NEW YORK (TheStreet) -- Shares of Education Management Corp. (EDMC) are falling -4.76% to $1.60 as the U.S. Department of Education threatens stricter enforcement of rules to investigate marketing and enrollment practices at for-profit colleges, which are also facing soaring student debt, an analyst from Moody's Investors Service told Bloomberg.
Education Management said last week it's in talks with lenders to resolve any issues related to its debt, Bloomberg reported.
This follows an announcement from Corinthian Colleges Inc., (COCO), owner of Everest and Heald for-profit colleges, which said last week that it will put 85 of its schools up for sale as the government limited access to federal funds.
TheStreet Ratings team rates EDUCATION MANAGEMENT CORP as a Sell with a ratings score of D-. TheStreet Ratings Team has this to say about their recommendation:
"We rate EDUCATION MANAGEMENT CORP (EDMC) a SELL. This is driven by multiple weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, weak operating cash flow and generally disappointing historical performance in the stock itself."