Shares of several public sector schools declined on Monday with the release of governmental report last week which raised doubts about quality of education provided by institutions and the loan repayment by students.

According to Matt Snowling, an analyst at FBR Capital Markets the education industry is all possibilities see regulatory changes in the for-profit school segment.

According to the data of the department of education fifty three percent of the one hundred and eighty one public sectors for-profit institutions have less than thirty five percent of their students who repay the principals of their education loans on time, stated by FBR. The figure is well above the thirty seven percent of schools of non-for-profit category.

Under proposed rules commencing from 2012 school year, institution in for-profit category will not get the money from student loans programs of the Federal department if their repayment rates go below thirty five percent.

Schools that will have repayment rate below forty five percent might have limited access to federal aid programs from which a large portion of their revenue is generated.

The stocks of Capella Education (CPLA) and Strayer Education (STRA) declined sharply.

STRA saw a fall of eighteen percent amounting to one hundred and sixty three dollars and twenty six cents.

CPLA fell thirteen percent amounting to sixty dollars ninety cents.

They were hit hard as investors apprehended that the institution's repayment rate will be in the tune of forty five percent or higher, as stated by an analyst of Signal Hill named Trace Urdan.

The methodology used by the Department of Education is controversial as stated by Amy Junker, an analyst from Robert W. Baird. According to her the data represented by them arouse confusion as they are not lucid. People find it difficult to understand.