Company: LGCY
Filing Date: 2025-09-25
Form Type: 10-K
Source: 0001493152-25-014945
Chunk: 86

Company: Legacy Education Inc.
Filing Date: 2025-09-25
Form: 10-K
Item: Item 1
Chunk 86
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ligation to repay certain Title IV Program loans when the BDR applications received on or after, or that were pending with ED as of,
July 1, 2023. The 2022 version of the BDR regulations applies the revised federal BDR standard to all BDR claims received on or after,
or pending with the Secretary as of, July 1, 2023, but would not allow for recovery against institutions for discharged amounts first
disbursed prior to July 1, 2023 unless the BDR claim would have been approved under the substantive BDR standard applicable to the time
period in which the loan was disbursed as set forth in the prior versions of the BDR regulations. The defenses to repayment are based
on certain acts or omissions, including misrepresentations, by an institution or a covered party. The regulations establish detailed
procedures and standards for the loan discharge processes, including the information required for borrowers to receive a loan discharge,
and the authority of ED to seek recovery from the institution of the amount of discharged loans. The 2022 version of the BDR regulations
were to take effect on July 1, 2023, in addition to certain closed school loan discharge provisions part of the same rule, but are currently
enjoined and delayed. The Career Colleges and Schools of Texas (“CCST”) filed a complaint challenging the regulations in
February 2023. In April 2024, the U.S. Court of Appeals for the Fifth Circuit granted a preliminary injunction to block enforcement of
the 2022 version of the BDR regulations while the case is pending. Further, the OBBBA, enacted July 4, 2025, delays the effective date
of the 2022 version of the revised BDR regulations for ten years, until July 1, 2035.Therefore, the 2022 version of the BDR regulations
are not in effect, but the previous BDR regulations in effect prior to July 1, 2023, generally remain in effect in the meantime and apply
different substantive standards and procedures based on when a BDR claimant’s loans were disbursed.

53

On
June 22, 2022, ED reached a settlement with plaintiffs in the case titled Sweet v. Cardona, which was filed by student loan borrowers
to challenge ED’s adjudication of BDR claims. The settlement resulted in automatic relief of claims pending as of June 22, 2022
that were filed against