Shares of Santa Ana-based Corinthian Colleges Inc. surged Wednesday on talk a federal stimulus package could include money for student loans.
The vocational school operator saw its shares close up 18% on a market value of nearly $1.5 billion.
Corinthian’s gains outpaced those of two other school operators, Arizona’s Apollo Group Inc. rose 9%, while DeVry Inc. of Illinois gained 5%.
The stimulus bill proposed in the House of Representatives would increase unsubsidized Stafford student loan limits by $2,000 and increase funding for Pell Grants by $15.6 billion over two years, FBR Capital Markets analysts Matt Snowling and Bill Jackson wrote in a research note Thursday, according to an Associated Press report.
Corinthian runs more than 100 schools in the U.S. and Canada that offer degrees and certificates in healthcare, automotive technology, criminal justice, technology and other areas.
The company is seeing a surge of students in the poor economy. In the September quarter, students at Corinthian’s schools were up 11% from a year earlier to 74,265.
The credit crunch has made student loans harder to get, posing problems for Corinthian.
The company started offering its own loans, according to Chief Executive Jack Massimino.
“We’re not in the credit business, but the program has been successful in giving students the opportunity to come to school because without it they wouldn’t have that opportunity,” he said in a recent interview.
