NEW YORK (CNN/Money) -
Education stocks sold off for a second day Thursday as federal regulators ratcheted up inquiries into various accounting and administrative problems at leading companies in the sector.
The Department of Education discovered that Corinthian Colleges Inc.'s Bryman College campus in San Jose, Calif., had committed loan violations, according to a Financial Times report.
The newspaper said that the department had revoked the school's ability to receive advance payments on its student loans.
Corinthian College (COCO: down $1.82 to $23.24, Research, Estimates) stock sank about 7 percent in afternoon trading on Nasdaq, after plunging nearly 13 percent earlier in the session.
Officials at Corinthian College did not return telephone calls.
Shares of Career Education (CECO: up $0.40 to $44.51, Research, Estimates) fell initially but then recovered Thursday after plummeting 25 percent Wednesday on news that the Securities and Exchange Commission was launching a formal investigation into allegations that schools affiliated with the company falsified student records to collect student loan money from the government.
Career Education had previously announced that the SEC was conducting an inquiry into the company, and said it intends to keep cooperating with the SEC.
A Career Education spokesman declined to comment beyond the company's brief statement issued Wednesday.
The news pressured other for-profit education companies, including Apollo Group, which Thursday reported increased second-quarter earnings that beat Wall Street forecasts for its two enterprises, Apollo Education Group and University of Phoenix Online.
But Apollo Education (QPOL: Research, Estimates) stock fell 4.6 percent in late afternoon on the NYSE, after dropping more than 7 percent earlier in the day.
University of Phoenix Online (UOPX: Research, Estimates) fell 4.3 percent late in the afternoon after sinking more than 8 percent midday.
Shares in rival DeVry Inc. (DV: Research, Estimates) fell 4.9 percent in late afternoon trading on the NYSE, while ITT Education (ESI: Research, Estimates) stock was little changed.