Deutsche Bank On Department Of Education Mulling Changes In 90/10 Rule

In a note out Thursday, Deutsche Bank analyst Paul Ginocchio commented on the potential impact of the changes in the 90/10 rule. The current 90/10 rule limits the percent of for-profit school revenues that come from Federal student aid to 90 percent.

Two changes that the Department of Education is considering are:

• Include tuition aid and GI Bill fund as Federal student aid
• Move from 90/10 to 85/15 rule, with Federal aid capped at 85 percent

Ginocchio feels that Strayer Education STRA would be most at risk, with Apollo Education APOL or Bridgeport Education BPI less affected under any guideline changes. He goes on to say he believes the near term risk of any changes is somewhat low.

• Shares of STRA are trading down 0.61 percent at $59.82
• Shares of APOL are higher by 2.2 percent at $26.26
• Shares of BPI are unchanged at $11.20