Company: LGCY
Filing Date: 2025-09-25
Form Type: 10-K
Source: 0001493152-25-014945
Chunk: 370

Company: Legacy Education Inc.
Filing Date: 2025-09-25
Form: 10-K
Item: Item 1A
Chunk 370
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58

    ●
    does
    not have programs that “fail” gainful employment rates and measures and that represent 50 percent or more of its total
    receipts under the Title IV Programs in the most recent award year;

    ●
    does
    not engage in substantial misrepresentations or aggressive and deceptive recruitment tactics; and

    ●
    not
    otherwise appear to lack administrative capability.

Failure
by us to satisfy any of these or other administrative capability criteria could cause our institutions to be subject to sanctions or
other actions by ED or to lose eligibility to participate in the Title IV Programs, which would have a significant impact on our business
and results of operations.

ED
published a notice in early September 2025 regarding its agenda for regulatory initiatives which, among other things, indicated an intent
to address certain issues including administrative capability requirements. We cannot predict whether ED intends to address these requirements
through negotiated rulemaking, published guidance, or other actions, nor can we predict the impact on our institutions of any changes
that might occur to the administrative capability requirements. We are continuing to monitor developments on this topic.

Our
institutions could be subject to liabilities and sanctions if they violate ED regulations and guidance limiting compensation to individuals
and entities involved in certain recruiting, admissions or financial aid activities.

An
institution participating in the Title IV Programs may not provide any commission, bonus or other incentive payment based directly or
indirectly on success in securing enrollments or financial aid to any person or entity engaged in any student recruiting or admission
activities or in making decisions regarding the awarding of Title IV Program funds. This statutory prohibition under the HEA, and as
implemented by ED, applies to all institutional employees and service providers who are engaged in or responsible for any student recruitment
or admission activity or making decisions regarding the award of financial aid. We cannot predict how ED will interpret and enforce the
incentive compensation prohibition. The prohibition on incentive compensation has had and will continue to have a significant impact
on the productivity of our employees, on the retention of our employees and on our business and results of operations. Failure to comply
with the incentive compensation prohibition could result in loss of an institution’s certification to participate in the Title
IV Programs, limitations on Title IV Program participation or financial penalties. On July 17, 2024, ED announced it will issue guidance
related to the incentive compensation rule no sooner than later that year, but it has not yet issued such guidance.

Our