What changed in this filing

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Item 1A. Risk Factors

2025-08-06 compared with 2025-05-12 · 19 added, 33 removed, 11 unchanged (83% of the section changed)

3 unchanged sentences

With the exception of the following, there have been no material changes in the risk factors set forth in the “Risk Factors” section of our Annual Report.

There are risks associated with the Combination, including with respect to the anticipated timeline.

We previously disclosed that we had anticipated completing the Combination in the third quarter of 2025 subject to obtaining required approvals and ED taking related actions.

At its June 2025 meeting, HLC approved the Combination and continuation of accreditation upon implementation of the related transactions.

As a result of ongoing dialogue with ED and HLC as to their preferred implementation process for and the timing of the Combination, the implementation of the Combination may be postponed, including potentially into the second quarter of 2026.

For additional information regarding risks related to the Combination, see our Form 10-K and the Risk Factor in that Form 10-K with the caption beginning “The planned combination of APUS, RU, and HCN….”

The postsecondary education regulatory environment has changed and may change in the future as a result of U.S.

1 unchanged sentence

Changes in Presidential administrations and control of Congress as a result of the outcome of elections or other events has in the past resulted and could in the future result in changes in or new legislation, appropriations, regulations, standards, policies and enforcement actions that could materially affect our business, including material consequences for our institutions’ accreditation, authorization to operate in various states, permissible activities, receipt of funds under student financial assistance programs, and cost of doing business.

The Trump administration and current Congress may act to change or eliminate

education-related legislation and ED regulations, to enact new legislation to alter existing regulations, and to change existing ED policies and practices with respect to matters related to postsecondary education institutions.

The Trump administration and current Congress may act to change or eliminate education-related legislation and ED regulations, to enact new legislation to alter existing regulations, and to change existing ED policies and practices with respect to matters related to postsecondary education institutions.

President Trump and members of his administration have also stated that the administration intends to dismantle ED, limiting its functions to only those that are statutorily required or transferring oversight of certain functions to other agencies.

On March 11, 2025, ED announced a reduction in force, or RIF, effective March 21, 2025, resulting in office, staff, and program cuts.

however, ED claimed the reduction in force will not directly impact students and families but will empower states and localities.

Subsequently, on March 20, 2025, President Trump signed an Executive Order titled “Improving Education Outcomes by Empowering Parents, States, and Communities”, or the Executive Order, which, among other things, instructed the Secretary of Education to facilitate the closure of ED and maintain certain services, programs, and benefits, including student loans and Pell grants.

We cannot predict the extent to which the RIF or the Executive Order will impact our results of operations and business, including as it relates to the planned combination of American Public University System, or APUS, Rasmussen University, or RU, and Hondros College of Nursing, or HCN, into one consolidated institution that will encompass all APUS, RU, and HCN programs, campuses, and operations.

We cannot predict what additional actions the Trump administration will take with respect to the operations of ED or the response of the staff of ED to any such actions, nor can we predict the extent to which the Trump administration and Congress, or any future administration or Congress, will act to change or eliminate or to implement new laws, regulations, standards, policies, and practices, nor can we predict the form that new laws, regulations, standards, policies, or practices may take or the extent to which those regulations, practices or policies may impact us or our institutions or federal funds disbursed to schools through Title IV programs or TA, nor can we predict whether any challenges to actions taken by the Trump administration will be successful.

ED has claimed the reduction in force will not directly impact students and families and will empower states and localities.

On May 22, 2025, a federal judge ordered ED to reverse the RIF, which order ED has appealed.

On July 14, 2025, the order was stayed by the U.S.

Supreme Court pending disposition of the appeal, thus allowing the RIF to proceed.

Relatedly, on March 20, 2025, President Trump signed an Executive Order titled “Improving Education Outcomes by Empowering Parents, States, and Communities”, or the Executive Order, which, among other things, instructed the Secretary of Education to facilitate the closure of ED and maintain certain services, programs, and benefits, including student loans and Pell grants.

We cannot predict the extent to which the RIF or the Executive Order will impact our results of operations and business, including as it relates to the Combination.

administration will be successful.

For example, even without changes being made to Title IV programs, more general changes or uncertainty at ED could cause disruptions or delays in the processing of Title IV or other necessary interactions with ED.

Significant changes to ED or to federal regulation of higher education could have a material adverse impact on our enrollment, revenue, results of operations, and financial condition.

RU’s Florida ADN programs may be adversely impacted by recently enacted legislation, which could have a significant adverse impact on RU’s business, operations, financial results, and reputation.

In May 2025, the Florida legislature passed legislation, which absent a veto by Florida’s governance will take effect July 1, 2025, that, among other things:

• allows FBN to consider adverse actions taken against RU nursing programs in other states when determining whether to approve a program, to deny approval if an RU program in another state is terminated (or a similar action is taken), and to take other actions in instances of adverse actions other than termination upon an investigation into any such action;

• reduces from two years to one year the amount of time an approved nursing program can fail to meet the state standard for NCLEX pass rates before being placed on probation;

• reduces from three years to two years the length of time a nursing program can spend on probation;

• requires FBN to terminate a nursing program upon the program’s failure to meet NCLEX pass rate requirements following two years of probation and upon failure to submit to FBN a legally compliant annual report;

• subjects nursing program directors to disciplinary action and penalties for failing to submit to FBN a legally compliant annual report or for failing to submit a remediation plan, or timely present such plan to FBN, following one year of NCLEX pass rates not meeting the state standard;

• requires FBN to deny approval of an application for a new prelicensure nursing program if an institution has an existing program that is on probation;

• requires standardization of certain admissions criteria;

• requires establishment of an exit examination and criteria for remediation for those who do not pass the exit examination, which must be provided to and approved by FBN;

• requires nursing programs placed on probation to provide free remediation to students who do not pass the exit examination or NCLEX and reimburse the total cost of tuition and fees for all first-time NCLEX takers who do not pass after completing a program with a passage rate of below 30% for the calendar year;

• authorizes FBN to deny an application for approval of a nursing program if FBN determines that the applicant is owned by an entity that owns, controls, or holds 25% or more financial or ownership interest in a program on probation at the time of its closure;

• authorizes FDH staff to conduct on-site inspections or evaluations of nursing programs to assess compliance with statutory requirements or for prosecution, as necessary.

The legislation is expected to lead to increased challenges in hiring and retaining qualified nursing program directors and increased expenses related to compliance with new requirements, such as those related to standardized admissions criteria, exit examinations, remedial programs for students, and tuition and fees reimbursement to students who fail the NCLEX if RU’s pass rate is less than 30%.

In addition, the legislation shortens the period before a program will be placed on probation due to low NCLEX scores and shortens the length of time a program can spend on probation, and it allows FBN to impose disciplinary remedies on an approved program against which an adverse action has been taken by another regulatory jurisdiction in the United States without defining what constitutes an adverse action or when a program in another jurisdiction would be considered equivalent to an approved program in Florida.

The Florida ADN programs and several RU nursing programs in other states have previously been, and may in the future be, subject to disciplinary actions by state regulatory bodies for failure to meet applicable NCLEX pass rates or other requirements, including disciplinary actions that could be deemed adverse actions by FBN for purposes of the legislation’s requirements.

The full impact of the legislation is unclear at this time, including because the legislation will be subject to rule-making that could clarify or expand the potential impact.

Failure to comply with the new legislation and any adverse action taken as a result could adversely impact our business, operations, financial results, and reputation, including RU’s ability to expand or operate in Florida.

In previous years, RU’s Florida ADN programs at its Fort Myers, Tampa, and Ocala, Florida, campuses, along with the Ocala campus satellite program at North Orlando, Florida, have been episodically placed on and then removed from probation.

In February 2023, FBN placed RU’s Fort Myers, Florida ADN program on probation based on failure to satisfy the state’s NCLEX pass rate standard for two consecutive years.

In March 2024, FBN placed RU’s ADN programs at its Tampa, and Ocala, Florida, campuses, along with the Ocala campus satellite program at North Orlando, Florida, on probationary status based on failure to satisfy the state’s NCLEX pass rate standard for two consecutive years.

In January 2025, RU’s ADN programs at its Fort Myers, Tampa, and Ocala, Florida campuses received notification from FBN that the programs met NCLEX pass rate requirements, and they were removed from probationary status at FBN’s February 2025 Board meeting.

In addition, in May 2024, the Florida Commission for Independent Education, or FCIE, reviewed RU for a substantive change due to financial stability concerns and concerns related to FBN’s probation action related to the Fort Myers, Tampa and Ocala, Florida ADN programs.

FCIE subsequently placed RU on a provisional license.

In May 2025, in light of the ADN programs’ removal from probation and RU’s positive working capital, FCIE moved RU from a provisional license back to a full License by Means of Accreditation.

In addition, as previously disclosed, the planned combination of APUS, RU, and HCN into one consolidated institution will result in part in a division tentatively named Rasmussen that will be comprised of RU’s campus-based and online nursing programs, RU’s healthcare programs, HCN’s campus-based nursing and healthcare programs, and RU’s non-healthcare programs.

Under the new legislation, following completion of the Combination, FBN and FDH could take action based on adverse actions that a different state agency takes with respect to HCN or Rasmussen nursing programs offered outside Florida.

The OBBBA may adversely impact us or our students’ ability to participate in federal student financial aid programs, which could have a significant adverse impact on enrollments and our business, operations, and financial results.

As discussed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Overview – Legislative and Regulatory Activity– The One Big Beautiful Bill Act”, President Trump recently signed into law the OBBBA, which, among other things, makes significant changes to federal student financial aid programs and eligibility requirements for such programs.

New caps on federal loans for graduate and professional students and parents of undergraduates may limit borrowing options for our students and the accountability framework and related earnings test may limit the availability of certain programs due to a potential loss of Federal Direct Loan eligibility.

These changes may impact our students’ ability to participate in federal student loan programs, which may have a significant adverse impact on enrollments and our business, operations, and financial results.

Various portions of the OBBBA may go through negotiated rulemaking prior to implementation, and we cannot predict the timing or outcome of those negotiations or the rulemaking process.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1A. Risk Factors