Company: GHC
Filing Date: 2025-02-26
Form Type: 10-K
Source: 0000104889-25-000022
Chunk: 186

Company: Graham Holdings Co
Filing Date: 2025-02-26
Form: 10-K
Item: Item 1A
Chunk 186
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 could have a negative impact on KI’s ability to recruit international students, which could materially adversely affect Kaplan’s U.S. Pathways business as well as the U.S.-based Kaplan Languages Group.

Changes to levels of direct and indirect government funding for international education programs would also materially affect the success of KI’s operations. For example, if access to student loans or other funding were to be lost for KI operations that admit students who are entitled to receive the benefit of this funding, Kaplan’s operating 

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results could be materially adversely affected. The U.K. government is considering a reduction to funding for the Level 7 apprenticeship (L7) in 2025. Presently, these apprenticeships, equivalent to masters degree level study, can be funded from U.K. employer apprenticeship levy payments. The apprenticeship levy are payments to the government by U.K. employers of a certain minimum size calculated as a percentage of the employer’s tax bill. The U.K. government is proposing to restrict the ability of employers to access their levy funds so that these can no longer be used to fund apprenticeships at L7. If such a change were implemented, this would impact Kaplan Financial (a division of Kaplan Professional UK), an apprenticeship training provider whose U.K. apprenticeship business represents nearly 50% of Kaplan Professional UK’s total revenue. Kaplan anticipates that employers would fund a significant portion of L7 outside of the levy paid for apprenticeships. The extent and timing of the proposed funding changes is not yet clear.

•Difficulties and Expenses in Connection with Managing Properties in England and Scotland Could Materially Impact Kaplan’s Expenses.

Kaplan has a number of real estate investments in England and Scotland, usually on long-term leases. As the tenant, Kaplan is required to keep the buildings in repair. Kaplan usually benefits from a package of contractor and subcontractor arrangements in relation to defects in the buildings due to poor construction or failure to adhere to property regulations during construction of the properties. If, however, the entities who have entered into these collateral agreements become insolvent or successfully assert another defense to a claim from Kaplan under the relevant agreement, Kaplan, as the tenant, may be expected to carry out work related to the relevant defect and/or bear the relevant cost of such work. The relevant costs may be material. Kaplan’s ability to enforce collateral agreements may also be impacted by other factors, including but not limited to, the operation of Scottish law on time periods permitted to bring a claim. Kaplan may be required to bear some