Company: LGCY
Filing Date: 2025-09-25
Form Type: 10-K
Source: 0001493152-25-014945
Chunk: 28

Company: Legacy Education Inc.
Filing Date: 2025-09-25
Form: 10-K
Item: Item 1
Chunk 28
---
 years
beginning on or after January 1, 2023 (which was the fiscal year ending June 30, 2024 for our schools). The new rule modified how institutions
counted revenue when calculating compliance with the 90/10 Rule, and added a requirement to notify students of the potential loss of
eligibility resulting from not meeting the 90/10 standard, among other changes. ED published a Notice in the Federal Register listing
the types of funds that are considered federal education assistance funds under the new 90/10 Rule. The funds include GI Bill funding
and Military Tuition Assistance, among other sources of funds. We expect the change in the 90/10 Rule will increase our 90/10 Rule percentages
and make it more difficult to comply with the 90/10 Rule and could require changes to our operations in order to maintain compliance.

ED
regulations have restricted the ability of institutions to limit the amount of Title IV Program loans that students and parents may borrow
which can impact our ability to control compliance with the 90/10 Rule at our institutions. However, under a provision of the OBBBA that
will be effective July 1, 2026, institutions are permitted to limit the total amount of loans that a student may borrow, and that a parent
may borrow on behalf of a student, as long as the limit is applied consistently to all students in a program of study. In addition, there
is a lack of clarity regarding some of the technical aspects of the calculation methodology under the 90/10 Rule, which may lead to regulatory
action or investigation by ED. Changes in, or new interpretations of the calculation methodology or other industry practices under the
90/10 Rule could further significantly impact our compliance with the 90/10 Rule, and responding to any review or investigation by ED
involving us could require a significant amount of resources.

Efforts
to reduce the 90/10 Rule percentage for our institutions have and may in the future involve taking measures that involve interpretations
of the 90/10 Rule that are without clear precedent, reduce our revenue or increase our operating expenses (or all of the foregoing, in
each case perhaps significantly). Because of the changes to the 90/10 Rule made by ARPA and ED, we may be required to make structural
changes to our business to remain in compliance, which changes may materially alter the manner in which we conduct our business and materially
and adversely impact our business, financial