Shares of Santa Ana-based vocational school operator Corinthian Colleges Inc. closed down Wednesday after an analyst downgraded the stock on concerns about student loan defaults.
Corinthian’s shares dropped about 4% on a market value of $730 million after PiperJaffray analyst Mark Marostica downgraded the stock to “neutral” from “buy.”
Marostica said the company could have trouble offering loans at some of its schools with high student loan default rates.
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.
Marostica’s downgrade comes after shares of Corinthian have slumped this year on concerns about lenders cutting off student loans as a result of the credit crisis that began last year.
In February, Corinthian said Sallie Mae, part of Virginia’s SLM Corp., would stop funding future loans to students with risky credit histories.
Buyout chatter about Corinthian has surfaced in recent months after Washington Post Co., which owns the newspaper and operates post secondary schools through its Kaplan Higher Education unit, bought an 8.1% stake or $60 million worth of shares in Corinthian in February.
