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Moody's Cuts Washington Post on Impending Education Rules

Moody's Investor Service cut Washiington Post's debt rating to A2 on Thursday, citing the government's proposed education rules that may dent earnings in the for-profit sector.

cost of education
cost of education

The rating agency downgraded the publisher's senior unsecured note by one notch, tacking on a negative outlook, singaling possible future downgrades.

Share of the Post were up slightly on Thursday.

"The downgrade reflects Moody's expectation that proposed Department of Education gainful employment guidelines [on] private for-profit educational institutions ... will negatively affect the earnings of Kaplan, which is WPO's largest operating segment," Moody's said in a statement.

In an effort to reduce student-loan defaults, the U.S. Department of Education has proposed regulation to ding for-profit educators for graduating students with unmanageable levels of debt. Shares of these institutions have suffered in the past months.

Moody's expects Kaplan to see enrollments fall in the coming quarter.