Santa Ana-based vocational college operator Corinthian Colleges Inc. said Monday that student loan company Sallie Mae won’t fund additional loans to its students but doesn’t expect the change to impact its already lowered yearly results.
Sallie Mae, part of Virginia’s SLM Corp., plans to continue funding current loans to students with risky credit histories but won’t make additional loans to those students.
Shares of Corinthian have slumped this year on concerns about lenders cutting off student loans as a result of the credit crisis that took hold last year.
The company’s stock is down about 50% in the past two months with a recent market value of $650 million.
Corinthian, which runs more than 100 schools in the U.S. and Canada, offers degrees and certificates in healthcare, automotive, criminal justice, technology and other areas.
The company doesn’t see the Sallie Mae shift impacting its forecasted results for the 12 months through June. The company expects a profit of $34 million to $38 million for the period. About $1 billion in sales are expected.
The company cut its outlook in January on expected fallout from lenders pulling back from student loans.
“We continue to explore alternative funding sources for our students and remain confident that we will be able to arrange financing for the vast majority of current and incoming students,” the company said in a filing with the Securities and Exchange Commission.
Earlier this month, shares of Corinthian fell after New York-based Apollo Group Inc., which runs University of Phoenix and other schools, said private loans have become more difficult to get.
Also in February, Washington Post Co., which owns the Washington Post and operates post secondary schools through its Kaplan Higher Education unit, bought an 8.1% stake in Corinthian, prompting buyout speculation.
