Company: LGCY
Filing Date: 2025-09-25
Form Type: 10-K
Source: 0001493152-25-014945
Chunk: 87

Company: Legacy Education Inc.
Filing Date: 2025-09-25
Form: 10-K
Item: Item 1
Chunk 87
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 institutions on a list of about 150 institutions named in the settlement agreement, which did not include any
of our institutions. In addition, under the settlement, any borrower who filed a defense to repayment claim between June 22, 2022 and
November 15, 2022 are “Post-Class Applicants” whose applications will be adjudicated under the 2016 version of the BDR regulations
and will be decided by January 2026. HDMC received and timely responded to seven BDR applications from Post-Class Applicants. CCC,
Integrity, and CCMCC (at least since we acquired CCMCC) have not received any BDR applications from Post-Class Applicants. It is possible that we could receive BDR claims in the future.
If we or our representatives are found to have engaged in certain acts or omissions under the broad definitions contained in the 2016
version of the BDR regulations, or other BDR regulations that could be in place in the future, we could be subject to substantial repayment
obligations and subject to other sanctions.

The
enjoined 2022 version of the BDR regulations, and the versions of the BDR regulations that are currently in effect and that could be
in effect in the future, could have a material adverse effect on our business, financial condition, results of operations, and cash flows
and result in the imposition of significant restrictions on us and our ability to operate, including a requirement that our institutions
to submit a letter of credit based on expanded standards of financial responsibility. See “Risk Factors - A failure to maintain
compliance with ED’s “financial responsibility” requirements would have negative impacts on our operations.”

In
recent years, ED has been more active in processing BDR applications and has recently distributed claims to institutions for an opportunity
to respond to borrower allegations. ED may, on its own or in response to other constituencies, allocate additional resources to reviewing
and adjudicating BDR applications from federal student loan borrowers. We cannot predict how many BDR applications have been filed by
our former students, but if we receive such claims from ED, we may incur significant costs in responding to the borrower allegations
and, if adjudicated as valid by ED, repaying the federal government for the amount of loans discharged pursuant to such claims.

ED
also grants closed school loan discharges to students when it determines the student’s institution or campus has closed. When an institution
or location meets ED’s definition of a closed school or location,