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Washington Post Warning Weighs on Peers

The Washington Post reports a new regulation could affect its Kaplan division as well as other for-profit education companies.



) -- Shares of education sector companies took a hit on Friday after

The Washington Post


announced in its earnings report that new regulations could affect its Kaplan division.

While the operating income for its Kaplan division was up 88% in the second quarter, new regulations that could thwart its growth may be on the horizon.

If passed, the proposed regulations would require the company to show that completion of its courses leads to "gainful employment in a recognized occupation," and that after graduating students can achieve a certain debt-to-income ratio.

The regulations would also revise the definition of a "credit hour" to keep admission workers and financial aid advisers from misrepresenting the cost and duration of education programs.

Washington Post shares are down almost 8% around $377.

Career Education

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shares are down more than 6% to around $20.50 while University of Phoenix owner

Apollo Group


shares are down 0.5% to around $42.60.

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shares are down almost 6% to around $48 and

American Public Education

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shares are plummeting more than 30% to around $29.50.

The Department of Education will finalize the new rules by November 1 this year, and they will go into effect on July 31, 2011.

-- Reported by Theresa McCabe in Boston.

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