(FORTUNE Magazine) – Investors in for-profit education companies have learned some hard lessons lately. On Aug. 2, Corinthian Colleges (COCO, $11) saw its shares fall 45%--wiping out $760 million in market value--after it warned that higher-than-expected expenses and attrition would cause a serious earnings shortfall. The selling spread to shares of competitors Apollo Group (APOL, $74), University of Phoenix Online (UOPX, $77), and Career Education (CECO, $28). It wasn't the first big tumble of the summer for Career Education. In June the stock dropped 25% after the company announced that the SEC had stepped up an investigation into its practices. (The company denies wrongdoing.)

Has the selloff created any bargains? Fans of the education companies say that a rising teenaged population will lead to higher earnings. But along with Career Education, other for-profits, including Corinthian and ITT Educational Services (ESI, $33), have attracted regulatory attention and investor lawsuits. So many analysts advise caution. Says Bear Stearns's Jennifer Childe: "Everyone is wondering, 'Are all of these allegations going to invite more regulatory scrutiny to the space, and what can that lead to?'"

--Julie Schlosser