The Brazilian government on Monday said recent changes to a student loan program were only temporary, easing worries about cash flow for education companies and sending their shares higher. Late last year, the government without warning changed the rules governing a college loan program known as Fies. The decision slowed government payments to the companies, leading to concern over cash flow and a resulting drop in share prices.
On Monday the government said in its official gazette that the rule would only be in place this year. Fies provides roughly half of the revenue of listed companies such as Kroton Educacional SA and Ser Educacional SA. Shares of Kroton were up 9 percent in morning trading, while rival Estacio Participacoes SA gained 7 percent. Shares of Ser Educacional rose 8.1 percent.