DeVry falls after analyst downgrade

ITT Educational Services Inc. and DeVry Inc. fell in New York trading after a Credit Suisse Group analyst said the U.S. government may make it harder for the companies' students to get financial aid.

DeVry, based in Oakbrook Terrace, fell $4.58, or 6.6 percent, to $64.88 at 12:01 p.m. in New York Stock Exchange composite trading after the Boston-based analyst, Kelly Flynn, cut her rating to "neutral" from "outperform." ITT Educational, based in Carmel, Indiana, fell $2.37, or 2.1 percent, to $109.41 after it was also cut to "neutral."

Department of Education rules may require education companies to show that graduates earn enough to afford repayment of their student loans. An exemption to the regulations that would have eased restrictions on students' access to loans may be dropped from the proposal, which may be made public in May or June, Flynn said today.

"We expect sector to remain volatile in coming weeks as regulatory process plays out," Flynn wrote in a note to clients.

The recovering economy may also hurt the for-profit colleges if students can get jobs rather than sign up for classes, Flynn said.