Company: LGCY
Filing Date: 2025-09-25
Form Type: 10-K
Source: 0001493152-25-014945
Chunk: 99

Company: Legacy Education Inc.
Filing Date: 2025-09-25
Form: 10-K
Item: Item 1
Chunk 99
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 consecutive federal fiscal years loses eligibility to participate
in certain Title IV Programs for the remainder of the federal fiscal year in which ED determines that such institution has lost its eligibility
and for the two subsequent federal fiscal years. An institution whose cohort default rate for any single federal fiscal year exceeds
40% loses its eligibility to participate in certain Title IV Programs for the remainder of the federal fiscal year in which ED determines
that such institution has lost its eligibility and for the two subsequent federal fiscal years. If an institution’s three-year
cohort default rate equals or exceeds 30% in two of the three most recent federal fiscal years for which ED has issued cohort default
rates, the institution may be placed on provisional certification status and could be required to submit a letter of credit to ED. See
“Risk Factors - A failure to maintain compliance with ED’s “financial responsibility” requirements would have
negative impacts on our operations.”

60

In
September 2025, ED released the final cohort default rates for the 2022 federal fiscal year. These are the most recent final rates
published by ED. The rates for our existing institutions for the 2022, 2021, and 2020 federal fiscal years respectively
are as follows: HDMC 0%, 0% and 0%; CCC 0%, 0% and 0%, Integrity 0%, 0%, and 0%; and CCMCC 0%, 0%, and 0%. Consequently, none
of our institutions had a cohort default rate equal to or greater than 30% for the 2022, 2021, and 2020 federal fiscal years. During
the COVID-19 pandemic, ED temporarily suspended federal student loan repayment obligations. This suspension, which lasted over three
years, contributed to a reduction in our cohort default rates. Our cohort default rates could be substantially higher for the
periods after October 2023, when the suspension expired if borrowers do not timely repay their federal student loans. We are
engaging in activities aimed at reminding borrowers of their obligations to repay loans and to reduce the number of borrowers who
default on their loans; however, we cannot predict or guarantee that these activities will be successful or that the cohort default
rates will not increase or exceed applicable eligibility thresholds.

If
any of our institutions were to lose eligibility to participate in the Title IV Programs due to student loan default rates being higher
than ED’s thresholds and we could not arrange for adequate alternative student financing sources, we