Risk Factors Update Summary

• Enrollment challenges due to NCLEX pass rate failures could lead to program closures, impacting operations.
• Congress may focus on for-profit education institutions. The government offers an extended payment plan.
• Tuition increases at RU, APUS, and HCN may adversely affect enrollment and financial condition.
• New Illinois legislation may lead to ADN program accreditation, potentially impacting results positively.
• The extended payment plan designed to assist students could lead to fines and penalties.
• Potential loss of Title IV funding due to GE regulations could impact programs and financials.
• Failure to meet financial responsibility standards could result in loss of Title IV eligibility.
• The transition to ArmyIgnitED 2.0 caused disruptions and delays impacting revenue and cash flow.
• Changes in financial responsibility regulations could increase compliance costs and affect cash flow.
• The delayed receipt of funds and changes in billing process may increase the "90%" side of the ratio.
• Increased scrutiny on accessibility requirements may lead to enforcement actions and financial impact.
• A qualitative assessment in June 2023 indicated a potential goodwill impairment for RU Segment.
• Potential changes in HEA reauthorization could impact funding levels and operational regulations.
• Reduction in force in 2023 resulted in labor and benefit savings of approximately $13.5 million annually.
• Transitioning marketing and IT services may lead to additional expenses and disruptions in 2024.