over the past year, we have worked closely with Secretary Duncan and his staff, members of Congress, and other stakeholders across higher education to facilitate proposals that focus on the issue of student debt without blocking access to quality education. By providing students with the tools they need to make fully-informed decisions about their education, we can ensure that all schools – traditional and proprietary alike – are working to address debt concerns, while preserving students' ability to choose which schools best serve their needs in the pursuit of a college degree. Our proposed modifications to the rule continue in that spirit," continued Nelson. The Company's post-secondary institutions educate a diverse group of students. The total student population at the Company's institutions is approximately 46% minority and 64% female. As of October 2009, 52% of the students were non-traditional students, including 35% who are working adults. As of May 2010, approximately half of EDMC's undergraduate students were eligible to participate in the Pell grant program, which the Department makes available to lower income undergraduate students. Students attending the Company's schools have graduation and repayment rates that compare favorably to other schools, including public and non-profit institutions. According to 2007-08 data for four-year institutions with more than 40 percent of their students receiving Pell grants, the average graduation rate at the Company's institutions exceeded those of public and private non-profit schools, as well as the proprietary school sector. According to the same data, the average two-year cohort default rate for the same student population in 2007 at the Company's institutions was lower than the rate at public institutions and other proprietary schools and comparable to the rate at private, non-profit schools. Though not effective until July 1, 2011, the Company intends to comply by December 31, 2010 with the student placement, graduation rate and indebtedness reporting and disclosure requirements set forth in the Department's June 18, 2010 notice of proposed rulemaking to the extent the information required is readily available and applicable for programs offered by the Company's schools. To access a copy of the Company's Comment Letter to the U.S. Department of Education in response to the notice of proposed rulemaking related to the proposed Gainful Employment regulation, please visit the Investor Relations section of the Company's website at www.edmc.edu. Education Management (www.edmc.edu), with over 136,000 students as of October 2009, is among the largest providers of post-secondary education in North America, based on student enrollment and revenue, with a total of 101 locations in 31 U.S. states and Canada. We offer academic programs to our students through campus-based and online instruction, or through a combination of both. We are committed to offering quality academic programs and continuously strive to improve the learning experience for our students. Our educational institutions offer students the opportunity to earn undergraduate and graduate degrees and certain specialized non-degree diplomas in a broad range of disciplines, including design, media arts, health sciences, psychology and behavioral sciences, culinary, fashion, business, education, legal and information technology. This entry passed through the Full-Text RSS service — if this is your content and you're reading it on someone else's site, please read our FAQ page at fivefilters.org/content-only/faq.php |
| American Public Education to Present at Upcoming Investor Conferences Posted: 09 Sep 2010 01:11 PM PDT CHARLES TOWN, W.Va.--(BUSINESS WIRE)--American Public Education, Inc. (NASDAQ: APEI) – parent company of online learning provider American Public University System, which operates through American Military University and American Public University – announced that President and Chief Executive Officer, Dr. Wallace E. Boston and Executive Vice President and Chief Financial Officer, Harry T. Wilkins, CPA plan to address the financial community at investor conferences in September. Mr. Wilkins will present according to the following date and time:
Dr. Boston will present according to the following dates and times:
A link to the live webcast of each presentation, as well as an audio replay, will be available to listeners who log in through American Public Education's website, www.AmericanPublicEducation.com. The replay will be available for 90 days after each presentation. About American Public Education, Inc. American Public Education, Inc. (NASDAQ: APEI) is an online provider of higher education focused primarily on serving the military and public service communities. American Public University System (APUS), wholly owned by APEI, comprises two universities – American Military University (AMU) and American Public University (APU). Regionally and nationally accredited, APUS serves more than 72,300 part-time students who live and work in all 50 states and in more than 100 countries; and offers more than 100 online certificate and degree programs in fields ranging from homeland security, military studies, intelligence, and criminal justice to technology, business administration, public health, and liberal arts. This entry passed through the Full-Text RSS service — if this is your content and you're reading it on someone else's site, please read our FAQ page at fivefilters.org/content-only/faq.php |
| Posted: 09 Sep 2010 08:39 AM PDT On Thursday September 9, 2010, 11:39 am EDT 67 WALL STREET, New York - September 8, 2010 - The Wall Street Transcript has just published its Education Report offering a timely review of the sector to serious investors and industry executives. This Special feature contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online. Topics covered: Regulatory Risks - Great Buying Opportunities Among Weak Stocks - Economic Recovery and Enrollment Trends - Growth Drivers in Chinese Education Sector - Innovation in Programming and Student Development - Student Quality Over Quantity Companies include: ATA (ATAI); American Public Education (APEI); Blackboard (BBBB); Bridgepoint (BPI); Cambium (ABCD); and many more. In the following brief excerpt from the Education Special Report, expert analysts discuss the outlook for the sector and for investors. Suzanne Stein is a Securities Analyst who covers the education and analytics companies within Morgan Stanley's business services group. Previously Ms. Stein worked in equity research, covering telecom services at Goldman Sachs. Prior to that, she served as an Associate at Donaldson, Lufkin & Jenrette. She holds a dual degree in finance and communications from the Wharton School and the College of Arts and Sciences of the University of Pennsylvania, and an MBA from the University of Chicago. In 2009 Ms. Stein was named the top stock picker in specialty retailers and services in the annual Wall Street Journal "Best on the Street" survey. She was also named one of the best brokerage analysts in the consumer discretionary sector in June 2010 by Forbes. TWST: Which companies are exposed to the biggest regulatory risk? Ms. Stein: They are all exposed to regulatory risk. It is important to keep in mind that the for-profits serve a high-risk population; these students are generally lower-income, working adults, and there are many reasons they don't complete programs. Typically as you move down the scale towards the shorter-term programs, the quality metrics, such as cohort default rates and graduation rates, decline. I don't want to make predictions of failures. The market implies that Corinthian (COCO) is the one that is most at risk. It fails several of the tests; it is the lowest of its peers in terms of repayment rates; it also has a severe problem with cohort default rates. Management is taking steps to address these problems - restricting enrollments - but it is not clear that these problems can be corrected. From an investor's point of view, if you just look at the risk to the model and run the population decline and tuition cut through the model, you can see how the operating leverage in the model can reverse pretty quickly, and it doesn't take a lot to get that model to not work anymore. There is a big fixed expense component to the model, and layer on top of that the added student services cost to try to improve retention, the fact that student acquisition costs are not necessarily lower than for longer-term programs, and it's hard to imagine a scenario where this model is profitable. Other models have some more breathing room, so if companies took down tuition, you could envision a scenario where they are still profitable. TWST: You view Strayer as one of the highest-quality names in the space, yet you're still underweight on the stock. Would you elaborate on your thoughts about that company and its current valuation? Ms. Stein: Our rating on Strayer (STRA), or for any stock in our coverage, does not necessarily reflect what we think of quality; it is more of a relative valuation call. When we put the "underweight" rating on Strayer, our view was that investors were pricing the stock as if it were not exposed to the same regulatory and legislative risk as the rest of the industry, which we do not believe is the case. I guess I took to heart what Senator Harkin said, that maybe there are no good apples. Not that I agree with this statement, but I believe this is how many individuals in Congress and the Department of Education view the sector. They are not distinguishing between Strayer and its peers, and are likely to regulate for-profits as a group, and this will create headwinds for everyone. It's not just going to create headwinds for the ones that people perceive to be lower quality. We changed the rating before the repayment rates were out simply because we felt at a 17 times 2011 p/e multiple there was more risk to the downside. The stock should not have been holding such a premium to the sector. I think there is still risk to the multiple. Repayment rates are low and even if this is a result of loan consolidation, I doubt the Department of Education is going to make material changes to the repayment formula. Also the high use of Pell Grants, which for Strayer was about 30% of students, makes me wonder if its students are that much higher quality than its peers'. Frankly, I am somewhat skeptical of the income numbers management has put out there, given it represents a small sample of Strayer's students. I think management said they had a 25% response rate, and I doubt it factors in zero-earners, which will drag down the numbers, giving these estimates an upward bias. Unless the Department of Education changes the repayment formula, given Strayer is below the threshold on the repayment rates, in order to stay unrestricted they need to meet the higher threshold on debt to income. If in fact loan consolidation is the only variable dragging the repayment number down, this should correct itself over time. Consolidation has been a less common practice since the student loan crisis, so this should roll off. We don't have enough data to support this theory, but this, along with questions about actual student income levels, is enough of a risk that I don't believe the stock is worth a premium to its peer group. The Wall Street Transcript is a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs and research analysts. This Special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online . The Wall Street Transcript does not endorse the views of any interviewees nor does it make stock recommendations. For Information on subscribing to The Wall Street Transcript, please call 800/246-7673 This entry passed through the Full-Text RSS service — if this is your content and you're reading it on someone else's site, please read our FAQ page at fivefilters.org/content-only/faq.php |
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