Company: LGCY
Filing Date: 2025-09-25
Form Type: 10-K
Source: 0001493152-25-014945
Chunk: 478

Company: Legacy Education Inc.
Filing Date: 2025-09-25
Form: 10-K
Item: Item 1B
Chunk 478
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 in our business. Regulatory agencies have also provided regulatory
capital relief to institutions as a result of the crisis as discussed below.

Regulatory
Impact from COVID-19 Pandemic

On
March 27, 2020, Congress enacted the CARES Act, which included a $2 trillion federal economic relief package providing financial assistance
and other relief to individuals and business impacted by the spread of COVID-19. The spread of COVID-19 has had an unprecedented impact
on higher educational institutions across the country, including our schools, and has led to the closure of campuses and the transition
of academic programs from on-ground to online delivery. The CARES Act includes provisions for financial assistance and other regulatory
relief benefitting students and their postsecondary institutions.

Among
other things, the CARES Act included a $14 billion Higher Education Emergency Relief Fund (“HEERF”) for ED to distribute
directly to institutions of higher education. Institutions were required to use at least half of the HEERF funds for emergency grants
to students for expenses related to disruptions in campus operations (e.g., food, housing, etc.). Institutions were permitted to use
the remainder of the funds for additional emergency grants to students or to cover institutional costs associated with significant changes
to the delivery of instruction due to the COVID-19 emergency, provided that those costs do not include payment to contractors for the
provision of pre-enrollment recruitment activities, endowments, or capital outlays associated with facilities related to athletics, sectarian
instruction, or religious worship. The law required institutions receiving funds to continue to the greatest extent practicable to pay
its employees and contractors during the period of any disruptions or closures related to the COVID-19 emergency.

ED
subsequently allocated funds to each institution of higher education based on a formula contained in the CARES Act. The formula was heavily
weighted toward institutions with large numbers of Pell Grant recipients. ED collectively allocated approximately $3.1 million to our
schools. As of June 30, 2022, we had used approximately $2.1 million on student grants and approximately $1.0 million of the allocated
funds were reimbursements for qualified expenses. These qualified expenses were reflected on the statement of operations as reductions
to general and administrative expenses. The failure to comply with requirements for the usage and reporting of these funds could result
in requirements to repay some or all of the allocated funds and in other sanctions.

82

During
the fiscal year ended June 30, 2021