What changed in this filing

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Item 1A. Risk Factors

2025-11-26 compared with 2024-12-05 · 53 added, 49 removed, 328 unchanged (24% of the section changed)

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These requirements, which are subject to frequent change, cover virtually every aspect of our schools’ operations.

The approvals granted by these entities permit our schools to operate and to participate in a variety of government-sponsored financial aid programs, including Title IV Programs and veterans’ programs, from which we derived approximately 78% of our revenues, on a cash basis, in fiscal year 2024.

If our institutions fail to comply with any of these regulatory requirements, our regulators could take an array of actions, including, without limitation, issuing fines or penalties, requiring reimbursement for discharged loan obligations, requiring letter(s) of credit, halting certain business practices, or suspending or terminating our eligibility to participate in the Title IV Programs.

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and comply with the 90/10 rule, the substantial misrepresentation rules or the incentive compensation rule.

Certain actions or reviews may also be triggered automatically based on ED’s standards.

Certain actions or reviews may also be triggered

automatically based on ED’s standards.

Types of sanctions or limitations ED might impose upon an institution include, without limitation:

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These regulations also are frequently challenged through litigation, creating significant uncertainty as to when and what part of the regulations have taken effect, how they should be implemented, and how they will be interpreted and enforced.

New Borrower Defense to Repayment, Financial Responsibility, or Gainful Employment regulations, in particular, may increase risks of financial liability or reputational harm.

We devote significant effort to understanding the effects of these regulations on our business and to developing

compliant solutions that also are congruent with our business, culture, and mission to serve our students and industry relationships.

Borrower Defense to Repayment, Financial Responsibility, or Gainful Employment regulations, in particular, or rulemakings promulgated in response to OBBBA, may increase risks of financial liability or reputational harm.

We devote significant effort to understanding the effects of these regulations on our business and to developing compliant solutions that also are congruent with our business, culture, and mission to serve our students and industry relationships.

However, we cannot predict with certainty how these new and developing regulatory requirements will be applied or whether each of our schools will be able to comply with all of the requirements in the future.

Significant negotiated rulemakings that could materially and adversely affect our business are discussed in “Business - Regulatory Environment - Title IV Program Rulemakings.”

Congress may change the law or reduce funding for or place restrictions on the use of funds received through Title IV Programs, which could reduce our student population, revenues and/or profit margin.

Congress periodically revises the HEA and other laws, and enacts new laws, governing Title IV Programs and determining the funding level for each Title IV Program.

Congress most recently reauthorized the HEA in 2008 and, despite repeated attempts, has not completed a full reauthorization since then.

In addition to HEA reauthorization, policies directly related to Title IV Programs and funding for those programs may be impacted by the annual budget and appropriations process as well as by other legislation.

In this regard, on July 4, 2025, OBBBA was signed into law.

Under OBBBA, Congress approved amendments to the HEA that, among other things, revised certain Title IV Programs, including provisions that condition the eligibility of educational programs upon compliance with earnings benchmarks that compare former students’ median earnings after completing a program to the median earnings of working adults with lesser credentials and other provisions that will limit or reduce the amount of Title IV Program funding that may be available to some higher education students.

OBBBA also enacted regulatory changes to the “borrower defense to repayment” and “closed school loan discharge” regulations.

The impact of these changes and other changes to the HEA enacted as part of OBBBA, and of related future regulatory and policy changes, is unknown at this time.

Any action by Congress that significantly affects Title IV Programs or the ability of our schools or students to receive funding through these programs or places restrictions on the use of funds received by an institution through these programs could have a material adverse effect on our operations, cash flows, results of operations, or financial condition.

Such action may occur during HEA reauthorization as part of separate technical amendments to the HEA or during Congress’s annual budget and appropriations cycle.

Additionally, a shutdown of government agencies responsible for administering student financial aid programs under Title IV, including ED, could lead to delays in student eligibility determinations and delays in origination and disbursement of government-funded student loans to our students.

These uncertainties could reduce our student population, revenues and/or profit margin.

The loss of funds from Veterans' benefits programs could materially and adversely affect our business.

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(ii) a reduction in appropriations for veterans’ benefits programs, or an extended government shutdown;

(iii) an inability to secure approvals in one or more states, delays in the process for obtaining approvals, or the revocation of an approval;

(iii) an inability to secure approvals in one or more states, delays in

the process for obtaining approvals, or the revocation of an approval;

(iv) changes in the interpretation and application of the 85/15 rule, which prohibits paying VA benefits to students enrolling in a program where more than 85% of the students enrolled in that program have any portion of their tuition, fees, or other charges paid for them by the institution or the VA;

and (v) changes in the interpretation and application of the VA rules governing the classification and treatment of blended coursework, and the eligibility of such coursework for veterans’ benefits programs.

Congress periodically revises the HEA and other laws, and enacts new laws, governing Title IV Programs and determining the funding level for each Title IV Program.

Congress most recently reauthorized the HEA in 2008.

Despite repeated attempts, Congress has not completed a full reauthorization since then.

Additionally, a shutdown of government agencies, such as ED, responsible for administering student financial aid programs under Title IV could lead to delays in student eligibility determinations and delays in origination and disbursement of government-funded student loans to our students.

Such action may occur during HEA reauthorization as part of separate technical amendments to the HEA or during Congress’ annual budget and appropriations cycle.

These uncertainties could reduce our student population, revenues and/or profit margin.

Continued or increased examination of the for-profit education sector could result in further legislation, appropriations, regulations, and enforcement actions that could materially and adversely affect our business.

Over the last decade, Congress and state legislatures have focused significantly on for-profit education institutions, specifically regarding participation in Title IV Programs and DOD or VA oversight of tuition assistance for military service members attending for-profit colleges.

In recent years, federal and state governments and agencies have focused significantly on for-profit education institutions, specifically regarding participation in Title IV Programs and DOD or VA oversight of tuition assistance for military service members attending for-profit colleges.

Continued or increased Congressional activity could result in the enactment of more stringent legislation, further rulemakings affecting participation in Title IV Programs and other governmental actions, increasing regulation of the for-profit sector.

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Our business could be harmed if we experience a disruption in our ability to process student loans under the Federal Direct Loan Program.

Because all Title IV Program student loans (other than Perkins loans) are now processed under the Direct Loan (“DL”) program, any disruption in our ability to process student loans through the DL program, either because of administrative challenges on our part or the inability of ED to process the increased volume of loans through the DL program on a timely

basis, could impact our students’ ability to timely obtain their student loans and have a material adverse effect on our operations, cash flows, results of operations, or financial condition.

Because all Title IV Program student loans (other than Perkins loans) are processed under the Direct Loan (“DL”) program, any disruption in our ability to process student loans through the DL program, either because of administrative challenges on our part or the inability of ED to process the increased volume of loans through the DL program on a timely basis, could impact our students’ ability to timely obtain their student loans and have a material adverse effect on our operations, cash flows, results of operations, or financial condition.

Government and regulatory agencies and third parties may conduct compliance reviews, bring claims or initiate litigation against us.

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Moreover, we may be subject to program reviews from ED, audits by the ED Office of Inspector General, or a compliance audit as a condition of participation in the Higher Education Emergency Relief Fund (“HEERF”).

We are also subject to various lawsuits, investigations and claims, covering a wide range of matters, including, but not limited to, alleged violations of federal and state laws, including consumer protection laws applicable to activities of postsecondary educational institutions, false claims made to the federal government and routine employment matters.

We are also subject to various lawsuits, investigations and claims covering a wide range of matters, including, but not limited to, alleged violations of federal and state laws, including consumer protection laws applicable to activities of post-secondary educational institutions, false claims made to the federal government and routine employment matters.

We may also face borrower defense to repayment claims or complaints from students or prospective students.

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We may be required to pay substantial damages, settlement costs or fines or penalties.

Such costs and expenses could have a material adverse effect on our business, cash flows, results of operations and financial condition and could also result in negative publicity that could negatively affect student enrollment.

affect student enrollment.

An adverse outcome in any of these matters could also materially and adversely affect our licenses, accreditation and eligibility to participate in Title IV Programs.

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Department of Justice, the SEC, the FTC, state governmental agencies and attorneys general, ED and other federal agencies.

These allegations have attracted adverse media coverage and have been the subject of legislative hearings and regulatory actions at both the federal and state levels, focusing not only on the individual schools but in some cases on the for-profit postsecondary education sector as a whole.

These investigations of, or regulatory actions against, specific companies in the education and training services industry could have a negative impact on our industry as a whole and on our stock price.

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Due to state budget constraints and changes in the regulatory environment in some of the states in which we operate, it is possible that some states may reduce the number of employees in, or curtail the operations of, the state education agencies that authorize our schools.

programs, a change of control or the hiring of new admissions representatives, could prevent us from making such changes or delay our ability to make such changes, or could require substantial additional costs to accommodate such delay.

A delay or refusal by any state education agency in approving any changes in our operations that require state approval, such as the opening of a new campus, the introduction of new programs or the revision of existing programs, a change of control or the hiring of new admissions representatives, could prevent us from making such changes or delay our ability to make such changes, or could require substantial additional costs to accommodate such delay.

State education agencies that authorize our schools continue to revise or issue new regulations requiring significant additional reporting and monitoring of student outcomes.

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If we acquire an institution that participates in Title IV Program funding or open an additional location, we must obtain approval from ED and applicable state education agencies and accrediting agencies in order for the institution or additional location to be able to operate and participate in Title IV Programs.

An acquisition can result in the temporary suspension of the acquired institution’s participation in Title IV Programs and opening an additional location can result in a delay of the campus’ participation in Title IV Programs unless we submit a timely and materially complete application for approval of the acquisition or the opening of the new location.

An acquisition can result in the temporary suspension of

the acquired institution’s participation in Title IV Programs and opening an additional location can result in a delay of the campus’ participation in Title IV Programs unless we submit a timely and materially complete application for approval of the acquisition or the opening of the new location.

If we were unable to timely establish or re-establish the state authorization, accreditation or ED certification of the acquired institution or obtain approval for the new location, our ability to operate the acquired institution or open the additional location as planned or to realize the anticipated benefits from the acquisition of that institution or the opening of the additional location could be significantly impaired.

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A student may only use Title IV Program funds to pay the costs associated with enrollment in an eligible educational program offered by an institution participating in Title IV Programs.

Our expansion plans are based, in part, on our ability to add new

educational programs at our existing institutions.

Our expansion plans are based, in part, on our ability to add new educational programs at our existing institutions.

Generally, an institution that is eligible to participate in Title IV Programs, and is not provisionally certified, may obtain ED approval if the new program is licensed by the applicable state agency and accredited by an agency recognized by ED.

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Failure to comply with private education loan requirements may impair our business.

Concorde offers students the opportunity to finance all or part of their education using institutional credit, including retail installment contracts.

UTI and Concorde offer students the opportunity to finance all or part of their education using institutional credit, including retail installment contracts.

If such arrangements qualify as a “private education loan” under federal law, a multitude of regulations must be followed, including from ED and the CFPB.

State attorneys general and other regulators also scrutinize such arrangements.

State attorneys general and other regulators also scrutinize

such arrangements.

Failure to comply with regulatory requirements could have a material adverse effect on our business, cash flows, results of operations and financial condition, and could also result in negative publicity that could negatively affect student enrollment.

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For additional information regarding the Company’s BDR claims (and responses thereto), please see “Business - Regulatory Environment - Borrower Defense to Repayment.”

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

If our students are unable to obtain professional licenses or certifications required for employment in their chosen fields of study, our reputation may suffer and we may face declining enrollments and revenue or be subject to student litigation.

Certain of our students require or desire professional licenses or certifications to obtain employment in their chosen fields.

Their success in obtaining such licensure or certification depends on several factors, including the individual merits of the student, whether the institution and the program were approved by the relevant government or by the relevant state regulatory authorities, whether the program from which the student graduated meets all professional licensure educational requirements and whether the program is accredited in accordance with state requirements.

If one or more state professional licensing authorities refuses to recognize our graduates for professional licensure in the future based on factors relating to us or our programs, the potential growth of our programs would be negatively affected, which could have a material adverse effect on our business, financial condition and results of operations.

In addition, we could be exposed to litigation that would force us to incur legal and other expenses that could have a material adverse effect on our business, cash flows, results of operations and financial condition, and could also result in negative publicity that could negatively affect student enrollment.

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

federal elections.

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Additionally, to be eligible for Title IV Program funding, a new school or campus would have to be certified by ED.

We cannot be sure that we will be able to identify suitable expansion opportunities to maintain or accelerate our current growth rate or that we will be able to successfully integrate or profitably operate any new schools or campuses.

We cannot be sure that

we will be able to identify suitable expansion opportunities to maintain or accelerate our current growth rate or that we will be able to successfully integrate or profitably operate any new schools or campuses.

Our failure to effectively identify, establish, obtain necessary regulatory approvals and manage the operations of newly established schools or campuses could slow our growth and make any newly established schools or campuses more costly to operate than we have historically experienced.

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We believe that our enrollment, which tends to be counter cyclical, is affected by changes in economic conditions.

During periods when the unemployment rate declines or remains stable, prospective students have more employment options and

recruiting new students has traditionally been more challenging.

During periods when the unemployment rate declines or remains stable, prospective students have more employment options and recruiting new students has traditionally been more challenging.

In addition, affordability concerns associated with increased living expenses, relocation expenses and the availability of full- and part-time jobs for students attending classes have made it more challenging for us to attract and retain students.

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These relationships enable us to support enrollment in our core programs by attracting students through brand name recognition and the associated prospect of high-quality employment opportunities.

Additionally, these relationships allow us to diversify funding sources, expand the scope and increase the number of programs we offer and reduce our costs and capital expenditures due to the fact that, pursuant to the terms of the underlying contracts with manufacturer brand partners, we provide a variety of specialized training programs and typically do so using tools, equipment and vehicles provided by the manufacturer brand partners.

partners, we provide a variety of specialized training programs and typically do so using tools, equipment and vehicles provided by the manufacturer brand partners.

These relationships also provide additional incremental revenue opportunities from training the employees of our industry customers.

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The amount of our outstanding indebtedness could have an adverse effect on our operations and liquidity, including by, among other things:

(i) making it more difficult for us to pay or refinance our debts as they become due during adverse economic and industry conditions, because we may not have sufficient cash flows to make our scheduled debt payments;

(i) making it more difficult for us to pay or refinance our debts as they become due during adverse economic and industry

conditions, because we may not have sufficient cash flows to make our scheduled debt payments;

(ii) causing us to use a larger portion of our cash flows to fund interest and principal payments, thereby reducing the availability of cash to fund working capital, capital expenditures and other business activities;

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Competition could decrease our market share and create tuition pricing concerns.

The postsecondary education market is highly competitive.

The post-secondary education market is highly competitive.

We continue to experience a high level of competition for higher quality students not only from similar programs, but also from the overall employment market and the military.

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The awareness of our programs among high school graduates, military personnel and working adults seeking advanced training is critical to the continued acceptance and growth of our programs.

Factors that could impact our ability to increase

such awareness include:

Factors that could impact our ability to increase such awareness include:

continued school district limitations on access to students by for-profit institutions;

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The complexity of these marketing efforts contributes to their cost.

If we are unable to advertise

and market our institutions and programs successfully, our ability to attract and enroll new students could be materially adversely affected and, consequently, our financial performance could suffer.

If we are unable to advertise and market our institutions and programs successfully, our ability to attract and enroll new students could be materially adversely affected and, consequently, our financial performance could suffer.

We use marketing tools such as the Internet, radio, television and print media advertising to promote our institutions and programs.

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and our ability to adequately train and motivate our admissions representatives.

If we are unable to hire, develop or retain quality admissions representatives, the effectiveness of our student recruiting efforts would be adversely affected.

are unable to hire, develop or retain quality admissions representatives, the effectiveness of our student recruiting efforts would be adversely affected.

An increase in interest rates would increase the cost of servicing our debt and could reduce our profitability.

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The proprietary loan program may also be subject to oversight by the CFPB, which could result in additional reporting requirements or increased scrutiny.

Other proprietary postsecondary institutions have been subject to information requests from the CFPB with regard to their private student loan programs.

Other proprietary post-secondary institutions have been subject to information requests from the CFPB with regard to their private student loan programs.

The possibility of litigation, and the associated cost, are risks associated with the proprietary loan program.

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Any resulting impairment charge is recognized as an expense in the period in which impairment is identified.

Our total recorded goodwill of $28.5 million as of September 30, 2024 resulted from our MMI, MIAT and Concorde acquisitions.

Our total recorded goodwill of $28.5 million as of September 30, 2025 resulted from our Motorcycle Mechanics Institute and Marine Mechanics Institute, MIAT College of Technology and Concorde acquisitions.

We perform our annual goodwill impairment assessment as of August 1 of each fiscal year.

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We teach our UTI and Concorde programs at campus locations in Jacksonville, Orlando, Miramar, and Tampa, Florida, all areas that can experience tropical storms and hurricanes, severe storms, floods, coastal storms, tornadoes and power outages.

We also have seven campus locations in California and seven campus locations in Texas, all in areas that have historically been susceptible to severe weather events or other natural disasters.

We also have seven campus locations in California and six campus locations in Texas, all in areas that have historically been susceptible to severe weather events or other natural disasters.

If floods, fire, inclement weather, including extreme rain, wind, heat, or cold, or accidents due to human error were to occur and cause damage to our campus facilities, or limit the ability of our students or faculty to participate in or contribute to our academic programs or our ability to comply with federal and state educational requirements or our agreements with our vendors, our business may be adversely effected, especially if such events were to occur in the midst of ongoing academic programs during an academic cycle.

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Moreover, damage to or total destruction of our campus facilities from various weather events may not be covered in whole or in part by any insurance we may have.

Increased scrutiny and changing expectations from regulators, investors, industry customers, employees, and others regarding our environmental, social and governance (“ESG”) practices and reporting may cause us to incur additional costs, devote additional resources, expose us to new or additional risks, or harm our reputation.

Companies across all industries are facing increasing scrutiny related to their ESG practices and reporting.

Regulators, investors, industry customers, employees and other stakeholders have focused increasingly on ESG practices and placed increasing importance on the implications and social cost of their investments, purchases and other interactions with companies.

If our ESG practices and reporting do not meet investor, industry customer, employee or stakeholder expectations and standards, which continue to evolve, our brand, reputation, and student and employee retention may be negatively impacted.

We also expect to incur additional costs and devote additional resources to monitor, report and implement various ESG practices, including as a result of regulatory developments.

Public health pandemics, epidemics or outbreaks, such as the COVID-19 pandemic, could have a material adverse effect on our business and operations.

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Our expenses, however, do not generally vary at the same rate as changes in our student population and revenues and, as a result, such expenses do not fluctuate significantly on a quarterly basis.

quarterly fluctuations in results of operations to continue as a result of seasonal enrollment patterns.

We expect quarterly fluctuations in results of operations to continue as a result of seasonal enrollment patterns.

Such patterns may change, however, as a result of acquisitions, new school openings, new program introductions and increased enrollments of adult students.

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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-K

Item 1A. Risk Factors