Company: LGCY
Filing Date: 2025-09-25
Form Type: 10-K
Source: 0001493152-25-014945
Chunk: 26

Company: Legacy Education Inc.
Filing Date: 2025-09-25
Form: 10-K
Item: Item 1
Chunk 26
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 predict how many BDR applications have been filed by
our former students, but if we receive such claims from ED, we may incur significant costs in responding to the borrower allegations
and, if adjudicated as valid by ED, repaying the federal government for the amount of loans discharged pursuant to such claims.

ED
also grants closed school loan discharges to students when it determines the student’s institution or campus has closed. When an institution
or location meets ED’s definition of a closed school or location, affected students can apply for a discharge of the Title IV loans
incurred for the program of study the student did not complete due to the closure, and ED grants the discharge if the student meets certain
requirements. ED also may seek to recover the cost of the discharge from the institution. If any of our locations or institutions close,
our institutions could be subject to liabilities for closed school loan discharges. In conjunction with the 2022 revisions to the BDR
rule, ED also revised the closed school loan discharge provisions. However, these revisions are also enjoined as well as delayed under
the OBBBA. We cannot predict the outcome of any future revisions to the closed school loan discharge provisions that ED may initiate.

90/10
Revenue Test. Under the HEA, a proprietary institution that derives more than 90% of its total revenue from the Title IV
Programs or, for fiscal years beginning on or after January 1, 2023 from all federal educational assistance funds, for two
consecutive fiscal years becomes immediately ineligible to participate in the Title IV Programs and may not reapply for eligibility
until the end of at least two fiscal years (“90/10 Rule”). An institution whose receipts of applicable funds exceeds 90%
of revenue for a single fiscal year will be placed on provisional certification, be required to notify ED and its students of the
possibility of a loss of Title IV Program eligibility, and may be subject to other enforcement measures, including a requirement to
submit a letter of credit. See “Education Regulations - Financial Responsibility Standards.” If an institution violated
the 90/10 Rule and became ineligible to participate in Title IV Programs but continued to disburse Title IV Program funds, ED would
require the institution to repay all Title IV Program funds received by the institution after the effective date of the loss of
eligibility.

19

We have calculated the 90/10 Rule percentage
for the 2024, 2023, and 2022 fiscal years as follows for H