Company: LGCY
Filing Date: 2025-09-25
Form Type: 10-K
Source: 0001493152-25-014945
Chunk: 371

Company: Legacy Education Inc.
Filing Date: 2025-09-25
Form: 10-K
Item: Item 1A
Chunk 371
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institutions could lose their eligibility to participate in the Title IV programs if the percentage of their revenues derived from applicable
federal educational assistance programs is too high.

Under
the HEA, a proprietary institution that derives more than 90% of its total revenue from the Title IV Programs or, for fiscal years beginning
on or after January 1, 2023, from all federal educational assistance funds, for two consecutive fiscal years becomes immediately ineligible
to participate in the Title IV Programs and may not reapply for eligibility until the end of at least two fiscal years (“90/10
Rule”). An institution whose receipts of applicable funds exceeds 90% of revenue for a single fiscal year will be placed on provisional
certification, be required to notify ED and its students of the possibility of a loss of Title IV Program eligibility, and may be subject
to other enforcement measures, including a requirement to submit a letter of credit. See “Business - Education Regulations - Financial
Responsibility Standards.” We have calculated the 90/10 Rule percentages for the 2024, 2023, and 2022 fiscal years as follows for
HDMC, CCC, and Integrity: HDMC 87.55%, 84.53%, and 82.17%; CCC 79.51%, 74.48%, and 72.34%; Integrity 84.19%, 88.14%, and 85.43% respectively.
CCMCC’s 90/10 Rule percentage
for its 2022 fiscal year was 21.76%, and for its 2023 fiscal year was 48.63%. CCMCC’s next 90/10 Rule percentage will be reported to ED in connection with the Company’s next
annual financial statement and compliance audit submissions. Our calculations of the
90/10 Rule percentage for the 2025 fiscal year for HDMC, CCC, Integrity, and CCMCC are due on December 31, 2025 and each are expected
to be below 90%. The 90/10 calculations for our institutions are subject to review and potential recalculation by ED. In addition, the
90/10 Rule is complex and there is some ambiguity in certain technical aspects of the calculation methodology under the 90/10 Rule. If
ED comes out with additional guidance or interpretations that are different than our interpretations, ED could recalculate the 90/10
Rule percentages of our institutions, which could result in one or more of the percentages