Company: LGCY
Filing Date: 2025-09-25
Form Type: 10-K
Source: 0001493152-25-014945
Chunk: 29

Company: Legacy Education Inc.
Filing Date: 2025-09-25
Form: 10-K
Item: Item 1
Chunk 29
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 condition, results of operations and cash flows. Furthermore, these required changes could
be unsuccessful and could make more difficult our ability to comply with other important regulatory requirements, such as the cohort
default rate regulations.

However,
we cannot predict the need or timing of any such changes, whether these changes would be successful in maintaining compliance with the
90/10 Rule or whether such changes will have other adverse effects on our business.

Cohort
default rate. The HEA limits participation in the Title IV Programs by institutions whose percentage of former students who defaulted
on the repayment of certain federally guaranteed or funded student loans (the “cohort default rate”) exceeds prescribed thresholds.
ED calculates these rates based on the number of students who have defaulted, not the dollar amount of such defaults. The cohort default
rate is calculated on a federal fiscal year basis and measures the percentage of students who enter repayment of a loan during the federal
fiscal year and default on the loan on or before the end of the federal fiscal year or the subsequent two federal fiscal years.

20

Under
the HEA, an institution whose cohort default rate is 30% or greater for three consecutive federal fiscal years loses eligibility to participate
in certain Title IV Programs and the Pell 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 Factor - A failure to maintain compliance with ED’s “financial responsibility” requirements
would have negative impacts on our operations.”

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 are as follows: HDMC 0%, 0%, and 0%; CCC 0%, 0% and 0%; Integrity