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On Jan 17, 2013, ITT Educational Services Inc. (ESI - Snapshot Report) reached a 52-week high of $45.42 soon after President Obama extended federal support to help more students afford a college education. ITT Educational Services currently carries a Zacks Rank #3 (Hold).

Share Price Drivers

President Obama has committed to devising an effective system to help low-income students afford college education. This is in keeping with his goal to help America generate the highest number of college graduates in the world by 2020.

The President has taken a number of steps to provide the tools, access and opportunity to pursue higher education to low-income students.
Federal investments in Pell Grants, a federal student financial aid that is usually awarded to undergraduate students, have been doubled. The President raised the maximum Pell Grant award amount to $5,635 for the 2013-14 award year — a $905 increase since 2008.

Moreover, the President announced changes to student loans to help students manage loans in a better way. Beginning late 2014, students will be given an option to cap repayment of student loans at 10% of their monthly income. This is aimed to reduce the burden of student loans.
In addition, President Obama has succeeded in keeping interest rates on federal student loans low for this school year.

More than 100 colleges and 40 organizations have joined the cause to help more people graduate from college.

The federal administration’s campaign to encourage low-income students to attend college comes as a boon to post-secondary education providers like ITT Educational, Strayer Education Inc. (STRA - Analyst Report), Apollo Education Group, Inc. (APOL - Analyst Report), American Public Education, Inc. (APEI - Analyst Report) and many more. Most higher education colleges witnessed a sharp decline in enrollments in the past few quarters due to weakness across the entire higher education system in the United States.

Being a technology-oriented postsecondary degree education provider, ITT Educational Services will benefit from the impetus provided by the White House. The company offers associate and bachelor's degree programs in business, criminal justice, electronics, drafting, health science and a variety of information technology-related fields. Given the recent increase in availability of finance, these job oriented courses should witness an increase in demand in the upcoming quarters. Thus the change in educational policies is likely to counter declining enrollment growth that the company has been witnessing for over a year.   

ITT Educational Services currently carries a Zacks Rank #3 (Hold).

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