Company: LGCY
Filing Date: 2025-09-25
Form Type: 10-K
Source: 0001493152-25-014945
Chunk: 36

Company: Legacy Education Inc.
Filing Date: 2025-09-25
Form: 10-K
Item: Item 1
Chunk 36
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 institutions.

ED’s
proposed regulatory agenda first published in early September 2025 includes an intent to address certain issues including financial responsibility
requirements via negotiated rulemaking. We cannot predict how ED will address these requirements or the impact the changes to financial
responsibility requirements may have on our schools.

Return
of Title IV Program Funds. An institution participating in the Title IV Programs must calculate the amount of unearned Title
IV Program funds that have been disbursed to students who withdraw from their educational programs before completing them, and must return
those unearned funds to ED in a timely manner, which is generally within 45 days from the date the institution determines that the student
has withdrawn. The failure to timely return funds can result in liabilities or sanctions.

24

If
an institution is cited in an audit or program review for late returns of Title IV Program funds for 5% or more of the pertinent students
within the audit or program review sample, or if an audit identifies a material weakness in the institution’s report on internal
controls relating to the return of unearned Title IV Program funds, the institution may be required to post a letter of credit in favor
of ED in an amount equal to 25% of the total amount of Title IV Program funds that should have been returned for students who withdrew
in the institution’s prior fiscal year. Neither HDMC nor CCC has received such a finding in either of the two most recently completed
annual Title IV Program compliance audits submitted to ED. On January 30, 2024, due to a failure to timely return unearned Title IV Program
funds to ED, Integrity was required to submit an acceptable form of financial protection for 25% of the refunds that were made for the
fiscal year ended June 30, 2023 in the amount of $18,828. In January through March 2024, ED conducted negotiated rulemaking to prepare
proposed regulations on several topics including the rules pertaining to returns of Title IV Program funds. On July 24, 2024, ED promulgated
proposed amended regulations related to return of Title IV calculations. ED published the final regulations on January 3, 2025, with
a general effective date of July 1, 2026. The regulations codify ED’s guidance requiring the date of determination of withdrawal
to be documented within 14 days after the student’s last date of attendance for institutions that take attendance; remove the option
for clock-hour programs to use the “