What changed in this filing

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Item 1. Business

2026-03-12 compared with 2025-03-06 · 541 added, 600 removed, 830 unchanged (58% of the section changed)

COMPANY OVERVIEW

American Public Education, or APEI , provides online and campus-based postsecondary education to approximately 106,700 students, and career learning to approximately 24,600 individuals, through our subsidiary institutions.

Our institutions offer purpose-built education programs and career learning designed to prepare individuals for productive contributions to their professions and society and to offer opportunities to advance students in their current professions or to help them prepare for their next career.

American Public Education, Inc., or APEI, provides online and campus-based postsecondary education to approximately 108,600 students through our subsidiary institutions.

Our institutions offer purpose-built education programs designed to prepare individuals for productive contributions to their professions and society and to offer opportunities designed to advance students in their current professions or to help them prepare for their next career.

Our Vision and Mission

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We are the number one educator of active-duty military and of veterans through American Public University System.

We are a national leader in pre-licensure nursing education, focused on a Diploma in Practical Nursing, or PN degree, and an Associate Degree in Nursing, or ADN degree, through Rasmussen University and Hondros College of Nursing.

We operate one of the largest providers of training to the federal government and public workforce through Graduate School USA.

We are a national leader in pre-licensure nursing education, focused on a Diploma in Practical Nursing, or PN diploma, and an Associate Degree in Nursing, or ADN, through Rasmussen University and Hondros College of Nursing, as well as a Bachelor of Science in Nursing, or BSN degree, through Rasmussen University.

Our Institutions

We have four subsidiary institutions:

We have three subsidiary institutions:

American Public University System;

Rasmussen University;

Hondros College of Nursing;

and Graduate School USA.

and Hondros College of Nursing.

American Public University System

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APUS traces its roots to American Military University, or AMU, which was founded in 1991, as a distance-learning, graduate-level institution for military officers seeking an advanced degree in military studies.

Since then, APUS has broadened its focus to include veterans, extended military families, and other public service and service-minded communities, with a focus on educating those who serve, and has two brands:

AMU, which is focused on educating students from the military, national security, military-affiliated and service communities, like police, firefighters, emergency personnel, and government employees, and American Public University, or APU, which is focused on educating career-focused working adults with an emphasis on educating professionals working in service-related communities, including nursing, public health, public administration, and business administration.

Since then, APUS has broadened its focus to include veterans, extended military families, and other public service and service-minded communities, with a focus on educating those who serve.

APUS has two brands:

AMU, which is focused on educating students from the military and national security communities, and military families and veterans, and American Public University, or APU, which is focused on educating career-focused working adults with an emphasis on educating professionals working in service-minded communities, including nursing, public health, public administration, and business administration.

Today, while the majority of APUS students are undergraduate-level, students are also enrolled in its certificate, graduate, and doctoral programs.

APUS is exclusively an online institution of higher learning, designed to meet the needs of the military, military-affiliated, public service, and working adult students.

APUS is exclusively an online institution of higher learning, purpose-built to meet the needs of the communities it serves.

Many of its students serve in positions requiring extended and irregular work schedules, are on-call for rapid response missions, participate in extended deployments and exercises, travel or relocate frequently, and often must balance family and work demands.

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As of December 31, 2025, approximately 62% of APUS’s students self-reported that they served in the military on active duty at the time of initial enrollment, and approximately 15% of APUS’s students self-reported that they are a military veteran.

The remainder of APUS’s students are other military or military-affiliated professionals (such as reservists or National Guard members), public service professionals (such as law enforcement personnel or other first responders), and other non-military students (such as working adult students and military spouses).

APUS is institutionally accredited by The Higher Learning Commission, or HLC, a regional accrediting agency recognized by the U.S.

The remainder of APUS’s students are other military or military-affiliated professionals (such as reservists or National Guard members), family members of veterans and active-duty military and public service professionals (such as law enforcement personnel or other first responders) and other non-military students (such as working adult students).

APUS is institutionally accredited by The Higher Learning Commission, or HLC, an institutional accrediting agency recognized by the U.S.

Department of Education, or ED.

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Rasmussen University

RU provides nursing- and health sciences-focused postsecondary education to approximately 14,600 students at its 20 campuses in six states and online.

At the beginning of its 124-year history, RU focused on educating business students to prepare them for practical careers in bookkeeping, secretarial services, and accounting.

RU provides nursing- and health sciences-focused postsecondary education to approximately 15,900 students at its 18 campuses across five states and online.

Not included in these counts are the Green Bay, Wisconsin campus that was closed effective December 31, 2025, and the Wausau, Wisconsin campus, which RU intends to close on December 31, 2026.

beginning of its 125-year history, RU focused on educating business students to prepare them for practical careers in bookkeeping, secretarial services, and accounting.

RU’s foundation of education that transforms lives created an institution built to serve those not typically served by traditional higher education.

While RU continues to offer programs across a broad range of study including business, technology, and education, it expanded its breadth and embarked on providing healthcare education in 2006.

Today, RU offers a comprehensive “ladder” of nursing degrees, including pre-licensure PN and ADN degrees, post-licensure Bachelor of Science in Nursing, or BSN, and Registered Nurse, or RN, to BSN degrees, Master of Science degrees in Nursing, Specialties and Nurse Practitioner, and a Doctorate of Nurse Practice.

Today, RU offers a comprehensive “ladder” of nursing degrees, including a pre-licensure Diploma in PN, ADN, and BSN degree, as well as the post-licensure RN to BSN degree, Master of Science in Nursing degree and Doctorate of Nursing Practice.

In addition, RU also offers a post-graduate nursing certificate.

RU is committed to innovation in program delivery.

For example, virtually every nursing program at RU incorporates online content alongside lab and clinical or classroom components.

As of December 31, 2024, on-ground enrollment was approximately 6,300, of which approximately 5,500 students were pursuing nursing degrees at RU, approximately 90% of whom were enrolled in RU’s pre-licensure nursing degree programs.

As of December 31, 2025, on-ground enrollment was approximately 7,100 students, of which approximately 6,200 were pursuing nursing degrees at RU, approximately 90% of whom were enrolled in RU’s pre-licensure nursing degree programs.

At December 31, 2025, online enrollment was approximately 8,800 students.

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Hondros College of Nursing

HCN provides nursing education to approximately 3,700 students across eight campuses in three states.

HCN offers pre-licensure nursing programs that are designed to prepare individuals for productive careers through both a PN degree and an ADN degree, and two Direct Entry ADN degree options that offer an accelerated graduation pathway for students who meet certain transfer credit, academic, and entrance exam requirements.

HCN provides nursing education to approximately 4,000 students at eight campuses across three states.

HCN offers pre-licensure nursing programs that are designed to prepare individuals for productive careers through both a PN diploma and an ADN, and a Direct Entry ADN option that offer an accelerated graduation pathway for students who meet certain transfer credit, academic, and entrance exam requirements.

HCN’s students principally receive on-campus instruction at one of HCN’s campuses and online for certain courses for those that prefer remote course learning.

As of December 31, 2025, approximately 68% of HCN students were enrolled in a PN program and 32% were enrolled in an ADN program.

HCN is institutionally accredited by the Accrediting Bureau for Health Education Schools, or ABHES, a national accrediting agency recognized by ED.

HCN is institutionally accredited by the Accrediting Bureau of Health Education Schools, or ABHES, a national accrediting agency recognized by ED.

HCN’s PN program is accredited by the National League for Nursing Commission for Nursing Education Accreditation, or NLN CNEA.

Graduate School USA

GSUSA, based in Washington, DC, is one of the largest providers of career learning to the federal government and public employee workforce.

We acquired substantially all of the assets of GSUSA on January 1, 2022, advancing our focus on delivering training that provides students with pathways to employment and career advancement.

GSUSA provides contract training to more than 100 federal government agency customers and through direct enrollment by federal, state, and municipal government employees, contractors, and non-government employees.

GSUSA provides career learning online as well as in-person at its headquarters facility in Washington, D.C.

and at government and customer sites.

GSUSA offers a catalog of more than 300 courses specializing in foundational and continuing professional development, as well as leadership training and practice management through its Center for Leadership and Management and Government Audit Training Institute.

GSUSA trained over 24,600 individuals in 2024.

GSUSA is accredited by the Accrediting Council for Continuing Education and Training, or ACCET.

We have three reportable segments:

For the periods covered by this Annual Report, we had three reportable segments:

the APUS Segment;

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and the HCN Segment.

Unallocated corporate activity, eliminations, and GSUSA’s results are included in “Corporate and Other” in the Consolidated Financial Statements.

Unallocated corporate activity, eliminations, and GSUSA’s results prior to the GSUSA Sale Date are included in “Corporate and Other” in the Consolidated Financial Statements.

Financial information regarding each of our reportable segments is reported and discussed in this Annual Report in the sections entitled “Financial Statements and Supplementary Data” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations”.

Beginning in fiscal year 2026, we will have two reportable segments:

APU Global, formerly the APUS Segment, and RU Health+, the businesses that formerly comprised the RU Segment and HCN Segment.

The following information for our segments is as of and for the year ended December 31, 2025.

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The Planned Combination of APUS, RU, and HCN

On January 28, 2025, we announced our plan to combine APUS, RU, and HCN into one consolidated HLC-accredited institution that will be a university system encompassing all APUS, RU, and HCN programs, campuses, and operations, or the Combination.

The combined institution will be named American Public University System, or the Combined Institution.

As a result of the Combination, the Combined Institution will have two divisions, tentatively named (i) APUS Global, comprised of AMU and APU and (ii) Rasmussen, 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, with final division names to be determined closer to closing of the Combination.

The structure will allow each institution to continue to serve its particular student populations while benefiting from being part of a single university system.

The structure is designed to leverage each institution’s strengths to focus our efforts on supporting the military and veterans and expanding our nursing and healthcare platforms to better serve our students.

We believe combining our subsidiary institutions into a single university system will strengthen the financial position of our Company as a whole, enable us to operate with greater efficiency, and facilitate innovation across the Company through more direct collaboration among the educational divisions.

We anticipate completing the Combination in the third quarter of 2025, subject to obtaining required approvals and ED taking related actions.

In 2025, we announced the planned combination of APUS, RU, and HCN, or the Combination, which will result in a combined institution named American Public University System comprised of two divisions named (i) APU Global, comprised of AMU and APU, and (ii) RU Health+, 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.

The Combination constitutes a Change of Control, Structure or Organization pursuant to HLC policy and, accordingly, we were required to obtain HLC approval prior to effectuating the Combination.

In December 2024, APUS and RU jointly submitted an application for Change of Control, Structure or Organization to HLC.

Subsequently, ED informed us that we would need to follow a different process to implement the Combination that entails two steps instead of one:

(i) merger of the legal entities that own and operate APUS, RU, and HCN, with the APUS entity surviving following the merger, and (ii) combination of the institutions into one HLC-accredited institution.

As a result of this process change, HLC required APUS and RU to submit a new joint application for Change of Control, Structure or Organization to HLC in September 2025 containing substantially the same information that had been submitted previously and reflecting the two-step process.

In February 2026, HLC approved the continuation of accreditation of APUS and RU after the legal entity merger with an acknowledgment that the intent is to eventually consolidate the three institutions into one HLC accreditation.

ABHES has also informed HCN that it will continue HCN’s ABHES accreditation after the legal entity merger.

On March 2, 2026, we completed the merger of the legal entities that own and operate APUS, RU, and HCN, with the APUS entity surviving the merger, and subsequently notified ED that the merger occurred and resulted in RU and HCN being directly owned by the same legal entity that directly owns APUS.

We currently expect to complete implementation of step two of the Combination in the third quarter of 2026 , subject to obtaining required approvals .

For additional details regarding regulatory treatment of the Combination, see “Regulatory Environment – Accreditation – Institutional Accreditation” and “Regulatory Environment – Accreditation – The Planned Combination of APUS, RU, and HCN”, and for additional information regarding risks related to the Combination, see the Risk Factor with the caption beginning “The planned combination of APUS, RU, and HCN .

Rasmussen University Regulatory Metrics

RU’s leadership team continued to focus throughout 2024 on improving various regulatory metrics at RU, particularly National Council Licensure Examination, or NCLEX, pass rates.

We increased our focus on these metrics in 2024, partially because RU’s ADN program enrollment had been adversely impacted by both voluntary and imposed enrollment caps imposed in large part due to NCLEX pass rates below requisite state thresholds, as discussed further in the Risk Factor captioned

“Declines in enrollments at RU could materially adversely affect RU’s and our profitability, financial condition, results of operations, and cash flows”.

In 2024, we saw improvements to RU NCLEX pass rates, including in the ADN program pass rates at nearly every campus, as compared to early 2023.

We believe these improvements were driven by initiatives put in place by RU’s leadership during the last two years as well as by changes to the NCLEX that were implemented in April 2023.

NCLEX pass rates and regulatory metrics more generally will continue to be an area of focus.

Federal Government Shutdown

On October 1, 2025, the U.S.

federal government shut down due to a failure by Congress to pass appropriations legislation, resulting in, among other things, suspension of the DoD TA programs and ultimately an inability of APUS students seeking to use TA as a payment source to register, or in some cases stay registered, for courses.

In connection with this shutdown, which ended November 12, 2025, APUS TA course registrations decreased in the fourth quarter 2025 compared to the prior year period.

This was the first time since 2013 that APUS had dropped course registrations as a result of a government

shutdown because the Defense Appropriations Bill, which annually funds TA, was not passed prior to October 1, 2025.

This shutdown had an adverse impact on APUS’s course registrations, which impacted APUS’s and our cash flows, results of operations, and financial condition.

See “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Overview – U.S.

Federal Government Shutdown”, for more information.

90/10 Compliance

We continued to have a sustained focus in 2024 on the “90/10 Rule”, which is described under “Student Financing Sources and Related Regulations/Requirements – Department of Education – Regulation of Title IV Financial Aid Programs – Financial Responsibility” below.

We continued to have a sustained focus in 2025 on the “90/10 Rule”, which is described under “Student Financing Sources and Related Regulations/Requirements – Department of Education – Regulation of Title IV Financial Aid Programs – The 90/10 Rule” below.

While each of our institutions was in compliance with the 90/10 Rule for 2025, APUS’s relevant percentage for 2025 was 89%.

Compliance with the 90/10 Rule will continue to be an area of focus, and despite our efforts, there can be no assurance that we will continue to be able to comply in future years, particularly at APUS.

See the Risk Factors captioned “If one or more of our institutions does not comply with the 90/10 Rule, it or they will lose eligibility to participate in federal student financial aid programs” and “Our student registrations, revenue, and cash flow have been adversely impacted and we could experience additional adverse impacts as a result of the Armed Forces’ transition to new systems for soldiers to request TA” for more information.

See the Risk Factors captioned “If one or more of our institutions does not comply with the 90/10 Rule for two consecutive years, it or they will lose eligibility to participate in federal student financial aid programs”, “Our student registrations, revenue, and cash flow have been adversely impacted and we could experience additional adverse impacts as a result of the Armed Forces’ TA processing system upgrades or a transition to new systems for service members to request TA or accessing VA education benefit programs”, and “There can be no guarantee that our business will generate sufficient cash flow from operations or that future capital or borrowings will be available to us in an amount sufficient to enable us to fund our other liquidity needs”, for more information.

Tuition Increases

Providing affordable degree and certificate programs is an important element of our competitive strategy.

In August 2025, RU implemented a modest tuition increase for new and reentering students, and in October 2025 implemented modest increases for current students in non-prelicensure nursing programs.

In January 2026, RU implemented a modest tuition increase for prelicensure nursing program students.

HCN implemented a 5% increase in tuition and fees effective in October 2025 for its ADN and PN programs.

The tuition and fee increases at RU and HCN are intended to reflect adjustments to be consistent with the local campus markets.

Even with these increases, RU and HCN’s tuition and fees are designed to be affordable and competitive when compared to the tuition and fees at similar institutions offering the same level of flexibility, accessibility, and student experience.

In February 2026, APUS implemented a modest tuition increase for non-military undergraduate and graduate students.

We believe that APUS’s tuition and fees remain lower than the average in-state cost at public universities.

Campus Consolidations and Closures

In 2024, RU combined two Florida campuses and two Minnesota campuses, each consolidation resulting in a single expanded campus in the respective state, with the intention to improve the student experience.

In May 2024, RU notified the Wisconsin Educational Approval Program, or EAP, that it intends to voluntarily close its two Wisconsin campuses, effective December 31, 2025, and 2026, respectively.

In May 2024, RU notified the Wisconsin Educational Approval Program, or EAP, that it intended to voluntarily close its two Wisconsin campuses, effective December 31, 2025, and 2026, respectively.

RU closed the Green Bay campus effective December 31, 2025 as planned, and intends to close the Wausau campus on December 31, 2026.

All students enrolled at the two Wisconsin campuses have expected graduation dates on or before the applicable campus closing date.

For additional information, see the Risk Factor captioned “RU’s actual and planned closure of campuses or termination of programs on certain campuses may adversely impact RU and us.”

Preferred Stock Redemption

On June 23, 2025, APEI redeemed all 400 outstanding shares of Series A Senior Preferred Stock for $43.1 million, excluding unpaid and accrued dividends of $1.4 million.

Accordingly, there are no shares of preferred stock issued or outstanding at December 31, 2025.

For additional details regarding the redemption of the Series A Senior Preferred Stock, please refer to “Note 12.

Preferred Stock” included in our Consolidated Financial Statements.

Assets Held for Sale

In the first and second quarters of 2025, APUS completed the sale of an undeveloped parcel of land and two buildings located in Charles Town, West Virginia, for net sales proceeds of approximately $23.0 million.

Please refer to “Note 5.

Assets Held For Sale” included in our Consolidated Financial Statements for more information.

Sale of Graduate School USA

On July 25, 2025, or the GSUSA Sale Date, APEI completed the sale of its membership interest in Graduate School USA, or GSUSA, for $0.5 million, subject to customary adjustments, and as a result, the lease liability was removed from our balance sheet.

We have no continuing involvement in GSUSA.

The sale of APEI’s membership interest in GSUSA is not considered significant shift in our strategic focus, nor is it considered material to our operations, cash flows, or financial position.

Please refer to “Note 2.

Significant Accounting Policies” included in our Consolidated Financial Statements for more information on APEI’s sale of its membership interest in GSUSA.

Executive Leadership Changes

During 2024, we entered into a Transition and Release Agreement with our Chief Financial Officer and began an orderly search to fill this position.

In addition, we recently announced a new president for RU and the transition of the current RU president to service on the RU Board of Directors.

On August 4, 2025, the Board of Directors of APEI, or the Board, appointed James Kenigsberg as Interim Chief Innovation and Technology Officer of APEI, and Mr.

Kenigsberg resigned from service on the Board in connection with and effective as of his appointment.

Effective October 20, 2025, we appointed Edward H.

Codispoti as Chief Financial Officer.

Our former Chief Financial Officer, Richard W.

Sunderland, Jr., continued to serve the Company until his departure in the first quarter of 2026.

Please refer to “Our Institutions and Our Operations – Information About our Executive Officers” below for additional information about our executive officers serving as of the date of this Annual Report.

Information Technology

In April 2024, as part of our technology transformation program, we transitioned to a managed service provider for certain information technology services, including service desk, student support, end user support, and network management and operations.

In the third quarter of 2024, the information technology services previously outsourced under the Collegis LLC, or Collegis, information technology contract were transitioned in-house and to third-party vendors.

Tuition Increases

Providing affordable degree and certificate programs is an important element of our competitive strategy.

In April 2024, APUS implemented a modest tuition increase for master’s level students across all categories, including military, non-military, and veteran students, and in September 2024, APUS returned the military rate for master’s level students to the $250 per credit hour rate in effect prior to the April 2024 tuition increase.

We believe that APUS’s tuition and fees remain lower than the average in-state cost at public universities.

RU implemented modest tuition increases for all students for select programs in the first quarter of 2024, for new students for select programs in August 2024, and for returning students for select programs in October 2024.

The tuition and fee increases at RU are intended to reflect adjustments to be consistent with the local campus markets and competitive environment.

Even with these increases, we believe RU’s tuition and fees are designed to be affordable and competitive when compared to the tuition and fees at similar institutions offering the same level of flexibility, accessibility, and student experience.

Share Repurchase Program

In January 2024, we repurchased 251,146 shares of our common stock under our November 2023 repurchase authorization for an aggregate purchase amount of $2.8 million.

Effective February 1, 2024, we ceased purchases under this purchase authorization.

Financial Objectives

In 2025, we strive to build on the momentum created by our actions and achievements in 2024 and continue to execute on our strategic plan.

Specifically, we are focused broadly on (i) achieving public market scale by growing the revenue of our enterprise organically and inorganically and (ii) delivering improved enterprise-wide operating margins.

Reductions in Force

On November 3, 2025, as a result of the government shutdown, we completed a reduction in force that resulted in the termination of approximately 40 non-faculty employees at APUS, representing approximately 6.5% of the APUS non-faculty workforce.

Separately, in the fourth quarter of 2025, 19 information technology employees at APEI were terminated in connection with our ongoing efforts to optimize certain information technology functions.

See “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Overview – Reductions in Force”, for more information.

Our Market and Competition

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The overall U.S.

postsecondary education market is large, with approximately 4,500 institutions of higher learning, diverse in its business models, and fragmented such that no one institution has a significant market share.

postsecondary education market is large, with more than 4,500 institutions of higher learning, diverse in its business models, and fragmented such that no one institution has a significant market share.

Most postsecondary institutions, including for-profit postsecondary institutions, regardless of where they are located, how they are organized, or who they serve, face challenges, including:

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• focus on quality and affordability, including via questions from potential students, lawmakers, the media, and others about the quality and cost of postsecondary education and the impact of poor quality and high costs;

• changes in consumer demands as prospective students look to unbundle their education and pursue credentials outside of degrees;

• changes in consumer demands as prospective students look to pursue credentials outside of degrees;

• a continually changing regulatory environment;

• fluctuations in enrollment, as evidenced by industry-wide undergraduate enrollment growth of 2.0% between the fall of 2012 and the fall of 2022 at four-year institutions;

• fluctuations in enrollment;

• rapid technological transformation, including through increasing demand for online offerings and the utilization of technology to enhance student learning, and increasing use of artificial intelligence, or AI, technologies.

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For example, the U.S.

Naval Community College, or the USNCC, a community college supporting naval education for enlisted service members, reached initial operating capability in the fall of 2023 and now provides education to approximately 5,000 service members.

By fiscal year 2026, it plans to achieve the capability to accommodate more than 10,000 students.

Naval Community College, or the USNCC, is a community college supporting naval education for enlisted service members.

While a number of schools with which APUS competes are participating partners with the USNCC, APUS is not an eligible partner because of its status as a for-profit institution.

As traditional not-for-profit public and private schools continue to advance online capabilities, we believe that they will continue to present increasing competition for APUS.

As traditional not-for-profit public and private schools continue to advance online capabilities, we believe that they may present competition for APUS.

Nursing Programs

RU and HCN’s nursing programs are offered as campus-based programs in the geographic areas surrounding their campuses.

In the approximately 20 market areas where RU and HCN’s combined 28 on-ground nursing campuses are located, we compete with a mix of community colleges, public and private postsecondary institutions, and other career-focused nursing colleges offering similar pre-licensure nursing programs.

In RU and HCN’s combined 26 on-ground nursing campuses, we compete with a mix of community colleges, public and private postsecondary institutions, and other career-focused nursing colleges offering similar pre-licensure nursing programs.

Because of the relatively local focus of these pre-licensure programs, our competitive environment is moderately fragmented and affected by various factors specific to the states and particular areas where campuses are located, including local supply and demand for nurses and nursing schools.

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We also face competition, particularly at APUS and for RU’s online programs, from competing schools and others providing non-traditional education programs, often without charge or at low costs, including:

• institutions offering CBE programs and single course or course packages aimed at credentialing outcomes rather than degree outcomes;

• institutions offering competency-based education, or CBE, programs and single course or course packages aimed at credentialing outcomes rather than degree outcomes;

• corporate training and other companies partnering with universities or the federal government to offer alternative educational paths for students and the federal government workforce, respectively;

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We believe that military veterans represent another important addressable market for online education.

Census Bureau estimates that in 2024 there were approximately 1.7 million veterans aged 18 to 34 and 4.7 million veterans aged 35 to 54.

Bureau of Labor estimates that in 2025 there were approximately 6.1 million veterans aged 18 to 54.

We believe that our military heritage, affordability, and online offerings are attractive to veterans.

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When factoring in the need to replace workers who transfer to different occupations or exit the labor force, such as to retire, the U.S.

Bureau of Labor Statistics projects openings each year for registered nurses of approximately 194,500, and approximately 54,000 for practical nurses, through 2033, though the amount of demand varies by geography.

Bureau of Labor Statistics projects openings each year for nurses of more than 200,000 through 2034, though the amount of demand varies by geography.

There is significant unmet demand from qualified students for nursing educational programs.

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Working adults also recognize the need to be lifelong learners.

We believe employers and professional associations will seek partnerships with academic institutions to advance the skills and productivity of their workforce through higher education and career learning programs, which we see as an opportunity, particularly for APUS, RU, and GSUSA.

We believe employers and professional associations will continue to seek partnerships with academic institutions to advance the skills and productivity of their workforce through higher education and career learning programs, which we see as an opportunity, particularly for RU and HCN.

We also believe that there is an opportunity to expand the APUS brand more broadly to attract students beyond its historical constituency.

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Providing affordable, quality degree and certificate programs is an important element of our competitive strategy.

The combined tuition and fees at APUS are generally less than the average in-state cost at a public university.

APUS’s low tuition

and fees, in combination with APUS-funded tuition grants and book grants provided to all undergraduate students result in significant savings and mean that APUS students are not required to take on as much debt as they might at another institution.

We believe the combined tuition and fees at APUS are generally less than the average in-state cost at a public university.

APUS’s low tuition and fees, in combination with APUS-funded tuition grants and book grants provided to all undergraduate students, result in significant savings and mean that APUS students are not required to take on as much debt as they might at another institution.

APUS’s generous transfer credit policy, and use of open educational resources, further reduce a student’s out-of-pocket costs.

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Please refer to “Our Institutions and Operations – Our Institutions – Affordability and Cost of Attendance” below.

We believe that, given broad concerns about rising tuition and student loan debt in higher education, there are opportunities to create awareness and attract college-ready students with the primary message of affordability and value, in order to help achieve a Higher Education Return on Investment for our Customers, or HEROIC TM .

Relevant Offerings Aligned with Demand

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Our institutions offer flexible learning modalities to meet the needs of busy working adults.

APUS offers online delivery with monthly starts and academic support offerings that are individualized to students’ needs, while RU offers a blend of online and in person courses for their nursing and other healthcare-related programs, and flexible start dates and online courses for other programs.

HCN offers PN and ADN programs that accommodate working adults by offering on-campus instruction, online instruction for certain courses, as well as daytime and evening/weekend options.

GSUSA offers virtual and in-person instructor-led, blended, and on demand online courses to accommodate the need for immediate application-specific training.

APUS offers online delivery with monthly starts and academic support offerings that are individualized to students’ needs, while RU offers a blend of in person and online courses for their nursing and other healthcare-related programs, and flexible start dates and online courses for other programs.

HCN offers PN and ADN programs that accommodate working adults by offering on-campus instruction, online instruction for certain courses, as well as daytime and evening/weekend options at its Ohio campuses.

Market Leadership

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We are also a national leader in pre-licensure nursing education.

RU and HCN have more than 9,200 nursing students at their 28 campuses across nine states and online with over 90% of those students pursuing a pre-licensure PN degree, ADN degree, or post-licensure BSN degree.

Finally, we are one of the largest providers of training to the federal and public employee workforces through GSUSA with its extensive portfolio of government agency customers and directly enrolled federal government employees.

RU and HCN have more than 10,200 nursing students at their 26 campuses across eight states and online with over 90% of those students pursuing a pre-licensure PN diploma, ADN, or post-licensure BSN degree.

Expansive Nursing Footprint

Our institutions train nurses at 28 campuses across nine states and online.

Given the state and regulatory approvals necessary, the investment in physical campus facilities, the specialized programmatic knowledge and related accreditations, clinical placement requirements, the time to receive approval to grow nursing enrollments and various standards that nursing schools must meet, we believe nursing education – and in particular first or pre-licensure nursing education – provides us with opportunities to distinguish ourselves from our competitors.

In addition, we believe we are one of the only educators with a full “ladder” of nursing curriculum from PN to Doctoral degrees.

Our institutions train nurses at 26 campuses across eight states and online.

opportunities to distinguish ourselves from our competitors.

In addition, we believe we are one of the only educators with a full “ladder” of nursing curriculum from PN diplomas to Doctoral degrees.

Purpose-Built Student Information System

At APUS, our purpose-built technology platform allows for scale without significant additional cost, and our student information system is purpose-built to serve active-duty military by allowing students that intend to access their TA benefit to seamlessly enroll, register, and gain approval for this benefit.

Our Business Strategy and Goals

Win with Service-Minded Students

Win with Service-Minded Students and their Families

At our core is a recognition of the importance of individuals who serve the country and society at large.

We aim to deliver on our vision of education that transforms lives, advances careers, and improves communities by “educating those who serve.” Our institutions are purpose-built to educate the service-minded student by offering programs designed to prepare individuals for contributions to their profession and society and to provide opportunities to advance students in their current professions or help them prepare for their next career.

We seek to offer curriculum in bundles that resonate with service-minded students.

We seek to offer curriculum in bundles that resonate with service-minded students and their families.

We expect to continue to focus on education that provides real skills and pathways to employment and career advancement in fields that align with demand.

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We believe that our institutions provide us with a foundation from which we can build a career learning platform.

We seek to enter into new nursing provider partnerships and expand existing nursing provider partnerships, such as those at HCN.

For example, in the fall of 2022, HCN entered into a tuition scholarship program with a national healthcare provider to provide scholarships to ADN students at its Toledo, Ohio, campus in exchange for a work commitment following graduation, and, in 2023, partnered with another national healthcare organization to provide similar scholarships to ADN students at its Columbus, Ohio, campus.

We continue to add new partnerships with healthcare partners at HCN to provide scholarships to ADN and LPN students at our Ohio campuses.

During the fourth quarter of 2024, we began exploring similar opportunities for RU.

APUS partners with community colleges, which prepare students for transfer opportunities to APUS for bachelor’s degree programs.

At RU and HCN we seek to enter into new nursing provider partnerships and expand existing nursing provider partnerships.

Together RU and HCN have over 400 corporate alliance partners whose employees can pursue an education at RU or HCN.

Additionally, among our institutions’ offerings are certificate and credentialing programs.

Transform the Company to Achieve Sustainable Growth

Achieve Sustainable Growth

We aim to increase our public market scale by growing the revenue of our enterprise organically and inorganically and delivering improved enterprise-wide operating margins.

We intend to develop capabilities to drive organic growth and plan to continue to assess and pursue strategic acquisitions and integrate and grow them for inorganic growth.

Our strategy is organized around areas where we believe we have “the right to win.” For example, we will continue to focus on being the top educator for active-duty military and veterans and pre-licensure nurses.

We also aim to deliver improved enterprise-wide operating margins by continuing to exercise financial discipline and taking steps such as our efforts focused on realigning our operating model, including the Combination, eliminating redundancies, and optimizing certain functions.

We will continue to develop capabilities to drive organic growth and plan to continue to assess and pursue strategic acquisitions and integrate and grow them for inorganic growth.

For example, we will continue to focus on being the top educator for active-duty military and veterans and one of the top educators for pre-licensure nurses.

Focus on Regulatory Metrics

We strive to deliver a quality, competitive education, which goes hand-in-hand with demonstrating compliance with various regulatory standards and metrics.

We expect to continue to focus on the core elements of our business that are necessary to meet these standards and metrics.

For example, in our nursing programs, we continue to be focused on improving various achievement metrics, particularly around NCLEX pass rates and retention statistics, and at APUS, we continue to focus on making sure we comply with the 90/10 Rule.

We expect to continue to focus on the core elements of our business that are necessary

to meet these standards and metrics.

For example, in our nursing programs, we continue to focus on improving various achievement metrics, particularly around NCLEX pass rates and retention statistics, and at APUS, we continue to focus on ensuring that we comply with the 90/10 Rule.

Optimize Our Cost Structure Through the Shared Services Model

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We believe that the shared services model promotes the efficient use of resources.

With the expected completion of the Combination and the creation of APU Global and RU Health+, we expect there to be revenue synergies and cost synergy opportunities through the elimination of redundancies and optimizing operations.

OUR INSTITUTIONS AND OPERATIONS

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APUS, RU, and HCN.

We also provide career learning to the federal government workforce through GSUSA.

Each institution is primarily responsible for its own academic mission, while APEI performs certain business functions on a shared basis for the benefit of APUS, RU, HCN, and GSUSA, with the capability to further expand these shared services to these entities.

Each institution is primarily responsible for its own academic mission, while APEI performs certain business functions on a shared basis for the benefit of APUS, RU, and HCN, with the capability to further expand these shared services to these entities.

We believe that the shared services model promotes the efficient use of resources.

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Programs and Areas of Study

We offer a total of 182 degree programs, 136 certificate programs, and five diploma programs, through our institutions.

We offer a total of 181 degree programs, 110 certificate programs, and four diploma programs, through our institutions.

We offer programs across a broad range of fields of study, including public service-focused fields such as nursing, national security, military studies, intelligence, and homeland security, as well as traditional academic fields such as business, health science, information technology, justice studies, education, and liberal arts.

In addition, through GSUSA, our offerings also include career learning opportunities in leadership, finance, human resources, and other fields of study critical to the federal government workforce.

Programs Number

Doctoral Degrees 2

Master’s Degrees 44

Bachelor’s Degrees 57

Associate Degrees 31

Doctoral Degrees 1

Master’s Degrees 6

Bachelor’s Degrees 19

Associate Degrees 21

Associate Degrees 1

APUS Degrees 133

RU Degrees 47

Total Degree Programs 181

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RU offers over 60 programs across seven schools of study in addition to nursing.

RU offers more than 745 distinct courses in 5.5 or 11-week formats with terms beginning in January, April, July, and October of each year.

RU offers a comprehensive “ladder” of nursing degrees, including a pre-licensure Diploma in PN, ADN degree, and a BSN degree, as well as the post-licensure RN to BSN degree, Master of Science in Nursing degree and Doctorate of Nurse Practice.

RU offers approximately 700 distinct courses in 5.5 or 11-week formats with terms beginning in January, April, July, and October, as well as 5.5 week terms beginning mid- February, mid- May, mid-August, and mid-November of each year.

RU offers a comprehensive “ladder” of nursing degrees, including a pre-licensure Diploma in PN, ADN, and a BSN degree, as well as the post-licensure RN to BSN degree, Master of Science in Nursing degree and Doctorate of Nursing Practice.

In addition, RU also offers a post-graduate nursing certificate.

HCN offers on-campus instruction leading to a PN or ADN degree and, beginning in the fourth quarter of 2024, a Medical Assisting Diploma, as well as a Direct Entry ADN degree option that offers an accelerated graduation pathway for students who meet certain transfer credit, academic, and entrance exam requirements.

HCN offers on-campus instruction leading to a PN diploma or ADN, as well as a Direct Entry ADN option that offers an accelerated graduation pathway for students who meet certain transfer credit, academic, and entrance exam requirements.

Portions of these programs are taught online.

Academic terms for HCN’s PN and ADN programs begin four times each year, with courses starting in January, April, July, and October.

terms for HCN’s PN and ADN programs begin four times each year, with courses starting in January, April, July, and October.

Graduates of RU and HCN’s PN and ADN programs are eligible to seek licensure after passing the applicable NCLEX exams.

Government Training

GSUSA offers professional development and training courses for federal government agencies and the federal government workforce, serving organizations and individuals with programs designed to support organizational missions, career and occupational development, and the personal ambitions of adult learners.

GSUSA’s offerings include more than 300 courses across 14 program areas.

Overall, our institutions have approximately 106,700 students enrolled online and at 28 campuses across nine states, with enrollment calculated differently depending on the institution.

In addition, GSUSA trained over 24,600 individuals in 2024.

Overall, our institutions have approximately 108,600 students enrolled online and at 26 campuses across eight states, with enrollment calculated differently depending on the institution.

The student body of APUS consists of approximately 88,700 enrolled students, most of whom are employed full-time.

Student enrollment is defined as the number of unique active students, including those who take an approved leave of absence, who are currently attending a course or have completed at least one course within the last 12 months.

APUS is designed to serve adult learners with tailored offerings to support them in successfully reaching their individual goals.

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Many APUS students have significant prior education and career experiences;

92% are working adults and the average age of APUS students is 34.

APUS is designed to serve those adult learners with tailored offerings to support them in successfully reaching their individual goals.

RU provides education to approximately 14,600 enrolled students at 20 campuses in six states.

approximately 88% enroll at APUS with prior educational credits, approximately 90% are working adults, and APUS students have an average age of 34.

RU provides education to approximately 15,900 enrolled students at 18 campuses across five states.

Student enrollment is defined as the number of unique active students, including those who take an approved leave of absence.

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As of December 31, 2025, approximately 6,200 students are pursuing nursing degrees at RU, over 90% of whom are enrolled in RU’s pre-licensure degree programs.

HCN provides nursing education to approximately 3,700 students at eight campuses in three states.

HCN provides nursing education to approximately 4,000 students at eight campuses across three states.

The average HCN student is approximately 35 years old and 93% of HCN students are female.

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Students and sponsors of tuition reimbursement programs look to accreditation for quality assurance, and employers rely on institutions’ accredited status when evaluating a candidate’s credentials.

APUS is institutionally accredited by HLC with a Standard Pathway designation, with the next reaffirmation of accreditation site visit date to take place in 2030-2031.

RU has institutional accreditation from HLC with an Open Pathway designation, with the next comprehensive evaluation for reaffirmation of accreditation scheduled for May 2026.

APUS is institutionally accredited by HLC with a Standard Pathway designation, with the next reaffirmation of accreditation site visit date to take place in May 2027, which will entail a review of APUS in its post-Combination form.

RU has institutional accreditation from HLC with an Open Pathway designation, with the next comprehensive evaluation for reaffirmation of accreditation scheduled for March 2027.

HCN is institutionally accredited by ABHES and has been granted continued accreditation through February 2027 for all programs at all campuses.

GSUSA is accredited by ACCET.

Upon completion of the Combination, HCN will no longer maintain its separate accreditation through ABHES.

In addition to institutional accreditation, certain of our programs offered have received specialized accreditation.

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Admissions and Admissions Standards

We work to attract students who are more likely to persist and succeed in our programs and continue to work to identify and implement changes and initiatives in an effort to attract and enroll more college-ready students more effectively.

We seek to attract students who are more likely to persist and succeed in our programs and continue to work to identify and implement changes and initiatives in an effort to attract and enroll more college-ready students more effectively.

We welcome students to apply for admission at any time through online application processes at APUS, RU, and HCN.

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APUS tuition remains among the lowest in the four-year for-profit sector.

APUS costs are more than 25% less than the average in-state full-time undergraduate tuition, fees, and books at four-year public universities, based on the final 2023-2024 institutional data reported to ED through the Integrated Postsecondary Education Data System.

This low tuition and fees, in combination with APUS-funded tuition grants and book grants provided to all undergraduate students, resulted in significant savings to APUS students.

APUS costs are approximately 22% less than the average in-state full-time undergraduate tuition, fees, and books at four-year public universities, based on the final 2024-2025 institutional data reported to ED through the Integrated Postsecondary Education Data System.

The low tuition and fees, in combination with APUS-funded tuition grants and book grants provided to all undergraduate students, results in significant savings to APUS students.

Additionally, APUS’s generous transfer credit policy, and use of open educational resources, further reduce a student’s out-of-pocket costs.

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In general, a bachelor’s degree may be earned for $42,000 in tuition costs at current tuition rates, and APUS master’s degrees may be earned for $16,380 in tuition at current tuition rates.

In February 2026, APUS increased undergraduate tuition to $360 per credit hour for undergraduate level courses, and increased tuition to $470 per credit hour for master’s level courses for non-military students.

APUS does not charge an admission fee or fees for services such as registration, course drops, or similar events that trigger fees at many other institutions.

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RU implemented modest tuition increases in the first quarters of 2023 and 2024 for all students for select programs, for new students for select programs in August 2024, and for returning students for select programs in October 2024, to help offset the increased cost of delivering a quality education.

RU implemented modest tuition increases for new and reentering students in August 2025 and implemented modest increases for current students in non-prelicensure nursing programs in October 2025.

RU implemented a modest tuition increase for prelicensure nursing program students in January 2026.

RU’s ADN program typically costs $453 per credit hour in addition to course fees.

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In the second quarter of 2023, HCN implemented a 5% increase in tuition and fees across all programs to offset the increased cost of delivering a quality, competitive education.

HCN’s PN program may be completed for approximately $19,600 in tuition and fees, the ADN program may be completed for approximately $27,800 in tuition and fees, and the new Medical Assisting program may be completed for approximately $13,000 in tuition and fees, each of which is dependent on the campus location.

In the fourth quarter of 2025, HCN implemented a 5% increase in tuition and fees for its ADN and PN programs, intended to reflect adjustments to be consistent with the local campus markets.

HCN’s PN program may be completed for approximately $20,500 in tuition and fees, the ADN program may be completed for approximately $29,200 in tuition and fees, each of which is dependent on the campus location.

Fees include the cost of examination review materials, lab fees, and test review fees, among others.

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Grants and Other Fee Reduction Opportunities

Prior to September 2023, to support APUS’s active-duty military students using TA, APUS provided an APUS-funded tuition grant so that undergraduate and master’s students who are eligible for TA benefits and their spouses and dependents had a net tuition of $250 per credit hour.

In September 2023, APUS removed the APUS-funded tuition grant and APUS began providing a Preferred Military Rate of $250 per credit hour for undergraduate and master’s level courses, for all U.S.

active-duty service members, National Guard members, Reservists, and military families.

APUS provides a Preferred Military Rate of $250 per credit hour for undergraduate and master’s level courses, for all U.S.

active-duty military, National Guard members, Reservists, and military families.

Active-duty military students using TA at the undergraduate level are expected to generally have no out-of-pocket expenses.

In the second quarter of 2023, coinciding with the tuition increases described above, APUS added a 10% Veteran Grant for veterans and veteran’s family members, on standard undergraduate and master’s level courses.

In April 2024, APUS increased the Veteran Grant on master’s level courses to 15% and added a 10% Opportunity Grant for undergraduate and master’s level courses.

In addition, APUS also provides a 10% grant for veterans and veteran’s family members, or Veteran Grant, on standard undergraduate tuition rates, a 15% Veteran Grant on master’s level courses, and a 10% Opportunity Grant for undergraduate and master’s level courses for remaining students.

In addition, veterans who qualify for 100% of their Post-9/11 Veterans Educational Assistance Act of 2008, or Post-9/11 GI Bill, benefits are expected to generally have no out-of-pocket expenses either.

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HCN students may apply performance-based grants toward the balance of their tuition after the application of all other funding sources.

HCN also offers an institutional affordability grant to students demonstrating financial need to cover the difference between the total cost of tuition and fees less the amount of all eligible financial aid resources.

HCN also offers an institutional affordability grant to students demonstrating financial need to cover the difference between the total cost of tuition and fees and the amount of all eligible financial aid resources.

The grant is designed to limit a student’s monthly payment to $200 through an award of up to $200 per month, or $600 per term after consideration of financial aid, employer tuition reimbursement, and other financial resources.

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We also carry out initiatives intended to improve the educational outcomes of our students.

For example, RU’s Council for Nursing Excellence is dedicated to helping students pass the NCLEX exam the first time by identifying student-specific challenge areas and providing customized tutoring resources and faculty training.

We believe these initiatives contributed to improved NCLEX pass rates, including improvements in the ADN program pass rates at nearly every campus in 2024 compared to early 2023.

In July 2024, RU entered into a contract with a third-party to provide nursing program curriculum upgrades and course materials and testing services to nursing students.

These services included integrated NCLEX testing simulation and preparation tools throughout the curriculum and curriculum assessments to identify areas where RU can better enable student mastery and success, which were implemented in January 2025.

For example, RU is dedicated to helping students pass the NCLEX exam the first time by identifying student-specific challenge areas, providing customized tutoring resources and faculty training, and creating student support specialist positions to conduct NCLEX review sessions.

In January 2025, RU implemented a contract with a third-party to provide nursing program curriculum upgrades and course materials and testing services to nursing students.

These services include integrated NCLEX testing simulation and preparation tools throughout the curriculum and curriculum assessments to identify areas where RU can better enable student mastery and success.

HCN offers students NCLEX fee vouchers to encourage students to take the NCLEX within a certain period after graduation.

HCN continues to provide significant faculty development resources to support improvements to the teaching and learning experience and program outcomes.

Additionally, HCN offers quarterly student workshops to help students prepare for taking the NCLEX exam, provides NCLEX-style questions on assessments throughout the program, and analyzes data from the NCLEX results, and other assessment tools, to adjust course requirements and materials.

Career Development

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We strive to link students directly with employers where we can.

For example, during the fourth quarter of 2022, HCN entered into a tuition scholarship program with a national healthcare provider to provide scholarships to ADN students at its Toledo, Ohio campus in exchange for a work commitment following graduation.

In the fall of 2023, HCN partnered with another national healthcare organization to provide similar scholarships to ADN students at its Columbus, Ohio campus.

During the fourth quarter of 2024, we began exploring similar opportunities at RU.

At RU and HCN we seek to enter into new nursing provider partnerships and expand existing nursing provider partnerships, and together RU and HCN have over 400 corporate alliance partners.

Marketing and Branding

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We also work with partners we believe can provide us with better access to students who will persist in our institutions’ programs.

Nearly 25% of our RU enrollments are associated with an alliance or partner relationship.

Over 25% of our RU enrollments are associated with an alliance or partner relationship.

We have agreements with over 300 employers whose employees pursue an education at RU.

At APUS, this includes partnerships with community colleges, which prepare students for transfer opportunities to APUS for bachelor’s degree programs.

At RU and HCN, we have begun establishing new partnerships with healthcare providers to further career outcomes and defray costs of education, as discussed more fully in “Our Institutions – Career Development” above.

APUS partners with over 120 employers and organizations directly.

Additionally, we collaborate with leading tuition assistance administrators and vertical channel partners, extending our indirect reach to over 1,000 organizations and expanding awareness of our academic programs across diverse industries.

The APUS Military Outreach team provides ongoing, professional, in-person services to our university’s military students across the United States.

This team conducts on-base office hours across the country and participates in nearly 100 education fairs each year, ensuring consistent visibility and hands-on guidance for military learners.

At RU and HCN, we

seek to establish new partnerships with healthcare providers to further career outcomes and defray costs of education, as discussed more fully in “Our Institutions – Career Development” above.

Marketing efforts tailored for our institutions consider prospective and current students, including their respective educational goals.

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We also have programs at APUS that aim to assist members of the military as they transition into private sector jobs.

RU and HCN nursing program marketing includes leveraging relationships with and marketing to the healthcare

community, and we continue to focus our marketing efforts on non-nursing in markets with increases in demand for those programs.

In April 2024, APU announced its plan to expand its reach to become a global digital university that integrates emerging technology and enhanced teaching and learning opportunities for faculty and students.

APU aims to provide students with collaborative learning experiences, classroom support powered by AI, and personalized digital services.

RU and HCN nursing program marketing includes leveraging relationships with and marketing to the healthcare community, and we continue to focus our marketing efforts on non-nursing in markets with increases in demand for those programs.

In November 2025, APUS announced its plan to optimize dedicated marketing resources to promote benefits to extended families, and increase its messaging about Veteran Grants.

APUS plans to leverage its existing military outreach team and student and alumni network, as well as entering new marketing channels, in order to accelerate growth among veteran and extended military family student populations.

APUS continues to plan to expand its reach to become a global digital university that integrates emerging technology and enhanced teaching and learning opportunities for faculty and students.

APUS aims to provide students with collaborative learning experiences, classroom support powered by AI, and personalized digital services.

Already, students can access personalized career coaches, and 24/7 mental health support, both in multiple languages;

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and numerous online practical work experience opportunities.

RU historically outsourced the vast majority of its marketing functions.

In October 2022, RU and Collegis mutually agreed to the termination of the marketing services contract, effective January 31, 2023, and completed the transition of RU marketing to our in-house centralized marketing team.

We continue to develop our marketing team with subject matter expertise and optimize our initiatives utilizing marketing technology and analytics.

All of our institutions’ marketing is performed in-house by our centralized marketing team through a shared services model.

We continue to enhance our marketing team with subject matter expertise and optimize our initiatives utilizing marketing technology, data, and analytics.

This in turn allows us to improve our marketing/media mix, audience targeting, creative messaging and user experience for all of our educational institutions.

Information Technology

Information technology systems are essential to our student experience and our business operations.

APEI provides information technology services to our institutions through a shared services model.

Prior to September 2024, RU outsourced a variety of information technology functions under a service agreement with Collegis, including its data center, support and maintenance of its learning management, student information, and customer relationship management systems, student support, end user support, voice services, and network management and operations, and its technology infrastructure was hosted, managed, and supported by Collegis.

Information technology systems are critical to our student experience and to the operations of our institutions.

APEI provides information technology services to its institutions through a shared services model that supports centralized governance while enabling institution-specific requirements.

Prior to September 2024, RU had outsourced a broad set of technology services under an agreement with Collegis LLC, including hosting and operation of learning management, student information, and customer relationship management systems, student and end-user support, voice services, network operations, and related infrastructure services.

Our Ongoing Technology Transformation

We are in the midst of a multi-year technology transformation program that we expect will enable us to enhance the learning experience for students, better accommodate new flexible learning modalities, and improve the operational effectiveness of our enterprise.

In April 2022, we notified Collegis that we intended to permit RU’s information technology services contract to expire by its terms in September 2024.

In December 2023, we entered into an agreement with a managed service provider to outsource a number of our information technology operations, including some that were previously being handled by Collegis, including service desk, student support, end user support, and network management and operations.

In April 2024, this transition was completed, and in the third quarter of 2024, we substantially completed the insourcing of information technology services and the outsourcing of certain of those same services to a managed service provider.

We are executing a multi-year enterprise technology transformation intended to modernize our core platforms, improve student experience, reduce long-term technology risk, and improve operational effectiveness.

This work is managed through defined, sequential stages to ensure a controlled rollout while maintaining uninterrupted operations.

Throughout 2024, we insourced core platform ownership, architecture, integration, and institutional support capabilities while continuing to use managed service providers for certain operational and commodity services.

This operating structure is intended to increase internal control over mission-critical systems and reduce dependency risks while benefitting from retaining the scalability of external partners.

In 2025, we began implementing an organizational redesign that aligns technology teams and functions into “domains.” Each domain is responsible for a defined set of platforms, business capabilities, and services.

This structural model is intended to create clearer accountability for system ownership, reduce fragmentation, streamline decision-making, and ensure that each critical area of student, academic, and enterprise operations has a dedicated technology leadership structure.

Domains are supported by centralized centers of excellence in data, cybersecurity, enterprise architecture, and platform engineering to promote consistency and standard practices across portfolios.

Student Information and Instructional Delivery

Our core enterprise systems are (i) our student information and services systems, or SIS, platforms which our institutions use to interact with and provide support to students in areas such as admissions, registration, tuition payment, grade reporting, progress toward degrees, and various other functions, (ii) our learning management systems, or LMS, platforms, which our institutions use to deliver course content and support teaching, learning, and collaboration, and (iii) our customer relationship management systems, or CRM, which manage our admissions functions.

At APUS, we have a legacy customized SIS that we refer to as Partnership at a Distance™, or PAD, and proprietary information systems and processes to support PAD.

RU uses Anthology Campus Nexus as its SIS.

The RU SIS environment is currently hosted with Anthology in a cloud environment.

APUS and RU admissions functions are managed inside of Salesforce and connected to PAD for APUS and Anthology for RU to ensure all pertinent information is synchronized appropriately.

HCN and GSUSA have their own SIS platforms.

In 2025, we plan to replace the existing SIS platform used by GSUSA and will also begin moving HCN to a new SIS platform.

More broadly, we continue to review and assess our student information and services platforms and their capabilities, including whether to consolidate to a standard platform across more or all our institutions.

PAD is designed to enable APUS to provide each student with individualized support at appropriate times from pre-enrollment through graduation and beyond, including student advising, administrative support, and community networking.

We continually evaluate PAD for changes and upgrades and anticipate that we will eventually make significant changes to or replace this system.

APUS and HCN use a cloud based LMS platform, Brightspace by D2L.

RU uses Blackboard Ultra as its LMS platform, in an environment hosted by Blackboard, which is now owned by Anthology.

All RU support for Blackboard Ultra is currently provided by APEI’s information technology shared services.

In early 2023, at APUS we launched a new native mobile application to improve the student experience.

The APUS mobile application provides current and prospective students with university information and access to academic tools via mobile and tablet, 24/7.

Key features include registration, academic dashboard, task manager, program tracker, and real-time notifications.

In 2024, we completed the consolidation of APUS’s CRM systems onto a single platform.

In addition to our SIS, LMS, and CRM platforms, we also have several other systems that support the student experience, financial aid processing, fiscal management, human resources processes, marketing, and decision support.

Our core enterprise systems include (i) student information systems, or SIS, which support admissions, registration, academic records, tuition and financial transactions, and student services;

(ii) learning management systems, or LMS, which support instructional delivery;

and (iii) customer relationship management, or CRM, systems, which support admissions and enrollment.

APUS operates a legacy customized SIS known as Partnership at a Distance™, or PAD.

We continue to evaluate modernization and long-term platform strategies, including staged transition approaches intended to minimize operational disruption while providing more modern architecture and end-user experiences.

RU uses Anthology Campus Nexus as its SIS and HCN uses a separate legacy SIS platform.

In 2026, we will be moving non-core SIS data and workflow functions for RU and HCN into Salesforce, which already serves as a stable system of record for student lifecycle data and operational processes for APUS and RU.

This approach is intended to preserve core regulatory and academic-record functions within the SIS while shifting surrounding processes into a more stable and standardized platform.

In 2026, we plan to begin migrating HCN to a new SIS platform as part of our broader strategy to reduce fragmentation and complexity across student information systems.

APUS and HCN use Brightspace by D2L as their LMS platform.

RU currently uses Blackboard Ultra, hosted by Anthology.

In 2026, we plan to transition RU from Blackboard Ultra to D2L to consolidate our LMS environment across our institutions, which we expect will reduce operational complexity and support a more consistent academic experience.

While we expect to complete certain of these upgrades in 2026 and 2027, there can be no guarantee that they will be completed on this timeline.

We regularly evaluate opportunities to modernize and improve the operational effectiveness of our technology systems and platforms, and we anticipate additional changes as we work to execute on our multi-year enterprise technology transformation.

In addition to our SIS, LMS, and CRM platforms, we maintain systems that support financial aid processing, institutional finance, human resources, marketing, analytics, and enterprise decision support.

Our Information Technology Infrastructure

The backbone of our information technology infrastructure currently consists of two co-location data centers.

Our technology environment is managed internally and through a third-party managed service provider.

Student access to our systems is provided through redundant data carriers.

We intend to continue to migrate much of our infrastructure and core applications to a cloud computing model with the goal of improving the reliability, scalability, agility, and security of our core infrastructure and applications.

Our technology infrastructure consists of two co-location data centers and a mix of internally managed and third-party managed environments.

Redundant network connectivity supports student and institutional access to all systems.

We are continuing to transition toward a cloud-based operating model through the phased migration of applications, integration services, and infrastructure workloads to cloud platforms.

We expect to operate a hybrid environment during this transition.

Our objective is to improve scalability, reliability, security, and resilience while reducing reliance on fixed on-premises infrastructure and reducing exposure to individual vendor ecosystems.

For additional information regarding risks relating to our information technology systems, see “Risk Factors – Risks Related to Our Technology Infrastructure” generally.

Human Capital

Strategy and Values

Our ability to deliver on our mission and to continue to transform our enterprise to focus on quality student outcomes and on sustainable growth is tightly aligned with our human capital strategy.

Our performance depends on the talents, experience, and efforts of our staff employees and faculty, and on our ability to foster a culture and practice of high performance, innovation, cooperation, integrity, and respect.

Our ability to deliver on our mission, on quality student outcomes, and on sustainable growth is tightly aligned with our human capital strategy.

Our performance depends on the talents, experience, and efforts of our faculty and non-faculty staff, and on our ability to foster a culture and practice of high performance, innovation, cooperation, integrity, and respect.

We seek to be a destination for high-potential employees and desire to build a bench of future leaders by developing best-in-class human capital capabilities.

During 2024, our key human capital efforts focused on continuing to centralize certain components of our human capital strategy, including our talent acquisition methodology and common talent management and talent review process, as well as implementing a centralized learning management and training platform.

We continue to provide centralized responses and support through our HR operations and AskHR team.

We also continue to implement a streamlined and proactive approach to employee communication to drive connectivity, engagement, and efficiencies.

We also strive to ensure we have optimized the position descriptions and performance expectations of the entire workforce.

During 2025, our key human capital efforts focused on furthering the partnership between our centralized shared services human resources, or HR, teams and our embedded HR business partners teams in our institutions, as well as continuing to enhance our learning management and training platforms.

Those teams collectively continue to support our talent acquisition and development efforts for our faculty and non-faculty staff roles.

As of December 31, 2025, APEI’s employee population comprised the following:

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HCN 150 172 322 86 32 440

GSUSA — 59 59 267 1 327

Corporate — 284 284 — — 284

Total 705 1,655 2,360 3,130 351 5,841

The different backgrounds of our employees are influenced in part by the geography in which our headquarters, administrative facilities, and campuses are located and by the communities we serve, in particular military, military-affiliated, veteran, and nursing communities.

The different backgrounds of our employees are influenced in part by the geography in which our headquarters, administrative offices, and campuses are located and by the communities we serve, in particular military, military-affiliated, veteran, and nursing communities.

Talent Development and Retention

We believe the quality of our faculty and non-faculty staff is critical to the student experience and student outcomes and is therefore vital to our institutions’ success.

Hiring competition is intense, especially for faculty in specialized areas and qualified executives.

Hiring competition is intense, especially for faculty in specialized areas and for qualified executives.

RU and HCN also compete with both nursing schools and traditional employers of healthcare professionals to fill open faculty positions.

A nursing faculty shortage continues, in certain markets, adversely affecting our

ability to recruit and retain qualified nursing faculty at RU and HCN.

A nursing faculty shortage continues in certain markets, adversely affecting our ability to recruit and retain qualified nursing faculty at RU and HCN.

We believe that current job market dynamics, including low unemployment, have further increased the challenge of hiring and employee retention.

We strive to retain our talent and closely track retention among our employees, both faculty and staff.

In 2023 and 2024, we had full-time employee turnover of approximately 19% and 14%, respectively, of which 73% was voluntary and 27% was involuntary for both years.

Although we continue to take steps to retain our current faculty and source and recruit talent, there can be no assurance that our efforts will be successful.

We strive to retain our talent and closely track retention of our faculty and non-faculty staff.

In 2024 and 2025, we had full-time faculty and non-faculty staff turnover of approximately 14% and 16%, of which, in 2024 and 2025, 73% and 67% were voluntary and 27% and 33% were involuntary, respectively.

Although we continue to take steps to retain our current faculty and non-faculty staff and source and recruit talent, there can be no assurance that our efforts will meet our goals.

Our strategic initiatives require our personnel to perform at a high level and to adapt and learn new skills and capabilities.

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We have implemented a centralized talent and transformation team to focus on improving internal learning and development practices and succession planning to ensure that we cultivate skills needed to deliver high quality student outcomes and help grow our operations.

In 2024, we again executed an enterprise-wide talent review for all vice-president and above employees to ensure a consistent review of talent and more meaningful development plans for those leaders, as well as enhanced succession planning.

We also continued our centralized and consistent compliance training approach across the organization.

We implemented a new learning management and training platform and remain committed to working to ensure that new hires and employees are fully trained on key compliance issues both at hire and also on an annual basis during the duration of employment.

We also review all required compliance trainings annually to ensure the training is comprehensive.

We execute an annual enterprise-wide talent review to ensure a consistent review of talent and construct meaningful development plans for leaders within our organization, as well as enhanced succession planning.

While previous talent reviews focused on vice presidents and more senior employees, in 2025 we extended the talent review process to include all employees at director and above.

We also continued our centralized, consistent compliance training approach across the organization.

We continued to use the learning management and training platform that we implemented in 2024 and remain committed to working to ensure that new hires and employees are fully trained on key compliance matters upon hiring and on an annual basis thereafter.

We review all required compliance trainings annually for comprehensiveness.

Finally, we offer a comprehensive education benefit program that provides opportunities for our employees to advance their education and careers by taking courses at APUS, RU, and HCN.

Staffing our Institutions

We believe that hiring and retaining well-educated and qualified faculty and non-faculty members is important to our success.

In 2024, we continued to centralize more of our talent acquisition function to improve talent search efficiency, increase the consistency of our sourcing practices, and strengthen hiring processes.

This centralization has significantly reduced our time to fill metrics and improved our ability to assess talent needs company-wide.

At APUS, approximately 77% of our full-time faculty have a terminal degree in their field of study, and virtually all undergraduate faculty members hold graduate degrees.

We believe that hiring and retaining well-educated and qualified faculty and non-faculty staff members is important to our success.

In 2025, we leveraged our fully centralized talent acquisition function and team to improve talent search efficiency, increase the consistency of our sourcing practices, and strengthen hiring processes.

We have seen a significant reduction in our metrics related to time to fill open positions and believe that we have improved our ability to assess talent needs company-wide.

At APUS, approximately 77% of our full-time faculty have a terminal degree in their field of study, and virtually all undergraduate full-time faculty members hold graduate degrees.

Many APUS faculty members have relevant experience at other universities and within military, corporate, and government institutions.

At RU and HCN, all nursing faculty have earned a BSN or higher.

At RU and HCN, all full-time nursing faculty have earned a BSN or higher.

In addition to having the necessary educational requirements, RU and HCN seek faculty members who have demonstrated experience in the field of nursing.

Employee Engagement and Relations

We measure employee engagement, including faculty, on an ongoing basis by soliciting feedback, including a company-wide annual employee engagement survey for all employees, to understand the views of our employees.

The results from engagement surveys are used to implement programs and processes designed to enhance employee engagement and improve the employee and faculty experience.

In 2024, we implemented certain enhancements around employee service awards to recognize the tenure and commitment of our employees.

None of our employees are parties to a collective bargaining agreement, and management considers employee relations to be good.

We measure employee engagement, including full-time faculty, on an ongoing basis by soliciting feedback, including by using an annual, company-wide employee engagement survey to gather and assess our employees’ views on various matters.

The results from these surveys are used to implement programs and processes designed to enhance employee engagement and improve the employee and faculty experience.

In 2025, we launched a condensed version of our annual survey to gain feedback on key areas of importance to our human capital management strategy, and we are implementing action plans to address areas of opportunities identified in those results.

None of our employees are party to a collective bargaining agreement, and management considers employee relations to be good.

Health and Safety

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We have increased our focus on employee well-being and have enhanced our Total Rewards Team, which is focused on benefits and well-being.

We offer paid parental leave to support our employees and their families and additional paid time off, including time for volunteerism, as additional retention tools.

In 2024, we added an employee discount program and developed communications and guides focusing on total rewards to educate our employees on benefits and resources available to them.

In addition, in 2025 we added a fitness benefit which provides access to online workouts and discounted gym memberships, and no cost mental health resources.

We offer paid parental leave to support our full-time faculty and non-faculty staff and their families and additional paid time off, including time for volunteerism, as additional retention tools.

In 2025, we continued to provide benefits through our employee discount program and continued focused efforts to educate our employees on the company-provided benefits and resources available to them.

Community Impact

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These teams lead our efforts to ensure that we positively impact the communities in which our employees work and live, including by organizing volunteer opportunities.

We provide full-time employees, faculty, and staff with eight hours of additional paid time off for volunteering and giving back to our communities.

We provide all full-time employees, including faculty and non-faculty staff, with eight hours of additional paid time off for volunteering and giving back to our communities.

Information About our Executive Officers

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Selden 60 President and Chief Executive Officer, APEI

Sunderland, Jr., CPA 64 Executive Vice President, Chief Financial Officer, APEI

MacGibbon 61 Executive Vice President, Chief Information Officer, APEI

Codispoti 54 Executive Vice President, Chief Financial Officer, APEI

James Kenigsberg 49 Interim Chief Innovation and Technology Officer, APEI

Beckett 58 Senior Vice President, General Counsel and Secretary, APEI

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Arnold 52 President, RU

Wilkins 68 Chief Executive Officer, HCN

Selden joined us in September 2019 as President and Chief Executive Officer and a member of our Board of Directors.

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Selden spent 18 years at Accenture, including serving as the Managing Partner leading Accenture’s North American West Consumer and Industrial Products group to significant growth.

Sunderland, Jr., CPA joined us in February 2011 as a consultant and became Senior Vice President of Finance of APUS in December 2012.

In January 2014, Mr.

Sunderland was appointed Executive Vice President and Chief Financial Officer of APEI.

Prior to joining APUS, Mr.

Sunderland served as the Chief Financial Officer of NovaSom, Inc.

from 2008 to 2010.

In addition, Mr.

Sunderland served as Chief Financial Officer of Active Day, Inc.

between 2005 and 2008, and in various roles, including as Controller, Senior Vice President and Chief Financial Officer, of NeighborCare, Inc.

from 1993 to 2004.

MacGibbon joined us in August 2022 as Executive Vice President and Chief Information Officer.

Codispoti, CPA joined us in October 2025 as Executive Vice President and Chief Financial Officer.

Codispoti had previously served as the Chief Financial Officer of NV5 Global, Inc.

from June 2019 until October 2025.

Prior to NV5 Global, Mr.

Codispoti was the Chief Financial Officer of Ilumno Holdings, Ltd.

from May 2017 until June 2019 and Chief Financial Officer of JetSmarter, Inc.

from October 2016 to March 2017.

He served in various capacities for TradeStation

Group, Inc., including Chief Financial Officer from June 2011 to August 2016, Chief Accounting Officer from February 2010 to June 2011 and Corporate Controller and Vice President of Accounting from September 2007 to May 2011.

Codispoti began his career at Arthur Andersen, LLP.

James Kenigsberg joined us in August 2025 as the Interim Chief Innovation and Technology Officer of APEI and had previously served as a director of APEI from June 2022 until his appointment as Interim Chief Innovation and Technology Officer.

Prior to joining APEI, Mr.

MacGibbon was a partner of Wavestone US (formerly WGroup), the North American arm of Paris-based global management and IT consulting firm Wavestone, from July 2019 to August 2022.

Before joining Wavestone US, Mr.

MacGibbon was the Chief of Application Development and Support of Synovus Financial Corporation from August 2015 to August 2019, Vice President of Global Shared Services of Las Vegas Sands Corporation from 2014 to 2015, Chief Information Officer of UIL Holdings Corporation (now Avangrid) from 2013 to 2014 and Senior Vice President and Chief Information Officer of Enterprise Solutions of Fifth Third Bank from 2010 to 2013.

MacGibbon has also held leadership roles with Michelin North America, Hubbell Inc., Emerson Electric Co., and Goldwell Cosmetics.

MacGibbon began his career in the US Navy, serving four years as an Avionics technician.

Kenigsberg was the founding Chief Technology Officer at 2U, Inc., from August 2008 until January 2022.

He continued to support 2U’s strategic initiatives as a Senior Strategic Advisor through January 2024.

Prior to 2U, Mr.

Kenigsberg served as Vice President of Application Development at The Princeton Review from October 2000 to August 2008.

He also held senior technology roles at Thomson Reuters and Ogilvy & Mather from January 1998 to October 2000.

Beckett joined us in April 2011 as Director, Legal Affairs for APUS, in January 2012 became Vice President, Legal Affairs, and since January 2016, has served as our Senior Vice President and General Counsel, and Secretary since June 2016.

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Arnold previously served as a senior healthcare research analyst at Piper Sandler from 2005 to 2011, held leadership roles at 3M Company, and was a healthcare management consultant.

Wilkins rejoined us in May 2019 as the Chief Executive Officer of HCN, a position he previously held from December 2013 until his retirement in December 2015.

From July 2021 until June 2022, Mr.

Wilkins was also the Executive Vice President, Strategy, Growth, and Innovation of APUS.

Prior to December 2013, Mr.

Wilkins served as our Chief Financial Officer of APEI.

Prior to serving as the Chief Financial Officer of APEI, Mr.

Wilkins had various executive roles, including serving as the Chief Financial Officer, at Strayer Education, Inc., now Strategic Education, Inc.

Intellectual Property

We and our institutions own, and exercise rights associated with patents, copyrights, trademarks, service marks, domain names, agreements, and registrations to protect our intellectual property.

Our institutions own or license all course syllabi and course and instructional materials developed by their faculty and employees and, as such, these course materials may be used by our institutions in current and future courses as needed to facilitate instruction and may be modified by our institutions to meet evolving course or curriculum requirements.

In general, our institutions do not assert ownership claims to scholarly works of their faculty, such as articles and books, which were not developed as course materials.

We and our institutions own, and exercise rights associated with patents, copyrights, trademarks (registered and common law), and domain names to protect our intellectual property.

Our institutions own or license all course syllabi and course and instructional materials developed by their faculty and non-faculty staff and, as such, these course materials may be used by our institutions in current and future courses as needed to

facilitate instruction and may be modified by our institutions to meet evolving course or curriculum requirements.

In general, our institutions do not assert ownership claims to scholarly works of their faculty, such as articles, professional presentations, and books, which were not developed as course materials.

Such intellectual property of our institutions’ individual faculty members remains the property of each such faculty member and is reserved specifically for use only by the faculty member who owns it unless the faculty member grants permission for use by others.

Our institutions rely on agreements under which they obtain rights to use course content developed by faculty members and other third-party content providers.

Our institutions own the copyright for a work by a faculty member where there has been express agreement on such ownership, if the institutions compensated the faculty member for the particular product, or if the institutions funded the research in whole or in part.

We or our institutions have secured or claim rights to trademarks for various names and terms used in our and their respective businesses, including rights in “American Public Education, Inc.,” “American Public University System,” “American Military University,” “American Public University”, “Rasmussen University”, “Graduate School USA”, and others.

Generally, however, our institutions claim copyright ownership of all course syllabi and other course and instructional materials developed during faculty employment as an employee or contractor of our institutions, or if our institutions have compensated the faculty member for the particular product.

In addition, our institutions claim ownership of research grant publications where our institutions have funded the research in full or in part, as well as other work products where our institutions have engaged in an agreement with the faculty or non-faculty staff member.

We or our institutions have secured or claim rights to trademarks for various names and terms used in our and their respective businesses, including rights in “American Public Education, Inc.,” “APEI,” “American Public University System,” “American Military University,” “AMU,” “American Public University,” “APU,” “Rasmussen University,” and others.

In connection with our acquisition of HCN, we received a royalty-free, irrevocable, exclusive, transferable, sublicensable license to use the name “Hondros College of Nursing” and, instead of “Nursing,” any other qualifier directly related to nursing, medicine, or healthcare in connection with the business and operations of HCN.

The trademarks and service marks we use are central to our institutions’ brand identities overall and marketing efforts, including how prospective students identify them.

The trademarks and service marks we use are central to our institutions’ brand identities overall and associated marketing efforts, including how prospective students identify them.

Our institutions also own rights to internet domain names pertaining to their brand names and other unique descriptors.

We and our institutions vigorously defend against infringement of intellectual property rights, including trademarks, service marks and copyrights.

We and our institutions vigorously defend against infringement of intellectual property rights, including trademarks and copyrights.

Seasonality and Quarterly Fluctuations

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We and our institutions are regulated by (i) accrediting agencies, (ii) state regulatory bodies, and (iii) the federal government through ED.

APUS, RU, and HCN are approved to participate in TA programs administered by DoD, and veterans education benefits programs administered by the VA and are therefore also subject to oversight by those agencies.

APUS, RU, and HCN are approved to participate in tuition assistance, or TA, programs administered by DoD, and veterans education benefits programs administered by the VA and are therefore also subject to oversight by those agencies.

Regulations, standards, and policies of these agencies address the vast majority of our operations, including our educational programs, facilities, instructional and administrative staff, administrative procedures, marketing, recruiting, and financial operations and condition.

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Changes in or new interpretations of law, regulations, standards, and policies could have 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 postsecondary education regulatory environment has also changed and may change in the future as a result of U.S.

federal elections, changes in Presidential administrations and control of Congress, and legislative activity at the state level.

The postsecondary education regulatory environment has also changed and may change in the future as a result of United States federal elections, changes in Presidential administrations and control of Congress, and legislative activity at the state level.

Additional information regarding the regulatory and legislative environment and potential risks associated with it is available below and in the section entitled “Risk Factors” in this Annual Report.

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To be recognized by ED, accrediting agencies must adopt specific standards and procedures.

If one of our institutions’ institutional accreditors was to lose its recognition as an accrediting agency and the institution was unable to obtain recognition from another recognized accrediting agency, the institution could lose its eligibility to participate in Title IV

programs and TA.

The loss of ability of one of our institutions to participate in either Title IV programs or TA could have a material adverse effect on our business and financial condition.

Additional information about each of our institutions’ accreditation is provided above in “Our Institutions and Operations – Our Institutions – Academics – Accreditation” and as follows:

• APUS is institutionally accredited by HLC.

APUS’s next reaffirmation of accreditation is scheduled for 2030-2031.

HLC conducted a focused visit at APUS in March 2024, after raising concerns regarding compliance with standards related to program development oversight and program assessment processes as a result of issues with course availability in one program.

Following the focused visit, the team found that the concerns were appropriately addressed, and that no additional monitoring was required.

Their recommendations were sent to HLC’s Institutional Action Council, or IAC, for review and action.

At the June 2024 meeting, the IAC concurred with the team’s findings and affirmed that APUS addressed all concerns regarding compliance with HLC standards.

APUS has a Standard Pathway designation, having transitioned from the Open Pathway in 2023 because of HLC’s decision to conduct a focused visit.

• APUS is institutionally accredited by HLC with a Standard Pathway designation.

All institutions on the Standard Pathway must undergo a mid-cycle comprehensive evaluation, which entails, among other things, HLC conducting a mid-cycle assurance review and site visit.

As a result of the Combination, APUS’s assurance review and site visit will now be conducted in March 2026 which will entail a review of APUS in its post-Combination form.

As noted below, HLC is scheduled to conduct a site visit in March 2025 in connection with the Combination.

• RU is institutionally accredited by HLC.

RU’s reaffirmation of accreditation had been scheduled for 2025-2026, and the associated comprehensive evaluation site visit is scheduled for May 2026.

RU’s assurance review and site visit will now be conducted in March 2026 which will entail a review of RU in its post-Combination form.

RU has an Open Pathway designation.

APUS’s mid-cycle comprehensive evaluation had been scheduled for May 2026, but in October 2025, HLC rescheduled the visit to May 2027.

The comprehensive evaluation site visit will entail a review of APUS in its post-Combination form.

APUS’s next reaffirmation of accreditation is scheduled for 2030-2031.

• RU is institutionally accredited by HLC with an Open Pathway designation.

RU’s reaffirmation of accreditation had been scheduled for 2025-2026, and HLC had scheduled the associated comprehensive evaluation site visit for May 2026, but in October 2025, HLC rescheduled the visit to March 2027.

As a result of completion of step one of the Combination in March 2026, we expect that the March 2027 visit will be cancelled because RU will be on Accredited Change of Control status and typically will not be required to undergo routine evaluative processes.

• HCN is institutionally accredited by ABHES.

In February 2021, ABHES granted HCN continued accreditation through February 2027 for all programs at all campuses.

In February 2021, ABHES granted HCN continued accreditation through February 2027 for all programs at its campuses in Ohio and Indiana.

In July 2022, ABHES approved inclusion of HCN’s Detroit, Michigan campus into its grant of accreditation.

Upon completion of the Combination, HCN will no longer maintain its separate accreditation through ABHES.

ABHES annually reviews student achievement indicators, including retention rate, placement rate, and licensing and credentialing examination pass rate.

Under ABHES policy, ABHES may withdraw accreditation at any time if it determines that an institution fails to demonstrate at least a 70% retention rate for each program, a 70% placement rate for each program, and a 70% pass rate on mandatory licensing and credentialing examinations or fails to meet the state-mandated results for credentialing or licensure.

ABHES may withdraw accreditation at any time if it determines that an institution fails to demonstrate at least a 70% retention rate for each program, a 70% placement rate for each program, and a 70% pass rate on mandatory licensing and credentialing examinations or fails to meet the state-mandated results for credentialing or licensure.

Alternatively, ABHES may in its discretion provide an opportunity for a program that is not meeting ABHES’ outcomes thresholds to come into compliance within a period of time specified by ABHES, and ABHES may extend the period for achieving compliance if a program demonstrates improvement over time or for other good cause.

In prior years, select HCN programs at certain HCN campuses have failed to satisfy ABHES’s student achievement measures, and as a result ABHES has placed specific programs at certain campus locations on program-specific warning or outcomes reporting status and required action plans.

As a result of retention rates being below the 70% benchmark for 2021-2022 reporting year, which was the second consecutive full reporting year, ABHES placed the PN programs at the Cincinnati, Cleveland, Columbus, and Dayton campuses on program-specific warning status in January 2023.

Due to the Toledo PN and Akron ADN program retention rates falling below the 70% benchmark for 2021-2022 reporting year, which was the first full reporting year, ABHES imposed additional reporting requirements for these programs.

As a result of failing to meet the threshold benchmark, ABHES required HCN to submit reports for each of these programs demonstrating their retention rate through the first three quarters of the 2022-2023 reporting year by May 2023.

The reports submitted in response to this requirement demonstrated that the PN program at the Cincinnati, Cleveland, Columbus, and Dayton campuses and the ADN program at the Akron campus were above the 70% retention benchmark through the first three quarters of the 2022-2023 reporting year.

As a result, the Cincinnati, Cleveland, Columbus, and Dayton PN programs were removed from program-specific warning status, and ABHES informed HCN that no additional reporting was required for the ADN program at the Akron campus.

However, HCN reported that the retention rate for the PN program at the Toledo campus was below the 70% benchmark through the first three quarters of the 2022-2023 reporting year.

Consequently, the Toledo PN program was placed on outcomes reporting status and required to provide an additional report and action plan in October 2023, which HCN submitted.

For the reporting year ended June 30, 2023, the PN program at the Cleveland, Columbus, Dayton, and Toledo campuses, as well as the ADN program at the Akron and Dayton campuses, were below the 70% benchmark for retention.

As a result, ABHES continued the Toledo PN program on outcomes reporting status and required HCN to submit reports for each of these programs demonstrating their retention rate through the first three quarters of the 2023-2024 reporting year by May 2024.

In May 2024, HCN submitted the required mid-year retention reports for the programs that fell below the 70% benchmark in the 2022-2023 reporting year (Cleveland PN, Columbus PN, Dayton PN and ADN, Toledo PN, and Akron ADN).

These reports demonstrated compliance with the 70% benchmark through the first three quarters of the 2023-2024 reporting year.

As a result, the ABHES Commission voted to remove retention reporting requirements for all affected HCN programs at its July 2024 meeting.

For the reporting year ended June 30, 2024, the Cleveland and Dayton PN programs, and the Akron ADN program were below the 70% benchmark for retention.

As a result, ABHES placed the Cleveland and Dayton PN programs and Akron ADN program on outcomes reporting status and required HCN to submit reports for each of these programs demonstrating their retention rate through the first three quarters of the 2024-2025 reporting year by May 2025.

At its July 2024 meeting, ABHES voted to affirm its July 2022 grant of accreditation of the Detroit, Michigan campus following a team visit to the campus from February 29, 2024, to March 1, 2024.

In the reporting years ended June 30, 2023, June 30, 2024, and June 30, 2025, select HCN programs at certain HCN campuses failed to satisfy certain ABHES student achievement measures, and, as a result, ABHES has placed specific programs at certain campus locations on outcomes reporting status and required action plans.

HCN has submitted all the required outcomes reports and action plans.

For the reporting year ended June 30, 2024, the Cleveland and Dayton, Ohio PN programs and the Akron, Ohio ADN program were below the 70% benchmark for retention.

As a result, ABHES placed these programs on outcomes reporting status and required HCN to submit reports for each of these programs demonstrating their retention rate through the first three quarters of the 2024-2025 reporting year by May 2025.

These three programs met the 70%

benchmark for the reporting period, and, as a result, at its July 2025 meeting, the ABHES Commission voted to remove retention reporting requirements.

HCN reported its final retention rates for the reporting year ended June 30, 2025 in November 2025.

The Akron and Toledo, Ohio ADN programs and the Dayton, Ohio MA program were below the 70% benchmark for retention.

As a result, ABHES placed Akron and Toledo, Ohio ADN programs and the Dayton, Ohio MA program on outcomes reporting status for those programs, and is requiring HCN to submit reports for each of these programs demonstrating their retention rate through the first three quarters of the 2025-2026 reporting year in May 2026.

For more information on the risks associated with these rates, refer to the risk factor in “Risk Factors – Risks Related to the Regulation of Our Industry” with the caption beginning “A failure of HCN to satisfy ABHES accreditation standards...”.

• GSUSA is institutionally accredited by ACCET through December 15, 2027.

GSUSA does not participate in the Title IV, TA, or VA education benefits programs.

Institutional accreditation is an important attribute of our institutions.

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The Planned Combination of APUS, RU, and HCN

On January 28, 2025, we announced the Combination, as discussed in more detail above under “2024 Developments and Future Financial Objectives – The Planned Combination of APUS, RU, and HCN”, which will result in a combined institution named American Public University System comprised of two divisions tentatively named (i) APUS Global, comprised of AMU and APU and (ii) Rasmussen, 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, with final division names to be determined closer to closing of the Combination.

W e anticipate completing the Combination in the third quarter of 2025 subject to obtaining required approvals and ED taking related actions.

The Combination constitutes a Change of Control, Structure or Organization pursuant to HLC policy and, accordingly, we must receive HLC approval prior to effectuating the Combination.

APUS and RU have jointly submitted an application for Change of Control, Structure or Organization .

For HLC purposes, APUS will be the surviving institution, and the application seeks approval for the Combination and the expansion of APUS’s HLC accreditation to include the RU and HCN programs and locations.

HLC will conduct a site visit in March 2025 related to the joint application and is expected to complete its review of the joint application in June 2025.

ED has conveyed that it does not treat the combination of institutions with the same parent as a change in ownership and control for the purposes of Title IV.

As such, we do not expect the proposed transaction to trigger ED’s change in ownership and control requirements.

Rather, we expect ED will require APUS, as the surviving institution, to seek and obtain approval to expand its Title IV certification to cover the RU and HCN programs and locations.

In order for ED to expand APUS’s Title IV certification, we will be required to submit evidence that APUS’s HLC accreditation has been expanded to include the RU and HCN programs and locations, and that APUS is approved to operate in the states where RU and HCN have campuses.

Accordingly, in addition to the HLC approval process described above, APUS will need to obtain required approvals from state agencies, including state boards of nursing, in order to operate in the states where HCN and RU currently operate.

We anticipate completing the Combination in the third quarter of 2025, subject to obtaining required approvals and ED taking related actions.

See the Risk Factor captioned “The planned combination of APUS, RU, and HCN may not be completed, or

may not be completed on the terms currently contemplated, and if it is, the expected benefits may not be realized, both of which would have a material adverse impact on our business, financial condition, and results of operations” for more information.

On January 28, 2025, we announced the planned combination of APUS, RU, and HCN, or the Combination, which will result in a combined institution named American Public University System comprised of two divisions named (i) APU Global, comprised of AMU and APU, and (ii) RU Health+, 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.

The Combination constitutes a Change of Control, Structure or Organization pursuant to HLC policy and, accordingly, we were required to obtain HLC approval prior to effectuating the Combination.

In December 2024, APUS and RU jointly submitted an application for Change of Control, Structure or Organization to HLC.

For HLC purposes, APUS will be the surviving institution, and the application sought approval for the Combination and the expansion of APUS’s HLC accreditation to include the RU and HCN programs and locations.

HLC conducted a site visit in March 2025 related to the joint application.

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

Subsequently, ED informed us that we would need to follow a different process to implement the Combination that entails two steps instead of one:

ED does not treat the combination of institutions with the same parent as a change in ownership and control for Title IV purposes.

Therefore, the first step requires only that RU and HCN provide notice to ED that the merger occurred, and the second step requires APUS, as the surviving institution, to seek and obtain approval from ED to expand its Title IV certification to cover RU and HCN programs and locations.

ABHES has also informed HCN that it will continue HCN’s ABHES accreditation after the legal entity merger.

On March 2, 2026, we completed the merger of the legal entities that own and operate APUS, RU, and HCN with the APUS entity surviving following the merger, and subsequently notified ED that the merger occurred and resulted in RU and HCN being directly owned by the same legal entity that directly owns APUS.

We currently expect implementation of step two of the Combination to be complete by the beginning of the third quarter of 2026 , subject to obtaining required approvals .

HLC will conduct at least one site visit after the Combination as required by HLC’s Change of Control, Structure or Organization Procedure.

In order for ED to expand APUS’s Title IV certification, we must submit evidence that APUS’s HLC accreditation has been expanded to include the RU and HCN programs and locations and that APUS is approved to operate in the states where RU and HCN have campuses.

See the Risk Factor captioned “The planned combination of APUS, RU, and HCN may not be completed, or may not be completed on the terms currently contemplated, and if it is, the expected benefits may not be realized, any of which could have a material adverse impact on our business, financial condition, and results of operations” for more information.

Programmatic Accreditation and Professional Recognition

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If our institutions fail to satisfy the standards of these programmatic accrediting agencies or professional organizations for the relevant programs, they could be subject to restrictions or could lose the programmatic accreditation or professional recognition for those programs, which could result in materially reduced student enrollments, prevent the institution from offering the programs in certain states where programmatic accreditation is required, or prevent our students from seeking and obtaining licensure or employment.

The Accreditation Commission for Education in Nursing, or ACEN, accredits certain RU PN and ADN programs at certain RU locations.

RU’s Illinois ADN program was in candidacy status for initial accreditation with ACEN since July 2020, but following a February 2024 site visit, ACEN granted initial accreditation to the Illinois ADN program at its September 2024 Board of Commissioners meeting, which is retroactive to July 2020.

ACEN’s next site visit is scheduled for Spring 2029.

RU’s Bloomington, Minnesota ADN program had been subject to adverse action and heightened scrutiny from regulators as a result of continued failure to meet applicable accreditor and regulatory requirements.

As more fully discussed in the Risk Factor with the caption beginning “RU’s actual and planned closure of campuses …” in December 2023, RU informed the Minnesota Board of Nursing, or MBN, that it intended to voluntarily close the program, which it did effective June 15, 2024.

In September 2022, ACEN granted RU’s ADN and PN programs in Moorhead, Minnesota and RU’s ADN program in Overland Park, Kansas continued accreditation with conditions, in each case because the program experienced first-time NCLEX pass rates below ACEN’s required threshold.

For the two Moorhead, Minnesota programs, ACEN also identified evidence of noncompliance with respect to analysis and use of assessment data in program decision-making.

The ADN programs were given two years, and the PN program 18 months, from the date the conditions were imposed, to demonstrate compliance with all criteria related to the standard for which the programs were found to be in noncompliance.

Although ACEN does not necessarily have to take action on any particular timetable, if compliance is not achieved by the end of the articulated monitoring period, ACEN may deny continuing accreditation absent good cause.

In February 2024, RU’s Moorhead, Minnesota PN program submitted to ACEN a follow-up report and an application for continuing accreditation for good cause.

In April 2024, after review of the follow-up report, ACEN removed the conditions for RU’s Moorhead, Minnesota PN program, granting continuing accreditation with the next evaluation in Spring 2030.

In July 2024, RU’s Moorhead, Minnesota ADN program and the Overland Park, Kansas ADN program submitted to ACEN their follow-up reports and applications for continuing accreditation for good cause.

In September 2024, after review of the follow-up reports, ACEN removed the conditions for RU’s Moorhead, Minnesota ADN program and Overland Park, Kansas ADN program, granting continuing accreditation with the next evaluation in Spring 2030.

State Authorization/Licensure

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The growth of online education has led and may further lead to new laws and regulations and new interpretations of existing laws and regulations.

particular states, which could negatively affect enrollments and revenue and have a material adverse effect on our business.

New laws, regulations, or interpretations, including with respect to whether our institutions’ activities constitute a physical presence or otherwise may require authorization or licensure, could increase our cost of doing business and affect our ability to recruit students in particular states, which could negatively affect enrollments and revenue and have a material adverse effect on our business.

Changes in our business activities could lead states that do not currently require our institutions to be authorized to require such authorization.

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In January 2025, SARA’s coordinating entity, the National Council for State Authorization Reciprocity Agreements, or NC-SARA, initiated its policy modification process, soliciting proposals for changes to SARA policy.

Such proposals included, among other things, potential denial of an institution’s participation in SARA if it violates any requirement related to state authorization, accreditation, or participation in Title IV programs and potential denial of an institution’s participation, or limiting participation, in SARA as a result of adverse actions against an institution related to its academic quality, its financial stability, or student consumer protection issues.

In October 2024, the NC-SARA board of directors approved ten proposals, which included changes related to when an institution may be placed on provisional status and when a state must deny or may exercise its discretion to deny an institution’s participation in SARA, which concluded the policy modification process.

Such proposals included, among other things, public disclosure of provisional status and modifications to the process for evaluating financial responsibility composite scores.

In October 2025, the NC-SARA board of directors approved nine proposals, which included changes related to when an institution may be placed on provisional status, public disclosure requirements for institutions placed on provisional status, and a state’s ability to calculate, or require that an institution has calculated, a composite score based on the institution’s most recent audited financial statements if ED’s composite score is outdated.

See the Risk Factor captioned “Our institutions’ failure to comply with the requirements of SARA or regulations of ED or various states related to state authorization could result in actions that would have a material adverse effect on our enrollments, revenue, and results of operations” for more information.

APUS, RU and HCN all participate in SARA.

Many states also have specific requirements that an individual must satisfy in order to be licensed as a professional in a specified field.

Students’ success in obtaining licensure typically depends on numerous factors, including:

individual merits of the graduate;

whether the institution and the program were approved by the state in which the graduate seeks licensure or by a professional association;

whether the program meets all state requirements for professional licensure;

and the accreditation of the institution and the specific program.

(i) individual merits of the graduate;

(ii) whether the institution and the program were approved by the state in which the graduate seeks licensure or

by a professional association;

(iii) whether the program meets all state requirements for professional licensure;

and (iv) the accreditation of the institution and the specific program.

Federal Requirements for State Authorization/Licensure

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ED regulations specify how an institution may demonstrate, as required by ED, that it is authorized to offer postsecondary education programs by the state(s) where it is located, including the state where its main campus is located, which we refer to as its “home” state, and that the home state otherwise satisfies ED requirements.

If ED determines that an institution does not have the required state approval, the institution will be ineligible to participate in Title IV programs.

If ED determines that an institution does not have the required home state approval, the institution will be ineligible to participate in Title IV programs.

If one of our institutions were to lose its ability to participate in Title IV programs in connection with home state authorization requirements, it would also lose its ability to participate in TA and VA, be unable to operate in the state, grant credentials, and lose institutional accreditation.

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State Authorization and Professional Licensure

Effective July 1, 2024, new ED regulations require institutions that offer postsecondary education programs leading to employment in an occupation that requires licensure or certification to meet certain additional requirements in order for those programs to maintain eligibility to participate in Title IV programs.

ED regulations require institutions that offer postsecondary education programs leading to employment in an occupation that requires licensure or certification to meet certain additional requirements in order for those programs to maintain eligibility to participate in Title IV programs.

In each state in which the institution is located, in which students enrolled in distance education are located, or where a student enrolled after July 1, 2024 attests that they intend to seek employment, the program must:

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Failure to comply with WVHEPC requirements could result in APUS losing its authorization from WVHEPC, its accreditation by HLC, its eligibility to participate in Title IV programs and TA, or its ability to offer certain programs, any of which could force APUS to cease operations.

As explained further in “Student Financing Sources and Related Regulations/Requirements – Department of Education – Regulation of Title IV Financial Aid Programs – Financial Responsibility”, APUS participates in SARA on provisional status due to its composite score for fiscal year 2022 being in the zone.

APUS previously participated on provisional status due to APEI’s consolidated composite score for fiscal 2022 and 2023 being in the zone.

In December 2025, APUS was removed from provisional status because APEI’s consolidated composite score for fiscal 2024 was no longer in the zone, and WVHEPC accepted that composite score without it being the most recently reflected score by ED.

APUS also has obtained authorization to operate in California, which is the only state that is a non-SARA jurisdiction.

RU is headquartered in Bloomington, Minnesota and is authorized to offer its programs by the Minnesota Office of Higher Education, or MOHE.

RU has a total of 20 campuses across Florida, Illinois, Kansas, Minnesota, North Dakota, and Wisconsin, and is also authorized to offer its programs by the relevant education agencies in these states.

In December 2024, the North Dakota State Board of Higher Education approved RU to operate under a provisional license effective January 1, 2025, due to APEI’s composite score for fiscal year 2022, which is the most recent composite score that ED has calculated.

In July 2024, RU closed its Lake Elmo, Minnesota campus and moved all enrolled students at the campus to RU’s Eagan, Minnesota campus, which is located less than 10 miles from the Lake Elmo campus.

In addition, in May 2024, RU notified the Wisconsin Educational Approval Program that it intends to voluntarily close RU’s two Wisconsin campuses, Green Bay and Wausau, effective December 31, 2025, and 2026, respectively.

These actions are expected to directly impact approximately 90 students, or less than 1% of RU’s current total enrollment.

RU is headquartered in suburban Minneapolis, Minnesota and is authorized to offer its programs by the Minnesota Office of Higher Education, or MOHE.

RU has a total of 18 campuses across Florida, Illinois, Kansas, Minnesota, and North Dakota, and is also authorized to offer its programs by the relevant education agencies in these states.

In May 2025 RU provided APEI’s new fiscal year 2024 consolidated composite score and was removed from provisional status and became fully authorized to operate in the state.

In July 2024, RU closed its Lake Elmo, Minnesota campus and moved all enrolled students at the campus to RU’s Eagan,

Minnesota campus, which is located less than 10 miles from the Lake Elmo campus.

In addition, in May 2024, RU notified the Wisconsin Educational Approval Program, or WEAP, that RU intends to voluntarily close RU’s two Wisconsin campuses, Green Bay and Wausau, effective December 31, 2025, and 2026, respectively.

All students enrolled at the two Wisconsin campuses had or have expected graduation dates on or before the applicable campus closing date.

RU closed the Green Bay campus, effective December 31, 2025, as planned.

As of December 31, 2025, closure of the Wausau, Wisconsin campus is expected to directly impact less than ten students.

HCN is headquartered in Westerville, Ohio and is authorized to offer its programs by the Ohio State Board of Career Colleges and Schools.

HCN has six campuses in Ohio, one campus in Indiana and one campus in Michigan and is also authorized to offer its programs by the relevant education agencies in these states.

RU and HCN participate in SARA, and RU has also obtained authorization to operate in California.

HCN does not offer online programs in California.

For details about “home” state authorization generally, see the “State Authorization/Licensure – Federal Requirements for State Authorization/Licensure – ‘Home’ State Authorization” above.

In addition, the nursing education programs offered by RU and HCN are approved by the relevant state boards of nursing.

RU and HCN participate in SARA, and RU has also obtained authorization to operate in California, which is the only state that is a non-SARA jurisdiction.

HCN does not offer online programs in California.

Effective as of July 2024, a new Minnesota statute prohibits private educational institutions from using agreements that restrict students from disclosing information in connection with many types of student complaints.

In October 2024, MOHE notified RU that it had determined that RU had used an impermissible nondisclosure agreement with one student.

For more information on the risks related to this determination, see the Risk Factor with the caption beginning “If we or our institutions fail to comply with the extensive regulatory requirements for the operation of postsecondary education institutions...”

To maintain regulatory approval from the state board of nursing or equivalent body in the states that we operate, an educational program must maintain a certain pass rate on the relevant licensure exam, as defined by the state.

If a program does not attain this pass rate, the program may face various consequences, including development and implementation of a plan of corrective action, issuance of a corrective order, or revocation of approval pursuant to an adjudication proceeding.

For example, in Indiana, a program that is under initial accreditation may not be granted full accreditation if the program’s pass rate is lower than one standard deviation below the average national pass rate.

In addition, if the program’s pass rate is lower than one standard deviation below the average national pass rate for three consecutive years, the program may be subject to additional oversight or a change in accreditation status.

A number of programs at certain RU campuses and in certain states, including its Moorhead, Minnesota, Fort Myers, Tampa and Ocala, Florida, and Illinois and Kansas ADN programs and its Moorhead, Minnesota PN program, as well as HCN’s Ohio ADN program, have not met state-established first-time NCLEX benchmarks for consecutive years.

A number of programs at certain RU campuses and in certain states, including its Moorhead, Minnesota, and Illinois ADN programs, as well as HCN’s Ohio ADN program, have not met state-established first-time NCLEX benchmarks for consecutive years.

We believe that low pass rates may be the result of a number of factors, including, without limitation, the academic preparedness of our students, curriculum gaps, changes in the mode of course delivery including the use of virtual courses, testing failures and inconsistencies, imbalances in enrollment and resources, and changes in admission standards.

For more information, please refer to the Risk Factor that begins with the caption “Failure to improve certain of our programs’ NCLEX pass rates...”.

RU’s Moorhead, Minnesota PN program is currently approved by MBN, but first-time NCLEX pass rates have been below the standard for three consecutive years.

In August 2024, MBN placed RU’s Moorhead, Minnesota PN program on conditional approval status and issued a corrective action order.

MBN conducted a survey visit in February 2025, regarding the third consecutive year of below-standard NCLEX pass rates.

The findings of the visit will be presented to MBN’s Board in mid-2025, and we believe the findings are likely to result in a corrective action order for the ADN program.

The program’s NCLEX pass rate must meet the state standard by the end of June 2025, measured using cumulative pass rates from the preceding four quarters (i.e., July 2024 to June 2025).

A stipulation and consent order with MBN required RU’s Bloomington, Minnesota ADN program to, among other things, reach applicable NCLEX pass rate standards by the end of 2023 and maintain a specified student to faculty ratio in 2023, with a potential penalty up to and including withdrawal of program approval.

The Bloomington, Minnesota ADN program did not reach the applicable NCLEX pass rates by the end of 2023.

As a result, on December 29, 2023, RU informed MBN that it intended to voluntarily close the Bloomington, Minnesota ADN program on June 15, 2024.

MBN approved the voluntary closure of the Bloomington, Minnesota ADN program at its February 1, 2024, meeting.

In February 2022, RU’s Illinois ADN program was placed on probationary status by the Illinois Department of Financial and Professional Regulation, or IDFPR.

RU was required to temporarily reduce admitted students in the program by 25% and was given two years to demonstrate evidence of implementing strategies to correct deficiencies and satisfy the required NCLEX pass rate.

The State of Illinois enacted legislation in August 2023, which took effect on January 1, 2024, that changed the Illinois NCLEX pass rate requirements from a one-year measurement based on first attempts only to a three-year average that includes all test attempts, and temporarily removed all nursing programs, including for RU’s Illinois ADN program, from probationary status until September 2026.

In October 2024, RU’s Illinois ADN program was included in IDFPR’s published list of approved nursing programs with no reference to probation;

however, its low pass rate for two consecutive years was acknowledged.

Kansas regulations were amended, effective January 2022, to increase the threshold first-time pass rate to 80% and change corrective actions for noncompliance.

In April 2022, RU’s Kansas ADN program was issued a notice of concern by the Kansas Board of Nursing, or KBN, requiring RU to submit to the KBN a plan of action to improve its NCLEX pass rates.

The Kansas ADN program had until April 2024 to increase its NCLEX pass rate to the regulatory standard.

RU’s Kansas ADN program’s first-time pass rate exceeded the threshold pass rate for 2023 in advance of the April 2024 deadline.

In February 2023, the Florida Board of Nursing, or FBN, placed RU’s Fort Myers, Florida ADN program on probation due to two consecutive years of its NCLEX pass rates not meeting the state standard.

In February 2024, FBN notified RU that the program will be allowed to continue on probation for one additional year.

If the program fails to achieve the required NCLEX pass rate at the end of this additional one-year period, but the program continues to show adequate progress toward the required pass rate, FBN may allow the program to continue on probation for one additional year.

If the program fails to show adequate progress toward the required pass rate, FBN may choose to disapprove the program.

RU is required to disclose this status to active and prospective students.

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 due to two consecutive years of NCLEX pass rates not meeting the state standard.

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.

The State of Illinois enacted legislation effective January 2024 that changed the Illinois NCLEX pass rate requirements from a one-year measurement based on first attempts only to include a three-year average that includes all test attempts, and temporarily removed all nursing programs, including for RU’s Illinois ADN program, from probationary status until September 2026.

RU’s Illinois ADN program is currently approved.

The Illinois Department of Financial and Professional Regulation, or IDFPR, has publicly reported that RU’s Illinois ADN program has not met the required NCLEX pass rate for the prior six years.

There can be no assurance that IDFPR will not seek to impose different or additional requirements prior to September 2026 as a result of failures to satisfy the required NCLEX pass rate, and we are unable to predict what actions IDFPR may take regarding RU’s Illinois ADN program after September 2026.

Actions could include reinstatement of probationary status or withdrawal of approval.

The Florida legislature passed legislation in May 2025 that would have subjected RU nursing programs to significant additional regulatory scrutiny by the Florida Board of Nursing, or FBN, and the Florida Department of Health.

The legislation was vetoed by the governor in July 2025, but was expected to lead to increased challenges in hiring and retaining qualified nursing program directors and increased expenses related to compliance with new requirements.

The legislation would have allowed 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.

Similar legislation passed the Florida House of Representatives in January 2026, and is currently making its way through Florida Senate committees.

In February 2023, the FBN placed RU’s Fort Myers, Florida ADN program on probation due to two consecutive years of its NCLEX pass rates not meeting the state standard.

In February 2024, FBN notified RU that the program would be allowed to continue on probation for one additional year.

RU achieved the required NCLEX pass rate in 2024, and FBN removed probation status at its February 5, 2025 board meeting.

At its May 2024 meeting, the Florida Commission for Independent Education, or FCIE, reviewed RU for a substantive change due to financial stability concerns and, at the time, the Fort Myers, Tampa, and Ocala, Florida ADN programs being placed on probation by FBN.

FCIE subsequently placed RU on a provisional license until November 30, 2024.

To fulfill a condition of licensure, RU submitted an interim report on its financial condition and NCLEX pass rates for the Fort Myers,

Ocala and Tampa, Florida ADN programs to FCIE in July 2024.

condition of licensure, RU submitted an interim report on its financial condition and NCLEX pass rates for the Fort Myers, Ocala and Tampa, Florida ADN programs to FCIE in July 2024.

RU’s annual renewal was reviewed by FCIE in November 2024, and RU was granted a provisional license for 2025.

HCN’s ADN program has been on provisional approval status in Ohio since March 2017 due to not meeting the first-time pass rate standard for five consecutive years.

The Ohio Board of Nursing, or OBN, will consider restoring a program to full approval status if the program meets the first-time pass rate standard for at least two consecutive years.

In January 2023, OBN placed HCN’s PN program on provisional approval for a period of 18 months due to two self-reported instances of noncompliance with faculty credential and program records requirements.

As a result, HCN was required to submit to OBN progress reports evidencing that it meets and maintains nursing program requirements.

In July 2024, OBN restored the PN program to full approval status for a five-year period after HCN hosted a site visit from OBN.

In May 2025, considering 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 July 2025, FCIE, placed RU on a provisional license due to RU’s a pplication for Substantive Change, Change in Ownership or Control required for the Combination.

In November 2025, FCIE moved RU back to a full License by Means of Accreditation following a review of its annual renewal application in connection with the two-step process required by ED to implement the Combination.

HCN’s ADN program has been on provisional approval status in Ohio since March 2017 due to not meeting the first-time pass rate standard.

The Ohio Board of Nursing, or OBN, will consider restoring a program to full approval status when the program meets the first-time pass rate standard for at least two consecutive years.

Failure to comply with state authorization or licensure requirements has impacted and could in the future restrict our institutions’ ability to recruit or enroll students or result in other sanctions, including fines and penalties.

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An institution will be certified to participate in the Title IV programs only if, among other things, it enters into a written program participation agreement, or PPA, with ED, which conditions participation in Title IV programs upon compliance with ED regulations and any additional conditions specified in the PPA.

ED regulations effective July 1, 2024, modify and expand requirements related to financial responsibility, administrative capability, and certification procedures.

ED regulations modify and expand requirements related to financial responsibility, administrative capability, and certification procedures.

Under the modified regulations, institutions are required to meet additional financial responsibility criteria and must report certain “financial responsibility” events to ED.

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ED may also impose additional requirements on the institution’s participation in Title IV programs, such as restrictions on enrollment, addition of new programs, or acquisitions.

In August 2024, ED announced that it would publish certain information related to PPAs, some of which ED already makes publicly available online or upon request.

Specifically, ED will now make publicly available on its website the Title IV participation statuses of the institutions currently participating in one or more Title IV programs, an example of a typical full certification PPA, copies of all provisional PPAs executed on or after January 1, 2024 and June 26, 2024, which will be updated on a rolling basis to include provisional PPAs issued after June 26, 2024, and a list of adverse administrative actions initiated between October 1, 2021, and July 31, 2024 against institutions participating in Title IV programs, which will be updated on a quarterly basis.

Higher Education Act

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The most recent comprehensive reauthorization occurred in 2008 when Congress reauthorized most HEA programs through the 2014 federal fiscal year.

The reauthorization has been temporarily extended in the years that have followed.

The reauthorization has been temporarily extended in

the years that have followed.

Congress previously considered comprehensive legislation to reauthorize the HEA, including proposals from Republicans and Democrats, referred to as the Student Aid Improvement Act and the College Affordability Act, respectively, and Congress could consider such legislation again in the future.

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Title IV program aid is primarily awarded to students on the basis of financial need, generally defined as the difference between the cost of attending an institution and the amount a student can reasonably contribute.

Our students receive grants and loans to fund their education under several Title IV programs, of which the two largest are Direct Loans and Pell Grants.

Our students receive grants and loans to fund their education under several Title IV programs, of which the two largest are federal Direct Loans, or Direct Loans, and Pell Grants.

Some of our students may also be eligible for other Title IV grant programs, such as the Federal Supplemental Education Opportunity Grant.

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For example, the Pell Grant program could be subject to cuts or changes in the future, and cuts in ED’s administrative budget could lead to delays in student eligibility determinations and delays in origination and processing of federal student loans.

On July 4, 2025, the One Big Beautiful Bill Act, or the OBBBA, was signed into law.

Among other things, the OBBBA amends portions of the HEA and makes changes to the Title IV programs.

Additional information regarding such changes is available below under “Compliance with Regulatory Standards and the Effect of Regulatory Violations – Other Recent Legislative and Regulatory Activity – The One Big Beautiful Bill Act”.

Regulation of Title IV Financial Aid Programs

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In addition, ED may more closely review a provisionally certified institution if it applies for approval to open a new location, add an educational program, acquire another school, or make any other significant change.

If ED determines that

a provisionally certified institution is unable to meet its responsibilities, it may seek to revoke the institution’s certification to participate in Title IV programs with fewer due process protections than if it were fully certified.

In June 2020, APUS timely applied for recertification to participate in Title IV programs.

ED subsequently notified APUS that it had completed its review of APUS’s application and had granted APUS provisional certification until June 30, 2023, because APUS was subject to an open program review at the time of renewal.

That program review was closed in January 2021 with no findings, penalties, or further action required.

APUS applied for recertification in March 2023.

If ED determines that a provisionally certified institution is unable to meet its responsibilities, it may seek to revoke the institution’s certification to participate in Title IV programs with fewer due process protections than if it were fully certified.

APUS applied for recertification to participate in Title IV programs in March 2023.

In July 2024, ED notified APUS that it had approved APUS’s continued participation in the Title IV programs under a Provisional Program Participation Agreement, or PPPA, that is effective July 15, 2024, and expires June 30, 2026.

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The PPPA imposes new reporting requirements on APUS related to accrediting agency actions, governmental actions, and class actions.

Additionally, APEI co-signed the PPPA pursuant to new regulations effective July 1, 2024, which require an entity with a direct or indirect ownership interest and the power to exercise control over the institution to co-sign the PPPA and assume joint and several liability for the participating institution’s Title IV liabilities.

Additionally, APEI co-signed the PPPA pursuant to ED regulations that require an entity with a direct or indirect ownership interest and the power to exercise control over the institution to co-sign the PPPA and assume joint and several liability for the participating institution’s Title IV liabilities.

APUS must apply for recertification to participate in Title IV programs no later than March 31, 2026, and APUS submitted this application on February 2, 2026.

In July 2021, in connection with RU’s March 2019 change in ownership that preceded our acquisition of RU, ED imposed certain temporary growth restrictions on RU, including limitations on new programs and locations and a cap on enrollments of students who participate in Title IV programs.

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In August 2023, ED notified RU that it had approved RU’s continued participation in the Title IV programs under APEI ownership under a PPPA.

The PPPA continues to impose certain growth restrictions on RU that were included in the TPPPA, including limitations on new programs and locations and the enrollment of students that participate in Title IV programs.

ED continues the prior requirement that RU submit periodic financial and Title IV enrollment reports.

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The PPPA specifies that after ED reviews and accepts financial statements and compliance audits for one complete fiscal year of RU’s Title IV participation under APEI’s ownership, RU may seek approval for new programs that replace current programs.

Because one complete fiscal year of RU’s Title IV participation under APEI’s ownership has passed and ED has accepted the financial statements and compliance audits for that year, we believe that we may now seek approval for new programs that replace current programs.

The PPPA also specifies that after ED reviews and accepts financial statements and compliance audits that cover the second complete fiscal year of RU’s Title IV participation under our ownership, RU must seek pre-approval for new locations, new programs that are not replacing current programs, and other changes.

For the second and third fiscal years, RU is also subject to enrollment growth limitations, after which RU can request that ED release RU from further enrollment restrictions.

The PPPA no longer requires RU to post the financial responsibility letter of credit that ED had imposed based on the 2019 change in ownership and control of RU, although this letter of credit has not yet been released.

We believe we have met all obligations for the release of the letter of credit.

The PPPA also specifies that after ED reviews and accepts financial statements and compliance audits that cover the second complete fiscal year of RU’s Title IV participation under our ownership, RU may seek approval for new locations, new programs that are not replacing current programs, and other changes.

Because two complete fiscal years of RU’s Title IV participation under APEI’s ownership have passed and ED has accepted the financial statements and compliance audits for those years, RU may now seek approval for new locations, new programs whether or not they are replacing current programs, and other changes.

RU remains subject to enrollment growth limitations under the PPPA.

RU can request that ED release RU from further enrollment restrictions after three full fiscal years of RU’s Title IV participation under APEI’s ownership.

The August 2023 PPPA no longer requires RU to post the financial responsibility letter of credit that ED had imposed based on the 2019 change in ownership and control of RU.

In May 2025, ED released the letter of credit and released RU from temporary growth restrictions imposed in connection with RU’s 2019 change in ownership.

RU must apply for recertification of its Title IV participation by March 31, 2026.

In June 2023, HCN timely applied for recertification to participate in Title IV programs.

ED subsequently notified HCN that it had been granted provisional certification for all Title IV programs until September 30, 2023.

ED granted approval on a provisional basis because HCN was subject to an open program review at the time of recertification.

As described in “Compliance with Regulatory Standards and Effect of Regulatory Violations – Compliance Reviews,” in July 2022, HCN received a final program review determination from ED, and in September 2022, ED notified HCN that it had closed the program review, and no further action was required though the provisional designation remained.

In June 2023, HCN again timely applied for recertification.

ED subsequently notified HCN that it had recertified HCN’s participation in all Title IV programs effective August 15, 2023, and expiring June 30, 2026.

Co-Signature Requirements.

A participating institution must sign a PPA with ED as a condition to participation in Title IV programs.

Regulations effective July 1, 2024, codify a current ED policy requiring signatures from corporations or other legal entities that have, or could have, a direct or indirect effect on the institution’s financial responsibility.

Under the new regulations, entities with a direct or indirect ownership interest and the power to exercise control over the institution must co-sign the PPA.

Co-signers agree that they are jointly and severally liable for the participating institution’s Title IV liabilities.

ED subsequently notified HCN that it had recertified HCN’s participation in all Title IV programs effective August 15, 2023, and which expires on September 30, 2026.

If ED approves the Combination, the scope of APUS’s certification to participate in Title IV programs will be expanded to include RU and HCN and RU and HCN will no longer have separate Title IV certifications.

See “Business – Regulatory Environment – Accreditation – Institutional Accreditation” above for more information.

Administrative Capability.

ED regulations specify extensive criteria that an institution must satisfy to establish that it has the requisite administrative capability to participate in Title IV programs.

These criteria relate to, among other things, institutional staffing, operational standards such as procedures for disbursing and safeguarding Title IV program funds, timely

submission of accurate reports to ED, referring to ED’s Office of Inspector General, or ED OIG, credible information that a student or employees with Title IV responsibilities may have engaged in fraud or illegal conduct in connection with Title IV program administration, and various other procedural matters.

As further explained above under “Student Financing Sources and Related Regulations/Requirements – Department of Education,” due to ED regulations effective July 1, 2024, ED may find that an institution has failed the administrative capability requirements if the institution does not provide adequate financial aid counseling or career services, has been subject to a negative action by a state or federal agency, court, or accreditor, fails to verify high school diplomas, or does not timely place students in geographically accessible clinical or externship opportunities.

These criteria relate to, among other things, institutional staffing, operational standards such as procedures for disbursing and safeguarding Title IV program funds, timely submission of accurate reports to ED, referring to ED’s Office of Inspector General, or ED OIG, credible information that a student or employees with Title IV responsibilities may have engaged in fraud or illegal conduct in connection with Title IV program administration, and various other procedural matters.

ED may find that an institution has failed the administrative capability requirements if the institution does not provide adequate financial aid counseling or career services, has been subject to a negative action by a state or federal agency, court, or accreditor, fails to verify high school diplomas, or does not timely place students in geographically accessible clinical or externship opportunities.

If an institution fails to satisfy any of the administrative capability requirements, ED may require the repayment of Title IV program funds, transfer the institution from the “advance” method of payment of Title IV program funds to heightened cash monitoring status, or to the “reimbursement” method of payment, place the institution on provisional certification status, or commence a proceeding to impose a fine or to limit, suspend, or terminate the participation of the institution in Title IV programs.

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The HEA and ED regulations establish extensive standards of financial responsibility that institutions must satisfy in order to participate in Title IV programs.

These standards generally require that an institution provide the services described in its official publications and statements, properly administer Title IV programs in which it participates, and meet all of its financial obligations, including making required refunds and any repayments to ED.

These standards generally require that an institution

provide the services described in its official publications and statements, properly administer Title IV programs in which it participates, and meet all of its financial obligations, including making required refunds and any repayments to ED.

ED evaluates institutions on an annual basis for compliance with specified financial responsibility standards, including a complex formula based on line items from the institution’s audited financial statements.

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Under the zone alternative, an institution:

must request and receive funds under the heightened cash monitoring or reimbursement payment methods (resulting in a delayed method of cash funding for Title IV aid);

may be required to provide additional information to ED upon request (e.g., early submission of financial statement and compliance audit, information about current operations and future plans);

must require its auditor to express an opinion regarding compliance with zone alternative requirements;

and must provide timely information to ED regarding certain oversight and financial events.

(i) must request and receive funds under the heightened cash monitoring or reimbursement payment methods (resulting in a delayed method of cash funding for Title IV aid);

(ii) may be required to provide additional information to ED upon request (e.g., early submission of financial statement and compliance audit, information about current operations and future plans);

(iii) must require its auditor to express an opinion regarding compliance with zone alternative requirements;

and (iv) must provide timely information to ED regarding certain oversight and financial events.

Under the financial protection alternative, the institution must provide financial protection of at least 50% of the Title IV funding that it received during its most recently completed fiscal year.

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See risk factor captioned “Our subsidiary institutions’ failure to meet financial responsibility…” for more information.

In March 2024, ED notified us that in calculating our composite score for the fiscal year-ended December 31, 2022, it excluded our deferred tax assets from its calculation of our assets.

As a result, ED calculated that we had a 2022 consolidated composite score of 1.1 and our institutions were therefore in the “zone.” We disagree with ED’s calculation and conclusion and submitted a timely response to ED also in March 2024.

In April 2024, ED issued a response to our rebuttal and disagreed with our position, reiterating that our institutions must establish financial responsibility on an alternative basis.

We timely informed ED in April 2024 that although we continue to disagree with its composite score methodology with respect to deferred tax assets, we select the “zone alternative” as the alternative basis on which we establish financial responsibility.

Under the zone alternative, we are required to:

(i) make Title IV disbursements to eligible students and parents under the heightened cash monitoring payment method, or HCM1, pursuant to which we would be required to first make disbursements to eligible students and parents and pay any credit balances before we request or receive funds from ED for the amount of those disbursements;

(ii) notify ED of certain events, such as an adverse action taken by any of our institution’s accreditors or state authorizing agencies;

(iii) provide regular reports to ED relating to our institution’s current operations and future plans;

and (iv) require our auditors to express an opinion on our compliance with the requirements under the zone alternative.

In addition, our institutions will be required to seek ED’s approval prior to adding educational programs or a new location at which the institution offers or will offer 50% or more of an educational program.

In April 2025, ED notified us that according to its calculations, we had a fiscal year end 2023 consolidated composite score of 1.3 and our institutions were therefore in the “zone,” and we selected the “zone alternative” as the alternative basis on which we establish financial responsibility.

Thereafter, APUS, RU and HCN operated under the zone alternative to establish financial responsibility, which imposed on us certain restrictions and obligations, including the heightened cash monitoring payment method, or HCM1.

On March 10, 2026, ED notified us that, as of such date, APUS, RU, and HCN were no longer required to comply with the zone alternative requirements due to a composite score for fiscal 2024 of 2.6.

Institutions with composite scores below 1.5 do not qualify for approval from SARA unless, in the case of scores above 1.0, the home state exercises its discretion to consider additional financial information.

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And, because composite scores are viewed as a measure of financial responsibility, other regulators or accreditors could consider a composite score that is in “zone” negatively, which could have an impact on their interactions with us and what they permit us to do.

In September 2019, ED published modifications to its financial responsibility standards that took effect July 1, 2020.

We refer to these regulations as the 2019 Borrower Defense Regulations.

The 2019 Borrower Defense Regulations identify certain conditions or other triggering events that have or may have an adverse material effect on the institution’s financial condition, in response to which ED would or could require that the institution submit some form of financial protection, such as a letter of credit, to ED.

APUS participated in SARA in 2025 on provisional status due to its composite score for fiscal 2022 and 2023 being in the zone.

In December 2025, APUS was removed from provisional status because its composite score for fiscal 2024 was no longer in the zone, and WVHEPC accepted that composite score in advance of it being approved by ED.

In September 2019, ED published modifications to its financial responsibility standards in regulations that took effect July 1, 2020, or the 2019 Borrower Defense Regulations.

The 2019 Borrower Defense Regulations, among other matters, identify certain conditions or other triggering events that have or may have an adverse material effect on the institution’s financial condition, in response to which ED would or could require that the institution submit some form of financial protection, such as a letter of credit, to ED.

Triggering events are characterized as either mandatory or discretionary.

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For each triggering event, to demonstrate that the institution remains financially responsible, the institution may submit evidence that the triggering event has been resolved, that the institution has insurance that will cover part or all of the debt or liabilities, or that the triggering event has not or will not have a material adverse effect on the institution.

If ED determines that one of our institutions is not financially responsible because of one or more triggering events, the institution would be required to provide an irrevocable letter of credit equal to at least 10% of the amount of federal student financial aid funds received by the institution for the past year.

In October 2023, ED published modifications to its financial responsibility standards effective July 1, 2024.

These revised standards include, among other requirements, an expanded list of conditions or other triggering events for which ED could require financial protection, such as a letter of credit.

In addition, if ED requires financial protection as a result of more than one mandatory or discretionary trigger, it will require separate financial protection for each individual trigger.

If ED determines that one of our institutions is not financially responsible because of one or more triggering events, the institution

would be required to provide an irrevocable letter of credit equal to at least 10% of the amount of federal student financial aid funds received by the institution for the past year for each triggering event.

The “90/10 Rule.” Under the so-called “90/10 Rule”, a for-profit institution is prohibited from deriving more than 90% of its revenue (as computed by ED) on a cash accounting basis (except for certain institutional loans) from Title IV programs for any fiscal year.

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Ineligibility of any one or more of our institutions to participate in Title IV programs and TA would have a material adverse effect on our enrollments, revenue, results of operations, and cash flows.

The American Rescue Plan Act, or ARPA, which was enacted in March 2021, modified the HEA’s 90/10 Rule to require that a for-profit institution derive not less than 10% of its revenue from sources other than “federal education assistance funds”.

ED published final regulations in October 2022 that address ARPA’s modifications to the 90/10 Rule and provide that for fiscal years beginning on or after January 1, 2023, federal educational assistance funds used to calculate the “90%” side of the ratio include Title IV funds and any other educational assistance funds provided by a federal agency directly to an institution or a student, including the federal portion of any grant funds provided by or administered by a non-federal agency, except for non-Title IV federal funds provided directly to a student to cover expenses other than tuition, fees, and other institutional charges.

The 90/10 Rule no longer permits institutions to count federal aid for veterans and service members as part of the “10%” side of the ratio.

As a result, effective January 1, 2023, TA and VA benefits are included in the “90%” side of the ratio.

See the Risk Factor captioned “If one or more of our institutions does not comply with the 90/10 Rule, it or they will lose eligibility to participate in federal student financial aid programs” for more information.

The American Rescue Plan Act, or ARPA, modified the HEA’s 90/10 Rule to require that a for-profit institution derive not less than 10% of its revenue from sources other than “federal education assistance funds”.

ED regulations that address ARPA’s modifications to the 90/10 Rule provide that federal educational assistance funds used to calculate the “90%” side of the ratio include Title IV funds and any other for fiscal years beginning on or after January 1, 2023, educational assistance funds provided by a federal agency directly to an institution or a student, including the federal portion of any grant funds provided by or administered by a non-federal agency, except for non-Title IV federal funds provided directly to a student to cover expenses other than tuition, fees, and other institutional charges.

The 90/10 Rule no longer permits institutions to count federal aid for active-duty service members and veterans as part of the “10%” side of the ratio.

As a result, TA and VA benefits are included in the “90%” side of the ratio.

See the Risk Factor captioned “If one or more of our institutions does not comply with the 90/10 Rule for two consecutive years, it or they will lose eligibility to participate in federal student financial aid programs” for more information.

The final regulations also include other requirements, including:

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and institutions must notify ED and students in a timely manner if they fail the 90/10 Rule.

On July 7, 2025, ED issued an interpretative rule that clarified ED’s classification of revenue received by for-profit schools under the 90/10 Rule.

The interpretive rule specifies that for-profit schools will be allowed to count non-federal funds generated from programs offered entirely through distance education, if such programs satisfy certain criteria, as non-federal revenue in their 90/10 calculations, and may revise 90/10 Rule calculations for prior fiscal years to include revenue from distance education programs in the “10%” side of the ratio.

Using the applicable 90/10 formula, the following table contains the percentage of cash-basis revenue earned from Title IV program funds:

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An institution participating in Title IV programs may not provide any commission, bonus or other incentive payment to any person or entity engaged in any student recruitment, admissions, or financial aid awarding activity based directly or indirectly on success in securing enrollments or federal student financial aid.

ED has previously announced that it will calculate institutional liability for noncompliance with the incentive payment rule by calculating the cost to ED of the Title IV funds improperly received by the institution, including the cost to ED of all of the Title IV funds received by the institution over a particular period of time if those funds were obtained through implementation of a policy or practice in which students were recruited in violation of the incentive payment rule.

ED has previously announced that it will calculate institutional liability for noncompliance with the incentive payment rule by calculating the cost to ED of all Title IV funds improperly received by the institution, including the cost to ED of all of the Title IV funds received by the institution over a particular period of time if those funds were obtained through implementation of a policy or practice in which students were recruited in violation of the incentive payment rule.

ED may also fine an institution, or take administrative action to limit, suspend, revoke, deny, or terminate an institution’s eligibility to participate in the Title IV programs, if the institution violates the prohibition.

We have designed our employee compensation and third-party contractual arrangements to comply with the incentive payment rule currently in effect.

However, because there are ambiguities as to how the rule is interpreted and enforced by ED and because we could make errors in implementation, we can make no assurances that ED would not find deficiencies in our past, current, or future employee compensation plans and relevant third-party contractual arrangements.

However, because there are ambiguities as to how the rule is interpreted and enforced by ED

and because we could make errors in implementation, we can make no assurances that ED would not find deficiencies in our past, current, or future employee compensation plans and relevant third-party contractual arrangements.

In addition, in recent years, other postsecondary education institutions have been named as defendants in whistleblower lawsuits, known as “qui tam” cases, brought pursuant to the Federal False Claims Act, alleging that an institution’s compensation practices did not comply with the incentive payment rule.

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In September 2025, ED released final official cohort default rates for institutions for federal fiscal year 2022, with ED reporting a zero percent cohort default rate for APUS, RU, and HCN.

These rates were favorably impacted by regulatory relief provided in connection with the COVID-19 pandemic pursuant to which borrowers with Title IV program student loans were not required to make payments on their federal loans, which, as explained further in “Student Loan Defaults” below, may lead to higher default rates in the future.

As explained further in “Student Loan Defaults” below, these rates were favorably impacted by regulatory relief provided in connection with the COVID-19 pandemic pursuant to which borrowers with Title IV program student loans were not required to make payments on their federal loans, and no interest accrued on these loans during this period.

Interest accrual on forborne federal student loans resumed on September 1, 2023, and payments became due beginning October 1, 2023.

In connection with these developments, ED implemented a 12-month “on-ramp” to repayment, running from October 1, 2023, to September 30, 2024, during which borrowers were not placed into default for missed payments.

The end of COVID-19 pandemic-related student loan forbearance and the 12-month “on-ramp” period may lead to higher default rates in the future.

The final official ED cohort default rates for APUS, RU, and HCN for the federal fiscal years 2020, 2021 and 2022 are as follows:

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APUS 0% 0% 0%

RU 1.6% 0.0% 0.0%

HCN 1.1% 0.0% 0.0%

Student Loan Defaults.

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Accordingly, interest accrual on federal student loans resumed on September 1, 2023, and payments became due beginning October 1, 2023.

for missed payments, which may lead to an increase in defaults and therefore an increase in our institutions’ cohort default rates in the future.

As a result, ED implemented a 12-month “on-ramp” to repayment, running from October 1, 2023, to September 30, 2024, during which borrowers were not considered delinquent, reported to credit bureaus, placed in default, or referred to debt collection agencies for missed payments, which may lead to an increase in defaults and therefore an increase in our institutions’ cohort default rates in the future.

See the Risk Factor captioned “Our institutions may lose eligibility to participate in Title IV programs if their student loan default rates are too high, and our future growth could be impaired as a result” for more information.

Gainful Employment Regulations .

Pursuant to new gainful employment, or GE, regulations that took effect July 1, 2024, ED will determine the Title IV eligibility of GE programs based in part on satisfaction of specified performance levels of two measures defined by GE regulations:

Effective July 1, 2024, gainful employment, or GE, regulations, established an accountability framework to determine the Title IV eligibility of GE programs based in part on satisfaction of specified performance levels of two measures defined by GE regulations:

the debt-to-earnings rates (which include two rates, the discretionary debt-to-earnings rate and the annual debt-to-earnings rate) and the earnings premium measure.

ED previously released a data set, referred to as the Program Performance Data, or the PPD, that includes calculations of the two metrics for certain programs.

The methodology ED used to produce the PPD differs from the methodology that will be used under the final GE regulations, primarily due to data limitations.

However, out of the 30 RU programs, 47 APUS programs, and three HCN programs (including one no longer offered at HCN) that ED assessed in the PPD, six current RU programs and three APUS programs failed one or both of the new measures.

The six RU programs failing in the PPD represent 5.0% of total student enrollment for the three months ended December 31, 2024.

The three APUS programs failing in the PPD represent 2.2% of total net course registrations for the three months ended December 31, 2024.

Programs that fail to achieve the specified performance levels of the GE measures in two of any three successive years for which the debt-to-earnings rates or the earnings premium measure are calculated will lose access to Title IV funding.

Institutions will generally be required to report certain information used to calculate these measures to ED by July 31 of each year, provided that for 2024, ED has extended the deadline numerous times.

Most recently, in February 2025, ED announced that all reporting will be due September 30, 2025, and that it does not anticipate any further extensions.

In addition, ED stated that it does not plan to produce any GE data prior to the September 30, 2025, deadline and confirmed that it will not take enforcement or other punitive actions against institutions that have not yet completed their required reporting.

See the Risk Factor captioned “ED’s new gainful employment requirements could materially and adversely affect our business” for more information.

Institutions were required to report by July 1, 2024, initial information relating to these GE measures that covered program and student data from the 2022-2023 and 2023-2024 award years.

ED extended this initial reporting deadline to September 30, 2025, and RU, APUS, and HCN reported their initial program and student data by such deadline.

RU, APUS, and HCN timely reported their program and student data for award year 2024-2025.

On July 4, 2025, the OBBBA was signed into law.

The OBBBA establishes an accountability framework, effective July 1, 2026, that institutions must satisfy at the program level in order for students in the program to continue to receive Direct Loans requiring that an undergraduate or graduate or professional program be ineligible for Direct Loans if, in two out of three consecutive years, the median earnings of a cohort of program completers are less than the median earnings of working adults

aged 25-34 with only a high school diploma for undergraduate program completers, or a bachelor’s degree for graduate or professional program completers, respectively, either in the state where the institution is located or, if fewer than 50% of students at the institution reside in the institution’s state, the national average.

If a program fails the earnings test for one year, institutions must provide students with a warning that the program is at risk of losing Direct Loan eligibility.

On December 8, 2025, ED convened the Accountability in Higher Education and Access through Demand-driven Workforce Pell Committee, or AHEAD, and initiated the negotiated rulemaking process for the OBBBA accountability framework.

On January 9, 2026, AHEAD reached consensus on proposed modifications to GE regulations that would eliminate debt-to-earnings rates, change student warning requirements, limit the consequences for failing the earnings premium measure, and add an appeal process for programs that lose Title IV eligibility under this framework.

The consensus language also maintains the current regulatory requirement that ED host a website that provides program-level data, including, but not limited to, median loan debt and median earnings.

Further, under the consensus language, an institution would lose Pell grant eligibility for a program if at least half of the institution’s Title IV recipients or half of an institution’s Title IV funds come from failing programs.

On January 30, 2026, ED published proposed regulations to implement the AHEAD consensus language.

The proposed regulations were subject to the notice and comment rulemaking process which ended on March 2, 2026.

As such, the final regulations may differ from those initially proposed.

In connection with the negotiated rulemaking, in December 2025, ED issued updated institutional program performance data, or PPD, that includes calculations of the earnings premium measure under the OBBBA accountability framework for certain programs.

These data are for informational purposes only and do not reflect the final data that will be used to determine whether a program will pass the earnings premium measure, as ED used a different cohort of students than will be used to calculate the actual earning premium measures and many programs’ earnings data were suppressed due to data privacy limitations.

However, out of the 67 APUS programs, 43 RU programs, and two HCN programs that ED assessed in the updated PPD, one APUS program failed the OBBBA earnings premium measure, representing less than 1% of total net course registrations for the three months ended December 31, 2025, compared to five APUS programs and six RU programs failing the GE debt-to-earnings test, representing 2.60% of total APUS net course registrations and 4.91% of total RU student enrollment, respectively, for the three months ended December 31, 2025.

The current GE regulations will remain in effect until ED publishes a final rule implementing the proposed OBBBA regulatory changes and that final rule goes into effect.

Under current GE regulations, beginning July 1, 2026, institutions must issue student warnings to current and prospective students if ED notifies the institution that the GE program could become ineligible based on its final debt to earnings rates or earnings premium measure for the next award year for which the measures are calculated.

Prospective students would need to review and acknowledge receipt of these warnings on ED’s program information website before we can disburse any Title IV student aid funds to the student.

This requirement would be changed by the anticipated proposed rules relating to the OBBBA.

Third-Party Servicers.

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If 5% or more of such returns were not timely made, the institution may be required to submit a letter of credit in favor of ED equal to 25% of the amount of unearned Title IV funds the institution was required to return for its most recently completed fiscal year.

If ED determines that one of our institutions has repeatedly failed to comply with ED regulations, it may take adverse action against the institution on the basis of the repeated finding or may find that the institution has failed to demonstrate administrative capability, as described above.

As described in Compliance with Regulatory Standards and Effect of Regulatory Violations – Compliance Reviews, in January 2022, HCN received a program review report from ED that included a finding related to return of Title IV funds calculations that were not properly calculated.

In connection with that finding, HCN was required to conduct a full file review and have the review tested by an independent auditor.

In July 2022, ED issued a final program review determination with respect to all findings, resulting in total liabilities of approximately $12,000.

If ED determines that one of our institutions has repeatedly failed to comply with ED regulations, it may

take adverse action against the institution on the basis of the repeated finding or may find that the institution has failed to demonstrate administrative capability, as described above.

Substantial Misrepresentation.

Under the HEA and its implementing regulations, ED may take action against an institution in the event of substantial misrepresentation by the institution concerning the nature of its educational programs, its

financial charges, or the employability of its graduates.

As part of the 2022 Borrower Defense Regulations, ED modified the substantial misrepresentation rule to explicitly include certain “omissions of fact” as a basis for a misrepresentation claim or borrower defense to repayment, or BDTR, claim.

As part of the 2022 Borrower Defense Regulations, as defined below, ED modified the substantial misrepresentation rule to explicitly include certain “omissions of fact” as a basis for a misrepresentation claim or borrower defense to repayment, or BDTR, claim.

If ED determines that an institution has engaged in substantial misrepresentation regarding the nature of its education program, its financial charges, or the employability of its graduates, ED may:

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Prior to 2016, ED’s regulations permitted a borrower to assert a BDTR of a Direct Loan if the institution’s acts or omissions give rise to a cause of action against the institution under state law.

In November 2016, ED published the 2016 Borrower Defense Regulations, which address, among other matters, which acts or omissions of an institution of higher education a student borrower or group of borrowers may assert as a defense to repayment of a Direct Loan.

In November 2016, ED published modifications to regulations that set forth, among other matters, the acts or omissions of an institution of higher education a student borrower or group of borrowers may assert as a defense to repayment of a Direct Loan, or the 2016 Borrower Defense Regulations.

The 2016 Borrower Defense Regulations were in effect from July 1, 2017, until July 1, 2020.

For Direct Loans first disbursed on or after July 1, 2017, the 2016 Borrower Defense Regulations created a new federal standard for BDTR of Direct Loans, new limitation periods for such claims, and new processes for resolution of such claims.

The 2016 Borrower Defense Regulations were in effect from July 1, 2017, until July 1, 2020, when new BDTR regulations became effective.

In September 2019, ED published the 2019 Borrower Defense Regulations, which, among other things, modify the standard for BDTR of Direct Loans made on or after July 1, 2020, the limitation periods for such claims, and the processes for resolution of such claims.

The 2016 Borrower Defense Regulations continue to apply to all Direct Loans made on or after July 1, 2017, and before July 1, 2020, with certain exceptions pursuant to the 2019 Borrower Defense Regulations.

The 2019 Borrower Defense Regulations apply to all Direct Loans made on or after July 1, 2020, and before July 1, 2023, when new BDTR regulations became effective.

The 2019 Borrower Defense Regulations apply to all Direct Loans made on or after July 1, 2020, and before July 1, 2023.

In March 2021, ED announced a revised approach for determining relief for borrowers who successfully assert borrower relief claims.

Under this new approach, a borrower will receive full loan relief when evidence shows that the institution engaged in certain misconduct.

Under this approach, a borrower will receive full loan relief when evidence shows that the institution engaged in certain misconduct.

This policy rescinded the prior administration’s formula that generally granted only partial loan relief for borrower defense claims.

Under the 2016 Borrower Defense Regulations and the 2019 Borrower Defense Regulations, ED may initiate a separate proceeding to collect from an institution the amount of relief granted based on a BDTR claim.

On November 1, 2022, ED published final regulations with an effective date of July 1, 2023, to address BDTR, loan discharge, pre-dispute arbitration and class-action waivers, among other issues, or the 2022 Borrower Defense Regulations.

The 2022 Borrower Defense Regulations will create a single standard and streamlined process for relief that will:

The 2022 Borrower Defense Regulations created a single standard and streamlined process for relief that will:

(i) apply to all future and pending BDTR claims as of July 1, 2023 instead of standards varying based on the date of the borrower’s first loan disbursement;

(ii) allow students to assert borrower defenses related to Direct Consolidation Loans;

(iii) define what kinds of misconduct could lead to borrower defense discharges (substantial misrepresentation, substantial omission of fact, breach of contract, aggressive and deceptive recruitment, and certain judgments or final ED actions);

(iii) define what kinds of misconduct could lead to borrower defense discharges ( e.g.

, substantial misrepresentation, substantial omission of fact, breach of contract, aggressive and deceptive recruitment, and certain judgments or final ED actions);

(iv) establish a reconsideration process for borrowers whose claims are not approved for a full discharge;

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and (vi) provide a clear timeline for adjudication of group and individual claims.

The 2022 Borrower Defense Regulations indicate that ED will hold colleges accountable for the cost of discharges, including by establishing a recoupment process separate from the approval of BDTR claims and making a recoupment determination based on the standards in place at the time the loan was first disbursed.

The effective date of the 2022 Borrower Defense Regulations is currently enjoined nationwide by court order, which means ED currently cannot apply the 2022 Borrower Defense Regulations to any institution.

As a result of the 2022 Borrower Defense Regulations injunction, ED announced that while it will not adjudicate any borrower defense applications under the 2022 Borrower Defense Regulations unless and until the effective date is reinstated, it will continue to adjudicate borrower defense applications under the 2016 Borrower Regulations and 2019 Borrower Defense Regulations if required pursuant to a court ordered settlement.

In 2022, ED joined a class settlement agreement that would result in a blanket grant of automatic, presumptive relief for all BDTR applications filed by students at certain institutions through June 22, 2022, but our institutions were not included in the blanket grant of relief.

The class settlement agreement provided certain expedited review of borrower defense claims related to institutions excluded from the automatic relief list, as well as for borrowers who applied during the period after execution of the settlement and before final approval.

Borrowers had to have submitted an application by November 15, 2022, in order to receive expedited review, and ED confirmed it would adjudicate all such applications under the 2016 Borrower Defense Regulations.

The 2022 Borrower Defense Regulations indicate that ED will hold institutions accountable for the cost of discharges, including by establishing a recoupment process separate from the approval of BDTR claims and making a recoupment determination based on the standards in place at the time the loan was first disbursed.

The OBBBA delays

implementation of the 2022 Borrower Defense Regulations until July 1, 2035.

Accordingly, BDTR regulations that were in effect on July 1, 2020, have been reinstated.

In December 2023, RU received from ED 338 BDTR claims, all of which had submission dates between June 23, 2022, and November 15, 2022, for students attending RU between 2000 and 2022, seeking in the aggregate a discharge of approximately $6.1 million in loans.

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In September 2024, APUS received from ED 408 BDTR claims, all of which had submission dates between June 23, 2022, and November 15, 2022, for students attending APUS between 2006 and 2021, seeking in the aggregate a discharge of approximately $6.6 million in loans.

Each of RU, HCN, and APUS disputes the validity of these claims and has filed responses to them with ED.

We are unable to predict whether ED will grant BDTR relief for the claims, or if so, whether it will seek recoupment from RU, HCN and/or APUS.

Refer to the Risk Factor captioned “ED rules related to BDTR claims may create significant liability that could have an adverse effect on our business” for additional information.

In 2025, RU received from ED 54 additional BDTR claims, all of which had submission dates between August 5, 2025 and November 14, 2025, for students attending RU between 1989 and 2019, seeking in the aggregate a discharge of approximately $1.1 million in loans.

As of March 11, 2026, APUS received from ED 98 BDTR claims, all of which had submission dates between November 17, 2022, and October 10, 2023, for students attending APUS between 2009 and 2020, seeking in the aggregate a discharge of approximately $1.8 million in loans.

As of March 11, 2026, RU received from ED 83 additional BDTR claims, all of which had submission dates between November 2022 and October 2023, for students attending RU between 2007 and 2026, seeking in the aggregate a discharge of approximately $1.6 million in loans.

As of March 11, 2026, HCN received from ED 11 BDTR claims, all of which had submission dates between January 7, 2023, and September 8, 2023, for students attending HCN between 2008 and 2020, seeking in the aggregate a discharge of approximately $0.2 million in loans.

Each of APUS, RU, HCN disputes the validity of these claims and has filed responses to them with ED.

We are unable to predict whether ED will grant BDTR relief for the claims, or if so, whether it will seek recoupment from APUS, RU, and/or HCN.

Refer to the Risk Factor captioned “ED rules related to BDTR claims may create significant liability that could have an adverse effect on our business and results of operations” for additional information.

Closed School Loan Discharge.

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For example, the 2016 Borrower Defense Regulations previously provided for an automatic loan discharge under certain circumstances, but the 2019 Borrower Defense Regulations eliminated the automatic loan discharge for schools closing on or after July 1, 2020.

Based on the automatic loan discharge rules, ED found RU responsible for $168,630 in closed school loan discharges as a result of campus consolidations in North Dakota in 2015 and in Wisconsin in 2016;

the liability was reduced on appeal to $77,569.

RU may also face closed school discharge liabilities as a result of the 2021 consolidation of two Florida campuses, the 2022 consolidation of two Minnesota campuses, and the planned closure of two Wisconsin campuses.

The 2022 Borrower Defense Regulations included closed school loan discharge provisions that would provide for automatic discharges to any borrower who was enrolled within 180 days prior to a school’s closure and who did not complete their education at the school or through an approved teach-out agreement at another school within one year after the closure of their original school.

The regulations would shorten the previous period for automatic discharge so borrowers do not default on their loans after a closure of their school.

The closed school loan discharge provisions of the 2022 Borrower Defense Regulations are currently enjoined nationwide by court order, which means ED currently cannot apply the closed school loan discharge provisions of the 2022 Borrower Defense Regulations to any institution.

Based on automatic loan discharge rules, RU was negatively affected in 2020 by two previous campus mergers, one in North Dakota in 2015, and one in Wisconsin in 2016.

The result were liabilities of $168,630, which was reduced to $77,569 after reconsideration appeals were submitted by RU to ED.

RU may also face closed school discharge liabilities as a result of the 2021 consolidation of two Florida campuses, the 2022 consolidation of two Minnesota campuses, the closure of one Wisconsin campus in 2025, and the planned closure of another Wisconsin campus in 2026.

The 2022 Borrower Defense Regulations include closed school loan discharge provisions that will provide for automatic discharges to any borrower who was enrolled within 180 days prior to a school’s closure and who did not complete their education at the school or through an approved teach-out agreement at another school within one year after the closure of their original school.

The regulations will shorten the previous period for automatic discharge, so borrowers do not default on their loans after a closure of their school.

The OBBBA delays implementation of the closed school loan discharge provisions of the 2022 Borrower Defense Regulations until July 1, 2035.

Accordingly, the closed school loan discharge provisions that were in effect on July 1, 2020, have been reinstated.

Dispute Resolution .

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The 2019 Borrower Defense Regulations, which apply to all Direct Loans made on or after July 1, 2020, and before July 1, 2023, generally remove these prohibitions but require institutions whose students must enter into pre-dispute arbitration agreements or class action waivers to disclose publicly those requirements, and prohibit requiring a student to participate in arbitration or any internal dispute resolution process prior to filing a BDTR application with ED.

The 2022 Borrower Defense Regulations, which apply to all Direct Loans made on or after July 1, 2023, and to all BDTR claims pending as of that date, prohibit institutions from requiring borrowers to sign mandatory pre-dispute arbitration agreements or class action waivers for claims related to the making of a Federal Direct Loan or the provision of educational services for which the loan was obtained.

However, the effective date of the 2022 Borrower Defense Regulations is currently enjoined nationwide by court order, which means ED currently cannot apply the 2022 Borrower Defense Regulations to any institution.

Other Department of Education Regulation

The 2022 Borrower Defense Regulations, prohibit institutions from requiring borrowers to sign mandatory pre-dispute arbitration agreements or class action waivers for claims related to the making of a Direct Loan or the provision of educational services for which the loan was obtained.

The OBBBA delays implementation of the 2022 Borrower Defense Regulations until July 1, 2035.

Accordingly, dispute resolution provisions under the BDTR regulations that were in effect on July 1, 2020, have been reinstated.

Other Department of Education and Privacy Regulation

Privacy of Student Personal Information and Records.

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Institutions are also subject to the FTC’s general deceptive and unfair practices jurisdiction of Section 5 of the FTC Act for processing student information.

FTC enforcement focuses primarily on:

FTC privacy and security enforcement focuses primarily on:

(i) collecting, using, sharing, or retaining personal information inconsistent with representations, commitments, and promises in privacy policies and other public statements;

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and (iii) failing to reasonably protect the security, privacy, and confidentiality of personal information.

Institutions must also comply with the FTC Red Flags Rule, a requirement designed to identify and mitigate identity theft for certain student accounts.

Institutions must also comply with the FTC Red Flags Rule, a requirement designed to identify and mitigate identity theft, including for certain student accounts.

States can also bring similar enforcement actions under so called “mini-FTC Acts” as well as other applicable privacy and security laws.

For example, the California Consumer Privacy Act, or the CCPA, as amended by the California Privacy Rights Act, or CPRA, and implementing regulations impose disclosure and notice obligations on institutions and provides a broad array of consumer rights relating to California residents and their personal information, including among others, the right to access personal information, the right to opt out of sales of personal information, the right to correct or delete personal information, and the right to limit certain disclosures of personal information.

For example, the California Consumer Privacy Act, or the CCPA, and implementing regulations impose disclosure and notice obligations on institutions and provide a broad array of consumer rights relating to California residents and their personal information, including among others, the right to access personal information, the right to opt out of sales of personal information, the right to correct or delete personal information, and the right to limit certain disclosures of personal information.

The CCPA has the potential for significant civil penalties for failing to comply as well as a private right of action and statutory damages for data breaches that are the result of unreasonable security.

Other comprehensive state privacy laws that our institutions may be subject to with varying requirements also came into effect in 2023.

Our collection of personal information relating to individuals in the European Union, or EU, may implicate the EU’s comprehensive General Data Protection Regulation, or GDPR.

Non-compliance with the GDPR could result in a fine for certain activities of up to 20 million Euros or 4% of an organization’s global annual revenue, whichever is higher, per violation.

Other comprehensive state privacy laws that our institutions may be subject to with varying requirements have come into effect in recent years and these requirements continue to evolve.

Our collection of personal information relating to individuals in the European Union, or EU, or the United Kingdom, or UK, may implicate the EU’s or the UK’s General Data Protection Regulation, or GDPR.

Non-compliance with the EU GDPR or UK GDPR could result in a fine for certain activities of up to €20 million or £17.5 million, respectively, or 4% of an organization’s global annual revenue, whichever is higher, per violation.

Accessibility for Students with Disabilities .

Section 504 of the Rehabilitation Act of 1973, or Section 504, prohibits discrimination against a person with a disability by any organization that receives federal financial assistance, which includes us.

ED’s Office for Civil Rights, or OCR, which enforces Section 504, together with the Department of Justice, has asserted that requiring the use of technology in a classroom environment when such technology is inaccessible to individuals with disabilities violates Section 504, unless those individuals are provided accommodations or modifications that permit them to receive all the educational benefits provided by the technology in an equally effective and integrated manner.

ED’s Office for Civil Rights, or OCR, which enforces Section 504, together with the Department of Justice, have asserted that requiring the use of technology in a classroom environment when such technology is inaccessible to individuals with disabilities violates Section 504, unless those individuals are provided accommodations or modifications that permit them to receive all the educational benefits provided by the technology in an equally effective and integrated manner.

In recent years, OCR has taken enforcement action against several institutions of higher education, including primarily online institutions, after determining that their websites and online learning management platforms were not accessible to persons with a disability.

In 2022, OCR initiated a compliance review of APUS’s learning management system and courses.

In August 2024, OCR identified we were out of compliance with certain accessibility requirements for people with disabilities for ten courses.

In August 2024, OCR identified APUS was out of compliance with certain accessibility requirements for people with disabilities for ten courses.

Currently, APUS is cooperating with OCR on a resolution to bring APUS into compliance.

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APUS was named among nearly 700 such schools in a July 2024 list.

Dep’t of Educ.

United States Dep’t of Educ., No.

5:24-cv-4041 (D.

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In January 2025, a federal district court granted summary judgment against ED, concluding that the new regulations were unlawful and permanently vacating the rule nationwide.

Cardona , No.

2:24-cv-072 (E.D.

In February 2025, OCR issued a Dear Colleague Letter confirming both that it will enforce Title IX under the 2020

Rule and that institutions with open investigations initiated under the new regulations should reevaluate such investigations for consistency with the 2020 Rule.

In February 2025, OCR issued a Dear Colleague Letter confirming both that it will enforce Title IX under the 2020 Rule and that institutions with open investigations initiated under the new regulations should reevaluate such investigations for consistency with the 2020 Rule.

Distance Education.

Regulations that were effective July 2021 provide institutions additional flexibility in offering distance education and competency-based education programs.

Definitions in the rule clarify the instructional requirements that distance education programs must abide in order to remain eligible for Title IV disbursements.

ED regulations provide institutions additional flexibility in offering distance education and competency-based education programs.

Definitions in these regulations specify the instructional requirements that distance education programs must abide in order to remain eligible for Title IV disbursements.

Failure to comply with these standards could lead to adverse actions by ED.

In addition, in January 2025, ED published new regulations related to distance education and Return to Title IV, or R2T4, rules, which govern an institution’s obligations to return Title IV funds to ED when a student withdraws.

These changes related to distance education, when effective, will require institutions to report student enrollment in distance education in accordance with procedures established by ED, and changes related to R2T4 rules address circumstances constituting a withdrawal, codify longstanding policies, and modify certain types of R2T4 calculations.

In addition, in January 2025, ED published new regulations that define a “distance education course” and require institutions to report student enrollment in distance education in accordance with procedures that will be established by ED.

The new regulations become effective July 1, 2026.

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Service members of the U.S.

Armed Forces are eligible to receive tuition assistance from their branch of service through the DoD’s TA program.

Armed Forces are eligible to receive TA from their branch of service through the DoD’s TA program.

Service members may use TA to pursue postsecondary degrees at institutions that are accredited by accrediting agencies recognized by ED.

APUS participates in TA, and for students in APUS undergraduate, and beginning January 2020, for students in APUS master’s programs.

RU and HCN also participate in TA.

RU’s active-duty military students in most undergraduate programs and master’s level graduate programs receive per credit hour tuition pricing at a tuition rate that is commensurate with available TA funding to allow tuition charges to be 100% covered by TA.

In March 2013, DoD restricted the ability of service members who have not previously taken a postsecondary education course and who are in certain duty locations outside the continental United States, or overseas locations, to receive TA for courses offered by institutions of higher education that are not parties to contracts with the DoD to provide DoD voluntary education programs at those locations.

APUS, RU, and HCN participate in TA programs.

Active-duty military students in most undergraduate programs and master’s level graduate programs at APUS and RU receive per credit hour tuition pricing at a tuition rate that is commensurate with available TA funding to allow tuition charges to be 100% covered by TA.

Since March 2013, DoD has restricted the ability of service members who have not previously taken a postsecondary education course and who are in certain duty locations outside the continental United States, or overseas locations, to receive TA for courses offered by institutions of higher education that are not parties to contracts with the DoD to provide DoD voluntary education programs at those locations.

Because we do not have contracts with the DoD to provide instruction at overseas locations, service members who begin their first postsecondary education program after arrival at an applicable overseas location may not use TA to pay for their education in our programs until after they have already successfully completed a course with an institution that has entered into a contract to provide voluntary education programs at that overseas location.

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(i) explain certain tools to service members, such as ED’s “College Navigator” website and the “Paying for College” website of the CFPB;

comply with requirements related to readmission policies for service members;

(ii) abide by limitations on the use of funds derived from TA;

provide certain academic and student support services;

(iii) disclose information about transfer of credit;

in certain circumstances, return TA funds to DoD (such as when a student ceases to attend or an institution cancels a course);

(iv) offer to service members loan counseling before private student loans are offered or recommended;

and (v) comply with ED’s Title IV “program integrity” rules, including rules related to incentive payments and misrepresentation.

The DoD MOUs also provide that an institution may only participate in TA if it is accredited by an accrediting agency recognized by ED, approved for VA funding, and a participant in Title IV programs.

In February 2025, the DoD Voluntary Education Institutional Compliance Program, or ICP, notified APUS that it will conduct a review of APUS compliance with the DoD MOU.

(ii) comply with requirements related to readmission policies for service members;

(iii) abide by limitations on the use of funds derived from TA;

(iv) provide certain academic and student support services;

(v) disclose information about transfer of credit;

(vi) in certain circumstances, return TA funds to DoD (such as when a student ceases to attend or an institution cancels a course);

(vii) offer to service members loan counseling before private student loans are offered or recommended;

and (ix comply with ED’s Title IV “program integrity” rules, including rules related to incentive payments and misrepresentation.

The DoD MOU also provides that an institution may only participate in TA if it is accredited by an accrediting agency recognized by ED, approved for VA funding, and a participant in Title IV programs.

In February 2025, the DoD Voluntary Education Institutional Compliance Program, or ICP, notified APUS that it will conduct a review of APUS’s compliance with the DoD MOU.

ICP completed its review in May 2025 and issued a report with no findings of noncompliance.

Additional information regarding the potential risks associated with the DoD MOUs is provided in the “Risk Factors” section of this Annual Report.

Several federal government agencies have established an online student complaint system for service members, veterans, and their families to report negative experiences at education institutions and training programs administering the Post-9/11 GI Bill, TA, and other military-related education benefit programs.

An institution having recurring substantive

complaints, or demonstrating an unwillingness to resolve complaints, may face a range of penalties, including revocation of its MOU and removal from participation in TA.

An institution having recurring substantive complaints, or demonstrating an unwillingness to resolve complaints, may face a range of penalties, including revocation of its MOU and removal from participation in TA.

Department of Defense Funding

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As a result of uncertainty about the availability of funding, several military branches initially suspended and later announced changes to their TA programs.

Congressional inaction on budgetary matters has led to lapses in federal funding, resulting in government shutdowns, and subsequent policy changes that have affected TA programs at DoD.

For example, the Army now requires service members to complete one year of service after graduation from Advanced Individual Training in order to be eligible for TA, and the Army and the Coast Guard have both reduced the total per service member annual benefits The OBBBA appropriated $100 million for TA in federal fiscal year 2025, beginning on October 1, 2025, that is available until September 30, 2029 if not earlier exhausted.

The $100 million was a one-time allocation across the military branches based on their active-duty population numbers.

We understand that a significant portion of this allocation may have been obligated or spent.

Congressional inaction on budgetary matters has led to lapses in federal funding, resulting in government shutdowns, including the government shutdown that began on October 1, 2025, and ended on November 12, 2025, or the 2025 Shutdown, and subsequent policy changes that have affected TA programs at DoD.

A future government shutdown, particularly one that includes DoD, or suspension or resulting modification of TA programs, including in connection with the failure to increase or a delay in increasing the federal debt ceiling, could have a material adverse effect on APUS’s enrollments and on our cash flows, results of operations, and financial condition.

For additional details, see the Risk Factor captioned “Enrollments and course registrations have been, and may in the future be, adversely affected by a variety of factors not directly related to education programs, including changes in military activity, budgets and government shutdowns” and the “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Overview – U.S.

Federal Government Shutdown” section.

Funding shortfalls have also affected DoD TA programs.

For example, as a result of the expected exhaustion of annual TA benefits available to sailors, in May 2019, the Navy ceased approving TA funds for eligible sailors until the start of the government’s fiscal year 2020.

Currently, Navy service members must have a minimum of three years of service before becoming eligible to use TA and cannot be in their last year of service, and for TA and the Navy College Program for Afloat College Education, funding is capped at 18 semester hours per fiscal year combined, and career funding is capped at 120 semester hours combined.

Currently, Navy service members must have a minimum of three years of service before becoming eligible to use TA and cannot use TA in their last year of service.

Additionally, for TA and the Navy College Program for Afloat College Education, funding is capped at 18 semester hours per fiscal year combined, and career funding is capped at 120 semester hours combined.

In addition, eligible sailors can only use TA to fund two courses each quarter of the fiscal year, and reservists on one-year orders are ineligible for TA.

In 2024, Congress approved an approximately 5.9% increase in the funds appropriated for DoD federal off-duty and volunteer education aid programs across all military branches.

On December 11, 2024, the U.S.

Department of the Army announced increases to the annual cap on the dollar amount of tuition assistance benefits and to the hours cap for each semester.

It is unclear whether the increased funding will encourage other military branches to expand service member eligibility for TA programs, or the amount of the service member annual benefit.

Other service branches have since followed suit and increased the annual cap on the amount of tuition assistance benefits.

We expect each military branch and the DoD to continually evaluate their approach to education funding, and the resulting changes could have an impact on the funds available to service members to pursue their education at our institutions.

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The Johnny Isakson and David P.

Veterans Health Care and Benefits Improvement Act of 2020, or the Isakson Roe Act, enacted in January 2021, modified policies related to GI Bill and other VA-administered education funds, in part to align VA requirements with DoD and ED requirements related to student financial aid.

Veterans Health Care and Benefits Improvement Act of 2020, or the Isakson Roe Act, modified policies related to GI Bill and other VA-administered education funds, in part to align VA requirements with DoD and ED requirements related to student financial aid.

Section 1018 of the Isakson Roe Act mandates that schools that receive veterans education benefits:

(i) provide VA students with information on total cost of an education program, an estimate of debt the student will have upon graduation, graduation rates, requirements to obtain any

license, certification, or approval for which the course of education is designed to provide preparation, and certain other information;

(i) provide VA students with information on total cost of an education program, an estimate of debt the student will have upon graduation, graduation rates, requirements to obtain any license, certification, or approval for which the course of education is designed to provide preparation, and certain other information;

(ii) inform VA students of the availability and potential eligibility of federal financial aid before packaging or arranging private student loans or alternative financing programs;

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and (ix) appoint a point of contact to provide academic and financial aid advising.

The Responsible Education Mitigating Options and Technical Extensions Act, enacted in December 2021, provides COVID-19 related extensions to certain veterans education benefits and clarifies that the Isakson Roe Act Section 1018 prohibition on incentive compensation does not apply to foreign students residing outside the U.S.

who are ineligible for federal student financial aid.

Institutions were generally required to be in compliance with the Isakson Roe Act by August 2021.

However, the Isakson Roe Act allowed institutions to seek from the VA a one-academic-year waiver of Section 1018.

Subsequently, the REMOTE Act delayed the effective date of the Isakson Roe Act’s Section 1018 requirements to August 1, 2022, and institutions were permitted to seek a one-academic-year waiver of that deadline beginning June 15, 2022.

RU did not seek a waiver of the August 1, 2021, compliance deadline, and it satisfied Section 1018 requirements by that deadline.

In September 2021, APUS and HCN received waivers for the requirements of Section 1018 for the period August 1, 2021, through July 31, 2022.

APUS and HCN did not seek additional waiver extensions, and they satisfied Section 1018 requirements by July 31, 2022.

The Training in High-Demand Roles to Improve Veteran Employment Act, or the THRIVE Act, enacted in June 2021, amended provisions related to veterans education programs found in ARPA and the Isakson Roe Act.

The legislation requires the VA to work with the Department of Labor to determine the list of high-demand occupations for rapid retraining assistance, excludes programs pursued solely through distance learning on a half-time basis or less from the housing stipend available to those in the retraining program, and requires the Government Accountability Office to report on the outcomes and effectiveness of retraining programs.

The Responsible Education Mitigating Options and Technical Extensions Act, among other things, clarified that the Isakson Roe Act Section 1018 prohibition on incentive compensation does not apply to foreign students residing outside the United States who are ineligible for federal student financial aid.

The Training in High-Demand Roles to Improve Veteran Employment Act, or the THRIVE Act, amended provisions related to veterans’ education programs found in ARPA and the Isakson Roe Act.

The THRIVE Act requires the VA to work with the Department of Labor to determine the list of high-demand occupations for rapid retraining assistance, excludes programs pursued solely through distance learning on a half-time basis or less from the housing stipend available to those in the retraining program, and requires the Government Accountability Office to report on the outcomes and effectiveness of retraining programs.

The legislation also requires the VA to take disciplinary action if a person with whom an institution has an agreement to provide educational or recruiting services violates the VA’s incentive compensation prohibitions.

On August 26, 2022, former President Biden signed into law the Ensuring the Best Schools for Veterans Act of 2022, which modifies how the VA implements the rule generally forbidding use of VA benefits for students enrolling in a program in which more than 85% of students enrolled in the program have any portion of their tuition, fees, or other charges paid to or for them by the institution or by the VA, or the 85/15 Requirement.

The Ensuring the Best Schools for Veterans Act of 2022 modified how the VA implements the rule generally forbidding use of VA benefits for students enrolling in a program in which more than 85% of students enrolled in the program have any portion of their tuition, fees, or other charges paid to or for them by the institution or by the VA, or the 85/15 Requirement.

Among other things, the law clarifies that reporting associated with the 85/15 Requirement generally does not apply to institutions at which 35% or fewer students receive GI bill benefits, computed separately for the main campus and any branch or extension of the institution.

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The extended payment plan is subject to various federal and state laws and regulations, such as the Truth in Lending Act as implemented in Regulation Z, the Equal Credit Opportunity Act as implemented in Regulation B and the Unfair, Deceptive or Abusive Acts or Practices provisions of Title X of the Dodd-Frank Act.

In addition, HCN offers an institutional affordability grant to students demonstrating financial need to cover the difference between the total cost of tuition and fees less the amount of all eligible financial aid resources.

Consumer Protection

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The CFPB has pursued enforcement actions against certain for-profit institutions of higher education and has released several reports that directly address issues related to institutions of higher education.

In November 2024, the CFPB Education Loan Ombudsman released its annual report which analyzed a sample set of 1,301 private student loan complaints (out of 4,107 received complaints) and 2,977 federal student loan complaints (out of 14,170 received complaints) received during the 2023-2024 award year.

The CFPB indicated that with respect to the private student loan complaints, almost one in three of the sample set were submitted by borrowers seeking loan cancellation;

and with respect to the federal student loan complaints, many complaints involved problems consumers had dealing with their loan servicer.

In January 2026, the CFPB Education Loan Ombudsman released its annual report, which analyzed 4,500 private student loan complaints and 18,400 federal student loan complaints received during the 2024-2025 award year.

The CFPB indicated that the majority of complaints involved problems consumers had dealing with their loan servicer.

We do not know what enforcement actions the CFPB may pursue, or what steps Congress or federal agencies may take, in response to these reports and whether such actions, if any, will have an adverse effect on our business or results of operations.

Federal Trade Commission

In October 2021, in what it termed a broad-based initiative to deter for-profit college fraud, the FTC issued informational notices to 70 for-profit higher education institutions, including APUS and RU, informing them of certain marketing practices the FTC had previously determined to be deceptive or unfair and therefore unlawful under the FTC Act.

The FTC indicated that an institution’s receipt of the notice was not an indication that the institution has engaged in deceptive or unfair conduct.

The informational notices were sent in furtherance of an FTC Act provision permitting penalties against those engaging in unfair or deceptive acts or practices with actual knowledge of their unfair or deceptive nature.

The informational notices informed the institutions that engaging in such practices could subject a company to civil penalties under that provision.

By providing the informational notices, the FTC is able to document that the institutions have knowledge that the FTC has found these marketing practices to be unfair or deceptive.

The FTC also announced that it would be enhancing its enforcement cooperation with other agencies with oversight of educational institutions, including ED’s Office of Federal Student Aid and the VA.

We do not know what enforcement actions the FTC may pursue in light of its informational notices and whether such actions, if any, will have an adverse effect on our business or results of operations.

Other Issues Related to Consumer Protection and Complaints

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Compliance Reviews

Our institutions are subject to compliance reviews and audits by various external agencies, including ED, ED OIG, state licensing agencies, DoD, VA, and accrediting agencies.

Our institutions and certain of our third-party service providers may be subject to compliance reviews, inspections, audits, and investigations, by various external agencies, including ED, ED OIG, state licensing agencies, DoD, VA, and accrediting agencies.

For example, in February 2026, ED OIG notified RU that it would conduct an inspection related to RU’s process related to addressing students with unusual enrollment history flags for the 2024-2025 award year.

The HEA and ED regulations also require institutions to submit annually a compliance audit conducted by an independent certified public accountant in accordance with Government Auditing Standards and applicable ED OIG audit standards.

In addition, to enable ED to make a determination of financial responsibility, institutions must annually submit audited financial statements prepared in accordance with ED regulations.

In September 2016, ED began a program review of APUS’s administration of the Title IV programs during the 2014-2015 and 2015-2016 award years.

ED closed the program review in January 2021, with no findings, penalties, or requirements for further action.

In July 2017, ED began a program review of RU’s administration of Title IV program during the 2015-2016 and 2016-2017 award years.

In September 2022, RU received a program review report from ED that asserted 14 findings of noncompliance with Title IV rules, including rules related to Title IV administration, policies, and consumer information and reporting requirements, and the federal work study, Pell Grant, and Federal Supplemental Educational Opportunity Grant programs.

The program review required RU to do a review in connection with the federal work study finding, prepare policies and procedures, return small amounts of funds to two students, provide training, and take other actions in connection with the findings, and to provide a response, which RU timely provided.

In July 2023, ED officially closed the program review by issuing a final program review determination and indicating that 12 of the findings were considered resolved with no liabilities.

The remaining two findings related to Title IV administration had established liabilities of less than $100.

ED determined that the total liability was minimal as it was under the $1,000 threshold so no recoupment was required;

however, RU was responsible for, and has taken all steps necessary, to ensure that adequate corrective procedures had been implemented.

In July 2022, HCN received from ED the final program review determination from a review that had been pending since June 2017, and in September 2022 ED notified HCN that it had closed the program review, and no further action was required.

The review included findings of a failure to prorate fees, return of Title IV funds calculations that were not properly computed, untimely and inaccurate reporting to the National Student Loan Data System, incomplete verification, and cost of attendance formulation deficiencies.

HCN was required to do a full file review in connection with the return of Title IV funds finding, to have the review tested by an independent auditor, and to prepare policies and procedures and take other actions in connection with the findings.

The total liability for this finding was approximately $12,000.

In July 2023, ED began a program review of APUS’s administration of Title IV programs during the 2021-2022 and 2022-2023 award years, which includes, among other things, a review of compliance with the 90/10 Rule.

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Accordingly, at this time, we cannot predict the outcome of the APUS program review, when it will be completed, whether there will be any adverse findings in the resulting program review report, what findings there may be related to 90/10 Rule compliance, if any, or whether ED will place any liability or other limitations on APUS as a result of the review.

In order to participate in TA, institutions must agree to participate in DoD’s ICP.

In order to participate in TA, institutions must agree to participate in DoD’s Voluntary Education Institutional Compliance Program, or ICP.

An institution that, through the ICP, is found noncompliant with DoD requirements and demonstrates an unwillingness to resolve a finding may be subject to a range of penalties from a written warning to termination of the institution’s participation in TA.

APUS and RS have previously been subject to ICP reviews.

For example, in February 2020, DoD informed APUS that it was one of 250 institutions selected for ICP review in 2020.

Upon request, in May 2020, APUS submitted a self-assessment in connection with the ICP.

In November 2020, DoD issued a report finding that APUS did not clearly articulate certain policies or clearly make certain disclosures.

As required, APUS submitted its corrective action plan and related evidentiary support and in April 2021, APUS was informed that the review had been completed, and no further actions are required.

In February 2025, ICP notified APUS that it will conduct a review of APUS compliance with the DoD MOU.

APUS and RU have previously been subject to ICP reviews.

For example, in February 2025, ICP notified APUS that it will conduct a review of APUS’s compliance with the DoD MOU.

ICP completed its review in May 2025 and issued a report with no findings of noncompliance.

Potential Effect of Regulatory Violations

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For example, ED’s regulations, state regulatory requirements, and accrediting agency standards may, in certain instances, limit our ability to acquire or sell institutions, and to establish additional locations and programs.

For example, as described in “Student Financing Sources and Related Regulations/Requirements – Department of Education – Regulation of Title IV Financial Aid Programs – Eligibility and Certification Procedures”, RU is currently subject to certain temporary growth restrictions on the institution, including imposing limitations on new programs and locations and imposing a cap on the number of students that participate in Title IV programs that can be enrolled.

Many states require approval before institutions can add new programs, campuses, or teaching locations.

Similarly, many states require approval before institutions can add new programs, campuses, or teaching locations.

Generally, these agencies require institutions to notify them and sometimes require institutions to obtain their approval, in advance of opening a new location or implementing new programs.

APUS is regulated by its institutional accreditor HLC as well as a state agency in West Virginia.

RU is regulated by its institutional accreditor HLC as well as the state agencies in Florida, Illinois, Kansas, Minnesota, North Dakota, and Wisconsin.

HCN is regulated by its institutional accreditor ABHES as well as the state agencies in Ohio, Indiana, and Michigan.

GSUSA is regulated by its institutional accreditor ACCET as well as a district agency in the District of Columbia.

As described in “Student Financing Sources and Related Regulations/Requirements – Department of Education – Regulation of Title IV Financial Aid Programs – Eligibility and Certification Procedures”, RU was subject to certain limitations on new programs and locations and is currently subject to a cap on the number of students that participate in Title IV programs that can be enrolled.

Change in Ownership Resulting in a Change of Control

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These restrictions may impede our ability to grow by acquisition, or to dispose of assets.

Moreover, as a publicly traded company, the potential adverse regulatory effects of a change of control could influence future decisions by us and our stockholders regarding the sale, purchase, transfer, issuance, or redemption of our stock.

In addition, the regulatory burdens and risks associated with a change of control could discourage bids for our shares of common stock and could have an adverse effect on the market price of our shares.

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RU also pursued post-closing notices and consents related to the change in ownership.

agencies, accreditors, boards of nursing, and other relevant regulators also required further action with respect to the Rasmussen Acquisition.

For example, HLC required an additional site visit within six months of the closing date of the Rasmussen Acquisition, and the visit occurred in February 2022.

State agencies, accreditors, boards of nursing, and other relevant regulators also required further action with respect to the Rasmussen Acquisition.

Additionally, some regulators required approval after the change in ownership in order to continue proper licensure, accreditation, approval, or authorization.

In addition, on January 1, 2022, APEI acquired substantially all of the assets of GSUSA for approximately $1.0 million, subject to working capital adjustments.

GSUSA is licensed by the D.C.

Higher Education Licensure Commission, or DCHELC, and accredited by ACCET.

DCHELC and ACCET approved the transaction.

Department of Education

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As a result, a significant purchase or disposition of our voting stock, including an acquisition resulting in a stockholder owning at least 25% of our outstanding stock, could be determined by ED to be a change in ownership and control.

ED’s approval process may apply when a change in control occurs despite not meeting the 50% threshold.

Institutions must notify ED and students of a planned change in ownership that results in a change in control at least 90 days in advance.

In addition, institutions are subject to certain reporting obligations for changes in ownership that do not result in a change in control, including 5% ownership interests for all entity types.

ED’s regulations also require additional financial protection (i.e., letters of credit) when a new owner is lacking financial statements or as ED determines necessary.

The HEA provides that after an institution undergoes a change in ownership and control ED may temporarily provisionally certify the institution based on a materially complete application received within 10 business days after the change occurred.

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ED’s financial responsibility standards are described more fully above in “Student Financing Sources and Related Regulations/Requirements – Department of Education – Regulation of Title IV Financial Aid Programs – Financial Responsibility”.

In October 2022, ED announced final regulations relating to change in ownership and change in control rules and procedures, effective July 1, 2023.

The ownership interest threshold for publicly traded corporations remains at 25%, as described above.

For entities that are not closely held or publicly traded corporations, including limited liability companies, limited liability partnerships, limited partnerships, and similar types of legal entities, the final regulations increase the ownership interest threshold from 25% to 50% for a change in ownership that results in a change in control automatically triggering ED’s approval process, and also provide that ED’s approval process may apply when a change in control occurs despite not meeting the 50% threshold.

The final regulations also require institutions to notify ED and students of a planned change in ownership that results in a change in control at least 90 days in advance.

In addition, the final regulations impose reporting obligations on institutions for changes in ownership that do not result in a change in control, lowering the threshold for reporting such changes from 25% to 5% ownership interest for all entity types.

The final regulations also:

(i) require additional financial protection (i.e., letters of credit) when a new owner is lacking financial statements or as ED determines necessary;

and (ii) eliminate the existing requirement that ED continue an institution’s participation with the same terms and conditions in their Title IV agreement as prior to the transaction.

In addition, the final regulations define “main campus” and modify the definitions of “additional location” and “branch campus” to clarify that a location must be within the same “ownership structure” of the institution.

State Regulatory Agencies

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Should we attempt to enter into transactions with institutions accredited by other accreditors, we would be required to follow the requirements of such accreditors.

Our management may not have experience with the accreditors of the target institution, which would increase the risks related to such a transaction and management of the institution subsequent to the transaction.

Our management may not have experience with the accreditors of the target

institution, which would increase the risks related to such a transaction and management of the institution subsequent to the transaction.

Restrictions on Adding Locations and Educational Programs

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The new campus location must satisfy all other applicable requirements for institutional eligibility, including approval by the relevant state authorizing agency and the institution’s accrediting agency.

Provisionally certified institutions of higher education such as APUS and RU, and institutions on HCM1 like APUS, RU and HCN, must seek prior approval from ED to offer new academic programs eligible for Title IV program funds and to open new locations at which Title IV program funds will be disbursed.

Provisionally certified institutions of higher education, such as APUS and RU, must seek prior approval from ED to offer new academic programs eligible for Title IV program funds and to open new locations at which Title IV program funds will be disbursed.

A fully certified degree-granting institution generally is not obligated to obtain ED’s prior approval for a new location, an additional program leading to a degree at the same level previously approved by ED, or a new program that both prepares students for gainful employment in the same or related recognized occupation as an education program that has previously been designated as an eligible program at that institution and meets certain minimum-length requirements.

However, ED could nevertheless require a fully certified institution to obtain prior approval for new programs and locations for purposes of Title IV program participation.

Other Regulations

GSUSA’s contracts are governed by the Federal Acquisition Regulation, or FAR, a regulatory framework.

The FAR affects how GSUSA interacts and does business with its federal government clients, including by providing government agencies with rights not typically found in commercial contracts.

Our government contracts may provide for termination by the government at any time, without cause.

In addition, we may be subject to audits and investigations relating to these contracts, and any violations could result in civil and criminal penalties and administrative sanctions, including termination of contract, refund or suspension of payments, forfeiture of profits, payment of fines, and suspension or debarment from future government business.

GSUSA’s GSA Schedule contract was renewed on March 4, 2024, and expires on March 1, 2044.

Failure to maintain a GSA Schedule contract would materially adversely impact GSUSA’s business.

Information about risks associated with GSUSA’s contracts being governed by the FAR is provided in the “Risk Factors” section of this Annual Report.

Other Recent Legislative and Regulatory Activity

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In addition, ED withdrew or terminated pending rulemakings pertinent to postsecondary education shortly before the change in the Presidential administration.

It is unclear what ED’s rulemaking priorities will be under the new administration, or if the administration will curtail ED’s operations, budget and rulemaking authority.

For more information, see the Risk Factor captioned “The postsecondary education regulatory environment has changed and may change in the future as a result of U.S.

federal elections”.

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.

For more information, see the Risk Factor captioned “The postsecondary education regulatory environment has changed and may change in the future as a result of United States federal elections”.

The One Big Beautiful Bill Act

On July 4, 2025, the OBBBA was signed into law.

Among other things, the OBBBA amends portions of the Higher Education Act of 1965, as amended, makes changes to the Title IV programs, and restores certain ED regulations related to borrower defense to repayment and closed school discharge.

The OBBBA will overhaul the structure of certain student loan programs.

Effective July 1, 2026, it will eliminate Federal Direct PLUS loans for graduate and professional students, with limited grandfathering.

The law also:

(i) fixes annual and aggregate loan limits for graduate students, with different caps depending on whether they are or have been professional students;

(ii) creates a lifetime maximum aggregate amount for Title IV loans (other than a loan made to the student as a parent on behalf of a dependent);

(iii) authorizes institutions to limit the amount of loans a student may borrow in an academic year provided such limit is applied consistently to all students enrolled in a program;

and (iv) requires the amount of loan funds available under a student’s annual loan eligibility to be reduced proportionately to the degree to which that student is not enrolled on a full-time basis.

On September 29, 2025, ED established the Reimagining and Improving Student Education Committee, or RISE Committee, and initiated the negotiated rulemaking process for the OBBBA student loan provisions.

On November 6, 2025, the RISE Committee reached consensus with ED on proposed changes regarding a new income-driven

repayment plan, the Repayment Assistance Plan, including the treatment of income for borrowers filing taxes jointly and the minimum monthly loan payment amount, and the definition of “professional student”, among other things.

The OBBBA also establishes an accountability framework, effective July 1, 2026, that institutions must satisfy at the program level in order for students in the program to continue to receive Direct Loans.

On December 8, 2025, ED convened AHEAD and initiated the negotiated rulemaking process for the OBBBA accountability framework.

On January 9, 2026, AHEAD reached consensus on proposed modifications to GE regulations.

Additional information regarding the proposed modifications is available above under “Student Financing Sources and Related Regulations/Requirements – Department of Education – Regulation of Title IV Financial Aid Programs – Gainful Employment Regulations”.

On January 30, 2026, ED published a notice of proposed rulemaking that incorporated the consensus language, and accepted public comments to the notice of proposed rulemaking until March 2, 2026.

The OBBBA creates Workforce Pell Grants, effective July 1, 2026, for students enrolled in eligible workforce programs that satisfy certain requirements and limits eligibility for Pell Grants in certain ways.

The OBBBA also changes existing U.S.

tax laws, including extending or making permanent certain provisions of the Tax Cuts and Jobs Act, repealing certain clean energy initiatives, in addition to other changes.

The OBBBA did not have a material impact on our annual effective tax rate in 2025.

The OBBBA also appropriated the OBBBA TA Funds, consisting of $100 million in funding for TA that is separate and apart from ordinary course appropriations and are available for use through September 30, 2029.

We understand that a significant portion of this allocation may have been obligated or spent.

Finally, the OBBBA delays implementation of the Biden Administration’s BDTR regulations and closed school loan discharge regulations until July 1, 2035.

Accordingly, BDTR and closed school loan discharge provisions of the 2019 Borrower Defense Regulations, as defined above, have been reinstated.

For details the 2019 Borrower Defense Regulations generally, see “Student Financing Sources and Related Regulations/Requirements – Regulation of Title IV Financial Aid Programs – Borrower Defenses” and “– Closed School Loan Discharge” above.

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What changed 10-K

Item 1. Business