Company: LGCY
Filing Date: 2025-09-25
Form Type: 10-K
Source: 0001493152-25-014945
Chunk: 360

Company: Legacy Education Inc.
Filing Date: 2025-09-25
Form: 10-K
Item: Item 1A
Chunk 360
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 certain provisions of the Higher Education Act, ED published its first version of the “borrower defense to repayment”
(“BDR”) regulations which generally allow federal student loan borrowers to assert a defense to repaying their federal loans
based on the conduct of the institution they attended. The amount of loans discharged by ED pursuant to an adjudicated BDR claim may
be assessed by ED as a Title IV Program liability against the institution. On November 1, 2016, the Department adopted revised BDR regulations
that became effective on July 1, 2017. Under the 2017 version of the BDR regulations, borrowers with federal student loans disbursed
after July 1, 2017 can assert a defense to repayment and be eligible for relief based on a nondefault, favorable, contested judgement
against the institution from a state or federal court; a claim that the institution failed to perform its obligations under a contract
with the student or a claim the institution committed a “substantial misrepresentation” on which the borrower reasonably
relied to his or her detriment. On September 23, 2019, the Department again revised its BDR regulations effective July 1, 2020, and created
a distinct standard and process for BDR applications applicable to federal student loans first disbursed after July 1, 2020. Under the
2019 version of the BDR regulations, a borrower can assert a defense to repayment and be eligible for relief if the borrower establishes
that the institution made a misrepresentation of material fact upon which the borrower reasonably relied in deciding to obtain their
loan; the misrepresentation related to the borrower’s enrollment or continuing enrollment at the institution or the provision of
education services for which the loan was made; and the borrower was financially harmed by the misrepresentation.

On
November 1, 2022, ED again revised the BDR regulations with an effective date of July 1, 2023. The 2022 version of the BDR regulations
included amendments regarding, among other things, (i) acts or omissions by or on behalf of an institution of higher education a borrower
may assert as a defense to repayment of certain Title IV Program loans; (ii) procedures for adjudicating borrower defense claims, and
(iii) prohibiting the use of mandatory pre-dispute arbitration clauses and class action waivers in enrollment agreements and requiring
disclosures of judicial and arbitration filings and awards pertaining to a borrower defense claim.

Among
other things, the