Company: LGCY
Filing Date: 2025-09-25
Form Type: 10-K
Source: 0001493152-25-014945
Chunk: 22

Company: Legacy Education Inc.
Filing Date: 2025-09-25
Form: 10-K
Item: Item 1
Chunk 22
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Financial
Value Transparency and Gainful Employment Regulations. In May 2021, ED announced its intention to initiate a rulemaking process
on several topics, including gainful employment. On May 19, 2023, ED published a notice of proposed rulemaking on financial value transparency
and gainful employment, and on October 10, 2023, ED published final regulations which became effective on July 1, 2024. Multiple lawsuits
were filed challenging these regulations, and these were consolidated into one case. We cannot predict the outcome of this case. The
financial value transparency and gainful employment regulations include standards for annually evaluating postsecondary educational programs
based on the calculation of debt-to-earnings rates and an “earnings premium” measure. The rule establishes formulae for calculating
these rates using data such as student debt, student earnings data, and median earnings data for working adults with only a high school
diploma or GED, which the rule uses to compare to median earnings data of the institution’s graduates. Under the regulations, ED
will annually calculate and publish the debt-to-earnings rates and median earnings data for our educational programs. If these calculations
show that any of our educational programs do not comply with debt-to-earnings or median earnings regulatory thresholds for two of three
consecutive years, those educational programs would lose Title IV Program eligibility. ED also requires institutions to provide warnings
to current and prospective students about programs in danger of losing of Title IV Program eligibility which could negatively impact
our retention of current students and enrollment of new students in these programs. The regulations also require certifications and data
reporting to ED and providing required student disclosures related to gainful employment. Some of the data ED will use to calculate the
debt-to-earnings rates and earnings premium measures is not yet readily accessible to institutions. Therefore, it is difficult for us
to predict how our institutions will perform under the new standards and the extent to which our programs could lose Title IV Program
eligibility under the new standards. We also do not have control over some of the factors that could impact the rates and measures for
our programs which could make it difficult to mitigate the impact of the regulations on our programs. However, the new regulations could
require us to modify or eliminate programs to comply with the new regulations and could result in the loss of Title IV Program eligibility
for our programs that fail to comply with the regulations which could have a material adverse effect on our student population and our