What changed in this filing

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Item 1. Financial Statements

2026-07-29 compared with 2026-04-23 · 307 added, 135 removed, 630 unchanged (41% of the section changed)

3 unchanged sentences

(in thousands, except share and per share data)

December 31, 2025 March 31, 2026

December 31, 2025 June 30, 2026

Current assets:

15 unchanged sentences

Accounts payable and accrued expenses $ 105,791 $ 117,169

Income taxes payable — 1,490

Contract liabilities 96,247 133,005

9 unchanged sentences

32,000,000 shares authorized;

22,968,860 and 22,612,909 shares issued and outstanding at December 31, 2025 and March 31, 2026, respectively

22,968,860 and 22,208,559 shares issued and outstanding at December 31, 2025 and June 30, 2026, respectively

Additional paid-in capital 1,436,795 1,377,637

7 unchanged sentences

(in thousands, except per share data)

For the three months ended March 31,

For the three months ended June 30, For the six months ended June 30,

2025 2026 2025 2026

Revenues $ 321,471 $ 337,264 $ 625,061 $ 643,192

5 unchanged sentences

Income from operations 45,760 50,480 85,554 91,565

Other income 2,211 1,205

Other income (expense) ( 315 ) 1,351 1,896 2,556

Income before income taxes 45,445 51,831 87,450 94,121

10 unchanged sentences

(in thousands)

For the three months ended March 31,

For the three months ended June 30, For the six months ended June 30,

2025 2026 2025 2026

Net income $ 32,331 $ 37,159 $ 62,075 $ 69,968

Other comprehensive income:

Other comprehensive income (loss):

Foreign currency translation adjustments 26,353 3,430 29,696 18,587

Unrealized gains on marketable securities, net of tax 1 —

Unrealized losses on marketable securities, net of tax ( 1 ) — — —

Comprehensive income $ 58,683 $ 40,589 $ 91,771 $ 88,555

3 unchanged sentences

(in thousands, except share data)

For the three months ended March 31, 2025

For the three months ended June 30, 2025

Common Stock Additional

4 unchanged sentences

Shares Par Value

Balance at December 31, 2024 24,502,385 $ 245 $ 1,532,414 $ 218,405 $ ( 88,565 ) $ 1,662,499

Balance at March 31, 2025 24,261,716 $ 243 $ 1,502,852 $ 225,440 $ ( 85,221 ) $ 1,643,314

Stock-based compensation — — 5,856 — — 5,856

5 unchanged sentences

Foreign currency translation adjustment — — — — 26,353 26,353

Unrealized gains on marketable securities, net of tax — — — — 1 1

Unrealized losses on marketable securities, net of tax — — — — ( 1 ) ( 1 )

Net income — — — 32,331 — 32,331

Balance at June 30, 2025 23,948,762 $ 239 $ 1,489,271 $ 236,076 $ ( 58,869 ) $ 1,666,717

For the three months ended June 30, 2026

Common Stock Additional

Capital Retained

Earnings Accumulated

Comprehensive

Income (Loss) Total

Shares Par Value

Balance at March 31, 2026 22,612,909 $ 226 $ 1,399,393 $ 265,792 $ ( 30,958 ) $ 1,634,453

For the three months ended March 31, 2026

Stock-based compensation — — 4,873 — — 4,873

Issuance of restricted stock, net 16,274 — — — — —

Repurchase of common stock ( 420,624 ) ( 4 ) ( 26,629 ) ( 6,434 ) — ( 33,067 )

Common stock dividends ($ 0.60 per share)

— — — ( 13,264 ) — ( 13,264 )

Foreign currency translation adjustment — — — — 3,430 3,430

Net income — — — 37,159 — 37,159

Balance at June 30, 2026 22,208,559 $ 222 $ 1,377,637 $ 283,253 $ ( 27,528 ) $ 1,633,584

The accompanying notes are an integral part of these condensed consolidated financial statements.

STRATEGIC EDUCATION, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands, except share data)

For the six months ended June 30, 2025

Common Stock Additional

13 unchanged sentences

Net income — — — 62,075 — 62,075

Balance at March 31, 2026 22,612,909 $ 226 $ 1,399,393 $ 265,792 $ ( 30,958 ) $ 1,634,453

Balance at June 30, 2025 23,948,762 $ 239 $ 1,489,271 $ 236,076 $ ( 58,869 ) $ 1,666,717

For the six months ended June 30, 2026

Common Stock Additional

Capital Retained

Earnings Accumulated

Comprehensive

Income (Loss) Total

Shares Par Value

Balance at December 31, 2025 22,968,860 $ 230 $ 1,436,795 $ 255,496 $ ( 46,115 ) $ 1,646,406

Stock-based compensation — — 10,259 — — 10,259

Exercise of stock options 1,211 — 63 — — 63

Issuance of restricted stock, net 152,217 1 ( 12,568 ) — — ( 12,567 )

Repurchase of common stock ( 913,729 ) ( 9 ) ( 56,912 ) ( 15,352 ) — ( 72,273 )

Common stock dividends ($ 1.20 per share)

— — — ( 26,859 ) — ( 26,859 )

Foreign currency translation adjustment — — — — 18,587 18,587

Net income — — — 69,968 — 69,968

Balance at June 30, 2026 22,208,559 $ 222 $ 1,377,637 $ 283,253 $ ( 27,528 ) $ 1,633,584

The accompanying notes are an integral part of these condensed consolidated financial statements.

2 unchanged sentences

(in thousands)

For the three months ended March 31,

For the six months ended June 30,

Cash flows from operating activities:

1 unchanged sentence

Adjustments to reconcile net income to net cash provided by operating activities:

Gain on early termination of operating leases — ( 190 )

Amortization of deferred financing costs 212 212

18 unchanged sentences

Other investments ( 231 ) ( 138 )

Cash paid for acquisition, net of cash acquired ( 16 ) —

Other investing activities — ( 71 )

Net cash used in investing activities ( 4,627 ) ( 21,874 )

5 unchanged sentences

Effect of exchange rate changes on cash, cash equivalents, and restricted cash 2,519 132

Net increase in cash, cash equivalents, and restricted cash 9,928 11,308

Net decrease in cash, cash equivalents, and restricted cash ( 1,673 ) ( 17,365 )

Cash, cash equivalents, and restricted cash — beginning of period 146,656 149,511

19 unchanged sentences

All intercompany accounts and transactions have been eliminated in the consolidated financial statements.

All information as of, and for the three months ended, March 31, 2025 and 2026 is unaudited but, in the opinion of management, contains all adjustments, consisting only of normal recurring adjustments, necessary to present fairly the condensed consolidated statements of financial position, results of operations, and cash flows of the Company.

All information as of, and for the three and six months ended, June 30, 2025 and 2026 is unaudited but, in the opinion of management, contains all adjustments, consisting only of normal recurring adjustments, necessary to present fairly the condensed consolidated statements of financial position, results of operations, and cash flows of the Company.

The condensed consolidated balance sheet as of December 31, 2025 has been derived from the audited consolidated financial statements at that date.

1 unchanged sentence

These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025.

The results of operations for the three months ended March 31, 2026 are not necessarily indicative of the results to be expected for the full fiscal year.

The results of operations for the three and six months ended June 30, 2026 are not necessarily indicative of the results to be expected for the full fiscal year.

Below is a description of the nature of the costs included in the Company’s operating expense categories.

23 unchanged sentences

higher education institution during the academic term.

The Company had approximately $ 0.3 million and $ 0.3 million of these unpaid obligations as of December 31, 2025 and March 31, 2026, respectively.

The Company had approximately $ 0.3 million and $ 0.3 million of these unpaid obligations as of December 31, 2025 and June 30, 2026, respectively.

In Australia and New Zealand, advance tuition payments from international students are required to be restricted until a student commences his or her course.

In addition, a portion of tuition prepayments from students enrolled in a vocational education and training program are held in trust by a third-party law firm to adhere to tuition protection requirements.

As of December 31, 2025 and March 31, 2026, the Company had approximately $ 8.0 million and $ 9.6 million, respectively, of restricted cash related to these requirements in Australia and New Zealand.

As of December 31, 2025 and June 30, 2026, the Company had approximately $ 8.0 million and $ 7.5 million, respectively, of restricted cash related to these requirements in Australia and New Zealand.

These balances are recorded as restricted cash and included in other current assets in the unaudited condensed consolidated balance sheets.

1 unchanged sentence

The Company holds these funds in an interest-bearing account, which is included in other assets in the unaudited condensed consolidated balance sheets.

The following table illustrates the reconciliation of cash, cash equivalents, and restricted cash shown in the unaudited condensed consolidated statements of cash flows as of March 31, 2025 and 2026 (in thousands):

As of March 31,

As of June 30,

Cash and cash equivalents $ 133,600 $ 123,755

7 unchanged sentences

Management determines the appropriate designation of marketable securities at the time of purchase and re-evaluates such designation as of each balance sheet date.

As of December 31, 2025 and March 31, 2026, all of the Company’s marketable securities are designated as held-to-maturity.

As of December 31, 2025 and June 30, 2026, all of the Company’s marketable securities are designated as held-to-maturity.

The Company’s held-to-maturity marketable securities consist of term deposits, U.S.

6 unchanged sentences

Amortization of premiums, accretion of discounts, interest, dividend income and realized gains and losses are included in other income.

The Company classifies marketable

securities as either current or non-current assets based on management’s intent with regard to usage of those funds, which is dependent upon the security’s maturity date and liquidity considerations based on current market conditions.

The Company classifies marketable securities as either current or non-current assets based on management’s intent with regard to usage of those funds, which is

dependent upon the security’s maturity date and liquidity considerations based on current market conditions.

If management intends to hold the securities for longer than one year as of the balance sheet date, they are classified as non-current.

6 unchanged sentences

In the event that current collection trends differ from historical trends, an adjustment is made to the allowance for credit losses and bad debt expense.

The Company’s current tuition receivable and allowance for credit losses were as follows as of December 31, 2025 and March 31, 2026 (in thousands):

December 31, 2025 March 31, 2026

The Company’s current tuition receivable and allowance for credit losses were as follows as of December 31, 2025 and June 30, 2026 (in thousands):

December 31, 2025 June 30, 2026

Tuition receivable $ 127,634 $ 147,136

1 unchanged sentence

Tuition receivable, net $ 78,202 $ 100,858

An additional $ 6.2 million and $ 6.2 million of tuition receivable, net, are included in other assets as of December 31, 2025 and March 31, 2026, respectively, because these amounts are expected to be collected after 12 months.

The following table illustrates changes in the Company’s current and non-current allowance for credit losses for the three months ended March 31, 2025 and 2026 (in thousands).

For the three months ended March 31,

An additional $ 6.2 million and $ 6.0 million of tuition receivable, net, are included in other assets as of December 31, 2025 and June 30, 2026, respectively, because these amounts are expected to be collected after 12 months.

The following table illustrates changes in the Company’s current and non-current allowance for credit losses for the three and six months ended June 30, 2025 and 2026 (in thousands).

For the three months ended June 30, For the six months ended June 30,

2025 2026 2025 2026

Allowance for credit losses, beginning of period $ 45,570 $ 43,920 $ 46,185 $ 45,465

9 unchanged sentences

Authorized Stock

The Company has authorized 32,000,000 shares of common stock, par value $ 0.01 , of which 22,968,860 and 22,612,909 shares were issued and outstanding as of December 31, 2025 and March 31, 2026, respectively.

The Company has authorized 32,000,000 shares of common stock, par value $ 0.01 , of which 22,968,860 and 22,208,559 shares were issued and outstanding as of December 31, 2025 and June 30, 2026, respectively.

The Company also has authorized 8,000,000 shares of preferred stock, none of which is issued or outstanding.

Before any preferred stock may be issued, the Board of Directors must establish the preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends, qualifications, and the terms or conditions of the redemption of the preferred stock.

In February 2026, the Company’s Board of Directors declared a regular, quarterly cash dividend of $ 0.60 per share of common stock.

The dividend was paid on March 16, 2026.

In April 2026, the Company’s Board of Directors declared a regular, quarterly cash dividend of $ 0.60 per share of common stock.

The dividend was paid on June 1, 2026.

Net Income Per Share

5 unchanged sentences

Stock awards are excluded from the computation of diluted earnings per share when their effect would be anti-dilutive.

Set forth below is a reconciliation of shares used to calculate basic and diluted earnings per share for the three months ended March 31, 2025 and 2026 (in thousands):

For the three months ended March 31,

Set forth below is a reconciliation of shares used to calculate basic and diluted earnings per share for the three and six months ended June 30, 2025 and 2026 (in thousands):

For the three months ended June 30, For the six months ended June 30,

2025 2026 2025 2026

Weighted average shares outstanding used to compute basic earnings per share 22,906 21,381 23,113 21,501

5 unchanged sentences

Comprehensive income includes net income and all changes in the Company’s equity during a period from non-owner sources, which for the Company consists of foreign currency translation adjustments and unrealized gains and losses on available-for-sale marketable securities, net of tax.

As of December 31, 2025 and March 31, 2026, the balance of accumulated other comprehensive loss was $ 46.1 million and $ 31.0 million, respectively.

There were no reclassifications out of accumulated other comprehensive income (loss) to net income for the three months ended March 31, 2025 and 2026.

As of December 31, 2025 and June 30, 2026, the balance of accumulated other comprehensive loss was $ 46.1 million and $ 27.5 million, respectively.

There were no reclassifications out of accumulated other comprehensive income (loss) to net income for the three and six months ended June 30, 2025 and 2026.

Use of Estimates

21 unchanged sentences

Torrens University offers the majority of its education programs on a trimester system having three primary academic terms, which all occur within the calendar year.

The following table presents the Company’s revenues from contracts with customers disaggregated by material revenue category for the three months ended March 31, 2025 and 2026 (in thousands):

For the three months ended March 31,

The following table presents the Company’s revenues from contracts with customers disaggregated by material revenue category for the three and six months ended June 30, 2025 and 2026 (in thousands):

For the three months ended June 30, For the six months ended June 30,

2025 2026 2025 2026

Higher Education Segment

Tuition, net of discounts, grants and scholarships $ 206,714 $ 207,340 $ 418,460 $ 410,154

8,921 13,186 18,183 22,963

Higher Education Segment 215,635 220,526 436,643 433,117

1 unchanged sentence

Tuition, net of discounts, grants and scholarships 67,849 73,407 114,295 124,491

1,295 977 3,109 1,713

Total Australia/New Zealand Segment 69,144 74,384 117,404 126,204

32 unchanged sentences

The table below presents activity in the contract liability related to the Learn and Earn Scholarship (in thousands):

For the three months ended March 31,

For the six months ended June 30,

Balance at beginning of period $ 37,118 $ 38,125

8 unchanged sentences

The table below presents activity in the contract liability related to Tuition Cap (in thousands):

For the three months ended March 31,

For the six months ended June 30,

Balance at beginning of period $ 14,672 $ 18,483

8 unchanged sentences

The Company incurs severance and other employee separation costs related to employee terminations that are not tied to a formal restructuring plan.

The Company incurred $ 1.5 million and $ 1.6 million of severance and other employee separation charges during the three months ended March 31, 2025 and 2026, respectively, related to the elimination of certain positions.

The Company incurred $ 1.3 million and $ 2.8 million of severance and other employee separation charges during the three and six months ended June 30, 2025, respectively, and $ 2.0 million and $ 3.5 million during the three and six months ended June 30, 2026, respectively, related to the elimination of certain positions.

These severance and other employee separation charges are included in Restructuring costs on the unaudited condensed consolidated statements of income.

The following details the changes in the Company’s severance and other employee separation costs restructuring liabilities during the three months ended March 31, 2025 and 2026 (in thousands):

The following details the changes in the Company’s severance and other employee separation costs restructuring liabilities during the six months ended June 30, 2025 and 2026 (in thousands):

Severance Restructuring Liability

2 unchanged sentences

Payments ( 2,833 )

Balance as of March 31, 2025

Balance as of June 30, 2025

Balance as of December 31, 2025 (1)

1 unchanged sentence

Payments ( 2,687 )

Balance as of March 31, 2026 (1)

Balance as of June 30, 2026 (1)

____________________________________

1 unchanged sentence

The Company evaluates its real estate portfolio on an ongoing basis, which has resulted in the consolidation and sale of underutilized facilities.

The Company recorded approximately $ 0.1 million and $ 0.2 million of right-of-use lease asset impairment charges during the three months ended March 31, 2025 and 2026, respectively, related to facilities that were consolidated during the period.

The Company also recorded fixed asset impairment charges of approximately $ 0.1 million and $ 0.2 million during the three months ended March 31, 2025 and 2026, respectively.

The Company recorded approximately $ 0.7 million and $ 0.8 million of right-of-use lease asset impairment charges during the three and six months ended June 30, 2025, respectively, and $ 0.1 million and $ 0.3 million during the three and six months ended June 30, 2026, respectively, related to facilities that were consolidated during the period.

The Company also recorded fixed asset impairment charges of approximately $ 0.7 million and $ 0.8 million during the three and six months ended June 30, 2025, respectively, and $ 0.3 million and $ 0.5 million during the three and six months ended June 30, 2026, respectively.

These right-of-use lease asset impairments and fixed asset impairments are included in Restructuring costs on the unaudited condensed consolidated statements of income.

Marketable Securities

The following is a summary of held-to-maturity securities, which are carried at amortized cost, as of December 31, 2025 and March 31, 2026 (in thousands):

The following is a summary of held-to-maturity securities, which are carried at amortized cost, as of December 31, 2025 and June 30, 2026 (in thousands):

Amortized Cost Gross Unrealized Gain Gross Unrealized (Losses) Estimated Fair Value

4 unchanged sentences

Total $ 12,297 $ 42 $ — $ 12,339

Balance as of March 31, 2026

Term deposits $ 2,281 $ — $ — $ 2,281

Balance as of June 30, 2026

treasury securities $ 4,997 $ 6 $ — $ 5,003

1 unchanged sentence

Total $ 9,997 $ 6 $ ( 5 ) $ 9,998

The unrealized gains and losses on the Company’s investments in marketable securities as of December 31, 2025 and March 31, 2026 were caused by changes in market values primarily due to interest rate changes.

As of March 31, 2026, there were no securities which were in an unrealized loss position for a period longer than 12 months.

The Company does not intend to sell these securities, and it is not more likely than not that the Company will be required to sell these securities prior to the recovery of their

amortized cost basis, which may be at maturity.

As such, no impairment charges were recorded during the three months ended March 31, 2025 and 2026.

The unrealized gains and losses on the Company’s investments in marketable securities as of December 31, 2025 and June 30, 2026 were caused by changes in market values primarily due to interest rate changes.

As of June 30, 2026, there were no securities which were in an unrealized loss position for a period longer than 12 months.

The Company does not intend to sell these

securities, and it is not more likely than not that the Company will be required to sell these securities prior to the recovery of their amortized cost basis, which may be at maturity.

As such, no impairment charges were recorded during the three and six months ended June 30, 2025 and 2026.

The Company has no allowance for credit losses related to its marketable securities as all investments are in investment grade securities.

The following table summarizes the maturities of the Company’s held-to-maturity securities as of December 31, 2025 and March 31, 2026 (in thousands):

December 31, 2025 March 31, 2026

The following table summarizes the maturities of the Company’s held-to-maturity securities as of December 31, 2025 and June 30, 2026 (in thousands):

December 31, 2025 June 30, 2026

Due within one year $ 7,297 $ 4,997

1 unchanged sentence

Total $ 12,297 $ 9,997

The following table summarizes the purchases of and proceeds from marketable securities for the three months ended March 31, 2025 and 2026 (in thousands):

For the three months ended March 31,

The following table summarizes the purchases of and proceeds from marketable securities for the six months ended June 30, 2025 and 2026 (in thousands):

For the six months ended June 30,

Purchases of marketable securities

5 unchanged sentences

Total proceeds from marketable securities $ 42,575 $ 8,306

The Company did not sell any available-for-sale or held-to-maturity securities during the three months ended March 31, 2025 and 2026.

The Company did not record any gross realized gains or losses in net income during the three months ended March 31, 2025 and 2026.

The Company did not sell any available-for-sale or held-to-maturity securities during the three and six months ended June 30, 2025 and 2026.

The Company did not record any gross realized gains or losses in net income during the three and six months ended June 30, 2025 and 2026.

Fair Value Measurement

9 unchanged sentences

Total assets at fair value on a recurring basis $ 88,239 $ 88,239 $ — $ —

Assets measured at fair value on a recurring basis consist of the following as of March 31, 2026 (in thousands):

Assets measured at fair value on a recurring basis consist of the following as of June 30, 2026 (in thousands):

Fair Value Measurements at Reporting Date Using

March 31, 2026 Quoted Prices in

June 30, 2026 Quoted Prices in

Active Markets

7 unchanged sentences

• Money market funds – Classified in Level 1 is excess cash the Company holds in money market funds, which are included in cash and cash equivalents in the accompanying unaudited condensed consolidated balance sheets.

The Company’s other cash and cash equivalents as of December 31, 2025 and March 31, 2026 approximate fair value and are not disclosed in the above tables because of the short-term nature of the financial instruments.

The Company’s other cash and cash equivalents as of December 31, 2025 and June 30, 2026 approximate fair value and are not disclosed in the above tables because of the short-term nature of the financial instruments.

The Company’s held-to-maturity marketable securities, which consist of term deposits, U.S.

treasury securities, and corporate debt securities, are not included in the tables above as they are carried at amortized cost and not measured at fair value on a recurring basis.

The estimated fair value of the Company’s held-to-maturity marketable securities as of December 31, 2025 and March 31, 2026 was $ 12.3 million and $ 12.3 million, respectively.

The estimated fair value of the Company’s held-to-maturity marketable securities as of December 31, 2025 and June 30, 2026 was $ 12.3 million and $ 10.0 million, respectively.

These securities are valued using readily available pricing sources for comparable instruments utilizing observable inputs from active markets and are classified in Level 2 of the fair value hierarchy.

The Company did not change its valuation techniques associated with recurring fair value measurements from prior periods and did not transfer assets or liabilities between levels of the fair value hierarchy during the three months ended March 31, 2025 and 2026.

Goodwill and Intangible Assets

The following table presents changes in the carrying value of goodwill by segment for the three months ended March 31, 2025 (in thousands):

The following table presents changes in the carrying value of goodwill by segment for the six months ended June 30, 2025 (in thousands):

Higher Education Australia /

4 unchanged sentences

Currency translation adjustments — 24,222 — 24,222

Balance as of March 31, 2025 $ 632,075 $ 477,635 $ 100,000 $ 1,209,710

The following table presents changes in the carrying value of goodwill by segment for the three months ended March 31, 2026 (in thousands):

Balance as of June 30, 2025 $ 632,075 $ 499,030 $ 100,000 $ 1,231,105

The following table presents changes in the carrying value of goodwill by segment for the six months ended June 30, 2026 (in thousands):

Higher Education Australia /

4 unchanged sentences

Currency translation adjustments — 16,123 — 16,123

Balance as of March 31, 2026 $ 632,075 $ 523,481 $ 100,000 $ 1,255,556

Balance as of June 30, 2026 $ 632,075 $ 526,461 $ 100,000 $ 1,258,536

The Company assesses goodwill at least annually for impairment during the fourth quarter, or more frequently if events occur or circumstances change between annual tests that would more likely than not reduce the fair value of the respective reporting unit below its carrying amount.

No events or circumstances occurred in the three months ended March 31, 2026 to indicate an impairment to goodwill at any of the Company’s segments.

There were no impairment charges related to goodwill recorded during the three months ended March 31, 2025 and 2026.

No events or circumstances occurred in the three and six months ended June 30, 2026 to indicate an impairment to goodwill at any of the Company’s segments.

There were no impairment charges related to goodwill recorded during the three and six months ended June 30, 2025 and 2026.

Intangible Assets

3 unchanged sentences

The following table presents changes in the carrying value of indefinite-lived intangible assets (in thousands):

For the three months ended March 31,

For the six months ended June 30,

Balance at beginning of period $ 245,098 $ 249,243

5 unchanged sentences

The Company assesses indefinite-lived intangible assets at least annually for impairment during the fourth quarter, or more frequently if events occur or circumstances change between annual tests that would more likely than not reduce the fair value of the respective indefinite-lived intangible asset below its carrying amount.

No events or circumstances occurred in the three months ended March 31, 2026 to indicate an impairment to indefinite-lived intangible assets.

There were no impairment charges related to indefinite-lived intangible assets recorded during the three months ended March 31, 2025 and 2026.

No events or circumstances occurred in the three and six months ended June 30, 2026 to indicate an impairment to indefinite-lived intangible assets.

There were no impairment charges related to indefinite-lived intangible assets recorded during the three and six months ended June 30, 2025 and 2026.

Other Current Assets

Other current assets consist of the following as of December 31, 2025 and March 31, 2026 (in thousands):

December 31, 2025 March 31, 2026

Other current assets consist of the following as of December 31, 2025 and June 30, 2026 (in thousands):

December 31, 2025 June 30, 2026

Prepaid expenses $ 22,970 $ 26,849

4 unchanged sentences

Other current assets $ 49,090 $ 55,738

Other assets consist of the following as of December 31, 2025 and March 31, 2026 (in thousands):

December 31, 2025 March 31, 2026

Other assets consist of the following as of December 31, 2025 and June 30, 2026 (in thousands):

December 31, 2025 June 30, 2026

Cloud computing arrangements, net of current portion $ 24,941 $ 25,856

2 unchanged sentences

Tuition receivable, net, non-current 6,217 5,997

Deferred contract costs, net of current portion 2,149 3,052

Other investments 2,786 2,766

Deferred contract costs, net of current portion 2,149 2,588

Other 4,976 6,038

5 unchanged sentences

In 2020, pursuant to the terms of the perpetual license agreement associated with the Jack Welch Management Institute, the Company made a final one-time cash payment of approximately $ 25.3 million for the right to continue to use the Jack Welch name and likeness.

As of December 31, 2025 and March 31, 2026, $ 13.2 million and $ 12.8 million, respectively, of this payment

is included in the prepaid expenses, net of current portion balance, as the payment is being amortized over an estimated useful life of 15 years.

As of December 31, 2025 and June 30, 2026, $ 13.2 million and $ 12.4 million, respectively, of this payment is

included in the prepaid expenses, net of current portion balance, as the payment is being amortized over an estimated useful life of 15 years.

Equity Method Investments

2 unchanged sentences

The Company’s investments range from 3 % to 5 % of any partnership’s interest and are accounted for under the equity method.

The following table illustrates changes in the Company’s limited partnership investments for the three months ended March 31, 2025 and 2026 (in thousands):

For the three months ended March 31,

The following table illustrates changes in the Company’s limited partnership investments for the three and six months ended June 30, 2025 and 2026 (in thousands):

For the three months ended June 30, For the six months ended June 30,

2025 2026 2025 2026

Limited partnership investments, beginning of period $ 13,514 $ 9,508 $ 13,428 $ 9,472

5 unchanged sentences

Non-current tuition receivable, net, represents tuition that the Company expects to collect, but not within the next 12 months.

Deferred Contract Costs

The Company defers certain commissions paid in the ANZ segment to third-party international recruitment agents and amortizes these costs over the period of benefit.

Other Investments

1 unchanged sentence

These investments are accounted for at cost less impairment as they do not have readily determinable fair value.

Deferred Contract Costs

The Company defers certain commissions paid in the ANZ segment to third-party international recruitment agents and amortizes these costs over the period of benefit.

Other is comprised primarily of deferred financing costs associated with the Company’s credit facility, deferred accreditation costs associated with the ANZ segment, and refundable security deposits associated with the Company’s leased campus and office space.

Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses consist of the following as of December 31, 2025 and March 31, 2026 (in thousands):

December 31, 2025 March 31, 2026

Accounts payable and accrued expenses consist of the following as of December 31, 2025 and June 30, 2026 (in thousands):

December 31, 2025 June 30, 2026

Trade payables $ 55,986 $ 56,744

Accrued compensation and benefits (1)

42,083 50,825

Accrued student obligations and other 7,722 9,600

Accounts payable and accrued expenses $ 105,791 $ 117,169

_________________________________________

(1) Accrued compensation and benefits as of June 30, 2026 includes a $ 13.9 million casual academic employee back-pay reserve related to the ANZ segment.

Refer to Note 16 for additional information on the reserve.

Long-Term Debt

On October 18, 2024, the Company entered into an amended credit facility (the “Amended Credit Facility”), which provides for a senior secured revolving credit facility (the “Revolving Credit Facility”) in an aggregate principal amount of up to $ 250 million.

(A) $ 300 million and (B) 100 % of the Company’s consolidated EBITDA (earnings before interest, taxes, depreciation, amortization, and noncash charges, such as stock-based compensation) calculated on a trailing four-quarter basis and on a pro forma basis, and (y) if such Incremental Facility is incurred in connection with a permitted acquisition or other permitted investment, any amounts so long as the Company’s leverage ratio (calculated on a trailing four-quarter basis) on a pro forma basis will be no greater than 1.75 :1.00.

The Amended Credit Facility provides the Company with an option, subject to obtaining additional loan commitments and satisfaction of certain conditions, to increase the commitments under the Revolving Credit Facility or establish one or more incremental term loans (each, an “Incremental Facility”) in the future in an aggregate amount of up to the sum of (x) the greater of (A) $ 300 million and (B) 100 % of the Company’s consolidated EBITDA (earnings before interest, taxes, depreciation, amortization, and noncash charges, such as stock-based compensation) calculated on a trailing four-quarter basis and on a pro forma basis, and (y) if such Incremental Facility is incurred in connection with a permitted acquisition or other permitted investment, any amounts so long as the Company’s leverage ratio (calculated on a trailing four-quarter basis) on a pro forma basis will be no greater than 1.75 :1.00.

In addition, the Amended Credit Facility provides for a subfacility for borrowings in certain foreign currencies in an amount equal to the U.S.

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Coverage ratio is defined as the ratio of trailing four-quarter EBITDA and rent expense to trailing four-quarter interest and rent expense.

As of December 31, 2025 and March 31, 2026, the Company was in compliance with all covenants of the Amended Credit Facility and had no borrowings outstanding under the Revolving Credit Facility.

During the three months ended March 31, 2025 and 2026, the Company paid $ 0.1 million and $ 0.1 million, respectively, of interest and unused commitment fees related to its Revolving Credit Facility.

As of December 31, 2025 and June 30, 2026, the Company was in compliance with all covenants of the Amended Credit Facility and had no borrowings outstanding under the Revolving Credit Facility.

During the six months ended June 30, 2025 and 2026, the Company paid $ 0.3 million and $ 0.3 million, respectively, of interest and unused commitment fees related to its Revolving Credit Facility.

Other Long-Term Liabilities

Other long-term liabilities consist of the following as of December 31, 2025 and March 31, 2026 (in thousands):

December 31, 2025 March 31, 2026

Other long-term liabilities consist of the following as of December 31, 2025 and June 30, 2026 (in thousands):

December 31, 2025 June 30, 2026

Contract liabilities, net of current portion $ 35,577 $ 36,113

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Equity Awards

The following table sets forth the amount of stock-based compensation expense recorded in each of the expense line items for the three months ended March 31, 2025 and 2026 (in thousands):

For the three months ended March 31,

The following table sets forth the amount of stock-based compensation expense recorded in each of the expense line items for the three and six months ended June 30, 2025 and 2026 (in thousands):

For the three months ended June 30, For the six months ended June 30,

2025 2026 2025 2026

Instructional and support costs $ 1,969 $ 1,147 $ 4,256 $ 2,891

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Stock-based compensation expense, net of tax $ 4,317 $ 3,639 $ 8,353 $ 7,620

During the three months ended March 31, 2025 and 2026, the Company recorded income tax expense of $ 12.3 million and $ 9.5 million, respectively.

Income tax expense for the three months ended March 31, 2025 and 2026 include windfall tax impacts of approximately $ 0.5 million and $ 2.6 million, respectively, related to share-based payment arrangements.

The Company had no unrecognized tax benefits as of December 31, 2025 and March 31, 2026.

During the six months ended June 30, 2025 and 2026, the Company recorded income tax expense of $ 25.4 million and $ 24.2 million, respectively.

Income tax expense for the six months ended June 30, 2025 and 2026 include windfall tax benefits of approximately $ 0.4 million and $ 2.6 million, respectively, related to share-based payment arrangements.

The Company had no unrecognized tax benefits as of December 31, 2025 and June 30, 2026.

Interest and penalties, including those related to uncertain tax positions, are included in the provision for income taxes in the unaudited condensed consolidated statements of income.

The Company paid $ 1.9 million and $ 2.4 million in income taxes during the three months ended March 31, 2025 and 2026, respectively.

The Company paid $ 29.2 million and $ 29.1 million in income taxes during the six months ended June 30, 2025 and 2026, respectively.

The tax years since 2022 remain open for federal tax examination, the tax years since 2021 remain open to examination by certain states, and the tax years since 2021 remain open to examination by foreign taxing jurisdictions in which the Company is subject to taxation.

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On a monthly basis, the CODM reviews budget-to-actual, latest forecast-to-actual, and year-over-year actual variances when reviewing segment performance and making decisions about the allocation of resources to each segment.

A summary of financial information by reportable segment for the three months ended March 31, 2025 is presented in the following table (in thousands):

A summary of financial information by reportable segment for the three months ended June 30, 2025 is presented in the following table (in thousands):

Higher Education Australia/New Zealand Education Technology Services Total

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Enterprise shared services allocation 15,036 5,515 1,715 22,266

Segment income (loss) from operations $ 29,956 $ ( 2,096 ) $ 13,848 $ 41,708

Segment income from operations $ 20,759 $ 12,756 $ 15,028 $ 48,543

Unallocated expenses

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Consolidated income from operations $ 45,760

Other expense ( 315 )

Consolidated income before income taxes $ 45,445

A summary of financial information by reportable segment for the three months ended June 30, 2026 is presented in the following table (in thousands):

Higher Education Australia/New Zealand (1)

Education Technology Services Total

Revenues $ 220,526 $ 74,384 $ 42,354 $ 337,264

Segment expenses

Direct segment expenses 174,122 67,834 20,883 262,839

Enterprise shared services allocation 14,029 5,548 1,903 21,480

Segment income from operations $ 32,375 $ 1,002 $ 19,568 $ 52,945

Unallocated expenses

Restructuring costs ( 2,465 )

Consolidated income from operations $ 50,480

Other income 1,351

Consolidated income before income taxes $ 51,831

A summary of financial information by reportable segment for the three months ended March 31, 2026 is presented in the following table (in thousands):

________________________________________

(1) Australia/New Zealand direct segment expenses and segment income from operations for the three months ended June 30, 2026 include a $ 13.9 million charge related to a casual academic employee back-pay reserve.

Refer to Note 16 for additional information on the reserve.

A summary of financial information by reportable segment for the six months ended June 30, 2025 is presented in the following table (in thousands):

Higher Education Australia/New Zealand Education Technology Services Total

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Enterprise shared services allocation 30,550 10,620 3,381 44,551

Segment income from operations $ 50,715 $ 10,660 $ 28,876 $ 90,251

Unallocated expenses

Restructuring costs ( 4,697 )

Consolidated income from operations $ 85,554

Other income 1,896

Consolidated income before income taxes $ 87,450

A summary of financial information by reportable segment for the six months ended June 30, 2026 is presented in the following table (in thousands):

Higher Education Australia/New Zealand (1)

Education Technology Services Total

Revenues $ 433,117 $ 126,204 $ 83,871 $ 643,192

Segment expenses

Direct segment expenses 345,741 116,150 40,591 502,482

Enterprise shared services allocation 29,499 11,059 4,020 44,578

Segment income (loss) from operations $ 57,877 $ ( 1,005 ) $ 39,260 $ 96,132

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Consolidated income before income taxes $ 94,121

The following table presents a schedule of significant non-cash items included in segment income (loss) from operations by reportable segment for the three months ended March 31, 2025 and 2026 (in thousands):

For the three months ended March 31,

________________________________________

(1) Australia/New Zealand direct segment expenses and segment loss from operations for the six months ended June 30, 2026 include a $ 13.9 million charge related to a casual academic employee back-pay reserve.

Refer to Note 16 for additional information on the reserve.

The following table presents a schedule of significant non-cash items included in segment income (loss) from operations by reportable segment for the three and six months ended June 30, 2025 and 2026 (in thousands):

For the three months ended June 30, For the six months ended June 30,

2025 2026 2025 2026

Depreciation and amortization

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There have been no material developments in the litigation and other legal proceedings that are described in our Annual Report on Form 10-K for the year ended December 31, 2025, other than as described below.

As disclosed in its Quarterly Report on Form 10-Q for the period ended March 31, 2026, the Company experienced a cybersecurity incident on February 25, 2026 (the “Incident”).

After detecting unusual activity that day within its U.S.-based network environment, the Company promptly isolated the affected portion of the environment and shut off access to contain the threat and minimize impact.

Core business functions remained operational, as the majority of staff and student platforms are hosted in separate environments.

The Company immediately took steps to further secure its systems and initiated a formal investigation of the Incident, with assistance from third-party experts.

By proactively taking certain systems offline, the Company prevented the encryption of its data that could have limited access to its systems, and therefore the Company was able to resume normal operations in less than one week.

The Incident affected only parts of the Company’s U.S.-based network environment and did not affect the Company’s Australia and New Zealand operations or our ETS operations, including Sophia Learning.

The Company worked with a third-party vendor to identify individuals whose information was contained in the files involved in the Incident and notified those individuals and relevant regulatory authorities in accordance with law.

In connection with the Incident, the Company is aware of the filing of a number of putative class action lawsuits in which the Company has been named as a defendant.

The complaints advance a range of common-law claims stemming from the alleged exposure of personal information contained in the files involved in the cybersecurity incident.

On June 26, 2026, the suits were consolidated under the matter Courtney Hampton v.

Strategic Education, Inc.

(In re Strategic Education, Inc.

Data Breach Litigation) , No.

1:26-cv-01526-AJT-WEF, in the U.S.

District Court for the Eastern District of Virginia.

The Company intends to defend against these claims vigorously.

Because of the many questions of fact and law that may arise, the Company is unable to predict the final outcome of the litigation.

At the date of this report, it is not practicable to determine the financial impact arising from this matter.

Accordingly, no provision has been recognized in the condensed consolidated financial statements.

Further, the Company maintains insurance coverage that is expected to apply to potential losses related to this matter.

The Company will continue to assess the matter and will recognize a provision if an obligation becomes probable and can be reliably measured.

On April 20, 2021, Capella University received a letter from the U.S.

Department of Education (“Department of Education” or the “Department”) referencing Wright, et al.

Capella Education Co., et al.

(subsequently captioned Ornelas, et al.

Capella, et al.

), United States District Court for the District of Minnesota, Case No.

18-cv-1062, and indicating that the Department would require a fact-finding process pursuant to the borrower defense to repayment regulations to determine the validity of more than

1,000 borrower defense applications that have been submitted regarding Capella University.

According to the Department, some of the applications allege similar claims as in the Wright matter concerning alleged misrepresentations of the length of time to complete doctoral programs.

Capella University subsequently received approximately 500 applications for borrower defense to repayment.

Capella University contested each claim for defense to repayment in individualized responses with supporting evidence, the last of which was sent to the Department in August 2021.

Since that time, Capella University has not received any communication from the Department related to the set of borrower defense claims received in 2021, nor has Capella University received indication that any of these claims has been evaluated on the facts presented and adjudicated on the merits.

On June 22, 2022, in litigation in which Capella University is not a party, Sweet, et al.

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If the Department were to successfully seek recovery for the amounts of discharged loans from Capella University in future proceedings, any such recovery could have a material adverse effect on our business.

As a result of the Fifth Circuit’s August 7, 2023 nationwide injunction of the 2022 Borrower Defense to Repayment (“BDTR”) Regulations, the Department announced that while it would not adjudicate any borrower defense applications under the 2022 Borrower Defense to Repayment Regulations unless and until the effective date is reinstated, it will continue to adjudicate applications under a prior version of the rule if required pursuant to a court ordered settlement.

For the Sweet Post-Class Applicants, the Department agreed to adjudicate such claims under the 2016 BDTR Rule, and pursuant to the Sweet settlement terms, if the Department did not adjudicate the applications by January 28, 2026, it would provide the applicants “Full Settlement Relief” (i.e., federal student loan(s) associated with the borrower’s attendance at the school will be discharged, the Department will refund any amounts paid to the Department on those loans, and the credit tradeline for those loans will be deleted from the

borrower’s credit report).

As a result of the Fifth Circuit’s August 7, 2023 nationwide injunction of the 2022 Borrower Defense to Repayment (“BDTR”) Regulations, the Department announced that while it would not adjudicate any borrower defense applications under the 2022 BDTR Regulations unless and until the effective date is reinstated, it will continue to adjudicate applications under a prior version of the rule if required pursuant to a court ordered settlement.

In November 2025, the Department requested an 18-month extension of the January 28, 2026 deadline for the Post-Class Applicants, which was denied by the district court;

the Department requested reconsideration in January 2026, which was also denied.

The Department has appealed to the Ninth Circuit;

an emergency motion to stay the district court order pending appeal was denied in March 2026, and the appeal is proceeding on the merits.

In 2023, the Department informed institutions that it would be notifying most schools of all applications received by the Department from June 23, 2022 to November 15, 2022 (constituting Sweet Post-Class Applicants) in a single send (and anticipated completing notification to all schools by approximately April 2024).

For further discussion of the Sweet litigation, please refer to Note 21, Litigation, in the consolidated financial statements appearing in Part II, Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2025.

In March 2024, the Australian Fair Work Ombudsman (“FWO”) issued a compliance notice to Torrens University (“Torrens”), alleging that Torrens had underpaid an academic employee for work performed between 2018 and 2024 in violation of the Higher Education Industry – Academic Staff Award (the “Award”), which prescribes minimum wages for academic employees under Australian law.

The Department appealed to the Ninth Circuit;

an emergency motion to stay the district court order pending appeal was denied in March 2026, and the Ninth Circuit affirmed the district court’s decision in July 2026.

On January 25, 2024, Capella University received notice that the Department received approximately 6,700 borrower defense to repayment applications with claims for forgiveness of loans taken out at the university and filed between June 23, 2022 and November 15, 2022.

On February 1, 2024, Strayer University received notice that the Department received approximately 1,900 borrower defense to repayment applications with claims for forgiveness of loans taken out at the university and filed between June 23, 2022 and November 15, 2022.

In the notices received, the Department indicated that:

(1) the notification was occurring prior to any substantive review of the applications as well as their adjudication;

(2) it would send the applications to Capella University and Strayer University in batches of 500 per week;

(3) it is optional for institutions to respond to the applications;

and (4) not responding will result in no negative inference by the Department.

The Department has also explained that it will separately decide whether to seek recoupment on any approved claim and that any recoupment actions the Department chooses to initiate will have their own notification and response processes, which include providing additional evidence to the institution.

The Department has indicated that an institution will learn of the Department’s determination only if it approves a BDTR application and the Department seeks recoupment.

In relation to the separate 2021 notice received by Capella University, the Department indicated there were more than 1,000 applications pending, but the Company only ever received approximately 500 actual claims, and after an exhaustive review and

response process the Company believes that none properly stated a claim for loan forgiveness.

Following the Department’s 2024 notices, Capella University received approximately 6,770 applications, and Strayer University received approximately 1,870 applications.

Each university provided a response to the applications it received within the time allowed by the Department.

In March 2026, the Department announced it would resume notifying institutions of borrower defense to repayment applications.

The Department subsequently informed Capella University that it would be receiving 2,126 borrower defense claims between May and July 2026 and informed Strayer University that it would be receiving 2,125 borrower defense claims between May and July 2026.

For further discussion of the Department’s March 2026 announcement, please refer to the “Borrower Defenses to Repayment” section of Note 17, Regulation, of this report.

At this time, the Company is unable to predict whether the Department will grant BDTR relief for the claims noticed on January 25, 2024, February 1, 2024, May-July 2026, or at any other time, or if so, whether it will seek recoupment from Capella University or Strayer University.

If the Department were to seek recoupment, Capella University and Strayer University would dispute and defend against such efforts.

However, if the Department were to successfully seek recovery for the amounts of discharged loans from Strayer University and Capella University in future proceedings, any such recovery could have a material adverse effect on our business.

On March 19, 2024, the Australian Fair Work Ombudsman (“FWO”) issued a compliance notice to Torrens University (“Torrens”), alleging that Torrens had underpaid an academic employee for work performed between 2018 and 2024 in violation of the Higher Education Industry – Academic Staff Award (the “Award”), which prescribes minimum wages for academic employees under Australian law.

The compliance notice interpreted the Award to require that institutions compensate the academic employee for the marking of student assessments separately from and in addition to standard lecture delivery rates.

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The Full Court concluded that, under the Award, lecture delivery rates compensate only for limited associated working time and that ordinary marking work generally constitutes a separate activity requiring separate payment.

Torrens filed an Application for Special Leave to appeal the Full Court’s decision to the High Court of Australia.

Torrens filed an Application for Special Leave to appeal the Full Court’s decision to the High Court of Australia, which remains pending.

The Company is unable to predict the final outcome of the litigation.

At the date of this report, it is not practicable to determine the financial impact arising from this matter.

Accordingly, no provision has been recognized in the condensed consolidated financial statements.

The Company will continue to assess the matter and will recognize a provision if an obligation becomes probable and can be reliably measured.

The Company’s higher education institutions are subject to uncertain and varying laws and regulations, and any changes to these laws or regulations or their application to us may materially adversely affect our business, financial condition, and results of operations.

Although the compliance notice and related litigation concern a single academic employee, the Full Court’s interpretation of the Award applies broadly to similarly situated casual academic staff.

Following the Full Court’s March 2026 decision, the Company began to compensate its casual academic staff for marking hours related to 2026 academic terms and evaluated this matter, including the likelihood and potential magnitude of loss related to historical periods.

As of March 31, 2026, it was not practicable to determine the financial impact of the matter, and no provision was recognized related to historical periods.

While the Company continues to believe it has strong arguments on the merits, during the second quarter of 2026 it obtained further legal advice assessing the likelihood of the High Court granting Special Leave to hear the case on appeal.

The Company also further evaluated the FWO’s pattern of entering into settlements with other employers in the Australian higher education sector involving similar employee compensation matters.

Drawing on its understanding of these settlements, the Company has explored whether remediation could be performed solely on a prospective basis, but ultimately concluded that retrospective remediation was likely to be required.

Based on these factors, the Company concluded that a loss was probable as of June 30, 2026.

In addition, the Company gathered data and completed an analysis of historical marking hours that provided a reliable basis for estimating its back-pay exposure for the period from 2020 through 2025, reflecting the period for which amounts may be payable to casual academic staff, and concluded that the loss was reasonably estimable.

Accordingly, during the second quarter of 2026, the Company recorded a reserve of $ 13.9 million, consisting of estimated back pay, related payroll taxes and benefits, and interest, within accounts payable and accrued expenses in the unaudited condensed consolidated balance sheets, with a corresponding charge to instructional and support costs in the unaudited condensed consolidated statements of operations.

The $ 13.9 million reserve reflects the Company’s best estimate of the potential loss for the period from 2020 through 2025.

The ultimate resolution of the litigation, including the outcome of Torrens’ Application for Special Leave and any subsequent proceedings before the High Court, remains uncertain, and the actual loss could differ materially from the amount reserved.

The Company will continue to monitor developments, including the status of the underlying litigation, and will adjust the reserve as additional information becomes available.

Other than as set forth below, there have been no material changes to the laws and regulations affecting the Company’s higher education institutions that are described in our Annual Report on Form 10-K for the year ended December 31, 2025.

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The Department informed institutions that these borrower defense applications are unrelated to the Sweet settlement and will be adjudicated under the relevant BDTR rule based on the date loans were first disbursed to the borrower.

Specifically, the Department indicated that it is notifying institutions of applications that will be adjudicated under the 1994 BDTR Rule or the 2016 BDTR Rule.

Specifically, the Department indicated that as of March 30, 2026 it is notifying institutions of applications that will be adjudicated under the 1994 BDTR Rule or the 2016 BDTR Rule.

Under the 1994 BDTR Rule, for Direct Loans disbursed prior to July 1, 2017, a borrower may assert a defense to repayment if the institution committed an act or omission that relates to the making of the loan for enrollment at the school or the provision of educational services for which the loan was provided, and would give rise to a cause of action against the institution under applicable state law.

Under the 2016 BDTR Rule, for Direct Loans disbursed after July 1, 2017, a borrower may assert a defense to repayment if the institution committed an act or omission that relates to the

making of the loan for enrollment at the school or the provision of educational services for which the loan was provided and:

Under the 2016 BDTR Rule, for Direct Loans disbursed after July 1, 2017, a borrower may assert a defense to repayment if the institution committed an act or omission that relates to the making of the loan for enrollment at the school or the provision of educational services for which the loan was provided and:

(1) the borrower obtained a state or federal court judgment against the institution;

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The Department indicated in the Electronic Announcement it has attempted to batch the applications in a single send and to issue batches of notifications periodically.

The Department indicated that “[w]hen [the Department] begins notifying institutions of cases that fall under the 2019 Regulation, we will issue a future announcement with additional details around the notification and adjudication process.”

State Authorization Reciprocity Agreement (SARA)

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Such proposals included circumstances under which an institution may be denied participation in SARA or have its participation limited as a result of investigations or adverse actions against it related to the institution’s academic quality, financial stability, or student consumer protection issues.

On April 24, 2026, NC-SARA will hold its public comment forum to seek input on these proposed changes.

In addition to the public comment forum, NC-SARA permits submission of written comments in two rounds:

between March 10, 2026 and April 9, 2026 (now closed), and between June 9, 2026 and July 7, 2026.

On April 24, 2026, NC-SARA held its public comment forum to seek input on these proposed changes.

In addition to the public comment forum, NC-SARA permitted submission of written comments in two rounds:

between March 10, 2026 and April 9, 2026, and between June 9, 2026 and July 7, 2026.

NC-SARA’s regional compacts/regional steering committees and the NC-SARA board of directors will vote on each proposal presented by September 2, 2026, and October 28, 2026, respectively.

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Negotiated Rulemaking

On July 24, 2025, the Department announced its intention to establish two negotiated rulemaking committees to prepare proposed regulations implementing the One Big Beautiful Bill Act (“OBBBA”) and related Trump administration priorities.

One committee, the Reimagining and Improving Student Education (“RISE”) Committee, addressed federal student loan-related changes and met for two multi-day sessions between September 2025 and November 2025;

the committee reached consensus on draft regulatory language, and the Department released final regulations on May 1, 2026.

Specifically, the final regulations implement the statutory loan-related changes reflected in OBBBA which among other things includes, with limited grandfathering, new annual, aggregate and lifetime loan limits for graduate students and professional students, proportional adjustment of annual loan limits for students enrolled less than full time, and the phasing out of Federal Direct PLUS loans for graduate students and professional students.

The final regulations define “graduate student” and “professional student” for purposes of such changes.

“Graduate student” is defined as “[a] student enrolled in a program of study that is above the baccalaureate level and awards a graduate credential (other than a professional degree) upon completion of the program.” “Professional student” is defined as “[a] student enrolled in a program of study that awards a professional degree upon completion of the program,” and the final regulations clarify that a professional degree is a degree that:

(1) signifies both completion of the academic requirements for beginning practice in a given profession and a level of professional skill beyond that normally required for a bachelor’s degree;

(2) is generally at the doctoral level, and that requires at least six academic years of postsecondary education coursework for completion, including at least two years of post-baccalaureate level coursework;

(3) generally requires professional licensure to begin practice;

and (4) includes a four-digit program CIP code in certain specified fields (pharmacy, dentistry, veterinary medicine, chiropractic, law, medicine, optometry, osteopathic medicine, podiatry, theology, and clinical psychology).

On June 29, 2026, following litigation challenging the Department’s approved list of professional degree programs which resulted in a preliminary stay ( American Association of Nurse Practitioners et al v.

McMahon et al (D.D.C.)), the Department released via Electronic Announcement an interim updated list of programs that are considered “professional,” including some graduate-level nursing programs.

The Department stated in the Electronic Announcement that it “is confident that the professional degree definition in the RISE Final rule is lawful and will continue to defend it,” and indicated that “[t]hese interim administrative designations are provided solely to facilitate implementation of the Court’s order [granting a preliminary stay] and may change as litigation in the case proceeds.”

The Accountability in Higher Education and Access through Demand-driven Workforce Pell (“AHEAD”) Committee addressed Workforce Pell, institutional and programmatic accountability, and other issues, and met for two multi-day sessions between December 2025 and January 2026.

The committee reached consensus on the Workforce Pell and accountability packages.

On March 9, 2026, the Department published proposed Workforce Pell regulations consistent with the consensus language and accepted public comment through April 8, 2026.

The proposed regulations implement the One Big Beautiful Bill Act’s (“OBBBA”) provisions regarding establishment of a new Workforce Pell program beginning July 1, 2026, that will permit Pell Grants to be used for certain short-term workforce training programs offered by eligible institutions;

On May 19, 2026, the Department published final Workforce Pell regulations.

The regulations implement OBBBA provisions regarding establishment of a new Workforce Pell program beginning July 1, 2026, that will permit Pell Grants to be used for certain short-term workforce training programs offered by eligible institutions;

and changes to the Pell Grant program such that effective July 1, 2026, eligible students will be ineligible for a Pell Grant if their non-federal aid equals or exceeds their cost of attendance.

The proposed regulations also invite public comment on certain topics, including the framework for measuring workforce program outcomes and approaches to prevent an institution’s “gaming” of the Pell Grant limitation provision.

On April 17, 2026, the Department released proposed regulations on the accountability packages consistent with the consensus language and will accept public comment until May 20, 2026.

The accountability packages implement the OBBBA’s separate accountability framework, effective July 2026, for Federal Direct Loan eligibility at the program level, with separate frameworks based on program type and in certain cases cohort size.

One-year failures of the relevant metrics trigger risk notifications;

the Department is required to provide an appeals process for institutions, with eligibility continuing during appeals.

On June 29, 2026, the Department released final regulations on the accountability packages, which it named the Student Tuition and Transparency System (STATS) and Earnings Accountability rule.

Most provisions take effect July 1, 2027.

Certain changes take effect earlier, including changes relating to reporting obligations beginning July 1, 2026, and, effective August 31, 2026, amendments to program participation agreements to incorporate the STATS and Earnings Accountability framework as a condition of Direct Loan eligibility.

The accountability packages implement the OBBBA’s separate accountability framework for Federal Direct Loan eligibility at the program level, with separate frameworks based on program type and in certain cases cohort size.

One-year failures of the relevant metrics trigger risk notifications (i.e., warnings to students and prospective students that the program could become ineligible for the Direct Loan program based on future earnings premium measures).

Programs that fail the relevant metrics in two out of three consecutive years become ineligible for Federal Direct Loans, and ineligible programs may reapply after two years per Secretary-established rules.

The proposed regulations permit an institution with a one-year failure of the relevant metrics to seek a “voluntary program closeout” under which it would meet certain program discontinuation requirements in exchange for retaining Direct Loan eligibility for no more than three years while currently enrolled students complete their program.

Under the proposed regulations, if more than half of an institution’s Title IV recipients or more than half of its Title IV, HEA funds are from low-earning programs in two out of any three consecutive award years, the Department would place the institution on a provisional program participation status and each of the institution’s low-earning outcome programs would be ineligible for all Title IV, HEA funds.

The Company is unable to predict the ultimate outcome of the rulemaking process or what guidance the Department may issue regarding how schools are to implement OBBBA’s legislative changes.

Institutions may appeal Department determinations that a program has failed on the basis of an error in the Department’s calculation of the program’s earnings premium measure, and program eligibility continues during the appeal process.

The final regulations also permit an institution with a one-year failure of the relevant metrics to conduct a voluntary “orderly program closure” with the Secretary’s approval under which it would meet certain program discontinuation requirements in exchange for retaining Direct Loan eligibility for the lesser of three years or the program’s full-time length, while currently enrolled students complete their program.

If more than half of an institution’s Title IV recipients or more than half of its Title IV, HEA funds are from failing programs in two out of any three consecutive award years, the Department will place the institution on a provisional program participation status and each of the institution’s failing programs will be ineligible for all Title IV, HEA funds (including, for example, Pell Grants).

The Department has indicated it intends to publish the first round of metrics in the 2027-2028 award year, with program sanctions first going into effect in 2028-2029.

Additionally, to harmonize with existing rules, the final regulations rescind some aspects of the existing gainful employment regulation, including the debt/earnings calculations.

On January 26, 2026, the Department announced its intent to establish the Accreditation, Innovation, and Modernization negotiated rulemaking committee to develop proposed regulations on accreditation-related topics.

The committee convened April 13-17, 2026 and will reconvene May 18-22, 2026.

The committee convened for two multi-day sessions in April 2026 and May 2026 and reached consensus on a package of rules.

The consensus draft reflects a reorientation of federal accreditation policy, including expansion of federal oversight and policy direction, introduction of competitive dynamics among accreditors, and an emphasis on student outcomes, cost effectiveness and transparency.

The rules will be subject to public comment and are expected to be effective July 1, 2027 (assuming proposed regulations are published by November 1, 2026).

In July 2026, the Department published an updated regulatory agenda, which identifies 19 areas of focus at various stages of the rulemaking process.

Anticipated future regulatory actions may address, among other topics, accreditation (discussed above);

Title IV eligibility issues (including change of ownership, cash management, administrative capability standards, program length requirements, financial responsibility requirements, and 90/10);

Title VI topics, and Title IX.

Under Title VI of the Civil Rights Act of 1964, institutions receiving federal financial assistance are prohibited from discriminating on the basis of race, color, or national origin.

17 unchanged sentences

Court of Appeals for the Fourth Circuit stayed the injunction and, on February 6, 2026, vacated the injunction and remanded the case to the district court.

After the district court denied another injunction, plaintiffs voluntarily dismissed the complaint without prejudice “in light of specific representations made by the government .

about the narrow scope of the Executive Orders challenged in this case and the decision of the Fourth Circuit accepting those representations and recognizing that narrow scope” (i.e., that the Executive Orders did not seek to establish new law related to DEI).

The district court terminated the case on June 30, 2026.

On February 14, 2025, the Department of Education issued a DCL setting forth the anti-discrimination obligations of institutions that receive federal financial assistance.

7 unchanged sentences

In August 2025, the U.S.

District Court for the District of Maryland vacated the DCL, FAQs, and a related certification requirement.

District Court for the District of Maryland vacated the DCL, FAQs, and a related certification

On October 15, 2025, the Department filed a notice of appeal to the U.S.

3 unchanged sentences

The Department has continued to initiate additional Title VI investigations, which are not predicated on the vacated DCL or FAQs, but instead are based on the Department’s interpretation of existing statutory and regulatory authority.

On June 16, 2026, the Department announced a Civil Rights Partnership with the U.S.

Department of Justice.

The interagency agreement would:

“(1) reinforce and strengthen respective enforcement processes and procedures to ensure vigorous enforcement of laws;

(2) increase cross-agency administrative alignment of civil rights enforcement policies and programmatic requirements;

and (3) provide process improvements by leveraging the expertise and capacity of both agencies to provide aggressive and focused civil rights expert oversight of America’s education institutions.”

Australian and New Zealand Regulation

8 unchanged sentences

The legislation, which does not address numerical limits on international students, contains several measures to reform key legislative frameworks for education providers and aims to strengthen the integrity and regulation of the international education sector within Australia as well as transnational education and offshore delivery.

On July 3, 2026 the Australian Government announced that the 2027 National Planning Level would be consistent with 2026, with no increase in numbers.

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

What changed 10-Q

Item 1. Financial Statements