US: Hedge fund sees 'Big Short' in education stocks

30 May 2010

Steven Eisman, a hedge-fund manager whose bet against the housing market was chronicled in a best- selling book, said he has found the next "big short" - higher education stocks - write Daniel Golden and John Hechinger for Bloomberg Businessweek.

The stocks of companies operating for-profit colleges could fall much as 50% if the US tightens student-loan rules, said Eisman, manager of the financial-services fund at FrontPoint Partners, a hedge-fund unit of New York-based Morgan Stanley.

An Obama administration proposal to limit student debt would slash earnings of Apollo Group Inc, ITT Educational Services Inc and Corinthian Colleges Inc by forcing them to reduce tuition and slow enrolment growth, Eisman said last week at a New York investment conference. Without new regulation, students at for-profit colleges will default on $275 billion of loans in the next decade, he said. Eisman is shorting, or betting against, shares of higher education companies because of the parallels he sees to the housing market.
Full report on the Business Week site

Receive UWN's free weekly e-newsletters

Sponsored Article

Getting to net zero, one community at a time

University of Victoria staff

Accelerating Community Energy Transformation is a University of Victoria-led collaborative initiative that brings together over 40 partners, including Indigenous knowledge keepers and community leaders, to create innovative place-based solutions for energy system transformation.

Promoted by the University of Victoria.

Sponsored Article

Africa pays a premium for global climate change sluggishness

Stellenbosch University staff

Africa needs to stop paying the price for the rest of the world’s recalcitrance to act fast enough in response to the irrefutable conclusions that climate change is real and that the impact of global warming could be devasting, says Professor Guy Midgley, interim director of the School for Climate Studies at Stellenbosch University, South Africa.

Promoted by Stellenbosch University.

Sponsored Article

Innovations to ensure energy savings in a hot, arid climate

UAE University staff

Researchers from the United Arab Emirates University have shown that the potential benefits of building energy savings and a cooler indoor environment, as well as improved cooling effect on air temperature at pedestrian level, strongly indicate that a cool roof with high solar reflectance and albedo is a promising strategy for buildings in regions with hot, arid climates.

Promoted by United Arab Emirates University.

Sponsored Article

A new global university ranking with an ethical mission

Aftab Dean

A new university ranking system aims to serve as a catalyst for positive transformation in higher education, ensuring that universities create an environment grounded in integrity and sustainability that inspires and supports students and staff in the development of novel solutions to global challenges.

Promoted by Globethics.net.

Sponsored Article

SDG progress report launches university into new territory

University of Pretoria staff

In the publication of its first progress report on its contribution to the Sustainable Development Goals, the University of Pretoria is navigating new territory at the same time as it is acknowledging its clear stewardship role in protecting the environment and biodiversity.

Promoted by the University of Pretoria.