On Jan 17, 2013,
ITT Educational Services Inc.
) reached a 52-week high of $45.42 soon after President Obama
extended federal support to help more students afford a college
education. ITT Educational Services currently carries a Zacks
Rank #3 (Hold).
Share Price Drivers
President Obama has committed to devising an effective system to
help low-income students afford college education. This is in
keeping with his goal to help America generate the highest number
of college graduates in the world by 2020.
The President has taken a number of steps to provide the tools,
access and opportunity to pursue higher education to low-income
Federal investments in Pell Grants, a federal student financial
aid that is usually awarded to undergraduate students, have been
doubled. The President raised the maximum Pell Grant award amount
to $5,635 for the 2013-14 award year - a $905 increase since
Moreover, the President announced changes to student loans to
help students manage loans in a better way. Beginning late 2014,
students will be given an option to cap repayment of student
loans at 10% of their monthly income. This is aimed to reduce the
burden of student loans.
In addition, President Obama has succeeded in keeping interest
rates on federal student loans low for this school year.
More than 100 colleges and 40 organizations have joined the cause
to help more people graduate from college.
The federal administration's campaign to encourage low-income
students to attend college comes as a boon to post-secondary
education providers like ITT Educational,
Strayer Education Inc.
Apollo Education Group, Inc.
American Public Education, Inc.
) and many more. Most higher education colleges witnessed a sharp
decline in enrollments in the past few quarters due to weakness
across the entire higher education system in the United States.
Being a technology-oriented postsecondary degree education
provider, ITT Educational Services will benefit from the impetus
provided by the White House. The company offers associate and
bachelor's degree programs in business, criminal justice,
electronics, drafting, health science and a variety of
information technology-related fields. Given the recent increase
in availability of finance, these job oriented courses should
witness an increase in demand in the upcoming quarters. Thus the
change in educational policies is likely to counter declining
enrollment growth that the company has been witnessing for over a
ITT Educational Services currently carries a Zacks Rank #3
AMER PUB EDUCAT (APEI): Free Stock Analysis
APOLLO GROUP (APOL): Free Stock Analysis
ITT EDUCATIONAL (ESI): Free Stock Analysis
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