Why Was Investment Firm Going After For-Profit Colleges?

July 12, 2010

For-profit colleges were embarrassed recently by reports about some institutions recruiting students in homeless shelters, attracting students with little chance of finishing a program once they had borrowed money and paid the colleges. ProPublica reported that some of the reporting on these incidents was pushed by an investment firm, which may have encouraged homeless shelter directors to blow the whistle on the practice. According to the article, the motive may be that some investors have "sold short" on for-profit education stocks, suggesting that they would gain if the companies' stock value dropped.

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