Company: LGCY
Filing Date: 2025-09-25
Form Type: 10-K
Source: 0001493152-25-014945
Chunk: 51

Company: Legacy Education Inc.
Filing Date: 2025-09-25
Form: 10-K
Item: Item 1
Chunk 51
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 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.

Restrictions
on Payment of Commissions, Bonuses and Other Incentive Payments. 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.

32

Compliance Reviews Regarding Compliance
with Regulatory Standards and Effect of Regulatory Violations. Because we operate in a highly regulated industry, we are subject
to compliance reviews and audits as well as claims of noncompliance and lawsuits by government agencies, regulatory agencies and third
parties. Our institutions are subject to audits, program reviews, site visits, and other reviews by various federal and state regulatory
agencies, including, but not limited to, ED, ED’s Office of Inspector General, state education agencies and other state regulators,
the U.S. Department of