Company: LGCY
Filing Date: 2025-09-25
Form Type: 10-K
Source: 0001493152-25-014945
Chunk: 30

Company: Legacy Education Inc.
Filing Date: 2025-09-25
Form: 10-K
Item: Item 1
Chunk 30
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0%, 0%, and 0%; and
CCMCC 0%, 0%, and 0%, respectively. 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.

Financial
Responsibility Standards. All institutions participating in the Title IV Programs must satisfy specific standards of financial
responsibility. ED evaluates institutions for compliance with these standards each year, based on the institution’s annual audited
financial statements, as well as following a change in ownership resulting in a change of control of the institution. The most significant
financial responsibility measurement is the institution’s composite score, which is calculated by ED based on three ratios:

    ●
    the equity ratio, which
    measures the institution’s capital resources, ability to borrow and financial viability;

    ●
    the primary reserve ratio,
    which measures the institution’s ability to support current operations from expendable resources; and

    ●
    the net income ratio, which
    measures the institution’s ability to operate at a profit.

ED
assigns a strength factor to the results of each of these ratios on a scale from negative 1.0 to positive 3.0, with negative 1.0 reflecting
financial weakness and positive 3.0 reflecting financial strength. ED then assigns a weighting percentage to each ratio and adds the
weighted scores for the three ratios together to produce a composite score for the institution. The composite score must be at least
1.5 for the institution to be deemed financially responsible without the need for further oversight. If an institution’s composite
score is below 1.5, but is at least 1.0, it is in a category denominated by ED as “the zone.” Under ED regulations, institutions
that are in the zone typically may