−Removed: Grand Canyon Education, Inc., a Delaware corporation (“GCE”) is a publicly traded education services company dedicated to serving colleges and universities.
+Added: Grand Canyon Education, Inc., a Delaware corporation (“GCE” or the “Company”) is a publicly traded education services company dedicated to serving colleges and universities.
GCE has developed significant technological solutions, infrastructure and operational processes to provide services to these institutions on a large scale.
−Removed: GCE’s most significant university partner is Grand Canyon University (“GCU”), an Arizona non-profit corporation that operates a comprehensive regionally accredited university that offers graduate and undergraduate degree programs, emphases and certificates across ten colleges both online and on ground at its campus in Phoenix, Arizona and at six off-campus classroom and laboratory sites.
+Added: GCE’s most significant university partner is Grand Canyon University (“GCU”), an Arizona non-profit corporation that operates a comprehensive regionally accredited university that offers graduate and undergraduate degree programs, emphases and certificates across ten colleges both online and on ground at its campus in Phoenix, Arizona and at eight off-campus classroom and laboratory sites.
As of December 31, 2024, GCE provided education services and support to approximately 127,150 students with more than 123,100 students enrolled in GCU’s programs, emphases and certificates.
−Removed: In January 2019, GCE began providing education services to numerous university partners across the United States, through our wholly owned subsidiary, Orbis Education Services LLC (“ Orbis Education”), which we acquired in 2019 (the “Acquisition”).
+Added: We also provide education services to numerous university partners across the United States.
In the healthcare field, we wo rk in partnership with universities and healthcare networks across the country, offering healthcare-related academic programs at off-campus classroom and laboratory sites located near healthcare providers and developing high-quality, career-ready graduates who enter the workforce ready to meet the demands of the healthcare industry.
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As of December 31, 2024, GCE provides education services to 22 university partners across the United States .
−Removed: We seek to add additional university partners and to roll out additional programs with both our existing partners and with new partners.
+Added: We seek to add additional university partners and to introduce additional programs with both our existing partners and with new partners.
We may engage with both new and existing university partners to offer healthcare programs, online only or hybrid programs, or, as is the case for our most significant partner, GCU, both healthcare and other programs.
−Removed: In addition, we have centralized a number of services that historically were provided separately to university partners of Orbis Education;
−Removed: therefore, we refer to all university partners as “GCE partners” or “our partners”.
We do disclose significant information for GCU, such as enrollments, due to its size in comparison to our other university partners.
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We evaluate all faculty according to university partner standards and provide evaluation results, if requested.
−Removed: Many of the health sciences specific faculty development resources are accredited by the International Association for Continuing Education and Training (“IACET”) and the American Nurses Credentialing Center (“ANCC”) allowing faculty to earn continuing education credits.
+Added: Many of the health sciences specific faculty development resources are accredited by the International Association for Continuing Education and Training and the American Nurses Credentialing Center allowing faculty to earn continuing education credits.
● Class Scheduling – GCE has a class scheduling department and has developed a proprietary system to provide these services to our university partners.
−Removed: Our scheduling software provides students the ability to set their class schedule and flexibility to make changes and create opportunities to complete courses in a myriad of online or onsite options.
+Added: Our scheduling software provides students the ability to set their class schedule and flexibility to make changes and create opportunities to complete
+Added: courses in a myriad of online or onsite options.
We optimize class size prior to course starts based on university partner standards, in order to maximize class resources and faculty utilization.
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Marketing and Communication
−Removed: We provide marketing and communication services that include lead acquisition, digital communication strategies, brand identity advertising, media planning and strategy, video, data science and analysis to potential students and other promotional and communication services.
+Added: We provide marketing and communication services that include lead acquisition, digital communication strategies, brand identity advertising, media planning and strategy, video, data science and analysis and other promotional and communication services.
GCE’s marketing leadership team approaches the marketplace with an outlook that applies the latest advancements in integrated marketing strategy and new and emerging technologies while leveraging GCE’s buying power.
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● Students are taking on too much debt;
−Removed: ● Bachelor degrees are taking too long to complete;
+Added: ● Bachelor’s degrees are taking too long to complete;
● Programs are not targeted enough toward careers.
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Our faculty services and curriculum development teams assist not only our university partners but other universities and K12 schools in improving their online education pedagogy.
−Removed: And our business model has helped our university partners as changes in the educational landscape and the pandemic has put pressure on their financial condition.
+Added: And our business model has helped our university partners as changes in the educational landscape has put pressure on their financial condition.
+Added: GCE is committed to hiring policies and practices that identify the most qualified candidate for a given position.
+Added: We believe that we must have the best talent, including employees who possess a diverse range of experiences, backgrounds and skills, in order to anticipate and meet the needs of our business and those of our university partners.
+Added: We provide employees with training, development, and educational resources that promote learning and lead to real career advancement opportunities.
+Added: We believe that our success in attracting, retaining, and developing human capital is directly correlated to our ability to provide employees both an interesting and engaging work experience as well as opportunities for meaningful involvement in the surrounding community.
+Added: Our employees take advantage of these opportunities and share our commitment to and enthusiasm for community service projects, as well as charitable organizations throughout the Phoenix area.
+Added: Through these activities, our employees have the opportunity to volunteer and provide servant leadership that benefits the surrounding neighborhoods and West Phoenix community.
+Added: Employee Learning and Development (ELD) Services – We provide learning and development support to our employees through numerous ELD initiatives.
+Added: Onboarding Programs provide new employees a foundation from which one can progress in his or her career at GCE.
+Added: Leadership Development, Team Development, Advanced Skills, and Self-Development Programs help employees improve their skills, assist management in identifying potential talent for leadership roles, and support those employees already in leadership roles.
+Added: Finally, our Compliance Curriculum ensures that employee stays current with regulatory and other compliance requirements.
+Added: These programs and curricula are offered virtually as both synchronous and self-paced.
+Added: Employee Tuition Benefit – GCE promotes the concept of lifelong learning and supports this concept by offering its employees a generous Tuition Benefit program through its university partner, GCU.
+Added: After 3 months of continuous service, fulltime employees admitted to GCU receive a 100% tuition reduction on undergraduate and graduate programs Additionally, the tuition benefit is available for an eligible employee’s spouse or up to two children with no more than two participants receiving the benefits at any one time.
+Added: An eligible employee’s spouse or child
+Added: admitted to GCU receives a 100% tuition reduction on undergraduate programs and a 50% tuition reduction on graduate programs.
+Added: Monitoring employee engagement and satisfaction – GCE administers an annual survey of all of its employees to assess employee engagement and satisfaction.
+Added: GCE received responses from 1,330 employees on the 2024 survey.
+Added: The survey asked a number of questions regarding employee engagement and satisfaction including whether they are actively engaged with their work, whether they have a sense of pride in what they do and whether they enjoy the type of work assigned to them.
+Added: The responses to each question were overwhelmingly positive.
+Added: To the prompt, “I plan to continue my career at GCE for at least two more years”;
+Added: “I would recommend employment at GCE to a friend”;
+Added: “I am actively engaged with my work at GCE”;
+Added: and “Overall I am satisfied with GCE as an employer,” less than 12% of the responders disagreed with any of these statements.
+Added: This survey also inquired about the importance of Environmental, Social and Governance topics that employees felt are important to GCE’s business performance and financial success both internal and external impacts.
+Added: The top five selected in the survey by employees and the percentage of the responders that selected that topic were Employee Health and Wellbeing (59%), Professional Integrity (47%), Human Capital Management (41%), Community Engagement (36%) and Workforce Diversity and Engagement (20%).
+Added: 92% of those that responded to the survey confirmed GCE enables a culture of diversity.
+Added: Whistleblower hotline – GCE has a whistleblower hotline available to both internal and external parties.
+Added: The whistleblower policy is disclosed on the GCE intranet for employees and disclosed on the GCE investor relations website for external parties.
+Added: Hotline activity is managed by a third party and all claims are reviewed and monitored by the Chief Risk Officer and General Counsel.
+Added: All claims are discussed at the quarterly Audit Committee meetings.
Community Involvement by GCE and its Employees.
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Students who seek academic assistance in the GCU Learning Lounge may become eligible to receive the Students Inspiring Students full-tuition scholarship.
−Removed: To serve our clients and community, we seek donations to fund this neighborhood scholarship program.
+Added: To serve our university partners and community, we seek donations to fund this neighborhood scholarship program.
● Sponsoring K-12 Educational Development - GCE supports GCU’s K-12 Educational Development Department through sponsorship of GCU’s Canyon Professional Development and K-12 Targeted School Assistance programs.
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Our employees also went out into our surrounding neighborhoods to participate in programs such as Serve the City, Canyon Kids, Salute Our Troops, Colter Commons senior home visits and the Run to Fight Children’s Cancer.
−Removed: We believe that we must have the best talent, including employees who possess a diverse range of experiences, backgrounds and skills, in order to anticipate and meet the needs of our business and those of our university partners.
−Removed: Over time, we have hired, developed and retained a diverse management and workforce that reflects our surrounding community and that is a key component in GCE’s success and an important part of our culture.
−Removed: We provide employees with training, development, and educational resources that promote learning and lead to real career advancement opportunities.
−Removed: We believe that our success in attracting, retaining, and developing human capital is directly correlated to our ability to provide employees both an interesting and engaging work experience as well as opportunities for meaningful involvement in the surrounding community.
−Removed: Our employees take advantage of these opportunities and share our commitment to and enthusiasm for community service projects, as well as charitable organizations throughout the Phoenix area.
−Removed: Through these activities, our employees have the opportunity to volunteer and provide servant leadership that benefits the surrounding neighborhoods and West Phoenix community.
Our Commitment to Diversity.
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In sum, GCE values diversity because it values every employee and university partners’ students entrusted to its care.
−Removed: ● Our Diverse Leadership - Our ability to attract and retain diverse talent is reflected at both the Board and management levels.
−Removed: Three of our five directors are women and one director identifies with an underrepresented diverse ethnicity.
−Removed: In addition, for all of our employees at the level of manager and above totaling 618 persons, 72.2% are held by women and other diverse persons, collectively, an increase of 4.9% over 2022.
−Removed: ● Our Diverse Workforce - As of December 31, 2023, for all of our employees totaling 5,800, 83.2% are women and other diverse persons, collectively, an increase of 4.1% over 2022.
+Added: ● Our Diverse Leadership - Our ability to attract and retain diverse talent is reflected at both our Board of Directors (the “Board”) and management levels.
+Added: Three of our six directors are women and two directors identify with an underrepresented diverse ethnicity.
+Added: In addition, for all of our employees at the level of manager and above totaling 644 persons, 70.2% are held by women and other diverse persons.
+Added: ● Our Diverse Workforce - As of December 31, 2024, 80.3% of our 5,830 employees are women and other diverse persons.
As of December 31, 2024, GCE employed approximately 4,092 professional and administrative personnel, including technical and academic advisors, counseling advisors, marketing and communication professionals, and personnel that handle financial aid processing, information technology, human resources, corporate accounting, finance, and other administrative functions.
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We consider our relations with our employees to be strong.
−Removed: ● Our Hiring Practices and Policies - GCE is committed to hiring policies and practices that promote diversity and to identifying the most qualified candidate for a given position.
−Removed: GCE ensures company diversity through hiring policies and practices that support diversity such as the Equal Employment Opportunity Policy, Nondiscrimination and Anti-Harassment Policy and Complaint Procedure, and the
−Removed: Disability Accommodation Policy.
−Removed: We post all open positions to a variety of diversity-related job boards to ensure we attract diverse candidates.
−Removed: We also collect and analyze employee demographic data to identify current trends and areas of opportunity in regard to our diversity efforts.
−Removed: ● Diversity Training - We provide employees and management with regular diversity training.
+Added: ● Our Hiring Practices and Policies - Our hiring policies and practices include an Equal Employment Opportunity Policy, Nondiscrimination and Anti-Harassment Policy and Complaint Procedure, and the Disability Accommodation Policy.
+Added: We post all open positions to a variety of job boards to ensure we attract diverse candidates.
+Added: We also collect and analyze employee demographic data to identify current trends.
+Added: ● Training - We provide employees and management with regular training.
New hires all complete anti-discrimination and harassment training within 3 months of starting at GCE.
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We have also provided Implicit Bias Training to all employees.
−Removed: Employee Learning and Development (ELD) Services.
−Removed: We provide learning and development support to our employees through numerous ELD initiatives.
−Removed: Onboarding Programs provide new employees a foundation from which one can progress in his or her career at GCE.
−Removed: Leadership Development, Team Development, Advanced Skills, and Self-Development Programs help employees improve their skills, assist management in identifying potential talent for leadership roles, and support those employees already in leadership roles.
−Removed: Finally, our Compliance Curriculum ensures that employee stays current with regulatory and other compliance requirements.
−Removed: These programs and curricula are offered virtually as both synchronous and self-paced.
−Removed: Employee Tuition Benefit – GCE promotes the concept of lifelong learning and supports this concept by offering its employees a generous Tuition Benefit program through its university partner, GCU.
−Removed: After 3 months of continuous service, fulltime employees admitted to GCU receive a 100% tuition reduction on undergraduate and graduate programs Additionally, the tuition benefit is available for an eligible employee’s spouse or up to two children with no more than two participants receiving the benefits at any one time.
−Removed: An eligible employee’s spouse or child admitted to GCU receives a 100% tuition reduction on undergraduate programs and a 50% tuition reduction on graduate programs.
−Removed: Monitoring employee engagement and satisfaction – GCE administered a survey with all of its employees to assess employee engagement and satisfaction.
−Removed: GCE received responses from 1,835 employees on the 2022 survey.
−Removed: The survey asked a number of questions regarding employee engagement and satisfaction including whether they are actively engaged with their work, whether they have a sense of pride in what they do and whether they enjoy the type of work assigned to them.
−Removed: The responses to each question were overwhelmingly positive.
−Removed: To the prompt, “Overall I am satisfied with GCE as an employer,” less than 10% of the responders disagreed with that statement.
−Removed: 92% of those responses confirmed GCE enables a culture of diversity.
−Removed: This survey also inquired about the importance of Environmental, Social and Governance topics that employees felt are important to GCE’s business performance and financial success both internal and external impacts.
−Removed: The top five selected in the survey by employees were Employee Health and Wellbeing (56%), Community Engagement (55%), Human Capital Management (51%), Workforce Diversity and Engagement (33%) and Professional Integrity (32%).
−Removed: Whistleblower hotline – GCE has a whistleblower hotline available to both internal and external parties.
−Removed: The whistleblower policy is disclosed on the GCE intranet for employees and disclosed on the GCE investor relations website for external parties.
−Removed: Hotline activity is managed by a third party and all claims are reviewed and monitored by the Chief Risk Officer and General Counsel.
−Removed: All claims are discussed at the quarterly Audit Committee meetings.
Environmental Awareness
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GCE owns a four-story 325,000 square foot administrative building, which includes office space for approximately 2,700 employees, and a parking garage at our headquarters in Phoenix, Arizona.
−Removed: We constructed these facilities in 2016 and, as with every one of our projects over the past 12 years, we designed them to maximize energy
−Removed: efficiency and minimize electricity usage and environmental impact, which ultimately lowers our operating costs.
+Added: We constructed these facilities in 2016 and, as with every one of our projects over the past 16 years, we designed them to maximize energy efficiency and minimize electricity usage and environmental impact, which ultimately lowers our operating costs.
Our headquarters building includes the following design features:
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We believe that we have low climate risk with respect to our physical environment (e.g., fires, drought, hailstorms, increasing weather pattern changes).
−Removed: A significant percentage of our workforce is continuing to work remotely.
+Added: A significant
+Added: percentage of our workforce is continuing to work remotely.
We have insurance policies in place to cover any damage for our property, plant and equipment.
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The following highlights certain key aspects of our corporate governance framework:
−Removed: ● We Have an Independent and Diverse Board - Four of our five directors are independent.
−Removed: Three of our five directors are diverse persons, and one of our directors identifies with an under-represented diverse ethnicity.
+Added: ● We Have an Independent and Diverse Board - Five of our six directors are independent.
+Added: Three of our six directors are diverse persons, and two of our directors identify with an under-represented diverse ethnicity.
● We Have Majority Voting for Directors - We have adopted majority voting for directors pursuant to which nominees who fail to achieve an affirmative majority of votes cast must submit their resignation.
● We Hold Annual Elections for Directors - We do not have a staggered board.
−Removed: ● We Assess Board Performance - We conduct regular evaluations of our Board and Committees.
+Added: ● We Assess Board Performance - We conduct regular evaluations of our Board of Directors and Committees.
● Our Independent Directors Meet Without Management - Our independent directors meet regularly in executive sessions without management present.
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These services include marketing and recruitment, enrollment management, curriculum development, online course design, student retention support, technology infrastructure, and student and faculty call center support.
−Removed: The largest companies in this sector have historically been Pearson Online Learning Services, Wiley Education Services, and 2U.
+Added: The largest companies in this sector have historically been Pearson Online Learning Services, Academic Partnerships and 2U, Inc.
The education services market, particularly with regard to those companies that help traditional universities develop new degree programs often delivered online, has historically been characterized by a full-service, revenue-sharing model, based on the premise that most traditional institutions are not only operationally unprepared to offer these programs at scale but also are not equipped to make the significant upfront investments necessary to develop these programs organically.
In recent years, an alternative unbundled fee-for-service model has emerged, in which the companies offer the same services, or some subset of services, for the market price of those services.
−Removed: Finally, other
−Removed: industry providers affiliate with university partners to offer massive open online courses, which are aimed at unlimited participation and open access via the web at little or no cost to the student.
+Added: Finally, other industry providers affiliate with university partners to offer massive open online courses, which are aimed at unlimited participation and open access via the web at little or no cost to the student.
The education services market is changing and expanding.
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Our principal executive offices are located at 2600 West Camelback Road, Phoenix, Arizona 85017, our telephone number is (602) 247-4400 and our Internet address is www.gce.com.
−Removed: We make available free of charge on our website our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, Forms 3, 4, and 5 filed on behalf of directors and executive officers, and all amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, as soon as reasonably practicable after such reports are electronically filed with, or furnished to, the Securities and Exchange Commission (hereafter, the SEC).
+Added: We make available free of charge on our website our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, Forms 3, 4, and 5 filed on behalf of directors and executive officers, and all amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, as soon as reasonably practicable after such reports are electronically filed with, or furnished to, the Securities and Exchange Commission (the “SEC”).
In addition, our earnings conference calls are web cast live via our website.
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§ 668.25 , which among other things, requires third-party servicers, in their contracts with institutions, to be contractually obligated to, among other things:
−Removed: o Comply with all statutory provisions of or applicable to Title IV of the HEA, including the requirement to use any funds that the servicer administers under any Title IV, HEA program and any interest or other earnings thereon solely for the purposes specified in and in accordance with that program;
−Removed: o Refer to the Office of Inspector General of ED for investigation any information indicating there is reasonable cause to believe that the institution might have engaged in fraud or other criminal misconduct in connection with the institution’s administration of any Title IV, HEA program or an applicant for Title IV, HEA program assistance might have engaged in fraud or other criminal misconduct in connection with his or her application;
+Added: o Comply with all statutory provisions of or applicable to Title IV of the HEA, including the requirement to use any funds that the servicer administers under any Title IV program and any interest or other earnings thereon solely for the purposes specified in and in accordance with that program;
+Added: o Refer to the Office of Inspector General of ED for investigation any information indicating there is reasonable cause to believe that the institution might have engaged in fraud or other criminal misconduct in connection with the institution’s administration of any Title IV program or an applicant for Title IV program assistance might have engaged in fraud or other criminal misconduct in connection with his or her application;
o Be jointly and severally liable with the institution to the Secretary for any violation by the servicer of any statutory provision of or applicable to Title IV of the HEA, any regulatory provision prescribed under that statutory authority, and any applicable special arrangement, agreement, or limitation entered into under the authority of statutes applicable to Title IV of the HEA.
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In addition, ED is independently conducting an ongoing series of rulemakings intended to assure the integrity of the Title IV programs.
−Removed: also frequently issues formal and informal guidance instructing institutions of higher education and other covered entities how to comply with various federal laws and regulations.
−Removed: For example, on February 15, 2023, ED released DCL 23-03, a guidance document expanding the definition of what activities are considered as third-party servicer activities.
−Removed: After substantial community outreach to ED, on April 11, 2023, ED notified the public that guidance in this area would be delayed.
−Removed: On November 28, 2023, ED issued a press release seeking nominations for another negotiated rulemaking panel where it said, “the Department intends to issue updated guidance on Third Party Servicers in early 2024.” Regarding data security matters, in Electronic Announcement GEN 23-09, ED stated “The Department will issue guidance on NIST 800-171 compliance in a future Electronic Announcement.” All ED guidance is subject to frequent change and may impact our business model.
−Removed: We are also regulated (depending upon the applicable activity being regulated) by other federal agencies or departments including the Securities and Exchange Commission (“SEC”), the Internal Revenue Service (“IRS”), and the Federal Trade Commission (“FTC”).
+Added: ED also frequently issues formal and informal guidance instructing institutions of higher education and other covered entities how to comply with various federal laws and regulations.
+Added: For example, in February 2023, ED released DCL 23-03, a guidance document expanding the definition of what activities are considered as third-party servicer activities.
+Added: After substantial community outreach to ED, and a number of notices that the guidance would be delayed, on November 14, 2024, the Department formally rescinded DCL 23-03.
+Added: Previously issued guidance on this topic (Dear Colleague Letters GEN 12-08, GEN 15-01, GEN 16-15 (as modified by the March 8, 2017 electronic announcement), and GEN-23-08) remains in effect.
+Added: Regarding data security matters, in Electronic Announcement GEN 23-09, ED stated that “[t]he Department will issue guidance on NIST 800-171 compliance in a future Electronic Announcement.” While it does not appear ED has addressed this issue in 2024 through rulemaking or otherwise, we believe data security is an area of importance and, like all ED guidance, is subject to change and may impact our business model.
+Added: We are also regulated (depending upon the applicable activity being regulated) by other federal agencies or departments including the SEC, the Internal Revenue Service (“IRS”), and the Federal Trade Commission (“FTC”).
REGULATION OF OUR UNIVERSITY PARTNERS
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The HEA requires accrediting commissions recognized by ED to review and monitor many aspects of an institution’s operations and to take appropriate action if the institution fails to meet the accrediting commission’s standards.
−Removed: While we no longer own and operate an institution of higher education, nor do we directly participate in Title IV programs, regulatory matters that materially affect GCU and our other university partners will, necessarily, have a material impact on us.
−Removed: The following section describes regulatory matters that affect our university partners and that may affect us as an education service company to institutions of higher education generally.
+Added: Although we no longer own and operate an institution of higher education, nor do we directly participate in Title IV programs, regulatory matters that materially affect GCU and our other university partners will, necessarily, have a material impact on us.
+Added: The following section describes regulatory matters that affect our university partners and that may affect us as an education services provider to institutions of higher education generally.
State Post-Secondary Education Regulation
−Removed: Our university partners are authorized to offer education by the relevant state authorizing agencies for the state in which the client is located.
+Added: Our university partners are authorized to offer education by the relevant state authorizing agencies for the state in which such university partner is located.
For example, GCU, our most significant university partner, is authorized to offer programs by the Arizona State Board for Private Postsecondary Education, the regulatory agency governing private post-secondary educational institutions in the State of Arizona, where it is located.
−Removed: This authorization is very important to our university partners and, as a result, to our business.
+Added: State authorization is very important to our university partners and, as a result, to our business.
To maintain their state authorization, our university partners must continuously meet standards relating to, among other things, educational programs, facilities, instructional and administrative staff, marketing and recruitment, financial operations, addition of new locations and educational programs, and various operational and administrative procedures.
2 unchanged sentences
State regulatory requirements for online education have historically varied among the states.
−Removed: To address this issue and to meet ED requirements many schools have applied and sought to become an approved institutional participant in the State Authorization Reciprocity Agreement (“SARA”).
+Added: To address this issue and to meet ED requirements many schools have applied and been approved to be institutional participants in the State Authorization Reciprocity Agreement (“SARA”).
SARA is an agreement among member states, districts and territories that establishes comparable national standards for interstate offering of post-secondary distance education courses and programs.
2 unchanged sentences
GCU, for example, is a member of SARA in Arizona (AZ-SARA), which is administered by the Western Interstate Commission for Higher Education (referred to as W-SARA).
−Removed: There is a yearly renewal for participating in NC-SARA and AZ-SARA and institutions must agree to meet certain requirements to participate.
+Added: There is a yearly renewal for
+Added: participating in NC-SARA and AZ-SARA and institutions must agree to meet certain requirements to participate.
As of December 31, 2024, all states other than California are members of SARA.
−Removed: Any state that does not participate in SARA may impose regulatory requirements on out-of-state higher education institutions operating within their boundaries, such as those having a physical facility or conducting certain academic activities within the state.
−Removed: GCU, for example, currently enrolls students in all 50 states and the District of Columbia.
−Removed: Although it is currently licensed, authorized, in-process, or exempt in all non-SARA jurisdictions in which it operates, if it fails to comply with state licensing or authorization requirements for a state, or fails to obtain licenses or authorizations when required, it could lose its state license or authorization by that state or be subject to other sanctions, including restrictions on our activities in, and fines and penalties imposed by, that state, as well as fines, penalties, and sanctions imposed by ED.
−Removed: The loss of licensure or authorization by a university partner in any non-SARA state could prohibit us from recruiting prospective students or offering services to current students in that state on behalf of such university partner, which could significantly affect our business.
+Added: Any state that does not participate in SARA may impose regulatory requirements on out-of-state post-secondary institutions operating within its boundaries, such as those having a physical facility or conducting certain academic activities within the state.
+Added: GCU, for example, enrolls students in all 50 states and the District of Columbia.
+Added: Although it is currently licensed, authorized, in-process, or exempt in all non-SARA jurisdictions in which it operates, if GCU fails to comply with state licensing or authorization requirements for a non-SARA jurisdiction, or fails to obtain licenses or authorizations when required, it could lose its license or authorization by that jurisdiction or be subject to other sanctions, including restrictions on its activities in, and fines and penalties imposed by, that jurisdiction, as well as fines, penalties, and sanctions imposed by ED.
+Added: The loss of licensure or authorization in any non-SARA jurisdiction by a university partner institution could prohibit us from recruiting prospective students or offering services to current students in that jurisdiction, which could significantly reduce such university partner’s enrollments.
Individual state laws establish standards in areas such as instruction, qualifications of faculty, administrative procedures, marketing, recruiting, financial operations, and other operational matters.
3 unchanged sentences
While we are not directly subject to those laws, those laws may inhibit our university partners from expanding or operating in those states, limiting our ability to serve our university partners, which could significantly affect our business.
−Removed: In addition, state laws can indirectly regulate how GCE provides its services to its university partners.
−Removed: For example, some states have considered new requirements that would dictate what information GCE must convey to students and prospective students and impose reporting requirements related to the nature of our services.
+Added: In addition, state laws can indirectly regulate how we provide its services to its university partners.
+Added: For example, some states have considered new requirements that would dictate what information we must convey to students and prospective students and impose reporting requirements related to the nature of our services.
To the extent such requirements were ultimately enacted into law, they could significantly affect our business.
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To be recognized by ED, accrediting commissions must adopt specific standards for their review of educational institutions, conduct peer-review evaluations of institutions, and publicly designate those institutions that meet their criteria.
−Removed: An accredited school is subject to periodic review by its accrediting commissions to determine whether it continues to meet the performance, integrity and quality required for accreditation.
+Added: An accredited school is subject to
+Added: periodic review by its accrediting commissions to determine whether it continues to meet the performance, integrity and quality required for accreditation.
Our most significant university partner, GCU has been regionally accredited by the HLC and its predecessor since 1968, most recently obtaining reaccreditation in 2017 for the ten-year period through 2027.
2 unchanged sentences
Institutional accreditation by a recognized accreditation agency is one of the prerequisites for an institution of higher education to be eligible to disburse Title IV aid to students.
−Removed: In addition, GCU holds a number of programmatic accreditations related to the conduct of specific programs of the college.
+Added: In addition, GCU holds a number of programmatic accreditations related to the conduct of specific programs of the university.
Other colleges and universities depend, in part, on an institution’s accreditation (institutional, and, in some cases, programmatic) in evaluating transfers of credit and applications to graduate schools.
12 unchanged sentences
Congress must reauthorize the HEA on a periodic basis, usually every five to six years, and the most recent reauthorization through September 30, 2013, occurred in August 2008.
−Removed: The reauthorized HEA
−Removed: reauthorized all of the Title IV programs in which institutions participate but made numerous revisions to the requirements governing the Title IV programs, including provisions relating to student loan default rates and the formula for determining the maximum amount of revenue that institutions are permitted to derive from the Title IV programs.
+Added: The reauthorized HEA reauthorized all of the Title IV programs in which institutions participate but made numerous revisions to the requirements governing the Title IV programs, including provisions relating to student loan default rates and the formula for determining the maximum amount of revenue that institutions are permitted to derive from the Title IV programs.
In addition, members of Congress periodically introduce legislation that would impact Title IV programs and the higher education industry generally.
Because a significant percentage of our revenue is indirectly derived from the Title IV programs, any action by Congress that significantly reduces Title IV program funding or the ability of our university partners to participate in the Title IV programs could reduce the ability of some students to finance their education at our university partner institutions and materially decrease their student enrollment.
−Removed: Consolidated Appropriations Act, 2021.
−Removed: On December 27, 2020, former President Trump signed into law the Consolidated Appropriations Act of 2021.
−Removed: Among other things, this package funded the federal government through September 2021, provided additional COVID-related relief, and made a number of U.S.
−Removed: higher education changes.
−Removed: The legislation includes a number of tax provisions, including replacing the tuition deduction with an expanded Lifetime Learning Credit, which now shares the higher income limitations of the American Opportunity Tax Credit.
−Removed: The legislation also extends until January 1, 2026 expanded employer-provided educational assistance permitting employers to pay up to $5,250 toward an employee’s federal student loans as a tax-free benefit.
−Removed: The bill also provided $22.7 billion for higher education institutions and students impacted by COVID-19 in which all of our university partners were eligible.
−Removed: Veterans Health Care and Benefits Improvement Act of 2020.
−Removed: On January 5, 2021, former President Trump signed into law the Veterans Health Care and Benefits Improvement Act of 2020, which expanded student veterans’ protections.
−Removed: Among other things, the legislation requires a risk-based review of schools if an institution is operating under Heightened Cash Monitoring 2 or provisional approval status by ED, is subject to any punitive action by a federal or state entity, faces the loss or risk of loss of accreditation, or has converted from for-profit to non-profit status.
−Removed: The legislation also restores veterans benefits to students whose school closed, as long as the student transferred fewer than 12 credits from the closed school or program;
−Removed: protects students from debt collection by the VA for overpaid tuition benefits;
−Removed: and establishes a number of institutional requirements, including:
−Removed: providing clear disclosures about cost, loan debt, graduation and job placement rates, and acceptance of transfer credit;
−Removed: ensuring institutions are accommodating short absences due to service;
−Removed: prohibiting same-day recruitment and registration;
−Removed: and prohibiting more than three unsolicited recruiting contacts during any one-month period.
−Removed: Most provisions became effective August 1, 2021.
−Removed: Institutions were permitted to seek waivers for certain sections of the new law if they were not able to satisfy compliance requirements by August 1, 2021.
−Removed: On June 8, 2021, President Biden signed into law the Training in High-Demand Roles to Improve Veteran Employment Act (the “THRIVE Act”), which amended provisions of the Veterans Health Care and Benefits Improvement Act and the American Rescue Plan Act.
−Removed: The law requires the U.S.
−Removed: Department of Labor and VA to collaborate on a list of high-demand occupations for a rapid retraining assistance program.
−Removed: Additionally, the law requires the Government Accountability Office to report on the outcomes and effectiveness of retraining programs.
−Removed: The THRIVE Act amended the Veterans Health Care and Benefits Improvement Act by clarifying that programs pursued solely through distance education on a half-time basis or less are not eligible for the housing stipend that is generally available for retraining programs.
−Removed: As noted above, the Veterans Health Care and Benefits Improvement Act prohibits certain high-pressure recruiting tactics.
−Removed: The THRIVE Act requires the VA to take disciplinary action if a person with whom an institution has a recruiting or educational services agreement violates the VA’s incentive compensation bans.
−Removed: On December 21, 2021, President Biden signed into law the Responsible Education Mitigating Options and Technical Extensions Act, which amended provisions of the Veterans Health Care and Benefits Improvement Act, the American Rescue Plan Act, and the THRIVE Act.
−Removed: The law includes changes to help institutions satisfy the Veterans Health Care and Benefits Improvement Act’s requirements by using the College Financing Plan template, in addition to extending some COVID-related flexibilities previously granted amid the pandemic.
−Removed: The law also extended remote learning waivers through June 1, 2022, simplified the VA verification process for tuition reimbursement, and fixed a technical error to ensure U.S.
−Removed: institutions of higher education can continue to use incentive compensation to recruit foreign students without losing GI Bill funding for their students.
−Removed: Consolidated Appropriations Act, 2022.
−Removed: On March 15, 2022, President Biden signed into law the Consolidated Appropriations Act of 2022.
−Removed: The bill allocated $76.4 billion to the Department of Education and its programs, including an increase to the maximum Pell Grant award, bringing the total to $6,895 for the 2022-23 award year.
−Removed: In addition, campus-based aid programs were increased, with $895 million allocated for the FSEOG program, an increase of $15 million above the FY 2021 enacted level, and $1.21 billion allocated for FWS, an increase of $20 million above the FY 2021 enacted level.
−Removed: In addition to the increases in federal student aid funding, the bill provided $2.1 billion for career, technical, and adult education, $61 million above the FY 2021 enacted level, and an additional $3 billion for higher education programs, $452 million more than the FY 2021 enacted level.
−Removed: The bill also dictated ED requirements related to federal loan servicing, including appropriations for just over $2 billion for expenses related to the administration of the federal loan program, and made a number of changes to the FAFSA Simplification Act.
−Removed: Ensuring the Best Schools for Veterans Act of 2022.
−Removed: On August 26, 2022, President Biden signed into law the Ensuring the Best Schools for Veterans Act of 2022, which amended prior statutory language and made modifications to how the VA operationalizes the 85/15 requirement (that is, the rule that generally forbids use of Department of Veterans Affairs 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).
−Removed: Among other things, the law clarifies that reporting associated with the 85/15 requirement does not apply to institutions at which 35% or fewer students receive GI bill benefits.
−Removed: The law also exempts programs for which fewer than 10 students have any portion of their tuition, fees, or other charges paid to or for them by the institution or by the VA.
Eligibility and certification procedures .
1 unchanged sentence
Such recertification generally is required every six years, but may be required earlier, including when an institution undergoes a change in control.
−Removed: To the extent ED suspends, limits, modifies, conditions, or terminates any client institution’s eligibility to participate in the Title IV programs, that action is likely to have a negative impact on our business.
−Removed: Indeed, this could range from disallowing the institution from adding new programs or terminating the institution from Title IV eligibility.
−Removed: The Transaction resulted in a change in control of our most significant university partner, GCU, following which it began operating as a non-profit university and necessitating the application by GCU to ED for approval of the change in control and for a new program participation agreement.
−Removed: In November 2019, GCU received a new provisional Program Participation Agreement (“PPA”), which granted GCU the ability to participate in the Title IV programs on a provisional basis through September 30, 2022.
−Removed: As required, GCU filed a renewal application three months in advance of the scheduled expiration date and continued to participate on a month-to-month extension of the PPA while the Department completed its review of the application (institutions are routinely given a month-to-month extension on their PPA until ED has completed its review of the application).
−Removed: The Department approved and the parties executed a new Provisional Program Participation Agreement on September 29, 2023, which expires June 30, 2026.
−Removed: For a school that is certified on a provisional basis, as GCU is, ED may revoke the institution’s certification without advance notice or advance opportunity for the institution to challenge that action.
−Removed: For a school that is provisionally certified on a month-to-month basis, ED may allow the institution’s certification to expire at the end of any month without advance notice, and without any formal procedure for review of such action.
+Added: To the extent ED suspends, limits, modifies, conditions, or terminates any university partner institution’s eligibility to participate in the Title IV, including by disallowing the institution from adding new programs or terminating the institution from Title IV eligibility programs, that action is likely to have a negative impact on our business.
+Added: ED may also grant an institution the ability to participate in Title IV programs on a provisional basis while it completes its review of the institution’s application.
+Added: For an institution that is certified on a provisional basis, ED may revoke the institution’s certification without advance notice or advance opportunity for the institution to challenge that
+Added: For an institution that is certified on a month-to-month basis, ED may allow the institution’s certification to expire at the end of any month without advance notice, and without any formal procedure for review of such action.
To our knowledge, either such action is very rare and has only occurred upon a determination that an institution is in substantial violation of material Title IV requirements.
−Removed: In connection with the issuance of the November 2019 PPA, ED also informed GCU that GCU does not satisfy ED’s definition of a non-profit institution and, as a result, that ED will continue to treat GCU as a proprietary institution for purposes of its continued participation in Title IV programs.
−Removed: GCU has challenged that determination.
−Removed: See “Coordinated actions by federal agencies.”
+Added: Our primary university partner, GCU, currently operates under a provisional program participation agreement that expires on June 30, 2026.
Administrative capability .
19 unchanged sentences
● commence a proceeding to impose a fine or to limit, suspend or terminate the institution’s participation in the Title IV programs.
−Removed: Imposition of these sanctions could have a negative impact on our ability to conduct our business.
+Added: Imposition of these sanctions on any of our university partners could have a negative impact on our ability to conduct our business.
Financial responsibility.
8 unchanged sentences
The composite score for an institution’s most recent fiscal year must be at least 1.5 for the institution to be deemed financially responsible without the need for further ED oversight.
−Removed: In addition to having an acceptable composite score, an institution must, among other things, provide the administrative resources necessary to comply with Title IV program requirements, meet all of its financial obligations, including required refunds to students and any Title IV liabilities and debts, be current in its debt payments, and not receive an adverse, qualified, or disclaimed opinion by its accountants in its audited consolidated financial statements.
+Added: In addition to having an
+Added: acceptable composite score, an institution must, among other things, provide the administrative resources necessary to comply with Title IV program requirements, meet all of its financial obligations, including required refunds to students and any Title IV liabilities and debts, be current in its debt payments, and not receive an adverse, qualified, or disclaimed opinion by its accountants in its audited consolidated financial statements.
As an education service company, we are not directly subject to this regulation.
−Removed: However, if ED were to determine that a university partner institution did not meet the financial responsibility standards due to a failure to meet the composite score or other financial responsibility factors, ED could impose a range of sanctions on the institution, such as requiring the institution to post a letter of credit, accept provisional certification (which would hamper the ability of the institution to add new programs), comply with additional ED monitoring requirements, agree to receive Title IV
−Removed: program funds under an arrangement other than ED’s standard advance funding arrangement, such as the reimbursement system of payment or heightened cash monitoring, and comply with or accept other limitations on the ability to increase the number of programs it offers or the number of students it enrolls, any of which sanctions on our university partners could also adversely affect our business.
+Added: However, if ED were to determine that a university partner institution did not meet the financial responsibility standards due to a failure to meet the composite score or other financial responsibility factors, ED could impose a range of sanctions on the institution, such as requiring the institution to post a letter of credit, accept provisional certification (which would hamper the ability of the institution to add new programs), comply with additional ED monitoring requirements, agree to receive Title IV program funds under an arrangement other than ED’s standard advance funding arrangement, such as the reimbursement system of payment or heightened cash monitoring, and comply with or accept other limitations on the ability to increase the number of programs it offers or the number of students it enrolls, any of which sanctions on our university partners could also adversely affect our business.
In addition, because other regulators may use the composite score for their purposes, a poor composite score could have additional effects.
−Removed: For example, NC-SARA utilizes the composite score in determining whether an institution is eligible to participate in SARA.
−Removed: Based on the data derived from the audited financial statements of GCU as of each of June 30, 2023 and 2022, GCU’s composite score was 1.8, using the proprietary school calculation methodology.
+Added: For example, NC-SARA utilizes an institution’s composite score in determining whether such institution is eligible to participate in SARA.
+Added: Based on the data derived from the audited financial statements of GCU as of each of June 30, 2024 and 2023, GCU’s composite score was 1.9 and 1.8, respectively, using the proprietary school calculation methodology.
If GCU’s future composite scores do not exceed 1.5, ED could impose sanctions.
4 unchanged sentences
Under ED regulations, the letter of credit requirement is triggered by late returns of Title IV program funds for 5% or more of the withdrawn students (and involving more than two student refunds) in the audit sample in the institution’s annual Title IV compliance audit for either of the institution’s two most recent fiscal years or in a ED program review.
−Removed: Additionally, on January 4, 2023, ED announced their intention to issue new regulations in eight different areas of higher education regulations via negotiated rulemaking, including on Return to Title IV funds.
−Removed: No specific proposals have been put forth at this time.
−Removed: To the extent our services for a university partner include conducting returns to Title IV, as they do with GCU, we would likely be jointly and severally liable to ED, along with the relevant university partner, for return of those funds.
+Added: Additionally, in January 2025, ED published new regulations, that become effective on July 1, 2026, related to a number of areas, including those concerning return to Title IV.
+Added: We are in the process of reviewing the regulations and have not formed a view as to the impact on our business.
The “90/10 Rule.” A requirement of the HEA, commonly referred to as the “90/10 Rule,” that is applicable only to proprietary, post-secondary educational institutions, provides that an institution loses its eligibility to participate in the Title IV programs if the institution derives more than 90% of its revenue for each of two consecutive fiscal years from Title IV program funds.
3 unchanged sentences
If an institution’s rate exceeds 90% for any single fiscal year, it will be placed on provisional certification for at least two fiscal years.
−Removed: Using ED’s cash-basis, regulatory formula under the 90/10 Rule as currently in effect, GCU, our most significant client, derived approximately 65.5% and 66.2% of its 90/10 Rule revenue from Title IV program funds for the fiscal years ended June 30, 2023 and 2022, respectively, per GCU’s audited financial statements.
+Added: Based on new regulations that went into effect on January 1, 2023, the 90/10 Rule was modified to include tuition assistance programs offered by the U.S.
+Added: Department of Defense and the U.S.
+Added: Veterans Administration as part of the 90% threshold, in addition to the Title IV programs already covered by the 90/10 Rule.
+Added: This means that institutions subject to the 90/10 Rule will be required to limit the combined amount of Title IV funds and applicable “Federal funds” revenue in a fiscal year to no more than 90% in a fiscal year as calculated under the rule, and the change to the 90/10 Rule is thus expected to increase the 90/10 Rule calculations for institutions subject to the rule.
+Added: Using ED’s cash-basis, regulatory formula under the 90/10 Rule as currently in effect, GCU derived approximately 67.2% and 65.5% of its 90/10 Rule revenue from Title IV program funds for the fiscal years ended June 30, 2024 and 2023, respectively, per
+Added: GCU’s audited financial statements.
Accordingly, even if ED continues to treat GCU as a proprietary institution for Title IV purposes, we do not expect this rule to have any material impact on GCU.
−Removed: In March 2021, the $1.9 trillion American Rescue Plan Act of 2021 (“ARPA”) was signed into law.
−Removed: Among other things, the ARPA also includes a provision that amends the 90/10 rule.
−Removed: The ARPA amended the 90/10 rule by treating other “Federal funds that are disbursed or delivered to or on behalf of a student to be used to attend such institution” in the same way as Title IV funds are currently treated in the 90/10 rule calculation.
−Removed: This means that institutions subject to the 90/10 Rule will be required to limit the combined amount of Title IV funds and applicable “Federal funds” revenue in a fiscal year to no more than 90% in a fiscal year as calculated under the rule.
−Removed: Consequently, the ARPA change to the 90/10 rule is expected to increase the 90/10 rule calculations at GCU.
−Removed: The ARPA stated that the amendments to the 90/10 rule apply to institutional fiscal years beginning on or after January 1, 2023 and were subject to the HEA’s negotiated rulemaking process which may not commence earlier than October 1, 2021.
−Removed: ED started the negotiated rulemaking process in January 2022.
−Removed: In March 2022, the negotiated rulemaking committee reached consensus on changes to the 90/10 Rule.
−Removed: On July 26, 2022, ED released proposed 90/10 regulations consistent with this consensus language which revised the definition of “federal education assistance” to include tuition assistance programs offered by the U.S.
−Removed: Department of Defense and VA, in addition to the Title IV programs already covered by the 90/10 Rule.
−Removed: On October 27, 2022, following a 30-day comment period that ended August 26, 2022, ED released final 90/10 regulations, which are consistent with the consensus language.
−Removed: The new 90/10 regulations are effective for fiscal years beginning on or after January 1, 2023.
−Removed: Other legislation has been introduced in both chambers of Congress that seeks to further modify the 90/10 Rule, including proposals to change the ratio requirement to 85/15 (federal to nonfederal revenue), or to eliminate the 90/10 Rule.
+Added: Legislation has been introduced in both chambers of Congress that seeks to further modify the 90/10 Rule, including proposals to change the ratio requirement to 85/15 (federal to nonfederal revenue), or to eliminate the 90/10 Rule.
We cannot predict whether or how legislative or regulatory changes will affect the 90/10 Rule.
13 unchanged sentences
An institution that participates in the Title IV programs may not provide any commission, bonus, or other incentive payment based directly or indirectly on success in securing enrollments or financial aid to any person or entity engaged in any student recruitment, admissions, or financial aid awarding activity.
−Removed: In its program participation agreement with ED, each higher education institution agrees that it will not “provide any commission, bonus, or other incentive payment based in any part, directly or indirectly, upon success in securing enrollments or the award of financial aid, to any person or entity who is engaged in any student recruitment or admission activity, or in making decisions regarding the award of Title IV, HEA program funds.” Pursuant to this rule, we are prohibited from offering our covered employees, who are those employees involved with or responsible for recruiting or admissions activities, any bonus or incentive-based compensation based on the successful recruitment, admission or enrollment of students into a postsecondary institution.
+Added: Since we are involved in recruiting and admission activities on behalf of our university partners, under current regulations, we are prohibited from offering our covered employees, who are those employees involved with or responsible for recruiting or admissions activities, any bonus or incentive-based compensation based on the successful recruitment, admission or enrollment of students into a postsecondary institution.
We are also precluded from offering our covered employees who work on financial aid matters (if any), any bonus or incentive-based compensation based on the award of financial aid to students enrolled in a postsecondary institution.
−Removed: In addition, the incentive compensation rule raises a question as to whether companies like ours, as an entity, are prohibited from entering into tuition revenue-sharing arrangements with university partners.
−Removed: On March 17, 2011, ED
−Removed: issued official agency guidance, known as a “Dear Colleague Letter,” or a DCL, providing guidance on this point.
+Added: In addition, the incentive compensation rule raises the question as to whether companies like ours, as an entity, are prohibited from entering into tuition revenue-sharing arrangements with university partners.
+Added: On March 17, 2011, ED issued official agency guidance, known as a “Dear Colleague Letter,” or a DCL, providing guidance on this point.
The DCL states that “[t]he Department generally views payment based on the amount of tuition generated as an indirect payment of incentive compensation based on success in recruitment and therefore a prohibited basis upon which to measure the value of the services provided” and that “[t]his is true regardless of the manner in which the entity compensates its employees.” But the DCL also provides an important exception to the ban on tuition revenue-sharing arrangements between institutions and third parties.
1 unchanged sentence
Example 2-B in the DCL is described as a “possible business model” developed “with the statutory mandate in mind.” Example 2-B describes the following as a possible business model:
−Removed: “A third-party that is not affiliated with the institution it serves and is not affiliated with any other institution that provides educational services, provides bundled services to the institution including marketing, enrollment application assistance, recruitment services, course support for online delivery of courses, the provision of technology, placement services for internships, and student career counseling.
+Added: “A third-party that is not affiliated with the institution it serves and is not affiliated with any other institution that provides educational services, provides bundled services to the institution including marketing, enrollment application assistance, recruitment services, course support for online delivery of courses, the provision of
+Added: technology, placement services for internships, and student career counseling.
The institution may pay the entity an amount based on tuition generated for the institution by the entity’s activities for all the bundled services that are offered and provided collectively, as long as the entity does not make prohibited compensation payments to its employees, and the institution does not pay the entity separately for student recruitment services provided by the entity.”
4 unchanged sentences
Similarly, a court could invalidate the rule in an action involving our company or our university partners, or in action that does not involve us at all.
−Removed: The revision, removal or invalidation of the bundled services rule by Congress, ED or a court could require us to change our business model.
+Added: The revision, removal or invalidation of the bundled services rule by Congress, ED or a court could require us to change our business model in ways that could be detrimental to our business.
Borrower Defense to Repayment regulations .
−Removed: ED has long had a regulation that establishes standards for borrowers that govern their ability to raise defenses to their obligation to repay certain Title IV loans, which defenses were based on certain acts or omissions of the institution that relate to the making of the loan for enrollment at the school or the provision of educational services for which the loan was provided and that gave rise to a cause of action under state law against the school.
−Removed: This regulation currently applies to all loans first disbursed prior to July 1, 2017.
−Removed: In 2016, ED published a regulatory package related to “Borrower Defense to Repayment.” This was a highly consequential rule that, among other things, would make it easier for borrowers – individually or in groups – to extinguish, in whole or in part, their student loans based on whether:
−Removed: ● The borrower or a governmental agency, has obtained against the school a nondefault, favorable contested judgment based on state or federal law in a court of administrative tribunal;
−Removed: ● The institution failed to perform its obligations under the terms of a contract with the student;
−Removed: ● The school or any of its representatives (including contractors) or any institution, organization, or person with whom the school has an agreement to provide educational programs, or to provide marketing, advertising, recruiting or admissions services, made a substantial misrepresentation (as defined by ED regulations) that the borrower reasonably relied on to the borrower’s detriment when the borrower decided to attend, or to continue attending, the school or decided to take out a Direct Loan.
−Removed: These regulations also established separate procedures for claims initiated for individual borrowers and claims initiated for groups of borrowers as well as separate procedures in the event that the institution is open or closed.
−Removed: The rules established varying, borrower-favorable statutes of limitations for the initiation of claims and, in some cases, imposed an unlimited statute of limitations.
−Removed: If ED official or hearing official approves the borrower’s defense to repayment through the applicable administrative process established in the proposed regulations, ED may discharge the borrower’s obligation to repay some or all of the borrower’s student loans, may return to the borrower amounts already paid by the borrower toward the discharged portion of the loan, and may initiate a separate proceeding to collect the discharged and returned amounts from the institution.
−Removed: Although ED attempted to prevent the effectiveness of these regulations, an October 2018 court decision mandated that the Borrower Defense to Repayment regulations that were originally published by ED in 2016 are now in effect and apply to loans first disbursed after July 1, 2017, and (because of recent regulatory developments) prior to July 1, 2020.
−Removed: On September 23, 2019, ED published new regulations related to the “Borrower Defense to Repayment” regulations.
−Removed: These regulations, which went into effect July 1, 2020 modify the existing regulations to now permit borrowers to raise as a defense to repayment on a student loan any statement, act, or omission to a borrower that is false, misleading, or deceptive;
−Removed: made with knowledge of its false, misleading, or deceptive nature or with a reckless disregard for the truth;
−Removed: and directly and clearly related to the making of a Direct Loan for enrollment at the school or the provision of educational services for which the loan was made.
−Removed: Among other things, the new regulations modify the procedures and standards for borrowers to assert through an ED-administered process a defense to the borrowers’ obligation to repay certain Title IV loans first disbursed on or after July 1, 2020, based on certain acts or omissions by the institution or a covered party.
−Removed: The procedures establish a process for students to obtain a loan discharge by establishing by a preponderance of the evidence that the institution made a misrepresentation of material fact, upon which the borrower reasonably relied in deciding to obtain a covered loan, where such misrepresentation directly and clearly relates to enrollment or continuing enrollment at the institution or to the provision of educational services for which the loan was made, and where the borrower was financially harmed by the misrepresentation.
−Removed: The regulations establish revised definitions for misrepresentation and financial harm, identify a nonexclusive list of items that may be evidence that a misrepresentation occurred, identify a list of items that do not constitute a basis for a defense to repayment.
−Removed: The regulations also set forth rules on a limitations period for submitting claims and circumstances for extending this period, on the requirements for submitting an application for a discharge, on the consideration of the application by ED, on the opportunities for the institution to respond and submit evidence, and on the process for discharging the borrower’s loan and for ED to seek recovery of the discharged amounts from the institution.
−Removed: In addition to revising the claims for defenses to repayment, the 2019 Borrower Defense to Repayment regulations that became effective on July 1, 2020, revises the financial responsibility regulations that were a part of the 2016 version of those regulations.
−Removed: The 2019 regulation shortens and reduces the scope of the list of events that could result in ED determining that an institution has failed ED’s financial responsibility standards and requiring a letter of credit or other form of acceptable financial protection and the acceptance of other conditions or requirements.
−Removed: Specifically, the regulations establish revised lists of mandatory triggering events and discretionary triggering events.
−Removed: The regulation also establishes discretionary triggering events for which ED may determine that an institution is not able to meet its financial or administrative obligations if the events are likely to have a material adverse effect on the financial condition of the institution.
−Removed: The regulations require the institution to notify ED of the occurrence of a mandatory or discretionary event in accordance with procedures established by ED, typically within 10 days of the occurrence of the event with certain exceptions.
−Removed: ED may make a determination that an institution fails to meet the financial responsibility standards based on the occurrence of one or more mandatory or discretionary triggers and impose a letter of credit and/or other conditions upon the institution.
−Removed: As with the 2016 version of this rule, the 2019 version of the regulations could require institutions we service – like GCU – to submit a letter of credit or other form of acceptable financial protection and accept other conditions or requirements.
−Removed: This could put financial strain on our university partners and negatively affect our business.
−Removed: On August 10, 2021, ED announced its intention to establish a negotiated rulemaking committee to develop proposed regulations for borrower defenses to repayment and other topics related to programs authorized under Title IV of the HEA.
−Removed: Negotiated rulemaking for the Affordability and Student Loans Committee began in October 2021 and
−Removed: concluded in December 2021, with the committee failing to reach consensus on Borrower Defense to Repayment (“BDTR”).
−Removed: On October 31, 2022, ED released final BDTR regulations.
−Removed: Among other things, the final rule sets a single standard and streamlined process for relief that will apply to all future and pending BDTR claims as of July 1, 2023, instead of various standards based on the date of the borrower’s first loan disbursement;
−Removed: defines what kinds of misconduct could lead to borrower defense discharges, including substantial misrepresentations, substantial omissions of fact, breaches of contract, aggressive and deceptive recruitment, and state or federal judgments or final ED actions that could give rise to a BDTR claim;
−Removed: establishes a reconsideration process for borrowers whose claims are not approved for a full discharge;
−Removed: and creates a process for forming groups of borrowers and adjudicating claims based on the common facts of those group claims.
−Removed: The final rule also sets the expectation that ED will hold colleges accountable for the cost of discharges, including establishing a recoupment process separate from the approval of BDTR claims.
−Removed: In addition, the final rule prohibits 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.
−Removed: Litigation related to the various iterations of the BDTR regulations, and the enforcement of these regulations has made this area complicated for all parties to understand and assess.
+Added: Under the HEA and its implementing regulations, students may file a claim with ED to discharge their FDL Loans if, generally, they believe their institution misled them or engaged in other misconduct related to the making of their federal loans or the provision of their educational services.
+Added: This is referred to as a “borrower defense to repayment” or “BDR” claim.
+Added: The regulations governing the standards and processes pursuant to which BDR claims are adjudicated have been revised multiple times since their introduction in 1994, with the result that the current regulatory framework is extraordinarily complex.
+Added: It is generally the case that an individual BDR claim would be adjudicated by an ED staff member and any subsequent recoupment process against the applicable institution initiated by ED would be overseen by a hearing official.
+Added: But the specific standards and processes that apply vary depending on when the underlying loan was made, and certain versions of the law permit the formation of a group claims process by ED.
+Added: In November 2022, the Biden administration promulgated a revised version of the BDR rule, which took effect on July 1, 2023.
+Added: In August 2023, the U.S.
+Added: Court of Appeals for the Fifth Circuit issued a nationwide preliminary injunction, enjoining the implementation of the borrower defense and closed school provisions of that rule.
+Added: While this case is decided, the previous versions of the borrower defense and closed school provisions are in effect.
+Added: Litigation related to the various iterations of the BDR regulations, and the enforcement of these regulations has made this area complicated for all parties to understand and assess.
Further, the lack of adjudications in this area has also made things less clear.
−Removed: Nonetheless, if our university partners are determined to have violated this regulation there could be significant sanctions imposed, whether related to the recoupment of any loans extinguished by the Department, the imposition of letters of credit, or other sanctions under the financial responsibility or administrative capability regulations (among others).
+Added: Nonetheless, if our university partners are determined to have violated this regulation there could be significant sanctions imposed, whether related to the recoupment of any loans extinguished by ED, the imposition of letters of credit, or other sanctions under the financial responsibility or administrative capability regulations (among others).
This could put a financial strain on our university partners and negatively affect our business.
1 unchanged sentence
Note, the borrower defense to repayment regulations discussed herein were and are extensive and this does not attempt to discuss all the facets of any of the versions of these regulations.
−Removed: We cannot determine what effect, if any, these regulations may have on out university partners or on GCE.
+Added: We cannot determine what effect, if any, these regulations may have on out university partners or on us.
Compliance reviews.
−Removed: Our client institutions are subject to announced and unannounced compliance reviews and audits by various external agencies, including ED, its Office of Inspector General, state licensing agencies, the applicable state approving agencies for financial assistance to veterans, and accrediting commissions.
+Added: Our university partners institutions are subject to announced and unannounced compliance reviews and audits by various external agencies, including ED, its Office of Inspector General, state licensing agencies, the applicable state approving agencies for financial assistance to veterans, and accrediting commissions.
As part of ED’s ongoing monitoring of institutions’ administration of the Title IV programs, the HEA also requires institutions to annually submit to ED a Title IV compliance audit conducted by an independent certified public accountant in accordance with applicable federal and ED audit standards.
In addition, to enable ED to make a determination of an institution’s financial responsibility, each institution must annually submit audited financial statements prepared in accordance with ED regulations.
−Removed: Additionally, on October 8, 2021, ED announced establishment of an Office of Enforcement within ED’s Office of Federal Student Aid, designed to strengthen oversight over and enforcement against postsecondary schools that participate in federal student loan, grant, and work-study programs.
−Removed: The Office of Enforcement restores an office first established by ED in 2016.
−Removed: ED announced the Office of Enforcement would comprise four existing divisions:
−Removed: Administrative Actions and Appeals Services Group, Borrower Defense Group, Investigations Group, and Resolution and Referral Management Group.
−Removed: ED intends the Office of Enforcement to coordinate with other state and federal partners, including the Department of Justice, Consumer Financial Protection Bureau, Federal Trade Commission, and state attorneys general.
As a third-party servicer, not only are our university partners subject to reviews and audits that may require our involvement, but we are also subject to program reviews from ED and the Office of the Inspector General.
−Removed: Further, we also have an obligation to annually submit to ED a Title IV compliance audit conducted by an independent certified public accountant in accordance with applicable federal and ED audit standards.
+Added: also have an obligation to annually submit to ED a Title IV compliance audit conducted by an independent certified public accountant in accordance with applicable federal and ED audit standards.
Gainful employment rule s.
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While GCU largely complied with the previously published gainful employment rules, those rules did indicate that four current degree programs were in the “Zone” – that is, potentially faced sanctions in the future if GCU could not reform the programs to comply with the regulations – including three undergraduate education programs and the Masters in Theology.
−Removed: On December 8, 2021, ED announced its intention to establish negotiated rulemaking committees to develop proposed regulations for gainful employment and other topics related to programs authorized under Title IV of the HEA.
−Removed: Negotiated rulemaking committee sessions occurred January-March 2022, and the Institutional and Programmatic Eligibility committee failed to reach consensus on the gainful employment topic.
−Removed: At the time, ED indicated its intention to publish draft gainful employment rules in April 2023, which would be effective no earlier than July 2024.
−Removed: On October 10, 2023, ED published the final gainful employment regulations which have a general effective date of July 1, 2024.
−Removed: The final regulations replace prior gainful employment regulations, rescinded by ED in 2019, that required GCU’s educational programs to achieve threshold rates in at least one of two debt measure categories.
−Removed: The new regulations establish rules for annually evaluating GCU’s educational programs based on the calculation of debt-to-earnings rates (an annual debt-to-earnings rate and a discretionary debt-to-earnings rate) and a median earnings measure.
+Added: ED published new gainful employment regulations in 2023, which became effective July 1, 2024.
+Added: These new regulations establish rules for annually evaluating GCU’s educational programs based on the calculation of debt-to-earnings rates (an annual debt-to-earnings rate and a discretionary debt-to-earnings rate) and a median earnings measure.
ED will calculate these rates and measures under complex regulatory formulas outlined in the regulations and using data such as student debt (including not only Title IV loans but also certain private loans and extensions of credit), student earnings data, and comparative median earnings data for young working adults with only a high school diploma or GED.
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Moreover, we do not have control over some of the factors that could impact the rates and measures for GCU’s programs which will limit our ability to eliminate or mitigate the impact of the regulations on us and GCU’s educational programs.
−Removed: Although we cannot predict how GCU’s programs will perform under the new gainful employment metrics, the performance data released suggests that in general the programs that were in the “Zone” under the previous gainful employment rules - certain undergraduate teacher education and theology programs as well as certain Masters in Counseling programs - were in jeopardy of failing under the new rules.
+Added: Although we cannot predict how GCU’s programs will perform under the new gainful employment metrics, the performance data released suggests that in general the programs that were in the “Zone” under the previous gainful employment rules - certain undergraduate teacher education and theology programs as well as certain Master’s in Counseling programs - are in jeopardy of failing under the new rules.
Given that the primary issue for the undergraduate programs that are in jeopardy of failing the new rules is not high average debt levels but rather relatively low earnings rates for first year teachers, it will be difficult for GCU to make material changes to ensure these programs do not fail.
−Removed: The Masters of Counseling programs that are in jeopardy of failing are long duration programs as required by the programmatic accreditation standards and the Title IV regulations allow graduate students to borrow substantially more than is required to pay tuition.
+Added: The Master’s of Counseling programs that are in jeopardy of failing are long duration programs as required by the programmatic accreditation standards and the Title IV regulations allow graduate students to borrow substantially more than is required to pay tuition.
Accordingly, the debt levels for these programs are higher than the university’s average.
−Removed: Thus, the implementation of the new gainful employment regulations could require GCU to eliminate or modify these educational programs, could result in the loss Title IV Program funds for the affected programs, and could have a significant impact on the rate at which students enroll in these programs.
−Removed: In addition, given ED continues to
−Removed: refuse to recognize GCU’s non-profit status, students in GCU programs that fail the new metrics may lose Title IV eligibility.
+Added: Thus, the implementation of the new gainful employment regulations could require GCU to eliminate or modify these educational programs, could result in the loss of Title IV program funds for the affected programs, and could have a significant impact on the rate at which students enroll in these programs.
+Added: In addition, given ED’s continued refusal to recognize GCU’s non-profit status, students in GCU programs that fail the new metrics may lose Title IV eligibility.
Substantial misrepresentation .
−Removed: The HEA prohibits an institution that participates in Title IV programs from engaging in “substantial misrepresentation” of the nature of its educational program, its financial charges, or the employability of its graduates.
+Added: The HEA prohibits an institution that participates in Title IV programs from engaging in “substantial misrepresentation” of the nature of its educational program, its financial charges, or the
+Added: employability of its graduates.
ED has defined a misrepresentation as any statement made by the institution or a third party that provides educational programs, marketing, advertising, recruiting, or admissions services to the institution that is false, erroneous or has the likelihood or tendency to deceive.
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We and our employees and subcontractors, as agents of our university partners, must use a high degree of care to comply with such rules and are prohibited by contract from making any false, erroneous or misleading statements about our university partners.
−Removed: To avoid an issue under the misrepresentation rule and similar rules, we assure that all marketing materials are approved in advance by our university partners before they are used by our employees and we carefully monitor our subcontractors.
+Added: To avoid an issue under the misrepresentation rule and similar rules, we assure that all marketing materials are approved in advance by our university partners before they are used by our employees and subcontractors in their conversations with students and prospective students.
Additionally, matters regarding substantial misrepresentation, and defining what constitutes “aggressive recruiting,” are currently the subject of negotiated rulemaking.
−Removed: While we are watching this process closely, we cannot determine what the outcome will be or the effect of these regulations on out university partners or on GCE.
−Removed: Despite our best efforts, we may face complaints from students and prospective students of our university partners over statements made by us and our agents throughout the conduct of our services which would expose our university partners, and derivatively us, to increased risk of enforcement action and applicable sanctions or other penalties and increased risk of private qui tam actions under the Federal False Claims Act.
+Added: While we are watching this process closely, we cannot determine what the outcome will be or the effect of these regulations on our university partners or on GCE.
+Added: Despite our best efforts, we or our university partners may face complaints from our university partners’ students and prospective students over statements made by us and our agents throughout the conduct of our services that would expose our university partners, and derivatively us, to increased risk of enforcement action and applicable sanctions or other penalties and increased risk of private qui tam actions under the Federal False Claims Act.
Also, if ED determines that an institution (including its contractors) has engaged in substantial misrepresentation, ED may revoke an institution’s program participation agreement, impose limitations on the institution’s participation in Title IV programs, deny applications from the institution for approval of new programs or locations or other matters, or initiate proceedings to fine the institution or limit, suspend, or terminate its eligibility to participate in Title IV programs.
Similar rules apply under state laws or are incorporated in institutional accreditation standards, and the FTC applies similar rules prohibiting any unfair or deceptive marketing practices to the education sector.
−Removed: On October 6, 2021 the FTC announced that it is resurrecting Penalty Offense Authority under Section 5(m) of the FTC Act.
+Added: In October 2021, the FTC announced that it was resurrecting its Penalty Offense Authority under Section 5(m) of the FTC Act.
Under the FTC Act, the FTC may secure penalties against entities not a party to an original proceeding if the FTC can show that the entity had actual knowledge that the conduct in question was found to be unfair or deceptive.
Entities that have actual knowledge of acts or practices the FTC has found to be unlawful and that subsequently engage in such unlawful acts or practices may be held liable for civil penalties up to $50,120 per violation.
−Removed: Also on October 6, 2021, in an effort to establish actual knowledge and create a pathway for penalties in the event of post-notice acts or practices, the FTC issued notice to the 70 largest for-profit schools based on enrollment and revenues.
+Added: Also in October 2021, in an effort to establish actual knowledge and create a pathway for penalties in the event of post-notice acts or practices, the FTC issued notice to the 70 largest for-profit schools based on enrollment and revenues.
The notice included a list of acts and practices that the FTC has determined are unfair or deceptive, including but not limited to acts relating to misrepresentation of employment opportunities and other benefits, together with citation to various prior determinations from cases previously litigated by the FTC.
−Removed: Because of ED’s decision to continue to treat GCU as a for-profit institution for Title IV purposes, GCU received the FTC’s notice on October 7, 2021.
+Added: Because of ED’s decision to continue to treat GCU as a for-profit institution for Title IV purposes, GCU received this notice.
The FTC made clear at that time that receipt of the notice itself did not reflect any assessment as to whether GCU has engaged in deceptive or unfair conduct.
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Prior to the closing of the Transaction, the IRS, HLC and the State of Arizona approved GCU’s non-profit designation.
−Removed: However, on November 6, 2019, in connection with its approval of the Transaction without conditions, ED informed GCU that GCU does not satisfy ED’s definition of a non-profit entity and, as a result, that ED will continue to treat GCU as a proprietary institution for purposes of its continued participation in Title IV programs.
−Removed: Upon receipt of this determination, GCU and GCE entered into ongoing discussions and negotiations that were then provided by GCU to ED regarding proposed changes to the services agreement between GCU and GCE and providing ED, upon request, with an updated transfer pricing study demonstrating that the revenue sharing arrangement reflected in the services agreement reflected fair market value for the services we provide.
+Added: However, in November 2019, in connection with its approval of the Transaction without conditions, ED informed GCU that GCU does not satisfy ED’s definition of a non-profit entity and, as a result, that ED will continue to treat GCU as a proprietary institution for purposes of its continued participation in Title IV programs.
+Added: Upon receipt of this determination, GCU and GCE entered into ongoing discussions
+Added: and negotiations that were then provided by GCU to ED regarding proposed changes to the services agreement between GCU and GCE and providing ED, upon request, with an updated transfer pricing study demonstrating that the revenue sharing arrangement reflected in the services agreement reflected fair market value for the services we provide.
Despite the ongoing discussions and negotiations, ED again denied GCU’s non-profit status in January 2021.
Thereafter, in order to pursue all available avenues for recourse on this matter, GCU opted to file a lawsuit against the ED, alleging that its 2019 and 2021 decisions overstepped its authority.
−Removed: That litigation currently remains ongoing.
−Removed: While the Company does not believe that ED’s determination, if ultimately upheld by the federal courts, will impact GCU’s ability to meet all regulatory requirements applicable to proprietary institutions, the determination not to accept GCU’s non-profit status by ED or any other federal agency, if upheld, would continue the limits currently in effect on GCU’s ability to identify itself as a non-profit university in its advertising or other materials and could adversely impact the manner in which GCU is viewed by students, prospective students, alumni, donors and other stakeholders.
−Removed: Thereafter, i n October 2021, at the same time that the FTC issued the notice to the 70 for-profit schools as mentioned above, the FTC issued a public statement indicating that it would coordinate efforts with ED and the VA to investigate for-profit universities in furtherance of the notice.
+Added: While ED’s decision to continue to treat GCU as a for-profit institution was upheld by the federal district court in Arizona, in November 2024, the United States Court of Appeals for the Ninth Circuit unanimously held that ED had failed to apply the correct legal standards in reviewing GCU’s application and it reversed the district court’s decision and remanded with instructions to set aside ED’s decision and to remand to ED for further proceedings.
+Added: In October 2021, at the same time that the FTC issued the notice to the 70 for-profit schools as mentioned above, the FTC issued a public statement indicating that it would coordinate efforts with ED and the VA to investigate for-profit universities in furtherance of the notice.
Since the FTC’s statement, ED, the VA and the FTC have initiated multiple actions against GCU, including audits, compliance reviews, civil investigative demands, fines and lawsuits, and the FTC has initiated civil investigative demands and a lawsuit against us, that allege, among other things, misrepresentations made in connection with marketing activities, including statements made related to GCU’s non-profit status.
−Removed: These actions, which are in addition to the class action and shareholder derivative action against us and certain of our directors and officers that we are currently defending and which largely also relate back to ED’s original decision to deny recognition of GCU’s non-profit status, appear to be coordinated in the manner described in the 2021 FTC statement.
+Added: These actions appear to have been coordinated in the manner described in the 2021 FTC statement.
These actions, or any future actions by ED, FTC or any other federal or state government agencies or accrediting bodies with oversight over us or GCU, if ultimately resolved adversely to us or GCU, could result in monetary penalties and liabilities, further impact GCU’s non-profit status, and/or cause reputational harm.
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Legal Proceedings for a discussion of certain litigation matters to which we are a party.
−Removed: In addition, given the importance of the non-profit designation to GCU, it is also possible that GCU might request changes to our contract with them to resolve any disputes it has with government agencies over its non-profit status.
−Removed: At this time, we cannot predict what changes those could be or what effect any of those outcomes could have on our business.
Negotiated rulemaking .
ED periodically issues new regulations and guidance that can have an adverse effect on our partner institutions.
−Removed: ED has changed its regulations, and may make other changes in the future, in a manner which could require us to incur additional costs in connection with providing the services that we provide our partners affect their ability to remain eligible to participate in the Title IV programs, impose restrictions on their participation in the Title IV programs, affect the rate at which students enroll in our partners’ programs, or otherwise have a significant impact on our business and results of operations.
−Removed: We cannot predict the timing and content of any new regulations or guidance that ED may seek to impose or whether and to what extent ED under the new administration may issue new regulations and guidance that could adversely impact our partner institutions.
−Removed: On January 4, 2023, ED announced their intention to issue new regulations in eight different areas of higher education regulations via negotiated rulemaking.
−Removed: The topics include:
−Removed: ● Distance Education
−Removed: ● Accreditation and Related Issues
−Removed: ● State Authorization
−Removed: ● Third-Party Servicers and Related Agencies
−Removed: ● Cash Management
−Removed: ● Return to Title IV
−Removed: ● Federal TRIO Programs
−Removed: ● Improving Use of Deferments and Forbearances.
−Removed: ED commenced its first negotiated rulemaking on January 8, 2024 to address five of these topics:
−Removed: State Authorization, Cash Management, Distance Education, Returns to Title IV, and Accreditation.
−Removed: In addition to the session held on January 8–11, 2024, ED will hold negotiation sessions on February 5–8, 2024 and March 4–7, 2024.While we will be watching this closely, we cannot predict what, if any, impact this rulemaking will have on our university partners or on our business.
−Removed: We cannot predict with certainty the ultimate combined impact of the regulatory changes which have occurred in recent years and that may occur as a result of the upcoming negotiated rulemaking, nor can we predict the effect of future legislative or regulatory action by federal, state or other agencies regulating our education programs or other aspects of our operations, how any resulting regulations will be interpreted or whether we and our partner institutions will be able to comply with these requirements in the future.
−Removed: Any such actions by legislative or regulatory bodies that affect our programs and operations could have a material adverse effect on our student population and our partner institutions, including the need to cease offering a number of programs.
+Added: ED has changed its regulations, and may make other changes in the future, in a manner which could require us to incur additional costs in connection with providing the services that we provide our university partners affect their ability to remain eligible to participate in the Title IV programs, impose restrictions on their participation in the Title IV programs, affect the rate at which students enroll in our partners’ programs, or otherwise have a significant impact on our business and results of operations.
+Added: We cannot predict with certainty the ultimate combined impact of the regulatory changes which have occurred in recent years, nor can we predict the effect of future legislative or regulatory action by federal, state or other agencies regulating our operations or those of our university partners, how any resulting regulations will be interpreted or whether we and our university partner institutions will be able to comply with these requirements in the future.
+Added: Any such actions by legislative or regulatory bodies that affect our operations or those of our university partners could have a material adverse effect on our business and that of university partner institutions.
Regulatory Standards that May Restrict Institutional Expansion or Other Changes
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With respect to ED, if an institution participating in the Title IV programs plans to add a new location or educational program, the institution must generally apply to ED to have the additional location or educational program designated as within the scope of the institution’s Title IV eligibility.
−Removed: Institutions that are fully certified to participate in the Title IV programs are not required to obtain ED’s approval of additional programs that lead to a bachelor’s, professional, or graduate degree at the same degree level as programs previously approved by ED, and, similarly, is not required to obtain advance approval for new programs that prepare students for gainful employment in the same or a related recognized occupation as an educational program that has previously been designated by ED as an eligible program at that institution if it meets certain minimum-length requirements.
+Added: Institutions that are fully certified to participate in the Title IV programs are not required to obtain ED’s approval of additional programs that lead to a bachelor’s, professional, or graduate degree at the same degree level as programs previously approved by ED.
GCU, because it is currently certified to participate in the Title IV programs on a provisional basis, is required to obtain ED approval for new programs, which requirement could impede GCU’s ability to introduce new programs and slow its growth.
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