Investors are fleeing for-profit college stocks after the sector’s bellwether predicted a 40 percent drop in new student enrollment next quarter.

Apollo Group Inc., which runs the University of Phoenix, attributes the expected decline to changing practices aimed at satisfying new government regulations.

The Department of Education has proposed a new rule that could limit schools’ access to federal financial aid if too few of its students were repaying loans or if they had too much debt.

Apollo withdrew its outlook for 2011. Shares plunged more than 25 percent to $36.80 in afternoon trading.

The news dragged down the sector, with Corinthian Colleges Inc., DeVry Inc., ITT Educational Services Inc., and Career Education Corp. all falling by more than 15 percent. Shares of Kaplan test prep owner Washington Post Co. slid 8 percent.