Phoenix Education Partners, Inc.
For the period ended Aug 31, 2026. Filed Nov 3, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2026 · Filed Nov 3, 2026
PXED$19.59-8.9%Stored close · as of Nov 6, 2026
What changed in Risk Factors?
Read the current filingPrevious report: 10-K
Period ended 2025-08-31; filed 2025-11-20.
0001193125-25-289786
Item 1A. Risk FactorsCurrent report: 10-K
Period ended 2026-08-31; filed 2026-11-03.
0001193125-26-445323
Item 1A. Risk FactorsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 249 previous paragraphs and 190 current paragraphs.
23 unchanged; 114 reworded; 51 added; 65 removed; 47 previous and 2 current paragraphs rearranged.
Tables are not compared: 0 previous and 0 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (51)
Current report
if our institution fails to maintain adequate systems and processes to detect and prevent fraudulent activity in student enrollment and financial aid, our institution may lose the ability to participate in Title IV programs, Department of Defense military tuition assistance programs, or Department of Veterans Affairs veterans’ education benefits programs, or have participation in these programs conditioned or limited, may face claims from third parties, may be required to repay Title IV and other federal program funds, or may face fines or other penalties;
Current report
a cyberattack, data breach, or other security incident suffered by us, our third-party vendors, our accreditors, or our regulators, or a disruption or failure of our IT systems or software, has in the past, and could in the future, expose us to liability and could adversely affect our financial condition and operating results;
Current report
as a “controlled company” under NYSE rules and an “emerging growth company” under SEC rules, we rely on exemptions from certain corporate governance and disclosure requirements, and our stockholders will not have the same protections as stockholders of companies subject to such requirements, and the interests of our controlling stockholder may conflict with our interests and the interests of our other stockholders; and
Current report
An institution generally must seek recertification from the Department of Education at least every six years and possibly more frequently depending on various factors, such as whether it is provisionally certified. The Department of Education also reviews an institution’s eligibility and certification to participate in Title IV programs in the event the institution undergoes a change in ownership resulting in a “change of control,” as defined by Department of Education regulations. An institution that undergoes a change of control loses its eligibility to participate in Title IV programs and must apply to the Department of Education to reestablish such eligibility. The Department of Education may also review the scope of an institution’s eligibility and certification when it expands its activities in certain ways, such as the addition of certain types of new programs, or changes to the academic credentials that it offers. The Department of Education may withdraw the University’s certification if the Department of Education determines that it is not fulfilling material requirements for continued participation in Title IV programs. The Department of Education renewed the University’s Title IV PPA in August 2025 allowing the University to participate in Title IV programs under full certification through June 30, 2031. If the Department of Education withdraws the University’s certification to participate in Title IV programs, or in the future denies recertification, our students would no longer be able to receive Title IV program funds. Such a loss would have a material adverse effect on our business and results of operations.
Current report
“Borrower Defense to Repayment” regulations may subject us to significant repayment liability for certain discharged federal student loans, require us to be provisionally certified or post a letter of credit or other security, or result in the limitation or termination of the University’s eligibility to participate in Title IV programs.
Current report
If our institution fails to maintain adequate systems and processes to detect and prevent fraudulent activity in student enrollment and financial aid, our institution may lose the ability to participate in Title IV programs, Department of Defense military tuition assistance programs, or Department of Veterans Affairs veterans’ education benefits programs, or have participation in these programs conditioned or limited, may face claims from third parties, may be required to repay Title IV and other federal program funds, or may face fines or other penalties.
Current report
Moreover, a pending legislative proposal may increase regulatory oversight and consequences for institutions, like the University, that are the target of fraudulent activity, including identity theft cases and attempts to obtain federal student aid by means of fraudulent enrollments. This year, multiple bills have been introduced aiming to prevent federal student aid fraud, including the No Aid for Ghost Students Act of 2026, which, if enacted into law would require the Department of Education to prioritize program reviews of institutions identified as having demonstrated a pattern of disbursing Title IV aid to students whose applications presented a reasonable suspicion of identity fraud. Accordingly, any significant failure to adequately detect fraudulent activity related to student enrollment and financial aid could subject us to additional adverse consequences. Furthermore, accrediting agencies that evaluate institutions offering online programs require such institutions to have processes to establish that a student who registers for such a program is the same student who participates in and receives credit for such program. Our failure to meet the requirements of the Department of Education or our accreditors pertaining to the detection and prevention of fraudulent activity in student enrollment and financial aid could result in (i) audits, investigations, and adverse findings and recommendations by the OIG, (ii) program reviews or other oversight activities by the Department of Education, (iii) the assertion of liabilities by the Department of Education for the return of Title IV or other federal program funds disbursed to fraudulent students, (iv) accreditation oversight actions, (v) the loss of accreditation, which could result in the loss of our ability to participate in Title IV or other federal assistance programs, or (vi) enforcement actions or government initiated or private party litigation, including the assertion of findings or other penalties, against the University, each of which could have a material adverse effect on our business, financial condition, and results of operations.
Current report
During fiscal year 2026, the Department of Education held OBBB-related negotiated rulemaking sessions, including:
Current report
RISE, which reached consensus and final regulations were published on a package of federal student loan-related changes, including, among other things, amending annual and aggregate loan limits for graduate, professional, and parent loan borrowers, implementing two new student loan repayment plans for new borrowers, and codifying the authority granted in OBBB to institutions to set loan limits for programs of study below the statutory loan limits.
Current report
AHEAD, which reached consensus and final regulations were published implementing changes pertaining to earnings-based accountability measures, institutional and programmatic accountability, the Pell Grant Program, and other changes to the Title IV programs.
Current report
AIM, which reached consensus based on the following goals: (i) simplifying the accreditation recognition process, (ii) examining how accreditation contributes to higher education costs and credential inflation, (iii) safeguarding against undue influence from related private trade associations, (iv) eliminating standards or policies of discrimination, and (v) refocusing quality assurance and improvement on data-driven student outcomes. The Department published the NPRM with proposed regulations on August 20, 2026.
Current report
The Department of Education effectuated new accountability standards and substantially revised the former gainful employment regulations to conform those rules to the new OBBB earnings-based measures, renaming the former gainful employment and financial value transparency regulations as Earnings Accountability and STATS, respectively. The new Earnings Accountability framework, which applies to all Title IV eligible undergraduate and graduate programs, including undergraduate certificate programs, at public, nonprofit, and proprietary institutions, condition the Federal Direct Loan Program eligibility of educational programs upon compliance with benchmarks that compare former students’ median earnings after completion to the median earnings of working adults with lesser credentials. The Earnings Accountability regulations use a single earnings premium measure to determine whether a program is a “low-earning outcome program,” eliminating the debt-to-earnings metric that was in place under the former gainful employment regulations. If a program fails the earnings premium measure in two of three consecutive years, that program is designated as a low-earning outcome program and loses eligibility to participate in the Direct Loan program for no less than two years.
Current report
The regulations also introduced a related administrative capability requirement that no more than half of an institution’s total Title IV funds come from low-earning outcome programs and no more than half of an institution’s Title IV recipients are from low-earning outcome programs and require that if an institution fails this administrative capability requirement in two out of any three consecutive award years, the institution will be placed on provisional status and the institution’s low-earning outcome programs shall not qualify for any Title IV funds, and would therefore lose eligibility for Pell Grants and the other Title IV programs in addition to Direct Loans.
Current report
Since the Earnings Accountability framework and STATS regulations were recently finalized, the Department of Education has stated that it will first calculate the earnings premium measure in 2027 using earnings data measured during the 2025 tax year, applying the result of the first earnings premium test to the 2027-28 award year. Accordingly, a program may be designated as a low-earning outcome program beginning in the 2028-29 award year if it fails the earnings premium test in the first two years of its application. As with the prior gainful employment regulations, our ability to satisfy the new earnings accountability framework and STATS regulations for certain of our programs is subject to some extent to factors outside of our control, including general economic conditions and changes in labor markets. Additionally, certain programs we offer that typically lead to lower-paying, service-oriented professions may be unable to satisfy the new earnings premium measure and would then need to be discontinued. See Item 1, “Business—Regulatory Environment—Regulation of Student Financial Aid Programs—New Earnings Accountability Framework and STATS Regulations.”
Current report
These new regulations create uncertainty about the extent to which any particular educational programs offered by the University may fail to comply with the earnings-based accountability measures. Similarly, the new STATS regulations create uncertainty about the extent that the University’s required earnings outcomes disclosures may include low earnings outcomes for some of our educational programs. Any failure to comply with the new earnings-based accountability measures or any disclosures of low-earnings outcomes for any of our programs could limit the programs we can offer students and the Title IV eligibility of the impacted programs, which could materially impact our enrollments, revenue, or costs of operation, and in each instance could have a material adverse effect on our business, financial condition, and results of operations.
Current report
If an education regulatory agency that regulates us delays or denies approval of a transaction involving us that constitutes a “change in control,” our ability to operate or participate in Title IV programs may be materially impaired.
Current report
Failure to adapt to changing market needs, including relating to AI or other new technology, could adversely affect our business.
Current report
Failure to attract or retain qualified employees, senior management, and faculty could materially impact our business.
Current report
System disruptions to our technology systems or platforms could have a material adverse effect on our business and our primarily remote work environment may exacerbate this risk.
Current report
A cyberattack, data breach, or other security incident suffered by us, our third-party vendors, our accreditors, or our regulators, or a disruption or failure of our IT systems or software, has in the past, and could in the future, expose us to liability and could adversely affect our financial condition and operating results.
Current report
We routinely collect, process, use, and store sensitive data and certain personal information from our students and employees. We also utilize third-party vendors and provide information about our students and employees to our accreditors and regulators to satisfy legal and regulatory requirements and use electronic payment methods to process and store some of this information, including credit card information. Our business relies on IT networks and systems to store this data, process financial and personal information, manage a variety of business processes, and comply with regulatory, legal, and tax requirements. Additionally, we maintain other confidential, proprietary, or otherwise sensitive information relating to our business.
Current report
The IT networks and systems owned, operated, controlled, or used by us, our third-party vendors, or other external agencies may be vulnerable to damage, disruptions, shutdowns, software or hardware vulnerabilities (e.g., “zero-day” vulnerabilities), attacks by cyber threat actors (e.g., hackers, phishers, or other digital bad actors), security incidents, failures during the process of upgrading or replacing software or databases or components thereof, power outages, natural disasters, hardware or telecommunication failures, user errors or malfeasance, and other real or perceived cyberattacks or catastrophic events, all of which may not be prevented by our efforts to secure our networks and systems. Security incidents can also occur because of non-technical issues, including intentional or inadvertent actions by our employees, our third-party vendors, external agencies or their personnel, or other parties. Security incidents are becoming increasingly prevalent and severe, as well as increasingly difficult to detect. Any of these incidents could lead to interruptions or shutdowns of our platforms, disruptions in our ability to process service requests and record or analyze the use of our services, the loss or corruption of data or unauthorized access to, or acquisition of, personal or other sensitive information. We maintain policies, practices, operational safeguards, measures and controls aimed at reducing our cyber risk, protecting, and recovering our data and ensuring business continuity, which include reasonable efforts aiming to ensure that our third-party vendors maintain reasonable security, including encryption and authentication technology, and will notify us promptly if a security incident occurs. However, none of these security measures can provide absolute security. Advances in computer capabilities, increasingly sophisticated tools and methods used by threat actors, new discoveries in the field of cryptography, or other developments may result in our failure or inability, or the failure or inability of our vendors or external agencies, to adequately protect personal or other sensitive information, and there can be no assurance that we, our vendors, or external agencies will not suffer a cyberattack, that hackers or other unauthorized parties will not gain access to or exfiltrate personal information or other sensitive data or that any such data compromise or unauthorized access will be discovered in a timely fashion.
Current report
Like many businesses, we, our third-party vendors, and external agencies have in the past, including the Oracle E-Business Suite (“Oracle EBS”) cybersecurity incident detected in November 2025 (see Note 15. Commitments and Contingenciesfor additional information), and will in the future continue to be subject to cyberattacks, cybersecurity threats, and attempts to compromise and penetrate our data security and systems and disrupt our services. Regular patching of each of our respective computer systems and frequent updates to our virus detection and prevention software with the latest virus and malware signatures may not catch newly introduced malware, ransomware, viruses, or “zero-day” vulnerabilities prior to infecting the computer systems or networks that we rely on. Future cyberattacks against us, our third-party vendors, or external agencies could lead to operational disruptions that could have an adverse effect on our ability to provide services to students and on our financial condition and results of operations. Any general decline in internet use for any reason, including security or privacy concerns, increased cost of internet service, or changes in government regulation, could result in less demand for online educational services, which could have a material impact on our enrollment, revenue, and results of operations.
Current report
Failure of our systems to operate effectively or a compromise in the system security of us, our third-party vendors, or our external agencies that results in unauthorized persons or entities obtaining personal or other sensitive information could materially and adversely affect our reputation, enrollment, revenue, financial condition, and results of operations. Actual or anticipated cyberattacks may cause us to incur costs, including costs to deploy additional personnel and protection technologies, train employees, pay higher insurance premiums, and engage third-party specialists for additional services. Breaches in our data security or that of our third-party vendors, or external agencies could expose us to various risks, including data loss, inappropriate confidential or proprietary information disclosure, potential claims, investigations, regulatory proceedings, or litigation penalties. In addition, we may incur substantial costs in connection with remediating and otherwise responding to any data security incident, including potential liability for stolen client, student, or employee data, repairing system damage, or providing credit monitoring or other benefits to clients, students, or employees affected by the incident. Additionally, prospects may become unwilling to provide us the information necessary to enroll if we, our third-party service providers, or external agencies experience security incidents that result in a performance decline in necessary services, availability problems, or the loss, corruption of, unauthorized access to, or disclosure of personal data or confidential information, which could harm our reputation and market position relative to competitors. Existing students may also decrease their use of our services or cease using our services altogether. The impact of security threats, incidents, and other disruptions are difficult to predict. Our insurance coverage for such security threats, incidents, and other disruptions may not be adequate to cover all related costs, and we may not otherwise be fully indemnified for such costs, which could impact the cost or availability of insurance coverage, or could result in denied coverage for future claims. Any of these results could materially harm our reputation, business, and financial condition.
Current report
Personal information that we collect may be vulnerable to breach, theft, or loss, which could adversely affect our retention, enrollment, and reputation.
Current report
We maintain information that is confidential, proprietary, personal (such as student information), or otherwise sensitive in nature on our network systems and the network systems of our third-party providers. Since this information can be accessed globally, it is vulnerable to inadvertent access or display and unauthorized access or other action by employees or cyber threat actors, including theft or misuse, ransomware, malware, and other computer viruses, and attacks of this nature have become more prevalent and sophisticated. Due to the sophistication of cyber threat actors, unauthorized access and action, including, but not limited to, ransomware, malware, or viruses, may evade the intrusion detection and prevention measures of us or our third-party providers and external agencies without alerting us to the breach or loss for some period or ever. A threat actor that circumvents security measures could misappropriate confidential or proprietary information or personal information about our students or employees, cause interruptions or malfunctions in our operations, or commit fraud. The Safeguards Rule under the GLBA passed by the FTC updated data security requirements for financial institutions, including all Title IV institutions, and the Department of Education has required auditors to verify Safeguards Rule compliance. Failure to comply with the applicable GLBA requirements may result in FTC enforcement and potentially include the imposition of restrictions on operations, penalties, monitoring, and oversight, which could materially impact our financial condition and results of operations. In addition to being subject to privacy and information security laws and regulations in the U.S. because our services can be accessed globally, we may also be subject to privacy and information security laws in countries outside the U.S. from which students access our services, which laws may constrain the way we market and provide our services. Any breach of student or employee privacy or errors in storing, using, or transmitting personal information could violate privacy laws and regulations resulting in fines or other penalties. The adoption of new or modified state or federal data or cybersecurity legislation could increase our costs and require changes in our operating procedures or systems.
Current report
Increased use of AI may present operational, reputational, legal, regulatory, and competitive risks and could result in additional costs, each of which could materially and adversely affect our business, financial condition, and results of operations.
Current report
We are investing in the use of AI across our business, with plans to increase our use of systems and tools that incorporate AI-based technologies for students, employees, faculty, and staff. We are implementing AI governance structures, policies, and safety controls to promote security and responsible use, but these measures may not fully mitigate the risks associated with rapid adoption of AI. As an emerging technology, the use of AI presents the following inherent risks: (i) other post-secondary institutions may integrate AI more efficiently as a means to facilitate business growth, reduce operating expenses, and improve the student experience, which may impact our retention and enrollments; (ii) we may be unable to implement AI technologies in a cost-effective manner or in a manner that appeals or is satisfactory to current or prospective students; (iii) AI may hallucinate or be error-prone, demonstrate biases or discriminatory practices and responses, and its use may result in other perceived or actual legal, compliance, privacy, security, and ethical risks; (iv) due to evolving regulatory conditions and related compliance obligations and otherwise, we may be unable to develop or maintain effective policies and provide adequate training regarding proper use of AI, which could lead to misuse by employees, faculty, and students; (v) AI use could result in increased plagiarism, cheating, and other academic integrity issues; (vi) AI use may make us more susceptible to cybersecurity incidents, including those affecting personal or confidential information, which could be more complicated to discover due to the nature of AI; (vii) compliance with new or changing AI-related laws, regulations, and industry standards may impose significant operational costs or limit our ability to develop, deploy, or use AI; (viii) external communication regarding AI-related initiatives could subject us to the risk of allegations of inaccurate or misleading statements regarding our ability to avail ourselves of the potential benefits of AI; and (ix) any disruption or failure of our AI systems, tools, or supporting infrastructure could adversely impact our operations. Any of these risks could result in additional costs, subject us to regulatory action or increased regulatory scrutiny, litigation, reputational harm, or other liability, and could materially and adversely affect our reputation, business, financial condition, and results of operations.
Current report
The acquisition, integration, and growth of acquired businesses may present challenges that could harm our business.
Current report
Our future success depends, in part, on our ability to successfully integrate into our operations any institutions or businesses we have acquired, or may acquire in the future, into our operations. The successful integration and profitable operation of acquired businesses, including the realization of anticipated cost savings and additional revenue opportunities, can present challenges, and the failure to overcome these challenges can have an adverse effect on our business, financial condition, cash flows and results of operations. Such challenges, while ultimately dependent on the particular acquisition at hand, may include, among other things, the inability to maintain uniform standards, controls, policies and procedures; the acquired business not performing as expected; distraction of management’s attention from normal business operations during the integration process; the inability to attract and/or retain key management personnel to operate the acquired entity; the inability to obtain, or delays in obtaining, regulatory or other approvals necessary to operate the business, including approvals from the Department of Education, the HLC, state education agencies and other accrediting commissions; the risk that disruptions from the integration will harm our or the acquired entity’s businesses; potential adverse reactions or changes to business relationships resulting from an acquisition; the inability to correctly estimate the size of a target market or accurately assess market dynamics; expenses associated with the integration efforts; and our assumption of unexpected risks, liabilities and obligations of the acquired business, including issues not discovered in the due diligence process.
Current report
An acquisition related to an institution or other educational business may require various regulatory approvals and, in the case of a Title IV eligible institution, may require growth restrictions, reporting obligations and temporary conditions on operations that limit changes to the institution after its acquisition. If we are unable to obtain such approvals, or obtain them on unfavorable terms, our ability to consummate a future transaction may be impaired or we may be unable to operate the acquired entity in a manner that is favorable to us. If we fail to properly evaluate an acquisition, we may be required to incur costs in excess of what we anticipated, and we may not achieve the anticipated benefits of such acquisition.
Current report
If we fail to maintain proper and effective internal controls, our ability to produce accurate financial statements or prevent fraud could be impaired.
Current report
The exercise of outstanding stock options may result in additional dilution to our stockholders or require us to use available cash if we choose to repurchase such options, and we cannot predict the timing, extent, or impact of future option exercises.
Current report
As of August 31, 2026, there were outstanding stock options that, if settled in shares, could result in the issuance of approximately 3.4 million shares of our common stock. In connection with the expiration of the IPO lock-up periods on April 6, 2026 for our pre-IPO holders, other than our Section 16 officers, and on October 8, 2026 for our Section 16 officers, shares of our common stock issuable upon the exercise of stock options by such holders became eligible for sale. Upon exercise of such stock options, we may, at our election, either repurchase such options for cash, in which case no shares of our common stock would be issued, or issue shares of our common stock on a one-for-one basis in exchange for the shares of University common stock otherwise issuable upon exercise. Option exercises may also be settled through net share settlement, cash exercises, or broker-assisted sell-to-cover transactions. If we elect to settle option exercises through the issuance of shares, such issuances could result in dilution to our existing stockholders and could cause the trading price of our common stock to decline, particularly if a significant number of options are exercised and the resulting shares are sold in the public market in a short period of time. If we elect to repurchase options for cash, such repurchases could require the use of a significant amount of our available cash, which could reduce cash available for dividends, share repurchases, capital expenditures, acquisitions, and other general corporate purposes. We cannot reasonably estimate the extent or timing of future option exercises, the timing or extent of any related sales of shares, or the settlement methods that may be utilized and, accordingly, the potential impact of future option exercises and related sales of shares on our outstanding share count, liquidity and stock price remains uncertain.
Current report
Our organizational documents may impede or discourage a takeover, which could deprive our investors of the opportunity to receive a premium on their shares.
Current report
Provisions of our certificate of incorporation and bylaws may make it more difficult for, or prevent a third party from, acquiring control of us without the approval of our Board. These provisions include:
Current report
providing that our Board will be divided into three classes, with each class of directors serving staggered three-year terms;
Current report
providing for the removal of directors only for cause and only upon the affirmative vote of the holders of at least 66 2/3% in voting power of all the then-outstanding shares of stock of the Company entitled to vote thereon, voting together as a single class, if less than 50.1% of the voting power of our outstanding common stock is beneficially owned by Apollo and its affiliates, including the Apollo Stockholder;
Current report
empowering only the Board to fill any vacancy on our Board (other than in respect of an Apollo Board Nominee (as defined in the Stockholders’ Agreement (as defined below)) or a Vistria Board Nominee (as defined in the Stockholders’ Agreement (as defined below))), whether such vacancy occurs as a result of an increase in the number of directors or otherwise;
Current report
prohibiting stockholders from acting by written consent if less than 50.1% of the voting power of our outstanding common stock is beneficially owned by Apollo and its affiliates, including the Apollo Stockholder;
Showing the first 40 of 51 passages. Open the source sections for the rest.
Removed paragraphs (65)
Previous report
if we do not maintain existing, and develop additional, B2B relationships with employers, our business may be impaired; and
Previous report
Department of Education certification to participate in Title IV programs lasts a maximum of six years, and institutions are thus required to seek recertification from the Department of Education on a regular basis in order to continue their participation in Title IV programs. An institution must also apply for recertification by the Department of Education if it undergoes a “change in control,” as defined by Department of Education regulations, and may be subject to similar review if it expands its operations or educational programs in certain ways. Certification can be granted on a full or provisional basis and, in instances where the Department of Education is reviewing an application for renewal but does not complete the review by the stated date of expiration, may be continued on a month-to-month basis until the review is complete. Institutions that are provisionally certified are typically required to obtain prior Department of Education approval to add educational programs or make any other significant change. Further, for an institution that is certified on a provisional basis, the Department of Education may revoke the institution’s certification without advance notice or advance opportunity for the institution to challenge that action. For an institution that is certified on a month-to-month basis, the Department of Education may allow the institution’s certification to expire at the end of any month by denying recertification without advance notice, and without any formal procedure for review of such action.
Previous report
In August 2025, the Department of Education renewed the University’s Title IV program participation agreement (“PPA”) and approved the recertification of the University’s continued participation in the Title IV programs through June 30, 2031. However, if the Department of Education were to initiate future proceedings to limit, suspend, or terminate the University’s eligibility or certification to participate in the Title IV programs, or if it were to choose not to renew our certification in the future, such actions could cause the participation by the University in the Title IV programs to be interrupted, limited, or terminated, and could cause our students to lose access to Title IV program funds.
Previous report
“Borrower Defense to Repayment” regulations may subject us to significant repayment liability for certain discharged federal student loans and require us to be provisionally certified or post a letter of credit or other security, or result in the limitation or termination of the University’s eligibility to participate in Title IV programs.
Previous report
Department of Education regulations specify extensive criteria an institution must satisfy to establish that it has the requisite administrative capability to participate in Title IV programs. These criteria impose requirements that, among other things, an institution administer Title IV programs in accordance with all applicable federal student financial aid requirements, with adequate checks and balances in its system of internal controls over financial reporting, and with capable and sufficient personnel. See the risks to the University described under the heading “
Previous report
The University’s 90/10 Rule percentages were 88.6% and 88.3% for fiscal years 2025 and 2024, respectively. The University has no direct control over the amount of Title IV student loans and grants sought and other federal funds for which its students are determined to be eligible.
Previous report
Any failure to comply with the Department of Education’s “gainful employment” metrics and financial transparency regulations could limit the programs we can offer students, the Title IV eligibility of the impacted programs and/or increase our cost of operations.
Previous report
Under the Higher Education Act, proprietary schools are generally eligible to participate in Title IV programs only in respect of educational programs that lead to “gainful employment in a recognized occupation.” An initial attempt by the Department of Education in 2010 to promulgate, for the first time, regulations that would have applied program-specific, student outcome-based eligibility criteria to determine whether individual educational programs offered by proprietary schools led to “gainful employment” were judicially rejected prior to implementation. Subsequently revised regulations were implemented by the Department of Education in 2014 but later repealed in 2020. In October 2023, the Department of Education released new financial value transparency and gainful employment regulations, which became effective July 1, 2024, that established two independent “gainful employment” metrics. To maintain Title IV eligibility, an institution must comply with both metrics, along with a related financial value transparency regulation (as described below). The two gainful employment metrics are (i) a debt-to-earnings ratio that compares the median earnings of graduates who received federal financial aid to the median annual payments on loan debt borrowed for the program, and (ii) an earnings premium test that measures whether the typical graduate from a program who received federal financial aid earns more than a typical high school graduate in the same state (or, in some cases, nationally) and within a certain age range in the labor force. See Item 1, “Business—Regulatory Environment—Regulation of Student Financial Aid Programs—Gainful Employment and Financial Value Transparency.” Any program that fails either or both metrics in a single year would be required to disclose such failure to students, and any program that fails the same metric in any two out of three consecutive years, or is voluntarily discontinued by the institution, would not be eligible to have Title IV reinstated for a minimum of three years. Nearly all programs at the University would be subject to evaluation under these “gainful employment” regulations. The Department of Education has not released gainful employment metrics and it is unknown when metrics will be released. At this time, it is difficult to predict which of our programs may not satisfy the gainful employment metrics.
Previous report
The Department of Education’s financial value transparency rule requires all colleges to provide certain student and financial information about their programs to the Department of Education. That information, including student debt burdens and program costs, will be published on a Department of Education consumer-facing website to help students make informed enrollment decisions. Beginning in 2026, a student interested in a program deemed to leave students with high debt burdens will need to acknowledge having seen that information before they can enroll.
Previous report
Failure of the University to resolve examination pass rate concerns with the Commission on Collegiate Nursing Education could result in potential action by the accreditor to limit or remove accreditation from all of the University’s Master of Science in Nursing programs.
Previous report
The University’s Master of Science in Nursing / Family Nurse Practitioner (“MSN/FNP”) program, which represented less than 1.0% of the University’s fiscal year 2025 revenue, is accredited by the Commission on Collegiate Nursing Education (“CCNE”). The CCNE requires, among other things, that programs leading to additional certification (such as the MSN/FNP program) demonstrate pass rates on applicable certification exams of at least 80%. From 2021 to 2023, the pass rates for the University’s MSN/FNP program decreased from 78% to 65%. The University has been continuously working closely with the CCNE and has undertaken a detailed and significant action plan with respect to curriculum revisions and other actions designed to improve the pass rates. These actions resulted in an increase for the calendar year 2024 pass rate to 78%. At its meeting in September 2025, the CCNE granted reaccreditation to the University’s Master of Science in Nursing program for 10 years, until September 2035. Although the CCNE determined that the program substantially complied with all accreditation standards, .it determined that the certification pass rate remained a concern. The University is required to file a compliance report to the CCNE by December 1, 2026 demonstrating compliance with the pass rate requirement of 80%.
Previous report
While a withdrawal of accreditation may not have an immediate material impact on our revenue, it could be harmful to our reputation and lead to claims from former students or other materially adverse consequences.
Previous report
In addition, Arizona rules state that the Arizona State Board must approve certain changes of ownership or control, including but not limited to a transfer of 50% or more of a privately held institution’s voting stock or assets or a change from one business form to another. An institution that undergoes a change in ownership or control must provide written notice to the Arizona State Board within seven days of the effective date of the change and submit a new license application to the Arizona State Board no later than 60 days after the date of written notice. The Arizona State Board’s approval requirements may be triggered by future offerings or transactions that constitute a change in ownership or control under their standards. If such a required Arizona State Board approval process were delayed or the University’s application for reauthorization were denied approval, such consequences could have a material adverse effect on our business, financial condition and results of operation. See “—If any of the education regulatory agencies that regulate us delay their approval of, or do not approve, any transaction involving us that constitutes a “change in control,” our ability to operate or participate in Title IV programs may be materially impaired.”
Previous report
For example, the University recently learned that a Mississippi student in its Bachelor of Science in Education/Early Childhood Education (BSED/ECH) program was denied teacher licensure in Mississippi. The University’s teacher licensure students complete an Arizona program that makes them eligible for a Mississippi teacher license via reciprocity. Graduates of this program must first obtain an Arizona teacher license prior to applying for licensure in Mississippi. The subject student received an Arizona license but upon application to Mississippi for licensure, was denied because of a deficiency related to a specific course. This licensure denial appears to be a change in interpretation by the Mississippi Department of Education of the Mississippi licensure requirements, as previous graduates of the BSED/ECH program have received Mississippi teacher licensure via reciprocity despite the same purported deficiency. Effective September 1, 2025, the University has updated its curriculum to require Mississippi students to complete the applicable courses in their program before applying for Arizona licensure.
Previous report
If any of the education regulatory agencies that regulate us delay their approval of, or do not approve, any transaction involving us that constitutes a “change in control,” our ability to operate or participate in Title IV programs may be materially impaired.
Previous report
In addition, Arizona rules state that the Arizona State Board must approve certain changes of ownership or control, including but not limited to a transfer of 50% or more of a privately held institution’s voting stock or assets or a change from one business form to another. An institution that undergoes a change of ownership or control must submit written notification within seven days of the effective date of the change and must submit a license application including all required documentation that demonstrates the University meets the applicable statutory and licensure requirements of the Arizona State Board no later than 60 days after the date of written notice. The application process requires the submission of substantial information and documentation, including with respect to our accreditation, corporate ownership, educational programs, financial responsibility, and other matters as may be deemed relevant to determining the University’s compliance with all licensing requirements, including, potentially, an inspection of the University’s place of business. The Arizona State Board’s approval requirements may be triggered by future offerings or transactions that constitute a change in ownership or control under their standards. If such a required Arizona State Board approval were delayed or the University’s application for reauthorization were denied approval, such consequences could have a material adverse effect on our business, financial condition and results of operation.
Previous report
If our institution fails to maintain adequate systems and processes to detect and prevent fraudulent activity in student enrollment and financial aid, our institution may lose the ability to participate in Title IV programs, Department of Defense military tuition assistance programs, or Department of Veterans Affairs veterans’ education benefits programs, or have participation in these programs conditioned or limited, or face claims from third parties.
Previous report
laws or other regulatory requirements that limit the amount we may spend on advertising;
Previous report
If one or more of these factors reduces demand for our programs, our enrollment could be negatively affected or our costs associated with each new enrollment could increase, or both, either of which could have a material adverse impact on our business and financial condition.
Previous report
Effective January 2018, the University implemented its Tuition Price Guarantee program. Under this program, a student’s tuition price per course is frozen at the tuition rates in effect at his or her enrollment date, thereby giving each of our students certainty in the price of tuition through the duration of their programs even if rates are subsequently increased for students who enroll at later dates. The net revenue we generate in a given period largely depends on the total number of courses taken by the enrolled student population and the tuition price per course. As a result of the Tuition Price Guarantee, while we can increase tuition rates over time for new students as they enroll, we may not increase the tuition rates we charge to currently enrolled students even if our costs to provide their programs increase over their programs’ duration. Accordingly, our net revenue may be materially lower than the net revenue that could be generated if all enrolled students were subject to normal course tuition increases. In addition, because we heavily promote our Tuition Price Guarantee as a beneficial means of providing students with tuition price certainty, any modification or elimination of this program could adversely affect our reputation among current and prospective students, cause our enrollment and retention to decline, and adversely impact our business and financial performance.
Previous report
If we fail to adapt to changing market needs or new technologies, our business may be adversely affected.
Previous report
If we cannot attract or retain a qualified senior management team, our business could be adversely affected.
Previous report
We also rely upon unregistered proprietary information in the operation of our business. For example, we rely on trade secrets to protect intellectual property that may not be patentable, or that we believe is best protected by means that do not require public disclosure. While it is our policy to enter into confidentiality agreements with employees and third parties to protect our proprietary expertise, know-how and trade secrets, and other confidential or proprietary information, we cannot guarantee that we have entered into such agreements with each party that has or may have had access to the same and, even if entered into, these agreements may be breached or may otherwise fail to prevent disclosure, third-party infringement or misappropriation of our confidential or proprietary information. These agreements also may be limited as to their terms and may not provide an adequate remedy in the event of unauthorized disclosure or use of confidential or proprietary information. Monitoring unauthorized uses and disclosures is difficult, and we do not know whether the steps we have taken to protect our confidential or proprietary information will be effective. Enforcing a claim that a party illegally disclosed or misappropriated a trade secret or other confidential or proprietary information can be difficult, expensive and time-consuming, and the outcome can be unpredictable.
Previous report
In addition, our trade secrets and other confidential or proprietary information may otherwise become known or be independently developed by our competitors or other third parties. If any of the same were to be lawfully obtained or independently developed by a competitor or other third party, we would have no right to prevent them from using that technology or information to compete with us, which could have a material adverse effect on our business. Furthermore, to the extent that our employees, consultants, contractors, and other third parties use intellectual property owned by others in their work for us, disputes may arise as to the rights in related or resulting know-how and inventions. Costly and time-consuming litigation could be necessary to enforce and determine the scope and validity of our proprietary rights, and the failure of our confidentiality agreements to protect our confidential or proprietary information or trade secrets could result in significantly lower revenue, reduced or eliminated profit margins, or other adverse effects on our business and financial condition.
Previous report
Litigation may be necessary to protect our trade secrets and otherwise enforce our intellectual property rights. If we decide to take legal action to protect, defend or enforce our intellectual property rights, our efforts may be met with defenses, counterclaims and countersuits attacking the validity and enforceability of our intellectual property rights. Any suit or proceeding initiated by us concerning the violation by third parties of our intellectual property rights could result in substantial costs and diversion of our resources and our management’s attention and could have a material adverse effect on our financial condition and results of operations, regardless of the final outcome of such legal action. Furthermore, it could result in a court or governmental agency invalidating or rendering unenforceable our patents or other intellectual property rights upon which the suit or proceeding is based.
Previous report
As we face increasing competition and as a public company, the possibility of intellectual property rights claims against us will grow. Such claims and litigation may involve patent holding companies or other adverse intellectual property rights holders who have no relevant product revenue (often referred to as “non-practicing entities” or “patent trolls”), and, therefore, our own pending patents and other intellectual property rights may provide little or no deterrence to these rights holders in bringing intellectual property rights claims against us. There may be intellectual property rights held by others, including issued or pending patents and trademarks, that cover significant aspects of our technologies, content, branding or business methods, and we cannot be sure that we are not infringing or violating, and have not infringed or violated, such third-party intellectual property rights, or that we will not be held or alleged to have done so in the future. We expect that we may receive notices in the future that claim that we or our partners, or clients using our solutions and services, have misappropriated or misused other parties’ intellectual property rights, particularly as the number of competitors in our market grows and the functionality of applications amongst competitors overlaps.
Previous report
System disruptions to our computer networks, phone systems, digital platforms or infrastructure could have a material adverse effect on our business.
Previous report
As part of our technology infrastructure and systems upgrade and our reduction of expenses, we have upgraded or are in the process of upgrading a substantial portion of our key IT systems, including migrating our learning management system, our student relationship platform, and our student financial aid and corporate website to cloud-hosted, SaaS providers. We have also recently migrated our entire technology footprint to a hybrid cloud and, in the process, shut down the last remaining University data center. As a result, the total server count reduced from over 11,000 to roughly 1,300. While this has reduced overall environmental cost and complexity, there are still key systems that must be upgraded from outdated software versions over the next twelve months. Additionally, the continued operation of key SaaS platforms is dependent upon each vendor’s ability to meet contractual service level agreements for availability and performance. We cannot be sure that the IT systems and infrastructure on which we depend, including those of third parties, will continue to meet our current and future business needs or adequately safeguard our operations. Our failure to complete or a delay in the migration of our IT systems may result in our failure to reduce or a delay in reducing our technology expenses. Such a failure or delay may adversely affect our business operations and our financial performance.
Previous report
Our collection, use, retention, and other processing of personal information—both in our capacity as a data controller as well as a data processor in our role as a service provider—makes us and the systems or vendors we rely upon a target for cyber-attacks, which could harm our business. We collect, use, retain, and otherwise process large amounts of personal and sensitive information regarding our applicants, students, faculty and employees, including social security numbers, tax return information, personal and family financial data, biometric information, health data and payment card information and we and our service providers rely on technology licensed from, or otherwise provided by, third parties to process and store this information. Much of this personal information is held and managed by third-party vendors, and as a result, we are vulnerable to disruptions from utility outages and susceptible to operational and information security risks resulting from system failures and cybersecurity incidents of our third-party vendors, and the technology and services they rely on to provide services to us. We also face risks of the acts and omissions of such third parties as they relate to data privacy and security. Any failure by such third parties to prevent or mitigate security incidents presents risk of operational disruptions and/or legal risk to us under applicable data protection laws and regulations, each of which could have a material adverse effect on our business and reputation.
Previous report
In instances where personal information is held or managed by us, we use technical, administrative, and physical controls to help limit access and use of personal information. However, a threat actor may be able to circumvent those controls, which could result in a security incident or data breach. In addition, our or a third party’s errors in the collection, use, retention, or other processing of personal information could result in a security incident or violation of applicable data protection laws or regulations. A security incident or data breach may require us to shut down relevant systems, terminate vendor relationships, undertake additional remediation measures that may interfere with our business operations and result in IT unavailability and downtime and may result in legal liability. In the event the security incident or data breach involves personal information that is held by us or our vendors, it could have additional material adverse effects on our operations. A security incident or data breach may also result in liability under state, federal and international data privacy laws and statutes, data breach and reporting laws, negative publicity, and legal actions by state attorneys general and private litigants, including class actions, any of which could have a material adverse effect on our reputation and business and financial condition.
Previous report
Many statutory requirements, both in the United States and abroad, include obligations for companies to notify individuals of data breaches involving certain personal information, which could result from security incidents experienced by us or our third-party service providers. There are federal laws and separate laws in each of the 50 states and the District of Columbia and foreign jurisdictions that may require companies to provide notice to consumers whose personal information has been impacted as a result of a data breach or notice to governmental agencies. These laws are not consistent, and an analysis of the impacted data and individuals is required in order to determine such obligations. Moreover, state data breach notification laws may be amended from time to time, requiring attention to changing regulatory requirements as part of the analysis. Complying with these laws following a security incident may require costly forensics and investigations, in addition to their impact on our business operations.
Previous report
Given that we rely on a number of third-party vendors for our IT and related infrastructures, the details of our vendor contracts largely determine whether a security incident caused by our vendor results in a breach of our contract and the remedies available to us in such instances. Any contractual protections we may have in place for our third-party service providers, contractors or consultants may not be sufficient to adequately protect us from any such liabilities and losses, and we may be unable to enforce any such contractual protections.
Previous report
Where we are a data processor or service provider, we also may have contractual obligations in the event of a security incident or data breach and may be contractually required to notify customers or counterparties of such incident or breach and pay for or reimburse a third party for costs associated with such incident or breach, even if we are not legally required to do so. As a result, security incidents and data breaches present legal risks under applicable laws, as well as contractual risks under our existing and future contracts. These obligations are time sensitive, and contractual obligations may vary between contracts. Compliance with these contracts requires contract management, including our understanding of our various obligations under such contracts and the ability to undertake those obligations pursuant to the applicable terms.
Previous report
We are subject to rapidly changing laws and regulations relating to privacy and data security. Failure to comply with such laws and regulations could lead to government enforcement actions (including civil or criminal penalties), private litigation or adverse publicity and could have a material adverse effect on our business.
Previous report
Many U.S. states have now passed comprehensive consumer privacy laws resulting in a patchwork of privacy legislation that heightens the costs of compliance, the risks of noncompliance, and the potential for enforcement actions by individual state attorneys general against the University. Federal and state laws or regulations also impose data security requirements in connection with our processing of personal information. Moreover, the Department of Education has issued regulations governing the collection and disclosure of student data. Our collection, use, storage, disclosure, retention, and other processing of personal information subjects us to a variety of laws and regulations, in the United States. Our legal exposure under data protection laws may expand as a result of new data protection laws and regulations or as a result of our ongoing growth. Such applicability could impact our internal business operations and data practices, and could limit the way we collect, use, retain, and otherwise process personal information, which could impact our business, including how we market and provide our products and services. Our business may be subject to laws regulating the use of marketing activities by telephone, email, mobile devices and the internet, including the CAN-SPAM Act of 2003 and the Telephone Consumer Protection Act of 1991. Compliance with these and the evolving privacy and data security requirements, such as developing and maintaining a robust privacy program, is rigorous and time-intensive and may increase our cost of doing business. In addition, we have in the past, and may in the future, be subject to litigation under state and federal privacy and data security laws and statutes by federal or state authorities and private litigants, including class actions, any of which could have a material adverse effect on our business. See Note 13 to our audited consolidated financial statements included in this Annual Report on Form 10-K.
Previous report
We also make public statements about our collection, use, and disclosure of personal information through our privacy policy and in other public facing policies or statements. Although we endeavor to ensure that these public statements are complete, accurate and fully implemented, we may at times fail to do so or be alleged to have failed to do so. We may be subject to potential regulatory or other legal action if such policies or statements are found to be deceptive, unfair or misrepresentative of our actual practices. Any concerns about our data privacy and security practices (even if unfounded), or any failure, real or perceived, by us to comply with our posted privacy policies or with any other legal or regulatory requirements, standards or other privacy or consumer protection-related laws and regulations applicable to us, could harm our business.
Previous report
The types of data that we collect and process are generally higher risk and/or sensitive, which comes with higher regulatory scrutiny and makes us a bigger target for malicious cyber threats.
Showing the first 40 of 65 passages. Open the source sections for the rest.
Reworded paragraphs (114)
Previous wording
You should carefully consider the risks and uncertainties described below, as well as the other information contained in this Annual Report on Form 10-K, including our consolidated financial statements and the related notes thereto and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Additional risks not presently known to us or that we currently deem immaterial may also affect us. If any of these risks occur, our business, financial condition or results of operations could be materially and adversely affected. Further, past financial performance may not be a reliable indicator of future performance and historical trends should not be used to anticipate results or trends in future periods.
Current wording
You should carefully consider the risks and uncertainties described below, as well as the other information contained in this Annual Report on Form 10-K, including our audited consolidated financial statements and the related notes thereto and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Additional risks not presently known to us or that we currently deem immaterial may also affect us. If any of these risks occur, our business, financial condition or results of operations could be materially and adversely affected. Further, past financial performance may not be a reliable indicator of future performance and historical trends should not be used to anticipate results or trends in future periods.
Previous wording
we operate in a highly regulated industry with extensive regulatory requirements, and the failure to comply with applicable regulations or regulatory requirements, standards or policies could subject us to significant monetary liabilities, fines and penalties, including loss of or limitations upon access to U.S. federal student loans, grants and military program benefits for our students, and otherwise have a material adverse impact on our business;
Current wording
we operate in a highly regulated industry with extensive regulatory requirements, and the failure to comply with applicable regulations or regulatory requirements, standards, or policies could subject us to significant monetary liabilities, Title IV repayment obligations, fines, and penalties, including loss of or limitations upon access to U.S. federal student loans, grants, and military program benefits for our students, and otherwise have a material adverse impact on our business;
Previous wording
we derived 88.6% of our cash basis revenue from Title IV funds in our most recent fiscal year, and if the University becomes ineligible to participate in Title IV programs, including due to the “90/10 Rule,” or participation is materially limited, our business may not be sustainable;
Current wording
we derived 88.6% of our cash basis revenue from Title IV and other designated federal education assistance funds in our most recent fiscal year, and if the University becomes ineligible to participate in Title IV programs, including due to the “90/10 Rule,” or participation is materially limited, our business may not be sustainable;
Previous wording
if our 90/10 Rule percentage is projected to exceed or exceeds 90% for a given fiscal year, we may be required to take measures to reduce the percentage of revenue that we derive from Title IV program funds, including by taking actions that reduce our revenue, increase our operating expenses, and/or increase our tuition, in each case perhaps significantly, or by making operational or programmatic changes, which may materially and adversely impact our business and financial condition;
Current wording
if our 90/10 Rule percentage is projected to exceed or exceeds 90% for a given fiscal year, we may be required to take measures to reduce the percentage of revenue that we derive from Title IV program funds, including by taking actions that reduce our revenue, increase our operating expenses, and/or increase our tuition, in each case perhaps significantly, or by making operational or programmatic changes, that could materially and adversely impact our business and financial condition;
Previous wording
“Borrower Defense to Repayment” regulations and “closed school loan discharge” regulations may subject us to significant repayment liability for certain discharged federal student loans, including with respect to the approximately 48,000 borrower defense applications the University received from the Department of Education beginning in June 2020 and continuing until April 2024, as well as potential additional pending claims in the Department’s possession of which the University has not been formally notified, and require us to be provisionally certified or post a letter of credit or other security, or result in the limitation or termination of eligibility of the University to participate in Title IV programs;
Current wording
“Borrower Defense to Repayment” regulations and “closed school loan discharge” regulations may subject us to significant repayment liability or other regulatory sanctions for discharged federal student loans with respect to the borrower defense applications the University has received from the Department of Education and with respect to additional pending claims in the Department of Education’s possession of which the University has not been formally notified, and may require us to be provisionally certified or post a letter of credit or other security, or result in the limitation or termination of eligibility of the University to participate in Title IV programs, any of which consequences could materially and adversely impact our business and financial condition;
Previous wording
successfully competing against current and future competitors, including traditional public and private degree-granting institutionally accredited colleges and universities, other proprietary degree-granting institutionally accredited schools and other alternatives to higher education, each of whom may offer programs that are wholly online and geared towards the needs of working adults;
Current wording
the potential impact on our business if we are unable to successfully compete against current and future competitors, including traditional public and private degree-granting institutionally accredited colleges and universities, other proprietary degree-granting institutionally accredited schools and other alternatives to higher education, each of whom may offer programs that are wholly online and geared towards the needs of working adults;
Previous wording
our ability to develop and maintain favorable awareness of the University among, and enroll and retain, students as well as structural changes in the marketing landscape;
Current wording
our ability to develop and maintain favorable awareness of the University among, and enroll and retain, students as well as adapt to structural changes in the marketing landscape;
Previous wording
our Tuition Price Guarantee program limits our ability to raise additional revenue from current students through tuition increases, and any changes to the Tuition Price Guarantee program could harm our reputation, enrollment numbers, retention rates and overall business and financial performance;
Current wording
our Tuition Price Guarantee and Locked-In Pricing Guarantee programs limit our ability to raise additional revenue from current students through tuition (or, in the case of the Locked-In Pricing Guarantee, resource fee) increases, and any changes to the Tuition Price Guarantee or Locked-In Pricing Guarantee programs could harm our reputation, enrollment numbers, retention rates and overall business and financial performance;
Previous wording
If we do not maintain existing, and develop additional, B2B relationships with employers, our business may be impaired.
Current wording
if we are unable to maintain and develop B2B relationships with employers, our business may be impaired;
Previous wording
If we fail to comply with the extensive regulatory requirements applicable to our business, we could face significant monetary liabilities, fines and penalties, including loss of or limitations upon access to U.S. federal student loans, grants and military program benefits for our students.
Current wording
Compliance with the extensive regulatory requirements applicable to our business can be costly and time consuming, and failure to comply could result in significant monetary liabilities, fines, and penalties, including loss of or limitations upon access to U.S. federal student loans, grants, and military program benefits for our students.
Previous wording
Higher Education Act (“Title IV”), which is the principal source of funding for students at the University. Most of our fiscal year 2025 consolidated net revenue was derived from the receipt of Title IV program funds disbursed to our students. We must also comply with statutes and regulations that govern the University’s administration of our students’ use of veterans’ education benefits or United States Department of Defense (the “Department of Defense” or “U.S. Department of Defense”) tuition assistance programs. See Item 1, “Business—Regulatory Environment.”
Current wording
Our operations are subject to extensive U.S. federal and state regulation applicable to providers of post-secondary education. The principal federal regulatory regime was established under the Higher Education Act and the regulations promulgated under the Higher Education Act by the Department of Education. Among other matters, these regulations govern the participation by the University in federal student financial aid programs under Title IV, which is the principal source of funding for students at the University. Most of our annual consolidated net revenue is derived from the receipt of Title IV program funds disbursed to our students. We must also comply with statutes and regulations that govern the University’s administration of our students’ use of veterans’ education benefits or Department of Defense tuition assistance programs. See Item 1, “Business—Regulatory Environment.”
Previous wording
To participate in Title IV programs, a post-secondary institution must be authorized by the appropriate state post-secondary agency or agencies in each state in which the institution operates, be accredited by an accrediting commission recognized by the Department of Education, be certified by the Department of Education as an eligible institution and offer at least one eligible program of education. The operations and programs of an institution may also be regulated by other state education agencies and additional specialized accrediting commissions. As a result of these requirements, we are subject to extensive regulation by the Department of Education, the HLC, which is our institutional accreditor, the education agencies of the states in which we operate, and specialized accrediting commissions. The applicable regulatory requirements cover nearly all phases of our operations, including educational program offerings, branch campus and classroom locations, instructional and administrative staff relations, administrative procedures, marketing and recruiting, compensation structures for certain employees, financial operations, including minimum financial responsibility calculations, other requirements for the eligibility of educational programs for federal student aid, the substantiation of credit hours awarded to students for their coursework, the eligibility of individual students for federal student aid, the amount of federal loans, federal Pell grants and other federal student aid that may be awarded, requirements affecting the timing of disbursement of federal student aid, payment of refunds to students who withdraw within allowable timeframes and the return to the Department of Education of federal student aid for such students, maintenance of restricted cash, acquisitions or openings of new schools, student accessibility, commencement of new or cessation of existing educational programs and changes in our corporate structure and ownership.
Current wording
To participate in Title IV programs, we must be authorized by the appropriate post-secondary agency or agencies in each state that we operate, be accredited by an accrediting commission recognized by the Department of Education, be certified by the Department of Education as an eligible institution and offer at least one eligible program of education. Our operations and programs may also be regulated by other state education agencies and additional specialized programmatic accrediting commissions. As a result of these requirements, we are subject to extensive regulation by the Department of Education, the HLC, our institutional accreditor, the post-secondary agencies of the states in which we operate, and specialized programmatic accrediting commissions. The applicable regulatory requirements cover nearly every phase of our operations, including educational program offerings, branch campus and classroom locations, instructional and administrative staff relations, administrative procedures, marketing and recruiting, compensation for certain employees, financial operations (e.g., minimum financial responsibility calculations), detection of fraudulent activity pertaining to student application and enrollment and financial aid, eligibility of students and educational programs for federal student aid, the substantiation of student credit hours, the amount of federal loans, grants, and other student aid that may be awarded and the timing of disbursement, payment of refunds to students who withdraw within allowable timeframes and the return to the Department of Education of federal student aid for such students, restricted cash maintenance, acquisitions or openings of new schools, student accessibility, and changes in our corporate structure and ownership.
Previous wording
The applicable statutes, regulations, standards and policies of the various regulatory agencies and accreditors frequently change and often are subject to interpretative uncertainty, particularly as they historically have been developed to govern the operations of traditional, academic term-based schools, which are prevalent in our industry, rather than on schools that follow a non-term academic delivery model, which is used by the University. Changes in, or new interpretations of, applicable statutes, regulations, standards or policies could have a material adverse effect on our ability to participate in and receive funds provided by federal student aid programs, as well as our accreditation, authorization to operate or grant degrees or other credentials in various states, the scope of our permissible activities, the costs of doing business and our ability to implement beneficial changes in our academic or business model. We cannot predict how the statutes, regulations, standards and policies administered by these agencies will be applied or interpreted in the future, or whether we will be able to comply with any future changes in these requirements.
Current wording
The applicable statutes, regulations, standards, and policies of the various regulatory agencies and accreditors frequently change and often are subject to interpretative uncertainty, particularly as they historically have been developed to govern the operations of traditional, academic term-based schools, which are prevalent in our industry, rather than schools like the University that follow a non-term academic delivery model. Changes in, or new interpretations of, applicable statutes, regulations, standards, or policies could have a material adverse effect on our ability to participate in and receive funds provided by federal student aid programs, as well as our accreditation, authorization to operate, or grant degrees or other credentials in various states, the scope of our permissible activities, the costs of doing business, and our ability to implement changes in our academic or business model. We cannot predict how the statutes, regulations, standards, and policies administered by these agencies will be applied or interpreted in the future, or whether we will be able to comply with any future changes in these requirements.
Previous wording
If we violate or fail to satisfactorily comply with applicable statutes, regulations, standards or policies, we may be subject to any of the following sanctions, among others, imposed by any one or more of the relevant regulatory agencies or accreditors:
Current wording
If we violate or fail to satisfactorily comply with applicable statutes, regulations, standards, or policies, we may be subject to any of the following sanctions, among others, imposed by one or more of the relevant regulatory agencies or accreditors, including: (i) monetary fines or penalties; (ii) limitations on, or termination of, our operations, including, but not limited to, our ability to offer new programs, change the length of our existing programs, increase enrollment levels, or grant degrees, diplomas and certificates; (iii) restrictions on, or revocations of, our accreditations, licenses, or other operating authority, including by the HLC or a programmatic accreditor; (iv) limitations on, or suspensions or termination of, the eligibility of our institution or of our education programs to participate in Title IV programs, military benefit programs, veteran education benefit programs or state financial aid programs; (v) imposition by the Department of Education of heightened cash monitoring, which could cause delays in the disbursement of Title IV program funds, or transfer from the Department of Education’s advance system of receiving Title IV program funds to its reimbursement system, under which a school must disburse its own funds to students and document the students’ eligibility for Title IV program funds before receiving such funds from the Department of Education; (vi) repayments of funds received under Title IV programs or state financial aid programs, including as a result of BDR claims (as defined below) or confirmed identity theft; (vii) requirements to post a letter of credit with the Department of Education; (viii) imposition of provisional certification by the Department of Education, which may include growth restrictions that prevent us from adding to or changing our locations and programs absent express approval from the Department of Education; (ix) other civil or criminal penalties; and (x) other forms of censure.
Previous wording
Any of the sanctions described above could have a material adverse effect on our business, financial condition and results of operations. In particular, if we become ineligible to participate in Title IV programs, or our participation is materially limited, our sources of revenue will become significantly more restricted and our business may not be sustainable. In addition to the potential financial implications, we may not be able to conduct our operations and our program offerings may in turn be significantly reduced. Furthermore, if we are charged with legal or regulatory violations, our reputation could be damaged, which could have a negative impact on our stock price, our enrollment and the willingness of third parties to conduct business with us. We cannot predict with certainty how these regulatory or accrediting requirements will be applied, or whether we will be able to comply with the applicable requirements in the future.
Current wording
Any of the sanctions described above could have a material adverse effect on our business, financial condition, and results of operations. In particular, if we become ineligible to participate in Title IV programs, or our participation is materially limited, our sources of revenue will become significantly more restricted and our business may not be sustainable. In addition to potential financial implications, we may not be able to conduct our operations and our program offerings may be significantly reduced. Furthermore, if we are accused of legal or regulatory violations, which has occurred in the past, our reputation could be damaged, which could have a negative impact on our stock price, our enrollment, or the willingness of third parties to conduct business with us. We cannot predict how these regulatory or accrediting requirements will be applied, or whether we will be able to comply with the applicable requirements in the future.
Previous wording
If the Department of Education were to limit, suspend, or terminate our eligibility or certification to participate in the Title IV programs or if it were to choose not to renew our certification in the future, our students could lose their access to Title IV program funds, our participation in Title IV programs would be restricted or terminated, or we could be required to accept significant limitations as a condition of our continued participation in Title IV programs.
Current wording
If the University fails to obtain recertification by the Department of Education when required, our participation in Title IV programs could be restricted or terminated, our students could lose their access to Title IV program funds, or we could be required to accept significant limitations as a condition of our continued participation in Title IV programs.
Previous wording
In addition, new federal regulations relating to certification and imposing additional requirements in PPAs may pose challenges to the University and increase the risk of regulatory noncompliance and a finding by the Department of Education that the University has not or cannot fully satisfy all required eligibility and certification standards. The new regulations, which became effective July 1, 2024, expand the grounds for placing an institution on provisional certification and identify new potential conditions on provisionally certified institutions. The regulations further added new requirements to an institution’s PPA including, among other things, restrictions on student transcript withholding and a prohibition on institutional policies and procedures that induce students to limit their amount of federal student aid. For certification decisions to which the new regulations are applicable, the regulations also require that the PPA be signed by entities with direct or indirect ownership of the institution and the power to exercise control over the institution, and require such co-signatories to assume liability for financial losses to the federal government related to the institution’s administration of Title IV programs. The entities required to become co-signatories include, but are not limited to, (i) entities with at least 50% control over an institution through direct or indirect ownership, by voting rights or by its right to appoint board members to an institution or any other entity, whether by itself or in combination with other entities or natural persons with which it is affiliated or related, or pursuant to a proxy or voting or similar agreement; (ii) entities with the power to block significant actions of an institution; (iii) entities that are the 100% direct or indirect interest holder of an institution; and (iv) certain entities that are required to submit financial statements to the Department of Education in connection with an institution.
Current wording
In addition, federal regulations relating to certification and imposing additional requirements in PPAs may pose challenges to the University and increase the risk of regulatory noncompliance and a finding by the Department of Education that the University has not or cannot fully satisfy all required eligibility and certification standards. These regulations expand the grounds for placing an institution on provisional certification, identify new potential conditions on provisionally certified institutions, and add requirements to an institution’s PPA including, among other things, restrictions on student transcript withholding and a prohibition on institutional policies and procedures that induce students to limit their amount of federal student aid. For certification decisions to which these regulations are applicable, the regulations would have further required that (i) the PPA be signed by entities with direct or indirect ownership of the institution and the power to exercise control over the institution and (ii) such co-signatories assume liability for financial losses to the federal government related to the institution’s administration of Title IV programs, however, in January 2026 the Department of Education agreed not to enforce the owner-entity signature requirement in response to legal challenge. While the rules may be revised and the scope and manner of their implementation and enforcement may vary or change, in the event that the University were unable to comply with the Department of Education’s regulations governing PPAs, this could have a material adverse effect on our business and the Department of Education could impose letter of credit requirements or take other adverse actions against the University up to and including termination of the University’s Title IV program participation.
Previous wording
If the Department of Education finds that the University has not fully satisfied all required eligibility and certification standards, the Department of Education could take adverse actions against the University, up to and including termination of the University’s Title IV program participation. Similarly, the Department of Education could renew our certification in the future, but restrict or delay our students’ receipt of Title IV funds, limit the number of students to whom we could disburse such funds, require us to post a substantial letter of credit, or place other conditions or restrictions on us. Since we derived 88.6% of our cash basis revenue from Title IV funds in our most recent fiscal year, if the University becomes ineligible to participate in Title IV programs, or participation is materially limited, our sources of revenue will become significantly more restricted and our business may not be sustainable. We cannot predict the timing or outcome of the future recertification application process. See “—If any of the education regulatory agencies that regulate us delay their approval of, or do not approve, any transaction involving us that constitutes a “change in control,” our ability to operate or participate in Title IV programs may be materially impaired.” We also cannot predict what terms and conditions may be imposed on the University as part of any recertification, or how such terms and conditions may affect the University’s ongoing participation in Title IV programs.
Current wording
If the Department of Education finds that the University has not fully satisfied all required eligibility and certification standards, the Department of Education could take adverse actions against the University, up to and including termination of the Title IV program participation of the University or one or more of its educational programs. Similarly, the Department of Education could renew our certification in the future, but restrict or delay our students’ receipt of Title IV funds, limit the number of students to whom we could disburse such funds, require us to post a substantial letter of credit, or place other conditions or restrictions on us. Since we derived 88.6% of our cash basis revenue from Title IV and other designated federal education assistance funds in our most recent fiscal year, if the University becomes ineligible to participate in Title IV programs, or participation is materially limited, our sources of revenue will become significantly more restricted and our business may not be sustainable. We cannot predict the timing or outcome of the future recertification application process. See “—If an education regulatory agency that regulates us delays or denies approval of a transaction involving us that constitutes a “change in control,” our ability to operate or participate in Title IV programs may be materially impaired.” We also cannot predict what terms and conditions may be imposed on the University as part of any recertification, or how such terms and conditions may affect the University’s ongoing participation in Title IV programs.
Previous wording
In conducting oversight of the administration of the federal student aid program by Title IV-participating institutions, the Department of Education relies on compliance reviews, including program reviews conducted by Department of Education staff, mandatory annual compliance audits by independent audit firms, and audits and investigations conducted by the Department of Education’s Office of Inspector General. For example, we are currently subject to an unresolved off-site program review that began in June 2021 in which the Department of Education is asserting that the University owes liabilities for closed school loan discharges for three former students in the amount of approximately $44,000, which determination is presently on appeal. See“—Closed School Loan Discharge” regulations may subject us to significant repayment liability for certain student loans pursuant to Title IV programs and require us to be provisionally certified or to post a letter of credit or other security, or may result in the limitation or termination of eligibility of the University to participate in Title IV programs.” We have experienced in the past, and are likely to experience in the future, additional program reviews or audits in addition to the annual compliance audit process.
Current wording
In conducting oversight of the administration of the federal student aid program by Title IV-participating institutions, the Department of Education relies on compliance reviews, including program reviews conducted by Department of Education staff, mandatory annual compliance audits by independent audit firms, and audits and investigations conducted by the OIG. For example, in connection with a Department of Education program review, we have appealed an Administrative Law Judge ruling that the University owes liabilities for CSLDs for certain former students in the amount of approximately $44,000. See“—“Closed School Loan Discharge” regulations may subject us to significant repayment liability for certain student loans pursuant to Title IV programs, require us to be provisionally certified or to post a letter of credit or other security, or result in the limitation or termination of the University’s eligibility to participate in Title IV programs.” We could also be subject to program reviews, audits, or other oversight actions by the Department of Education, the OIG, or other oversight agencies with respect to alleged or actual noncompliance with the array of statutory and regulatory requirements applicable to Title IV-participating institutions. For example, we could be subject to program reviews or other compliance reviews resulting from efforts by unqualified third parties to apply to and enroll in our programs and obtain Title IV program funds, and from attempts by outside parties to perpetrate fraud in connection with the award and disbursement of Title IV program funds, including as a result of identity theft. See “—If our institution fails to maintain adequate systems and processes to detect and prevent fraudulent activity in student enrollment and financial aid, our institution may lose the ability to participate in Title IV programs, Department of Defense military tuition assistance programs, or Department of Veterans Affairs veterans’ education benefits programs, or have participation in these programs conditioned or limited, may face claims from third parties, may be required to repay Title IV and other federal program funds, or may face fines or other penalties.” We have experienced in the past, and are likely to experience in the future, program reviews or audits in addition to the annual compliance audit process.
Previous wording
We are also subject to ongoing oversight actions by other regulatory agencies, including, but not limited to, those conducted by our institutional accreditor, the HLC, other agencies that accredit programs that we offer, our state authorizing agencies, the Federal Trade Commission (the “FTC”), the Department of Defense, the United States Department of Veterans Affairs (the “U.S. Department of Veterans Affairs” or “Department of Veterans Affairs”), the state approving agencies that approve programs for military program benefits, and state attorneys general. For example, as a result of past resolutions of certain government investigations, we are subject to ongoing obligations and prohibitions against misrepresentations in certain advertising practices that were a focus of an FTC investigation, and rules of engagement for University-related activities on military installations that were a focus of a state attorney general investigation (each as further described in Item 1, “Business—Regulatory Environment”), as well as other notification, recordkeeping and reporting requirements. Actual or perceived non-compliance with these ongoing or other obligations could prompt the FTC or a state attorney general to seek fines and penalties via an enforcement action against the University. The imposition of any such fines or penalties could have a material adverse effect on our business and operations. See Item 1, “Business—Regulatory Environment—Regulation of Student Financial Aid Programs—Federal Trade Commission Investigation” and “—Attorney General Investigations.”
Current wording
We are also subject to ongoing oversight actions by other regulatory agencies, including, but not limited to, those conducted by HLC, our institutional accreditor, other agencies that accredit programs that we offer, our state authorizing agencies, the FTC, the Department of Defense, the Department of Veterans Affairs, state agencies that approve programs for military program benefits, and state attorneys general. Actual or perceived non-compliance with ongoing or other obligations could prompt the FTC or a state attorney general to seek fines and penalties via an enforcement action against the University. The imposition of any such fines or penalties could have a material adverse effect on our business and operations. See Item 1, “Business—Regulatory Environment—Regulation of Student Financial Aid Programs—Federal Trade Commission Investigation” and “—Attorney General Investigations.”
Previous wording
In some circumstances of non-compliance or alleged non-compliance, we may be subject toqui tamlawsuits under the Federal False Claims Act or various, similar state false claim statutes. In these actions, private plaintiffs seek to enforce remedies under the Federal False Claims Act on behalf of the federal government and, if successful, are entitled to recover their costs and to receive a portion of any amounts recovered by the federal government in the lawsuit. These lawsuits can be prosecuted by a private plaintiff, even if the Departments of Education and Justice do not agree with plaintiff’s theory of liability. We have been subject to, and settled, qui tam lawsuits in the past and while we cannot predict the size or frequency of similar claims that we may face in the future, any resulting liability may be material. The broad-based scrutiny and related investigations by state and federal regulators can also lead to follow-on consumer class actions filed by private attorneys on behalf of current and former students. Such actions often adopt the same theories of liability pursued by the regulators and seek additional relief under the premise that the student consumers were not made whole by the regulator’s settlement. In addition, investigations by and settlements with state and federal regulators can also lead to securities-related class actions that take a similar approach of adopting the regulators’ allegations and/or findings and seeking relief based on alleged losses to shareholders.
Current wording
In some circumstances of actual or alleged non-compliance, we may be subject toqui tamlawsuits under the Federal False Claims Act or similar state false claim statutes. In these actions, private plaintiffs seek to enforce remedies under the Federal False Claims Act on behalf of the federal government and, if successful, are entitled to recover their costs and to receive a portion of any amounts recovered by the federal government in the lawsuit, even if the Departments of Education and Justice do not agree with plaintiff’s theory of liability. We have been subject to, and settled, qui tam lawsuits in the past and while we cannot predict the size or frequency of similar claims that we may face in the future, any resulting liability may be material. The broad-based scrutiny and related investigations by state and federal regulators can also lead to follow-on consumer class actions filed by private attorneys on behalf of current and former students. Such actions often adopt similar theories of liability pursued by the regulators and seek additional relief under the premise that the student consumers were not made whole by the regulator’s settlement. In addition, investigations by and settlements with state and federal regulators can also lead to securities-related class actions that take a similar approach of adopting the regulators’ allegations and/or findings and seeking relief based on alleged losses to shareholders.
Previous wording
Claims and lawsuits brought against us, even if they are without merit, may also result in adverse publicity, damage our reputation, negatively affect the market price of our stock, adversely affect our student enrollments, and discourage third parties from doing business with us. Even if we adequately address the issues raised by any such proceeding and successfully defend against it, we may have to devote significant financial and management resources to address these issues, which could materially harm our business.
Current wording
Claims and lawsuits brought against us, even if they are without merit, may also result in adverse publicity, damage our reputation, negatively affect our stock price, adversely affect our student enrollments, and discourage third parties from doing business with us. Even if we adequately address the issues raised by any such proceeding and successfully defend against it, we may have to devote significant financial and management resources to address these issues, which could materially harm our business.
Previous wording
Under the Higher Education Act, the Department of Education’s regulations specify acts or omissions of a school that a student loan borrower may assert as a defense to repayment (“BDR” or “BDR claim”) of a federal student loan and thereby seek to obtain a discharge and refund of such loan. Under the rules governing BDR claims, the Department of Education has indicated that it believes it may also assert such a claim on behalf of a student borrower. Additionally, the Department of Education may initiate a recoupment proceeding against a school to collect loan amounts that are discharged or refunded as the result of a BDR claim. These rules have been significantly revised three times in recent years. Currently, a complex framework of rules applies different loan relief and recoupment standards and procedures based upon the date that the loan in question was first disbursed. See Item 1, “Business—Regulatory Environment—Regulation of Student Financial Aid Programs—Borrower Defense to Repayment” for further discussion of the 1995, 2017, 2020, and (enjoined) 2023 BDR rules (each, a “BDR Rule” and collectively, the “BDR Rules”) and relevant litigation, legal challenges, and recent amendments to the Higher Education Act regarding the BDR regulatory framework.
Current wording
Under the Higher Education Act, the Department of Education’s regulations specify acts or omissions of a school that a student loan borrower may assert as a defense to repayment (“BDR” or “BDR claim”) of a federal student loan and thereby seek to obtain a discharge and refund of such loan. Additionally, the Department of Education may initiate a recoupment proceeding against a school to collect loan amounts that are discharged or refunded as the result of a BDR claim. The BDR Rules have been significantly revised in recent years resulting in a complex framework of rules applying up to four iterations of loan relief and recoupment standards and procedures based upon the date of loan disbursement. The OBBB Act delayed the applicability of the most recent iteration of the BDR Rules and that iteration has also been enjoined by court order. See Item 1, “Business—Regulatory Environment—Regulation of Student Financial Aid Programs—Borrower Defense to Repayment” for further discussion of the BDR Rules and relevant litigation, legal challenges, and recent amendments to the Higher Education Act regarding the BDR regulatory framework.
Previous wording
Beginning in June 2020 and continuing until April 2024, the University received approximately 48,000 borrower defense applications from the Department of Education as part of the fact-finding process by which the Department of Education notifies institutions regarding BDR claims received from student borrowers and provides institutions an opportunity to respond. The University provided substantive, timely responses related to each such application and other requested evidence to the Department of Education. While the University believes it has both factual and procedural defenses to the claims made in the applications regardless of which BDR Rules apply, we cannot predict how the Department of Education will evaluate the evidence and adjudicate each claim. Additionally, approximately one-third of the applications received by the University were dated on or before June 22, 2022, which would subject the underlying loans associated with those BDR claims to automatic discharge under the terms of the settlement in the Sweet class-action lawsuit and potentially prevent such claims from serving as the basis of a recoupment action by the Department of Education against us. See Item 1, “Business—Regulatory Environment—Regulation of Student Financial Aid Programs—Borrower Defense to Repayment.” Nearly all of the remaining applications received by the University were dated between June 23, 2022 and November 15, 2022. The Sweet settlement provided that BDR claims filed between June 22, 2022 and November 15, 2022 would be adjudicated no later than January 28, 2026, or would be automatically discharged. The federal courts overseeing the Sweet settlement have referenced the Department of Education’s assurances that it will not rely on automatic discharges under the Sweet settlement as the basis upon which to recoup such discharged loans from institutions. Accordingly, any such automatic discharges would be potentially unable to serve as the basis of a recoupment action by the Department of Education against us.
Current wording
Between June 2020 and April 2024, the University received approximately 48,000 borrower defense applications from the Department of Education, which the University responded to and believes are subject to resolution under the Sweet class action settlement. Certain of these BDR claims could be subject to automatic discharge under the terms of the Sweet settlement, which could potentially prevent such claims from serving as the basis of a recoupment action by the Department of Education against us, while others were subject to automatic discharge if not adjudicated prior to the January 2026 deadline established in connection with that settlement. Further, the federal courts overseeing Sweet have referenced the Department of Education’s assurances that it will not rely on automatic discharges of BDR claims under the Sweet settlement as the basis upon which to recoup such discharged loans from institutions. Accordingly, while there remains significant uncertainty, any such automatic discharges would be potentially unable to serve as the basis of a recoupment action by the Department of Education against us. See Item 1, “Business—Regulatory Environment—Regulation of Student Financial Aid Programs—Borrower Defense to Repayment.”
Previous wording
In September 2023, the Department of Education announced that it had approved more than 1,200 BDR claims and discharged nearly $37 million federal student loans from borrowers who made claims regarding the University’s “Let’s Get to Work” ad campaign, which ran from 2012 to 2014. The Department of Education announced it had determined that the University substantially misrepresented its relationships with outside companies in the ad campaign. The Department of Education further indicated its intent to commence a recoupment effort against the University for the amounts of the discharged loans, but the Department of Education has not yet commenced any such action. While the BDR claims that were discharged appear to have also been subject to automatic discharge under the terms of the Sweet settlement, and the settlement itself could not serve as the basis of a recoupment action by the Department of Education under its stated position, the Department of Education may still attempt to seek recoupment of such discharged payments in the future, and we cannot predict the timing or scale of such recoupment efforts if pursued. Furthermore, based on preliminary information available to the University, we believe there are a substantial number of additional pending BDR claims with respect to the University that have not yet been provided to the University by the Department of Education and of which the University has not been formally notified. If such claims are adjudicated and the Department of Education seeks recoupment from the University, such recoupment could have a material adverse impact on our business.
Current wording
Additionally, the Department of Education announced in September 2023 that it approved more than 1,200 BDR claims and discharged nearly $37 million in federal student loans from borrowers who made claims regarding a 2012-2014 University ad campaign. The Department of Education further indicated its intent to commence a recoupment effort against the University for the amounts of the discharged loans, but no such action has been commenced. While the BDR claims that were discharged appear to have also been subject to automatic discharge under the terms of the Sweet settlement, and the settlement itself could not serve as the basis of a recoupment action by the Department of Education under its stated position, the Department of Education may still attempt to seek recoupment of such discharged payments in the future, and we cannot predict the timing or scale of such recoupment efforts if pursued.
Previous wording
Additionally, the BDR Rules require the University to dedicate significant resources to navigating as many as four different versions of regulatory standards and processes. The University also maintains reporting procedures to comply with the financial responsibility provisions related to BDR, under which the Department of Education may require the University to post a letter of credit or other financial protection in the event of certain triggering events. See Item 1, “Business—Regulatory Environment—Borrower Defense to Repayment” and “Regulation of Student Financial Aid Programs—Standards of Financial Responsibility.”
Current wording
In December 2025, the University began receiving additional borrower defense applications from the Department of Education, which are dated after November 15, 2022 and therefore not part of the Sweet settlement. The University has submitted responses or intends to submit a response to these BDR Claims. While the University believes it has both factual and procedural defenses to the claims made in the applications, we cannot predict how the Department of Education will evaluate the evidence and adjudicate each claim. Furthermore, based on information available to the University, we believe there are a substantial number of additional pending BDR claims with respect to the University that have not yet been provided to the University by the Department of Education. If such claims are adjudicated and the Department of Education seeks recoupment from the University, such recoupment could have a material adverse impact on our business. Additionally, the BDR Rules require the University to dedicate significant resources to navigating the various iterations of the BDR regulatory standards and processes. The University also maintains reporting procedures to comply with the financial responsibility provisions related to BDR, under which the Department of Education may require the University to post a letter of credit or other financial protection in the event of certain triggering events. See Item 1, “Business—Regulatory Environment—Regulation of Student Financial Aid Programs—Borrower Defense to Repayment” and “Regulation of Student Financial Aid Programs—Standards of Financial Responsibility.”
Previous wording
Individual BDR applications are submitted by student loan borrowers to the Department of Education, rather than to institutions directly, and the Department of Education has asserted that the BDR Rules provide for group claims without an underlying individual BDR application from a borrower in certain circumstances. It is unclear how many individual or group BDR claims have been approved or denied by the Department of Education, or how many individual or group BDR claims will be asserted, approved or denied in the future. It is further unknown whether and to what extent the Department of Education may seek to recoup the amount of discharged or refunded loans or impose such liability against the University, whether our legal and factual defenses with respect to such BDR claims and recoupment proceedings or imposition of liability would succeed, or even which procedures will ultimately govern the BDR resolution process. Additionally, the University could receive negative coverage in the media regarding BDR claims that could impede the recruitment of students. See Item 1, “Business—Regulatory Environment—Regulation of Student Financial Aid Programs—Borrower Defense to Repayment.” While we cannot predict the outcome of any current, pending or potential future claims, they could have a material adverse effect on our business, financial performance and operations.
Current wording
The current BDR Rules and regulations could result in significant risks for our business and the application of the various BDR standards may be unclear or subject to interpretation in a manner that is adverse to us and unpredictable. If a significant amount of BDR claims are adjudicated by the Department of Education and the Department of Education seeks recoupment from the University for such claims, such recoupment could have a material adverse impact on our business. Furthermore, the potentially significant discretion vested in the Department of Education to administer the regulations, including whether to seek recoupment of discharged loan amounts or require letters of credit from institutions, and the subjective judgments regarding the triggers for debt relief may result in unexpected outcomes that materially and adversely affect our business and liquidity. In addition, how we respond to state or federal regulatory action or private lawsuits may be materially impacted because of the potentially significant consequences of an adverse judgment or finding in such matters on the subsequent adjudication of BDR claims. Further, individual BDR applications are submitted by student loan borrowers to the Department of Education, rather than to institutions directly, and the Department of Education has asserted that the BDR Rules provide for group claims without an underlying individual BDR application from a borrower in certain circumstances. It is unclear how many individual or group BDR claims have been approved, or denied by the Department of Education, or how many individual or group BDR claims will be asserted, approved or denied in the future. It is further unknown whether and to what extent the Department of Education may seek to recoup the amount of discharged or refunded loans or impose such liability against the University, whether our legal and factual defenses with respect to such BDR claims and recoupment proceedings or imposition of liability would succeed, or even which procedures will ultimately govern the BDR resolution process. Additionally, the University could receive negative coverage in the media regarding BDR claims that could impede the recruitment of students. While we cannot predict the outcome of any current, pending or potential future claims, they could have a material adverse effect on our business, financial performance, and operations. See Item 1, “Business—Regulatory Environment—Regulation of Student Financial Aid Programs—Borrower Defense to Repayment.”
Previous wording
Institutions must maintain systems and processes to identify and prevent fraudulent applications for enrollment and financial aid. We have been the target of fraudulent and abusive activity, including related to efforts by unqualified third parties to apply to and enroll in our programs and obtain Title IV program funds, and believe that the risk to us of outside parties attempting to perpetrate fraud in connection with the award and disbursement of Title IV program funds, including as a result of identity theft, is heightened due to our being an almost exclusively online education provider. In recent periods, we, and other institutions like us, have experienced a measurable increase in these types of suspicious activities resulting in greater numbers of fraudulent applications and enrollments, including by persons receiving the Title IV funds. Accordingly, we have implemented additional checks and balances to supplement our processes aimed at ensuring that only qualified persons apply to and enroll in our programs and seek or obtain the Title IV program funds. The Department of Education recently issued new guidance regarding institutions’ responsibilities to prevent fraud and protect the integrity of the Title IV programs. If the systems and processes that our institution has established to detect and prevent fraud, or our administration of Title IV programs, military tuition assistance, or veterans’ education benefits are deemed inadequate or noncompliant in connection with preventing these suspicious activities, the Department of Education may find that our institution has failed to comply with Title IV requirements, including but not limited to the Department of Education’s administrative capability requirements. See “—If we do not comply with the Department of Education’s administrative capability standards, we could suffer financial penalties, be required to accept other limitations in order to continue participating in the Title IV programs, or lose our eligibility to participate in the Title IV programs.” Any significant failure to adequately detect fraudulent activity related to student enrollment and financial aid could cause us to fail to meet accreditor standards, or could subject us to complaints or claims by affected third parties. Furthermore, accrediting agencies that evaluate institutions offering online programs require such institutions to have processes to establish that a student who registers for such a program is the same student who participates in and receives credit for such program. Our failure to meet the requirements of the Department of Education could result in audits, investigations, and adverse findings and recommendations by its Office of Inspector General, in the assertion of liabilities by the Department of Education for the return of Title IV funds or the loss of accreditation, which could result in the loss of our ability to participate in Title IV programs or other federal assistance programs or in enforcem…
Excerpt shortened here; the source contains the full paragraph.
Current wording
Institutions must maintain systems and processes to identify and prevent fraudulent applications for enrollment and financial aid. We have been the target of fraudulent and abusive activity, including efforts by unqualified third parties to apply to and enroll in our programs and obtain Title IV program funds. We believe that we face heightened risk as a predominantly online education provider from third parties attempting to perpetrate fraud in connection with the award and disbursement of Title IV program funds, including because of identity theft. We, and other institutions like us, have experienced a measurable increase in these types of suspicious activities resulting in increases in fraudulent applications, and enrollments, including by persons receiving Title IV funds. Accordingly, we have enhanced our control environment to help ensure that only qualified students are able to enroll in our programs and receive Title IV program funds.
Previous wording
“Closed School Loan Discharge” regulations may subject us to significant repayment liability for certain student loans pursuant to Title IV programs and require us to be provisionally certified or to post a letter of credit or other security, or may result in the limitation or termination of the University’s eligibility to participate in Title IV programs.
Current wording
“Closed School Loan Discharge” regulations may subject us to significant repayment liability for certain student loans pursuant to Title IV programs, require us to be provisionally certified or to post a letter of credit or other security, or result in the limitation or termination of the University’s eligibility to participate in Title IV programs.
Previous wording
The Higher Education Act and related Department of Education regulations provide that upon the closure of an institution participating in Title IV programs, including any campus location thereof, certain students who had attended that institution or location may be eligible to obtain a “closed school loan discharge” of their federal student loans if they withdraw from the closed school within a prescribed timeframe and do not complete their educational programs through transfer or teach-out with another postsecondary institution. If a loan is discharged on these grounds, then the Department of Education may seek recoupment of the discharged amount from the responsible institution. In December 2024, following a program review and related administrative proceeding, the University was found liable for recoupment for closed school loan discharges for three student borrowers in the amount of approximately $44,000. The University has appealed this decision to the Secretary of the Department of Education, and the ultimate outcome of the proceedings is uncertain. Although this liability is de minimis, the outcome of the proceeding, along with the evolving regulations governing closed school loan discharges, could have potential implications with respect to student borrowers who attended any of the substantial number of physical campuses and learning centers that the University has closed in recent years. These closures were made in connection with its Campus Footprint Initiative, where the University worked closely with its regulatory oversight bodies and students to adhere to the University’s commitment to ensure that every impacted student would have the opportunity to complete their education program at their location or attend online at their choice. See Item 1, “Business—Regulatory Environment—Defense to Repayment,” “—Regulation of Student Financial Aid Programs—Closed School Loan Discharge” and “Regulation of Student Financial Aid Programs—Branching and Classroom Locations.” The University is not aware of any other closed school loan discharges that have been approved by the Department of Education in regard to the University’s closed locations. If, in the future, other discharges are approved and the number of such discharges is substantial, the impact on the terms of the University’s participation in Title IV programs or on the University’s financial condition could be material and adverse.
Current wording
The Higher Education Act and related Department of Education regulations provide that upon the closure of an institution participating in Title IV programs, including any campus location thereof, certain students who had attended that institution or location may be eligible to obtain a CSLD of their federal student loans if they withdraw from the closed school within a prescribed timeframe and do not complete their educational programs through transfer or teach-out with another post-secondary institution. If a loan is discharged on these grounds, the Department of Education may seek recoupment of the discharged amount from the responsible institution. Commencing in June 2021, the Department of Education conducted an off-site program review focused on possible liabilities for CSLDs related to the University’s closing of various locations. Following the Department of Education’s issuance of a final program review determination in September 2022 and a subsequent administrative appeal, an Administrative Law Judge ruled in December 2024 that the University owes liabilities for CSLDs for three student borrowers in the amount of approximately $44,000. The University has appealed this decision to the Secretary of Education, and the ultimate outcome of the proceedings is uncertain. Although this liability is de minimis, the outcome of the proceedings, together with the evolving regulations governing CSLDs, could have implications for student borrowers who attended the substantial number of our physical campuses and learning centers that have closed in recent years. In connection with those closures, we worked closely with regulatory oversight bodies and students to help ensure that each affected student had the opportunity to choose whether to complete their educational program at their location or to transition to online study. The University has not received data on the number of CSLDs that have been, or may be, approved by the Department of Education in regard to the University’s closed locations. See Item 1, “Business—Regulatory Environment—Regulation of Student Financial Aid Programs—Borrower Defense to Repayment,” “—Regulation of Student Financial Aid Programs—Closed School Loan Discharge” and “—Regulation of Student Financial Aid Programs—Branching and Classroom Locations.” We are not aware of any other CSLDs approved by the Department of Education for our closed locations. If, in the future, other CSLDs are approved and the number is substantial, the impact on the terms of our participation in Title IV programs or financial condition could be material and adverse.
Previous wording
Recent action by Congress that revised the laws governing federal student financial aid programs, including changes to the level of federal student aid funding available to higher education students and to the requirements educational programs must meet to qualify for such funding, could reduce our enrollment and revenue, and increase our costs of operation.
Current wording
Recent action by Congress that resulted in revisions to the laws governing federal student financial aid programs, including the level of federal student aid funding available and the earnings-based accountability requirements that programs must meet to qualify for such funding, could materially impact our enrollment, revenue, and costs of operation.
Previous wording
The U.S. Congress must periodically reauthorize the Higher Education Act and annually determine the funding level for each Title IV program. The most recent reauthorization of the Higher Education Act expired September 30, 2013, but Title IV student financial aid programs remain authorized and functioning. However, as part of the annual federal budget reconciliation process, on July 4, 2025, amendments to the Higher Education Act revising certain federal student aid program provisions were signed into law by President Trump as part of the OBBB. The recent amendments, which generally take effect in July 2026, include provisions that will limit or reduce the amount of federal student aid funding that may be available to some higher education students and that impose new accountability standards on institutions. For example, the recent amendments may reduce the amount of federal student loan funding available to graduate students and to the parents of student borrowers, except during a limited timeframe for current borrowers. The recent amendments also create new accountability standards conditioning the Federal Direct Loan Program eligibility of educational programs upon compliance with benchmarks that compare former students’ median earnings after completion to the median earnings of working adults with lesser credentials. Individual programs (other than undergraduate certificate programs) will lose federal direct loan eligibility if, in two out of three consecutive years, the median earnings (as determined by the Department of Education) of the program’s student cohort who received Title IV funds and graduated four years prior falls below the median earnings of working adults aged 25 to 34 who are not enrolled in an institution of higher education and who have only a high school diploma (for undergraduate degree programs) or only a bachelor’s degree (for graduate and professional programs). See Item 1, “Business—Financial Aid Programs.” We are continuing to evaluate this complex new earnings accountability requirement, and it is anticipated that the Department of Education will publish further implementing regulations. The Department of Education published a notice on July 25, 2025 of its intention to establish two negotiated rulemaking committees to prepare regulations that will implement the recent amendments to the Higher Education Act under the OBBB. The first committee, RISE, reached consensus in early November 2025 on the entire package of student loan-related changes. The Department has indicated their intention to publish proposed regulations on these federal student loan-related changes in early 2026. The second committee, AHEAD, is scheduled to hold sessions in December 2025 and January 2026, and is expected to consider changes to institutional and programmatic accountability, the Pell Grant
Current wording
Congress must periodically reauthorize the Higher Education Act and annually determine the funding level for each Title IV program. The most recent reauthorization of the Higher Education Act expired in September 2013, but Title IV student financial aid programs remain authorized and functioning. The Department of Education has recently promulgated regulations implementing the OBBB’s amendments to the Higher Education Act revising certain federal student aid program provisions, including provisions that limit or reduce the amount of federal student aid funding that may be available to some higher education students and that impose new accountability standards on institutions. See Item 1, “Business—Regulatory Environment—Regulation of Student Financial Aid Programs—Recent Department of Education Rulemaking Initiatives.”
Previous wording
Program, and other changes to the Title IV programs. The Department of Education may also initiate additional rulemaking proceedings. Accordingly, the impact of the recent amendments to the Higher Education Act and of ongoing, pending, and future regulatory and policy changes resulting from those amendments, including with respect to the new accountability requirement conditioning the federal direct loan eligibility of our programs, cannot be predicted, and could have a material adverse effect on our business, financial condition and results of operations.
Current wording
The impact of the recent amendments to the Higher Education Act and ongoing, pending, and future regulatory and policy changes resulting from those or future amendments, including with respect to the new earnings-based accountability requirements, cannot be predicted, and could have a material adverse effect on our business, financial condition and results of operations.
Previous wording
any failure to comply with the Department of Education’s “gainful employment” metrics and financial transparency regulations could limit the programs we can offer students, the Title IV eligibility of the impacted programs and/or increase our cost of operations;
Current wording
Failure to comply with the new earnings-based accountability measures or any related reporting of low-earning programs could limit the programs we can offer students and the Title IV eligibility of the impacted programs, which could materially impact our enrollment, revenue, or costs of operation.
Previous wording
Our ability to satisfy the gainful employment metrics for certain of our programs will be subject to some extent on factors outside of our control, including, but not limited to, general economic conditions affecting our graduates, changes in labor markets, increases in student borrowing levels, increases in interest rates, changes in the federal poverty income levels, and changes in the percentage of our former students who are current in repayment of their student loans. Additionally, certain programs we offer that typically lead to lower-paying, service-oriented professions may be unable to satisfy the gainful employment metrics and have to be discontinued in order for the University to maintain Title IV eligibility. Additionally, future enrollments could also be impacted if students were required by the transparency rule to acknowledge that the program they are interested in has been known to leave students with high debt burdens. Even if we were able to correct any deficiency in the gainful employment metrics in a timely manner so that the impacted program did not lose Title IV eligibility, the disclosure requirements associated with a program’s failure to meet at least one metric may adversely affect our reputation. Each of these impacts could have a material adverse effect on our business, financial condition and results of operations. See Item 1, “Business—Regulatory Environment—Regulation of Student Financial Aid Programs—Gainful Employment and Financial Value Transparency.” In addition, it is uncertain whether or how the Department of Education will modify the current gainful employment and financial value transparency rules as a result of the recent amendments to the Higher Education Act introducing the new program eligibility requirements based on student earning outcomes, or for other purposes. See “—Recent action by Congress that revised the laws governing federal student financial aid programs, including changes to the level of federal student aid funding available to our students and to the requirements educational programs must meet to qualify for such funding, could reduce our enrollment and revenue, and increase our costs of operation.”
Current wording
Even if we were able to correct any deficiency in the accountability measure in a timely manner so that the impacted program did not lose Title IV eligibility, potential disclosure requirements may adversely affect our reputation, which could materially impact our enrollments, revenue, and costs of operation. Each of these impacts could have a material adverse effect on our business, financial condition and results of operations.
Previous wording
Further action by Congress to revise the laws governing federal student financial aid programs, including changes applicable only to proprietary educational institutions, could reduce our enrollment and revenue, and increase our costs of operation.
Current wording
Further action by Congress to revise the laws governing federal student financial aid programs, including changes applicable only to proprietary educational institutions, could materially impact our enrollments, revenue, and costs of operation.
Previous wording
Congress continues to engage in discussion and activity regarding reauthorizing the Higher Education Act, but political and policy differences have prevented legislative progress, creating the potential for additional future amendments to the Higher Education Act in the interim, and making timing unpredictable and the terms of any eventual full reauthorization difficult to forecast. Because the significant majority of our revenue is derived from Title IV programs, any legislative changes to Title IV programs, whether in connection with a reauthorization of the Higher Education Act or in other amendments, including any changes that affect the level of funding or the eligibility of the University or its students to participate in Title IV programs or that require us to modify our practices in ways that could increase our administrative or operating costs, could have a material adverse effect on our enrollment, business, results of operations and financial condition.
Current wording
Congress continues to discuss Higher Education Act reauthorization; however, political and policy differences have prevented legislative progress and created opportunity for additional amendments to the Higher Education Act in the interim, which brings unpredictability to the timing and terms of an eventual full reauthorization. Since a significant majority of our revenue is derived from Title IV programs, any legislative changes to Title IV programs, whether in connection with reauthorization of the Higher Education Act or other amendments, including any changes impacting the funding level or eligibility of the University or its students to participate in Title IV programs or that require us to modify our practices in ways that could increase our administrative or operating costs, could have a material adverse effect on our enrollment, business, results of operations, and financial condition.
Previous wording
Shifts in higher education policy at the federal and state levels could have a material adverse effect on our business or render our current business impractical or unsustainable.
Current wording
Shifts in higher education policy at the federal and state levels could materially impact our business or even render our current business impractical or unsustainable.
Previous wording
Shifts in higher education policy at the federal or state levels occur from time to time. Among other things, policy changes can increase the risk of new legislation, and of changes in and new interpretations of, and more aggressive enforcement of, existing statutes, regulations, standards or policies. They may also lead to the imposition of new terms and conditions of participation that could limit, perhaps materially, the eligibility of proprietary schools, such as the University, to participate in Title IV student financial aid programs, as well as other aid programs that benefit our students. While some proposals that have been made in the past require congressional action, others could be taken via executive action. In addition, state governors, legislatures and attorneys general could negatively influence public policy initiatives, privacy and tax policy developments, investigative demands and regulatory efforts against proprietary higher education institutions. The passage of legislation, or executive or regulatory actions on higher education, at both the federal and state level, could have a material adverse effect on our business, financial condition and results of operation, or render our business impractical or unsustainable.
Current wording
Shifts in higher education policy at the federal or state levels occur from time to time. Among other things, policy changes can increase the risk of new legislation and changes in, new interpretations of, and more aggressive enforcement of existing statutes, regulations, standards, or policies. Such shifts may also lead to the imposition of new terms and conditions of participation that could limit, perhaps materially, the eligibility of proprietary institutions, such as the University, to participate in Title IV student financial aid programs, as well as other aid programs that benefit our students. While some past proposals require congressional action, others could be taken via executive action. In addition, state governors, legislatures, and attorneys general could influence public policy initiatives, privacy and tax policy developments, investigative demands, and regulatory efforts against proprietary institutions. The passage of legislation, or executive or regulatory actions on higher education, at both the federal and state level, could have a material adverse effect on our business, financial condition, and results of operations, or even render our business impractical or unsustainable.
Previous wording
If we do not meet specific financial responsibility standards established by the Department of Education, we may be required to post a letter of credit or accept other limitations in order to continue participating in Title IV programs, or we could lose our eligibility to participate in Title IV programs.
Current wording
If we do not meet the Department of Education’s financial responsibility standards, we could be required to post a letter of credit or accept other limitations to continue participating in Title IV programs, or even lose our eligibility to participate in Title IV programs.
Showing the first 40 of 114 pairs. Open the source sections for the rest.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
The Department of Education recently issued revised guidance regarding institutions’ responsibilities to prevent fraud and protect the integrity of the Title IV programs. Other recent Department of Education guidance provides for the return of Title IV program funds disbursed to students who are determined to be ineligible in certain circumstances, including in cases involving fraudulent students, even if the institution had no actual knowledge of the student’s ineligibility at the time of disbursement. If the systems and processes that our institution has established to detect and prevent fraud, or our administration of Title IV programs, military tuition assistance, or veterans’ education benefits are deemed inadequate or noncompliant in connection with preventing these activities, the Department of Education may find that our institution has failed to comply with Title IV requirements, including but not limited to the Department of Education’s administrative capability requirements. See “—If we do not comply with the Department of Education’s administrative capability standards, we could suffer financial penalties, be required to accept other limitations in order to continue participating in the Title IV programs, or lose our eligibility to participate in the Title IV programs.”
Current report — wording carried from elsewhere
These amendments and implementing federal regulations also create new accountability standards conditioning the Federal Direct Loan Program eligibility of educational programs upon compliance with benchmarks that compare former students’ median earnings after completion to the median earnings of working adults with lesser credentials. Certain individual educational programs will lose Federal Direct Loan Program eligibility if, in two out of three consecutive years, the median earnings (as determined by the Department of Education) of the program’s student cohort who received Title IV funds and graduated four years prior falls below the median earnings of working adults aged 25 to 34 who are not enrolled in an institution of higher education and who have only a high school diploma (for undergraduate programs) or only a bachelor’s degree (for graduate and professional programs). See Item 1, “Business—Financial Aid Programs.”
Rearranged previous paragraphs (47)
Previous report — wording carried elsewhere
Our operations are subject to extensive U.S. federal and state regulation applicable to providers of post-secondary education. The principal federal regulatory regime was established under the Higher Education Act and the regulations promulgated under the Higher Education Act by the Department of Education. Among other matters, these regulations govern the participation by the University in federal student financial aid programs under Title IV of the
Previous report — wording carried elsewhere
limitations on, or termination of, our operations, including, but not limited to, our ability to offer new programs, change the length of our existing programs, increase enrollment levels, or grant degrees, diplomas and certificates;
Previous report — wording carried elsewhere
restrictions on, or revocations of, our accreditations, licenses or other operating authority, including by the HLC or a programmatic accreditor;
Previous report — wording carried elsewhere
limitations on, or suspensions or termination of, our eligibility to participate in Title IV programs, military benefit programs, veteran education benefit programs or state financial aid programs;
Previous report — wording carried elsewhere
imposition by the Department of Education of heightened cash monitoring, which could cause delays in the disbursement of Title IV program funds, or transfer from the Department of Education’s advance system of receiving Title IV program funds to its reimbursement system, under which a school must disburse its own funds to students and document the students’ eligibility for Title IV program funds before receiving such funds from the Department of Education;
Previous report — wording carried elsewhere
repayments of funds received under Title IV programs or state financial aid programs;
Previous report — wording carried elsewhere
requirements to post a letter of credit with the Department of Education;
Previous report — wording carried elsewhere
imposition of provisional certification by the Department of Education, which may include growth restrictions that prevent us from adding to or changing our locations and programs absent express approval from the Department of Education;
Previous report — wording carried elsewhere
other civil or criminal penalties; and
Previous report — wording carried elsewhere
The current BDR Rules and regulations could result in significant risks for our business and the application of the various BDR standards may be unclear or subject to interpretation in a manner that is adverse to us and unpredictable. If a significant amount of BDR claims are adjudicated by the Department of Education and the Department of Education seeks significant recoupment from the University for such claims, such recoupment could have a material adverse impact on our business. Furthermore, the potentially significant discretion vested in the Department of Education to administer the regulations, including whether to seek recoupment of discharged loan amounts or require letters of credit from institutions, and the subjective judgments regarding the triggers for debt relief may result in unexpected outcomes that materially and adversely affect our business and liquidity. In addition, the manner in which we respond to state or federal and certain private lawsuits may be materially impacted as a result of the possible significant consequences of an adverse judgment or finding in such matters on the subsequent adjudication of BDR claims.
Previous report — wording carried elsewhere
“Business—Regulatory Environment—Regulation of Student Financial Aid Programs—Standards of Financial Responsibility.”
Previous report — wording carried elsewhere
If we cannot effectively respond to competitors, however, it could reduce our enrollment. We cannot be sure that we will be able to compete successfully against current or future competitors or that competitive pressures faced by us will not adversely affect our market share, revenue and operating margin.
Previous report — wording carried elsewhere
structural changes in the marketing landscape, including fundamental changes to internet search due to AI (both organic and sponsored), and the transformation of television, that could result in less efficient student acquisition;
Previous report — wording carried elsewhere
changes in the cost or efficacy of our advertising;
Previous report — wording carried elsewhere
increased competition from schools offering distance learning and other online educational programs;
Previous report — wording carried elsewhere
a decrease in the perceived or actual economic benefits that students derive from our programs or education in general;
Previous report — wording carried elsewhere
a decrease in or perceived low student pass rates for professional licenses and other examinations necessary for students to work in their chosen fields;
Previous report — wording carried elsewhere
regulatory investigations or enforcement proceedings that may damage our or the industry’s reputation;
Previous report — wording carried elsewhere
increased regulation of online education, including in states in which we do not have a physical presence;
Previous report — wording carried elsewhere
litigation that may damage our or the industry’s reputation;
Previous report — wording carried elsewhere
inability to continue to recruit, train and retain quality faculty;
Previous report — wording carried elsewhere
student or employer dissatisfaction with the quality of our services and programs;
Previous report — wording carried elsewhere
tuition rate reductions by competitors that we are unwilling or unable to match;
Previous report — wording carried elsewhere
a decline in the acceptance of online education;
Previous report — wording carried elsewhere
disruptions to our information technology systems; and
Previous report — wording carried elsewhere
Our Tuition Price Guarantee program limits our ability to raise additional revenue from current students through tuition increases, and any changes to the Tuition Price Guarantee program could harm our reputation, enrollment numbers, retention rates and overall business and financial performance.
Previous report — wording carried elsewhere
Establishing new academic programs or modifying existing programs requires us to make investments, incur marketing expenses and reallocate other resources. We may have limited experience with the courses in new areas and may need to modify our systems and strategy or enter into arrangements with other educational institutions to provide new programs effectively and profitably. If we are unable to offer new programs in a cost-effective manner or are otherwise unable to effectively manage the operations of newly established academic programs, our business, financial condition and results of operations could be adversely affected.
Previous report — wording carried elsewhere
Our success to date has largely depended on, and our future performance will continue to depend on, the skills, efforts, and motivation of our senior management team, who generally have significant experience with our business and the education industry. Our future success also depends on our continued ability to attract and retain qualified personnel. The loss of the services of any of our key personnel, or our failure to attract and retain other qualified and experienced personnel on acceptable terms, could adversely affect our business results.
Previous report — wording carried elsewhere
To effectively educate our students, we must continue to attract and retain qualified faculty members.
Previous report — wording carried elsewhere
Our intellectual property rights and the enforcement or defense of such rights may be affected by developments or uncertainty in laws and regulations relating to intellectual property rights. Moreover, many companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions. The legal systems of certain countries, particularly certain developing countries, may not favor the enforcement of trademarks, copyrights, trade secrets and other intellectual property protections, which could make it difficult for us to stop the infringement, misappropriation or other violation of our intellectual property or marketing of competing products in violation of our intellectual property rights generally.
Previous report — wording carried elsewhere
Our efforts to protect our intellectual property may require use of funds in litigation to seek to protect our proprietary rights against any infringement, misappropriation or other violation, which could have a material adverse effect on our business and financial condition.
Previous report — wording carried elsewhere
We will not be able to protect our intellectual property if we are unable to enforce our rights or if we do not detect unauthorized use of our intellectual property. However, the costs associated with enforcing patents, confidentiality agreements or other intellectual property rights may make aggressive enforcement impracticable. We may be unable or unwilling to incur the costs and resources necessary to determine whether third parties are using our intellectual property rights without our authorization. The undetected or unremedied use of our intellectual property rights or the development or acquisition of intellectual property by third parties could reduce or eliminate any competitive advantage we may have as a result of our intellectual property, adversely affecting our business prospects, financial condition and results of operations.
Previous report — wording carried elsewhere
We may become subject to litigation brought by third parties claiming infringement, misappropriation or other violation by us of their intellectual property rights.
Previous report — wording carried elsewhere
Significant disruption in SaaS vendor platforms could make significant portions of our operations unavailable without suitable workarounds. Any disruption in our IT systems could significantly impact our operations and reputation, reduce student and prospective student confidence in our educational institution, adversely affect our compliance with applicable regulations and accrediting body standards, and have a material adverse effect on our business and financial condition. Although we vet the capabilities of current and future suppliers and maintain insurance for some types of these disruptions, there is no assurance that insurance proceeds would be adequate or available to compensate us for damages sustained due to these disruptions.
Previous report — wording carried elsewhere
Although we believe our tax accruals are reasonable, the final determination of tax returns under review or returns that may be reviewed in the future and any related litigation could result in tax liabilities that materially differ from our historical income tax provisions and accruals.
Previous report — wording carried elsewhere
quarterly variations in the rate of growth (if any) of our financial or operational indicators, such as earnings per share, net income, net income margin, net revenue, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income and Average Total Degreed Enrollment;
Previous report — wording carried elsewhere
results of operations that vary from those of our competitors or other strategic actions by our competitors;
Previous report — wording carried elsewhere
announcements related to litigation and governmental inquiries or investigations, and reputational harm related thereto;
Previous report — wording carried elsewhere
changes in the political, legislative, regulatory, and public policy outlook or associated enactments that are adverse to the University or to the eligibility of proprietary schools to participate in federal student aid programs;
Previous report — wording carried elsewhere
our failure to meet revenue or earnings estimates made by research analysts or other investors;
Showing the first 40 of 47 passages. Open the source sections for the rest.