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What changed in LINCOLN EDUCATIONAL SERVICES CORP's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of LINCOLN EDUCATIONAL SERVICES CORP's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+494 added−482 removedSource: 10-K (2025-03-04) vs 10-K (2024-03-05)

Top changes in LINCOLN EDUCATIONAL SERVICES CORP's 2024 10-K

494 paragraphs added · 482 removed · 338 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

150 edited+63 added−80 removed168 unchanged
Biggest changeIn turn, the new and proposed regulations are likely to increase the possibility that our schools could be subject to additional reporting requirements, to potential liabilities and sanctions such as letter of credit amounts, and to potential loss of Title IV eligibility if our efforts to modify our operations to comply with the new regulations are unsuccessful. Substantial Misrepresentation.
Biggest change“Business - Regulatory Environment – Restrictions on payment of Commissions, Bonuses and Other Incentive Payments.” We cannot predict the timing and scope of any regulations or guidance the DOE might issue on these or other topics (or whether the DOE under the new administration will issue such regulations or guidance), but new regulations or guidance on these or other topics could increase the possibility that our schools could be subject to additional reporting requirements, to potential liabilities and sanctions such as letter of credit requirements, and to potential loss of Title IV eligibility if our efforts to modify our operations to comply with any new requirements are unsuccessful which could have a significant impact on our business and results of operations.
Department of Defense (“DOD”), the VA and DOE to establish “Principles of Excellence” (“Principles”), based on certain guidelines set forth in the Executive Order, to apply to educational institutions receiving federal funding for service members, veterans and family members. As requested, we provided written confirmation of our intent to comply with the Principles to the VA in June 2012.
Department of Defense (“DOD”), the VA and DOE to establish “Principles of Excellence” (the “Principles”), based on certain guidelines set forth in the Executive Order, to apply to educational institutions receiving federal funding for service members, veterans and family members. As requested, we provided written confirmation of our intent to comply with the Principles to the VA in June 2012.
The DOE will certify an institution to participate in Title IV Programs only after reviewing and approving an institution’s application to participate in Title IV Programs. The DOE defines an institution to consist of both a main campus and its additional locations, if any.
The DOE will certify an institution to participate in Title IV Programs only after reviewing and approving the institution’s application to participate in Title IV Programs. The DOE defines an institution to consist of both a main campus and its additional locations, if any.
The final regulations also expand the types of conditions the DOE can impose on provisionally certified institutions including, for example, restrictions on the addition of new programs or locations, restrictions on the rate of growth or new enrollment of students or of Title IV volume, restrictions on the institution providing a teach-out on behalf of another institution, restrictions on the acquisition of another participating institution (including financial protection requirements), additional reporting requirements, limitations on entering into certain written arrangements with institutions or entities for providing part of an educational program, requirements to submit marketing and recruiting materials to DOE for approval (if the institution is alleged or found to have engaged in substantial misrepresentations to students, engaged in aggressive recruiting practices, or violated incentive compensation rules), reporting requirements for institutions that received a government formal inquiry such as a subpoena related to its marketing or recruitment or its federal financial aid, and other potential conditions imposed by the DOE.
The final regulations also expand the types of conditions that the DOE can impose on provisionally certified institutions including, for example, restrictions on the addition of new programs or locations, restrictions on the rate of growth or new enrollment of students or of Title IV volume, restrictions on the institution providing a teach-out on behalf of another institution, restrictions on the acquisition of another participating institution (including financial protection requirements), additional reporting requirements, limitations on entering into certain written arrangements with institutions or entities for providing part of an educational program, requirements to submit marketing and recruiting materials to DOE for approval (if the institution is alleged or found to have engaged in substantial misrepresentations to students, engaged in aggressive recruiting practices, or violated incentive compensation rules), reporting requirements for institutions that received a government formal inquiry such as a subpoena related to its marketing or recruitment or its federal financial aid, and other potential conditions imposed by the DOE.
Second, the proposed settlement included new procedures for DOE to resolve pending borrower defense claims associated with other schools not on the list.
Second, the proposed settlement included new procedures for the DOE to resolve pending borrower defense claims associated with other schools not on the list.
The DOE’s regulations prohibit an institution that participates in Title IV Programs from engaging in substantial misrepresentation of the nature of its educational programs, financial charges, graduate employability or its relationship with the DOE.
Substantial Misrepresentation. The DOE’s regulations prohibit an institution that participates in Title IV Programs from engaging in substantial misrepresentation of the nature of its educational programs, financial charges, graduate employability or its relationship with the DOE.
If the DOE determines that an institution does not satisfy the DOE's financial responsibility standards, depending on its composite score and other factors, that institution may establish its eligibility to participate in the Title IV Programs on an alternative basis by, among other things: • posting a letter of credit in an amount equal to at least 50% of the total Title IV Program funds received by the institution during the institution's most recently completed fiscal year; or • posting a letter of credit in an amount equal to at least 10% of the Title IV Program funds received by the institution during its most recently completed fiscal year accepting provisional certification; complying with additional DOE monitoring requirements and agreeing to receive Title IV Program funds under an arrangement other than the DOE's standard advance funding arrangement.
If the DOE determines that an institution does not satisfy the DOE's financial responsibility standards, depending on its composite score and other factors, that institution may establish its eligibility to participate in the Title IV Programs on an alternative basis by, among other things: • posting a letter of credit in an amount equal to at least 50% of the total Title IV Program funds received by the institution during the institution's most recently completed fiscal year; or • posting a letter of credit in an amount equal to at least 10% of the Title IV Program funds received by the institution during its most recently completed fiscal year accepting provisional certification status; complying with additional DOE monitoring requirements and agreeing to receive Title IV Program funds under an arrangement other than the DOE's standard advance funding arrangement.
Nature of Federal and State Support for Post-Secondary Education As noted above, the federal government provides a substantial part of the financial support for post-secondary education through Title IV Programs, in the form of grants and loans to students who can use those funds at any institution that has been certified as eligible by the DOE.
Nature of Federal and State Support for Post-Secondary Education As noted above, the federal government provides a substantial part of the financial support for postsecondary education through Title IV Programs, in the form of grants and loans to students who can use those funds at any institution that has been certified as eligible by the DOE.
The final regulations allow the DOE to place institutions on provisional certification if, among other reasons, the institution does not meet financial responsibility factors or administrative capability standards, if the institution is required by the DOE to submit a letter of credit as a result of a mandatory or discretionary triggering event, or if the DOE deems the institution to be at risk of closure.
The final regulations allow the DOE to place institutions on provisional certification status if, among other reasons, the institution does not meet financial responsibility factors or administrative capability standards, if the institution is required by the DOE to submit a letter of credit as a result of a mandatory or discretionary triggering event, or if the DOE deems the institution to be at risk of closure.
The HEA limits participation in Title IV Programs by institutions whose former students defaulted on the repayment of federally guaranteed or funded student loans above a prescribed rate (the “cohort default rate”). The DOE calculates these rates based on the number of students who have defaulted, not the dollar amount of such defaults.
Student Loan Defaults. The HEA limits participation in Title IV Programs by institutions whose former students defaulted on the repayment of federally guaranteed or funded student loans above a prescribed rate (the “cohort default rate”). The DOE calculates these rates based on the number of students who have defaulted, not the dollar amount of such defaults.
Provisional certification makes it easier for the DOE to revoke or decline to renew our Title IV eligibility if the DOE chooses to take such an action against us and other provisionally certified for-profit schools without undergoing a formal administrative appeal process.
Provisional certification status makes it easier for the DOE to revoke or decline to renew our Title IV eligibility if the DOE chooses to take such an action against us and other provisionally certified for-profit schools without undergoing a formal administrative appeal process.
The DOE typically provides provisional certification to an institution following a change in ownership resulting in a change of control and also may provisionally certify an institution for other reasons, including, but not limited to, noncompliance with certain standards of administrative capability and financial responsibility.
The DOE typically provides provisional certification status to an institution following a change in ownership resulting in a change of control and also may provisionally certify an institution for other reasons, including, but not limited to, noncompliance with certain standards of administrative capability and financial responsibility.
Our institutions’ 90/10 Rule percentages also will increase when the ARPA amendments to the 90/10 Rule take effect to the extent that students eligible to receive military and veteran education assistance enroll and use their financial assistance at our institutions.
Our institutions’ 90/10 Rule percentages also will continue to increase when the ARPA amendments to the 90/10 Rule take effect to the extent that students eligible to receive military and veteran education assistance enroll and use their financial assistance at our institutions.
Significant factors relating to Title IV Programs that could adversely affect us include the following: Congressional Action. Political and budgetary concerns significantly affect Title IV Programs. Congress periodically revises the HEA and other laws governing Title IV Programs.
Significant factors relating to Title IV Programs that could adversely affect us include the following: Congressional and Presidential Action. Political and budgetary concerns significantly affect Title IV Programs. Congress periodically revises the HEA and other laws governing Title IV Programs.
In August 2022, Lincoln and three other schools were granted permission to intervene in the lawsuit to protect their interests in the finalization and implementation of any settlement agreement the court might approve.
In August 2022, Lincoln and three other schools were granted permission to intervene in the lawsuit to protect their interests in the finalization and implementation of any settlement agreement that the court might approve.
The ARPA does not identify the specific federal funding programs that will be covered by this provision, but it is expected to include funding from federal student aid programs such as the veterans’ benefits programs, which include the Post-9/11 GI Bill and Veterans Readiness and Employment services, from which we derived approximately 5.5% of our revenues on a cash basis in fiscal year 2023.
The ARPA does not identify the specific federal funding programs that will be covered by this provision, but it is expected to include funding from federal student aid programs such as the veterans’ benefits programs, which include the Post-9/11 GI Bill and Veterans Readiness and Employment services, from which we derived approximately 5.5% of our revenues on a cash basis in fiscal year 2024.
The DOE also commenced a new negotiated rulemaking process with meetings scheduled for January through March 2024 on several topics including state authorization, accreditation, return of unearned Title IV Program funds for students who withdraw from school without completing their educational programs, cash management, and distance education. See Part I, Item 1.
The DOE also commenced a new negotiated rulemaking process with meetings conducted from January through March 2024 on several topics including state authorization, accreditation, return of unearned Title IV Program funds for students who withdraw from school without completing their educational programs, cash management, and distance education. See Part I, Item 1.
As noted above, the DOE published final regulations on November 1, 2022 with a general effective date of July 1, 2023 on a variety of topics, including closed school loan discharges (and, among other things, the reintroduction of automatic closed school loan discharges), which will make it easier for borrowers to obtain discharges of their loans and for the DOE to recover liabilities from institutions.
As noted above, the DOE published final regulations on November 1, 2022 with a general effective date of July 1, 2023 on a variety of topics, including closed school loan discharges (and, among other things, the reintroduction of automatic closed school loan discharges), which would make it easier for borrowers to obtain discharges of their loans and for the DOE to recover liabilities from institutions.
In addition, each school must ensure that Title IV Program funds are properly accounted for and disbursed in the correct amounts to eligible students and provide reports on recipient data. Other Financial Assistance Programs Some of our students receive financial aid from federal sources other than Title IV Programs, such as programs administered by the VA.
In addition, each school must ensure that Title IV Program funds are properly accounted for and disbursed in the correct amounts to eligible students and provide reports on recipient data. 9 Index Other Financial Assistance Programs Some of our students receive financial aid from federal sources other than Title IV Programs, such as programs administered by the VA.
The DOE could attempt to use an institution’s provisional certification as a basis for imposing additional conditions or restrictions on the institution. 11 Index The DOE published final regulations on a variety of topics on October 31, 2023, including but not limited to rules to authorize additional conditions and restrictions on provisionally certified institutions. See Part I, Item 1.
The DOE could attempt to use an institution’s provisional certification status as a basis for imposing additional conditions or restrictions on the institution. 11 Index On October 31, 2023, the DOE published final regulations on a variety of topics including, but not limited to, regulations to authorize additional conditions and restrictions on provisionally certified institutions. See Part I, Item 1.
Our expansion plans are based, in part, on our ability to add new educational programs at our existing schools. 20 Index Some of the state education agencies and our accrediting commission also have requirements that may affect our schools' ability to open a new campus, establish an additional location of an existing institution or begin offering a new educational program.
Our expansion plans are based, in part, on our ability to add new educational programs at our existing schools. Some of the state education agencies and our accrediting commission also have requirements that may affect our schools' ability to open a new campus, establish an additional location of an existing institution or begin offering a new educational program.
Our recruiting efforts are conducted by a group of approximately 260 campus-based and field representatives who meet directly with prospective students during presentations conducted at high schools, in the prospective students’ homes or during their visit to one of our campuses. We also recruit adult career-seekers or career-changers through our campus-based representatives.
Our recruiting efforts are conducted by a group of approximately 278 campus-based and field representatives who meet directly with prospective students during presentations conducted at high schools, in the prospective students’ homes or during their visit to one of our campuses. We also recruit adult career-seekers or career-changers through our campus-based representatives.
During the fiscal year ended December 31, 2023, we recruited approximately 21% of our students directly out of high school. Field sales continue to be a large part of our business and developing local community relationships is one of our most important recruiting functions. Student Admissions, Enrollment and Retention Admissions.
During the fiscal year ended December 31, 2024, we recruited approximately 21% of our students directly out of high school. Field sales continue to be a large part of our business and developing local community relationships is one of our most important recruiting functions. Student Admissions, Enrollment and Retention Admissions.
On May 19, 2023, the DOE published a notice of proposed rulemaking in the Federal Register that included proposed regulations on topics including gainful employment, financial responsibility, administrative capability, certification, and ability to benefit. On October 10, 2023, the DOE published the final gainful employment regulations which have a general effective date of July 1, 2024.
On May 19, 2023, the DOE published a notice of proposed rulemaking in the Federal Register that included proposed regulations on topics including gainful employment, financial responsibility, administrative capability, certification, and ability to benefit. On October 10, 2023, the DOE published the final gainful employment regulations which had a general effective date of July 1, 2024.
The three appealing schools also sought to stay the implementation of the settlement while their appeals were being decided, but the requested stay was denied by the district court, the Ninth Circuit, and the U.S. Supreme Court. As a result, the DOE is implementing the settlement relief while the three schools appeal the settlement’s final approval.
The three schools appealing also sought to stay the implementation of the settlement while their appeals were being decided, but the requested stay was denied by the district court, the Ninth Circuit, and the U.S. Supreme Court. As a result, the DOE began implementing the settlement relief while the three schools appeal the settlement’s final approval.
See Part I, Item 1. “Business - Regulatory Environment – Gainful Employment.” On October 31, 2023, the DOE published final regulations regarding financial responsibility, administrative capability, certification standards and procedures, and ability to benefit. The regulations have a general effective date of July 1, 2024. See Part I, Item 1.
See Part I, Item 1. “Business - Regulatory Environment – Gainful Employment.” On October 31, 2023, the DOE published final regulations regarding financial responsibility, administrative capability, certification standards and procedures, and ability to benefit. The regulations had a general effective date of July 1, 2024. See Part I, Item 1.
Generally, a termination of Title IV Program eligibility extends for 18 months before the institution may apply for reinstatement of its participation. Some of the findings in the annual Title IV Program compliance audits for some of our institutions resulted in the DOE placing those institutions on provisional certification. See Part I. Item 1.
Generally, a termination of Title IV Program eligibility extends for 18 months before the institution may apply for reinstatement of its participation. Some of the findings in the annual Title IV Program compliance audits for some of our institutions resulted in the DOE placing those institutions in provisional certification status. See Part I. Item 1.
The DOE could also place the institution on provisional certification status and/or transfer the institution to the reimbursement or cash monitoring system of receiving Title IV Program funds, under which an institution must disburse its own funds to students and document the students' eligibility for Title IV Program funds before receiving such funds from the DOE.
The DOE could also place the institution in provisional certification status and/or transfer the institution to the reimbursement or cash monitoring system of receiving Title IV Program funds, under which an institution must disburse its own funds to students and document the students' eligibility for Title IV Program funds before receiving such funds from the DOE.
“Business - Regulatory Environment – Negotiated Rulemaking.” The regulations have a general effective date of July 1, 2024 and expand the grounds for placing institutions on provisional certification, expand the types of conditions the DOE may impose on provisionally certified institutions, and expand the number of requirements contained in the institution’s program participation agreement with the DOE (including, among other requirements, an obligation to comply with all state laws related to closure).
“Business - Regulatory Environment – Negotiated Rulemaking.” The regulations had a general effective date of July 1, 2024 and expand the grounds for placing institutions on provisional certification status, expand the types of conditions the DOE may impose on provisionally certified institutions, and expand the number of requirements contained in the institution’s program participation agreement with the DOE (including, among other requirements, an obligation to comply with all state laws related to closure).
We are required to comply with the Principles to continue recruitment activities on military installations. Additionally, there is a requirement to execute a memorandum of understanding (“MOU”) with the DOD as well as with certain individual installations. Each of our institutions has an MOU with the DOD.
We are required to comply with the Principles to continue recruitment activities at military installations. Additionally, there is a requirement to execute a memorandum of understanding (“MOU”) with the DOD as well as with certain individual installations. Each of our institutions has an MOU with the DOD.
Borrower Defense to Repayment Regulations. The DOE’s current Borrower Defense to Repayment regulations establish processes for borrowers to receive from the DOE a discharge of the obligation to repay certain Title IV Program loans based on certain acts or omissions by the institution or a covered party.
Borrower Defense to Repayment Regulations. The DOE’s Borrower Defense to Repayment (“BDR”) regulations establish processes for borrowers to receive from the DOE a discharge of the obligation to repay certain Title IV Program loans based on certain acts or omissions by the institution or a covered party.
Some states prescribe standards of financial responsibility and mandate that institutions post surety bonds. We have posted surety bonds on behalf of our schools and education representatives with multiple states in an aggregate amount of approximately $16.0 million.
Some states prescribe standards of financial responsibility and mandate that institutions post surety bonds. We have posted surety bonds on behalf of our schools and education representatives with multiple states in an aggregate amount of approximately $17.0 million .
In fiscal year 2023, we derived approximately 5.5% of our revenues, on a cash basis, from veterans’ benefits programs, which include the Post-9/11 GI Bill and Veteran Readiness and Employment services.
In fiscal year 2024, we derived approximately 5.5% of our revenues, on a cash basis, from veterans’ benefits programs, which include the Post-9/11 GI Bill and Veteran Readiness and Employment services.
“Financial Statements and Supplemental Data - Notes to Consolidated Financial Statements – Note 6 Leases and Note 8 Real Estate Transactions.” 1 Index Business Strategy We strive to strengthen our position as a leading provider of career‑oriented post-secondary education by continuing to pursue the following strategy: • Increase Operating Efficiency .
“Financial Statements and Supplemental Data - Notes to Consolidated Financial Statements – Note 6 Leases and Note 8 Real Estate Transactions.” 1 Index Business Strategy We strive to strengthen our position as a leading provider of career‑oriented postsecondary education by continuing to pursue the following strategy: • Increase Operating Efficiency .
Our marketing and recruiting efforts are targeted at prospective students who are high school graduates entering the workforce, or who are currently underemployed or unemployed and require additional training to enter or re-enter the workforce. Marketing and Advertising.
Our marketing and recruiting efforts are targeted at prospective students who are high school graduates entering the workforce, or who are currently underemployed or unemployed and require additional training to enter or re-enter the workforce. 3 Index Marketing and Advertising.
The new regulations increase the possibility that our schools could remain on provisional certification, be subject to additional reporting requirements and other conditions and sanctions such as letter of credit requirements and be subject to a potential loss of Title IV eligibility if our efforts to comply with the new regulations are unsuccessful.
The new regulations increase the possibility that our schools could remain in provisional certification status, be subject to additional reporting requirements and other conditions and sanctions such as letter of credit requirements and be subject to a potential loss of Title IV eligibility if our efforts to comply with the new regulations are unsuccessful.
On January 13, 2023, Lincoln appealed the settlement’s final approval to the U.S. Court of Appeals for the Ninth Circuit. Two of the three other intervenor schools also appealed on the same date.
On January 13, 2023, Lincoln appealed the settlement’s final approval to the U.S. Court of Appeals for the Ninth Circuit. Two of the three other intervener schools also appealed on the same date.
The DOE has placed three of our institutions on provisional certification based on findings in recent audits of the institutions’ Title IV compliance that the DOE alleges identified deficiencies in regulations related to DOE regulations regarding an institution’s level of administrative capability. See Part I. Item 1.
The DOE has placed all of our institutions in provisional certification status based on findings in recent audits of the institutions’ Title IV compliance that the DOE alleges identified deficiencies in regulations related to DOE regulations regarding an institution’s level of administrative capability. See Part I. Item 1.
“Risk Factors.” Competition The for-profit, post-secondary education industry is highly competitive and highly fragmented with no one provider controlling significant market share. Direct competition between career-oriented schools like ours and traditional four-year colleges or universities is limited.
“Risk Factors.” Competition The for-profit, postsecondary education industry is highly competitive and highly fragmented with no one provider controlling significant market share. Direct competition between career-oriented schools like ours and traditional four-year colleges or universities is limited.
As a post-secondary educational institution, we are subject to a broad range of consumer protection and other laws, such as recruiting, marketing, the protection of personal information, student financing and payment servicing, enforced by federal agencies such as the FTC and CFPB and various state agencies and state attorneys general.
As a postsecondary educational institution, we are subject to a broad range of consumer protection and other laws, such as recruiting, marketing, the protection of personal information, student financing and payment servicing, enforced by federal agencies such as the FTC and CFPB and various state agencies and state attorneys general.
An institution with revenues exceeding 90% for a single fiscal year will be placed on provisional certification and may be subject to other enforcement measures, including a potential requirement to submit a letter of credit. See Part I, Item 1.
An institution with revenues exceeding 90% for a single fiscal year will be placed in provisional certification status and may be subject to other enforcement measures, including a potential requirement to submit a letter of credit. See Part I, Item 1.
“Business - Regulatory Environment – Borrower Defense to Repayment Regulations.” 19 Index In March 2022, the DOE published guidance about the enforcement of the requirements regarding substantial misrepresentations.
“Business - Regulatory Environment – Borrower Defense to Repayment Regulations.” In March 2022, the DOE published guidance about the enforcement of the requirements regarding substantial misrepresentations.
Accrediting Commission of Career Schools and Colleges Reaccreditation Dates School Last Accreditation Letter Next Accreditation Philadelphia, PA 2 September 1, 2023 May 1, 2028 Union, NJ 1 May 24, 2019 February 1,2024 4 Mahwah, NJ 1 October 15, 2020 August 1, 2024 4 Melrose Park, IL 2 December 2, 2019 November 1, 2024 4 Denver, CO 1 September 6, 2022 February 1, 2026 Columbia, MD 2 September 1, 2023 February 1, 2027 Grand Prairie, TX 1 May 26, 2022 August 1, 2026 Allentown, PA 2 May 23, 2023 January 1, 2027 Nashville, TN 1 March 8, 2023 May 1, 2027 Indianapolis, IN May 23, 2023 November 1, 2026 New Britain, CT December 1, 2023 January 1, 2028 Shelton, CT 2 May 23, 2023 January 1, 2028 Queens, NY 1 September 4, 2018 June 1, 2023 4 East Windsor, CT 2 October 17, 2017 February 1, 2023 4 South Plainfield, NJ 1 December 2, 2019 August 1, 2024 4 Iselin, NJ May 15, 2018 May 15, 2023 4 Moorestown, NJ 3 May 15, 2018 May 15, 2023 4 Paramus, NJ 3 May 15, 2018 May 15, 2023 4 Lincoln, RI 3 May 15, 2018 May 15, 2023 4 Summerlin, NV 3 May 15, 2018 May 15, 2023 4 Marietta, GA 3 May 1, 2022 May 1, 2027 East Point, GA 2 December 20, 2023 December 20, 2025 1 Branch campus of main campus in Indianapolis, IN 2 Branch campus of main campus in New Britain, CT 3 Branch campus of main campus in Iselin, NJ 4 Campus going through reaccreditation If one of our schools fails to comply with accrediting commission requirements, the institution and its main and/or branch campuses are subject to the loss of accreditation or may be placed on probation or a special monitoring or reporting status which, if the noncompliance is not resolved, could result in loss of accreditation or restrictions on the addition of new locations, new programs, or other substantive changes.
Accrediting Commission of Career Schools and Colleges Reaccreditation Dates School Last Accreditation Letter Next Accreditation Philadelphia, PA 2 September 1, 2023 May 1, 2028 Union, NJ 1 August 14, 2024 February 1,2029 Mahwah, NJ 1 October 15, 2020 August 1, 2024 4 Melrose Park, IL 2 November 21, 2024 November 1, 2029 Denver, CO 1 September 6, 2022 February 1, 2026 Columbia, MD 2 September 1, 2023 February 1, 2027 Grand Prairie, TX 1 May 26, 2022 August 1, 2026 Allentown, PA 2 May 23, 2023 January 1, 2027 Nashville, TN 1 March 8, 2023 May 1, 2027 Indianapolis, IN May 23, 2023 November 1, 2026 New Britain, CT December 1, 2023 January 1, 2028 Shelton, CT 2 May 23, 2023 September 1, 2028 Queens, NY 1 November 21, 2024 June 1, 2028 East Windsor, CT 2 March 13, 2024 February 1, 2028 South Plainfield, NJ 1 August 14, 2024 August 1, 2029 Iselin, NJ May 15, 2018 May 15, 2023 4 Moorestown, NJ 3 May 28, 2024 May 1, 2028 Paramus, NJ 3 August 14, 2024 May 15, 2028 Lincoln, RI 3 September 4, 2024 May 1, 2028 Marietta, GA 3 May 1, 2022 May 1, 2027 East Point, GA 2 December 20, 2023 December 20, 2025 4 1 Branch campus of main campus in Indianapolis, IN 2 Branch campus of main campus in New Britain, CT 3 Branch campus of main campus in Iselin, NJ 4 Campus going through reaccreditation If one of our schools fails to comply with accrediting commission requirements, the institution and its main and/or branch campuses are subject to the loss of accreditation or may be placed on probation or a special monitoring or reporting status which, if the noncompliance is not resolved, could result in loss of accreditation or restrictions on the addition of new locations, new programs, or other substantive changes.
The Company identifies high-performing employee participants for acceleration training programs to develop internal candidates for succession opportunities in key functions. Labor Relations We believe that we have good relationships with all of our employees. At six of our 21 campuses, the teaching professionals are represented by various unions.
The Company identifies high-performing employee participants for acceleration training programs to develop internal candidates for succession opportunities in key functions. 5 Index Labor Relations We believe that we have good relationships with all of our employees. At seven of our 21 campuses, the teaching professionals are represented by various unions.
The DOE announced at the time it released the final gainful employment regulations that the first official outcome rates will be published in early 2025 and that programs that fail the same gainful employment metric in the first two years the rates are issued will become ineligible in 2026.
The DOE announced at the time it released the final gainful employment regulations that the first official outcome rates would be published in early 2025 and that programs that fail the gainful employment metric in the first two years the rates are issued would become ineligible in 2026.
This means that our institutions will be required to limit the combined amount of Title IV Program funds and applicable “federal funds” revenue in a fiscal year to no more than 90% in a fiscal year as calculated under the rule. Consequently, the ARPA change to the 90/10 Rule is expected to increase the 90/10 Rule calculations at our institutions.
This means that our institutions are now required to limit the combined amount of Title IV Program funds and applicable “federal funds” revenue in a fiscal year to no more than 90% in a fiscal year as calculated under the rule. Consequently, the ARPA change to the 90/10 Rule is expected to increase the 90/10 Rule calculations at our institutions.
Referrals from current students, high school counselors and satisfied graduates and their employers have historically represented approximately 14% of our new student starts. Our school administrators actively work with our current students to encourage them to recommend our programs to prospective students.
Referrals from current students, high school counselors and satisfied graduates and their employers have historically represented approximately 11.0% of our new student starts. Our school administrators actively work with our current students to encourage them to recommend our programs to prospective students.
Our automotive technology programs are 52 to 98 weeks in length, with tuition rates ranging from $26,000 to $46,000. We believe we are a leading provider of automotive technology education in each of our local markets. Graduates of our programs are qualified to obtain entry-level employment ranging from positions as technicians and mechanics to various apprentice level positions.
Our automotive technology programs are 52 to 98 weeks in length, with tuition rates ranging from $27,000 to $42,000. We believe we are a leading provider of automotive technology education in each of our local markets. Graduates of our programs are qualified to obtain entry-level employment ranging from positions as technicians and mechanics to various apprentice level positions.
If provided, this period would provide time for institutions to apply for accreditation from another DOE-recognized accrediting body. The DOE could impose provisional certification and other conditions and restrictions on such institutions during this time period.
If provided, this period would allow time for institutions to apply for accreditation from another DOE-recognized accrediting body. The DOE could impose provisional certification status and other conditions and restrictions on such institutions during this time period.
If one or more of our educational programs were to yield debt-to-earnings rates or a median earnings measure that do not comply with regulatory benchmarks for two of three consecutive years, we would lose Title IV eligibility for each of the impacted educational programs.
If one or more of our educational programs were to yield debt-to-earnings rates or an earnings premium measure that do not comply with regulatory benchmarks for two of three consecutive years, we would lose Title IV eligibility for each of the impacted educational programs.
We offer programs in areas of study that we believe are typically underserved by traditional providers of post-secondary education and for which we believe there exists significant demand among students and employers.
We offer programs in areas of study that we believe are typically underserved by traditional providers of postsecondary education and for which we believe there exists significant demand among students and employers.
Moreover, with the introduction of online education, the number of competitors in each market has increased because students can now attend classes from an online institution. On average, each of our schools has at least three direct competitors and at least a dozen indirect competitors.
Moreover, with online education becoming more prevalent, the number of competitors in each market has increased because students can now attend classes from an online institution. On average, each of our schools has at least three direct competitors and at least a dozen indirect competitors.
In addition, we provide intensive instructional training and continuing education, including quarterly instructional development seminars, annual reviews, technical upgrade training, faculty development plans and weekly staff meetings. 5 Index The Company acknowledges the relevance of managing productivity and efficiency of its workforce.
In addition, we provide intensive instructional training and continuing education, including quarterly instructional development seminars, annual reviews, technical upgrade training, faculty development plans and weekly staff meetings. The Company acknowledges the importance of managing productivity and efficiency of its workforce.
“Business - Regulatory Environment – Financial Responsibility Standards.” In September 2023, the DOE released the final cohort default rates for the 2020 federal fiscal year. These are the most recent final rates published by the DOE. The rates for our existing institutions for the 2020 federal fiscal year were zero.
“Business - Regulatory Environment – Financial Responsibility Standards.” In September 2024, the DOE released the final cohort default rates for the 2021 federal fiscal year. These are the most recent final rates published by the DOE. The rates for our existing institutions for the 2021 federal fiscal year were zero.
We expect borrower defaults to increase during periods after the expiration of the temporary suspension which we expect will result in higher cohort default rates in the future particularly if borrowers do not successfully resume timely repayment of their federal student loans.
We expect borrower defaults to increase during periods after the expiration of the temporary suspension which we expect will result in higher cohort default rates in the future particularly if borrowers do not successfully resume timely repayment of their federal student loans. We cannot predict how high our cohort default rates will increase in the future.
Further, current requirements for student or school participation in Title IV Programs may change or one or more of the present Title IV Programs could be replaced by other programs with materially different student or school eligibility requirements. 12 Index Gainful Employment.
Further, current requirements for student or school participation in Title IV Programs may change or one or more of the present Title IV Programs could be replaced by other programs with materially different student or school eligibility requirements.
The new gainful employment regulations establish rules for annually evaluating each of our educational programs based on the calculation of debt-to-earnings rates (an annual debt-to-earnings rate and a discretionary debt-to-earnings rate) and a median earnings measure.
The new regulations establish rules for annually evaluating each of our educational programs based on the calculation of debt-to-earnings rates (an annual debt-to-earnings rate and a discretionary debt-to-earnings rate) and an earnings premium measure based on an evaluation of median annual earnings.
Our graduates are employed by a wide variety of employers, including residential and commercial construction, telecommunications installation companies and architectural firms. As of December 31, 2023, we offer skilled trades programs at 15 campuses. Automotive Technology. Automotive technology is our second largest area of study, with 31% of our total average student enrollment for the year ended December 31, 2023.
Our graduates are employed by a wide variety of employers, including residential and commercial construction, telecommunications installation companies and architectural firms. As of December 31, 2024, we offered skilled trades programs at 17 campuses. Automotive Technology. Automotive technology is our second largest area of study, with 29% of our total average student enrollment for the year ended December 31, 2024.
For the 2023 fiscal year, we calculated our composite score to be 3.0. Composite scores are subject to determination by the DOE based on its review of our consolidated audited financial statements, but we believe it is likely that the DOE will determine that our institutions comply with the composite score requirement.
For the 2024 fiscal year, we calculated our composite score to be 2.5. Composite scores are subject to determination by the DOE based on its review of our consolidated audited financial statements, but we believe it is likely that the DOE will determine that our institutions comply with the composite score requirement.
The expanded financial responsibility regulations could result in the DOE recalculating and reducing our composite score to account for DOE estimates of potential losses under one or more of the extensive list of triggering circumstances and also could result in the imposition of conditions and requirements, including a requirement to provide one or more letters of credit or other forms of financial protection.
The expanded financial responsibility regulations could result in the DOE recalculating and reducing our composite score to account for DOE estimates of potential losses under one or more of the extensive list of triggering circumstances and also could result in the imposition of conditions and requirements, including a requirement to provide one or more letters of credit or other forms of financial protection. 17 Index Return of Title IV Program Funds.
Our graduates are employed by a wide variety of companies, ranging from automotive and diesel dealers, to independent auto body paint and repair shops to trucking and construction companies. As of December 31, 2023, we offer programs in automotive technology at 12 campuses.
Our graduates are employed by a wide variety of companies, ranging from automotive and diesel dealers, to independent auto body paint and repair shops to trucking and construction companies. As of December 31, 2024, we offered programs in automotive technology at 13 campuses.
The DOE will calculate these rates and measures under complex regulatory formulas outlined in the regulations and using data such as student debt (including not only Title IV loans but also certain private loans and extensions of credit), student earnings data, and comparative median earnings data for young working adults with only a high school diploma or GED.
The DOE will calculate these rates and measures under complex regulatory formulas outlined in the regulations and using data such as student debt (including not only Title IV loans but also certain private loans and extensions of credit), student earnings data, and comparative median earnings data for young working adults with only a high school diploma or GED (including state-by-state annual earnings thresholds for 2024 published by the DOE on December 31, 2024).
Our campuses in East Windsor, Connecticut; Nashville, Tennessee; Grand Prairie, Texas; Indianapolis, Indiana; and Denver, Colorado are destination campuses, attracting students throughout the United States and, in some cases, from abroad. Health Sciences. For the year ended December 31, 2023, 24% of our total average student enrollment was in our health science program.
Our campuses in East Windsor, Connecticut; Nashville, Tennessee; Grand Prairie, Texas; Indianapolis, Indiana; and Denver, Colorado are destination campuses, attracting students throughout the United States and, in some cases, from abroad. Health Sciences & Information Technology. For the year ended December 31, 2024, 26% of our total average student enrollment was in our health science & information technology programs.
Failure by us to satisfy any of these or other administrative capability criteria could cause our institutions to be subject to sanctions or other actions by the DOE including the loss of eligibility to participate in Title IV Programs, which would have a significant impact on our business and results of operations. 21 Index Restrictions on Payment of Commissions, Bonuses and Other Incentive Payments.
Failure by us to satisfy any of these or other administrative capability criteria could cause our institutions to be subject to sanctions or other actions by the DOE including the loss of eligibility to participate in Title IV Programs, which would have a significant impact on our business and results of operations.
Classroom instruction combines lectures and demonstrations by our experienced faculty with comprehensive hands-on laboratory exercises in simulated workplace environments. 2 Index The following table lists the programs offered as of December 31, 2023: Current Programs Offered Area of Study Associate's Degree Diploma and Certificate Skilled Trades Electrical and Electronic Systems Technology Service Management, HVAC Electrical & Electronics Systems Technology, Electrician Training, HVAC, Welding Technology, Welding Fabrication Technology, Welding and Metal Fabrication Technology, Welding with Introduction to Pipefitting, CNC Machining and Manufacturing, Advanced Manufacturing with Robotics Automotive Automotive Service Management, Collision Repair & Refinishing Service Management, Diesel & Truck Service Management, Heavy Equipment Maintenance Service Management Automotive Technology, Automotive Technology with BMW, Automotive Technology with Mopar X-Press, Automotive Technology with Volkswagen, Collision Repair and Refinishing Technology, Diesel & Truck Technology, Diesel & Truck Technology with Alternate Fuel Technology, Diesel & Truck Technology with Transport Refrigeration, Heavy Equipment Service Technology Health Sciences Medical Assisting Technology Medical Assistant, Patient Care Technician, Dental Assistant, Licensed Practical Nursing Hospitality Services and Information Technology Culinary Arts & Food Services, Cosmetology, Aesthetics, International Baking and Pastry, Nail Technology, Therapeutic Massage & Bodywork Technician.
Classroom instruction combines lectures and demonstrations by our experienced faculty with comprehensive hands-on laboratory exercises in simulated workplace environments. 2 Index The following table lists the programs offered as of December 31, 2024: Current Programs Offered Area of Study Associate's Degree Diploma and Certificate Skilled Trades Electrical and Electronic Systems Technology Service Management, HVAC Electrical & Electronics Systems Technology, Electrician Training, HVAC, Welding Technology, Welding Fabrication Technology, Welding and Metal Fabrication Technology, Welding with Introduction to Pipefitting, CNC Machining and Manufacturing, Advanced Manufacturing with Robotics Automotive Automotive Service Management, Collision Repair & Refinishing Service Management, Diesel & Truck Service Management, Heavy Equipment Maintenance Service Management Automotive Technology, Automotive Technology with BMW, Automotive Technology with Mopar X-Press, Automotive Technology with Volkswagen, Collision Repair and Refinishing Technology, Diesel & Truck Technology, Diesel & Truck Technology with Alternate Fuel Technology, Diesel & Truck Technology with Transport Refrigeration, Heavy Equipment Service Technology Health Sciences & Information Technology Medical Assisting Technology Medical Assistant, Patient Care Technician, Dental Assistant, Licensed Practical Nursing, Computer Systems Support Technician Skilled Trades.
We cannot be certain that the changes we make in the future will succeed in maintaining our institutions’ 90/10 Rule percentages below the required levels or that the changes will not materially impact our business operations, revenues, and operating costs.
We cannot be certain that the changes we continue to make to comply with the amended 90/10 Rule will succeed in maintaining our institutions’ 90/10 Rule percentages below the required levels or that the changes will not materially impact our business operations, revenues, and operating costs.
The regulations have a general effective date of July 1, 2024.
The regulations had a general effective date of July 1, 2024.
The implementation of the final regulations required us to change our compensation practices and has had and will continue to have a significant impact on the productivity of our employees, on the retention of our employees and on our business and results of operations. Compliance with Regulatory Standards and Effect of Regulatory Violations.
“Business – Regulatory Environment – Negotiated Rulemaking.” The implementation of the final regulations have required us to change our compensation practices and has had and will continue to have a significant impact on the productivity of our employees, on the retention of our employees and on our business and results of operations. 21 Index Compliance with Regulatory Standards and Effect of Regulatory Violations.
The following table sets forth the expiration dates for each of our institutions’ current Title IV Program participation agreements: Institution Expiration Date of Current Program Participation Agreement Iselin, NJ December 31, 2024 2 Indianapolis, IN December 31, 2024 2 New Britain, CT December 31, 2024 2 2 Provisionally certified.
The following table sets forth the expiration dates for each of our institutions’ current Title IV Program participation agreements: Institution Expiration Date of Current Program Participation Agreement Iselin, NJ December 31, 2024 1 Indianapolis, IN December 31, 2024 1 New Britain, CT December 31, 2024 1 1 Provisionally certified and recertification application under review.
“Business - Regulatory Environment – 90/10 Rule.” Because a significant percentage of our revenues are derived from Title IV Programs, any action by Congress or the DOE that significantly reduces Title IV Program funding, that limits or restricts the ability of our schools, programs, or students to receive funding through the Title IV Programs, or that imposes new restrictions or constraints upon our business or operations could reduce our student enrollment and our revenues, and could increase our administrative costs and require us to modify our practices in order for our schools to comply fully with Title IV Program requirements.
Because a significant percentage of our revenues are derived from Title IV Programs, any action by Congress, the President or the DOE that significantly reduces Title IV Program funding, that limits or restricts the ability of our schools, programs, or students to receive funding through the Title IV Programs, or that imposes new restrictions or constraints upon our business or operations could reduce our student enrollment and our revenues, and could increase our administrative costs and require us to arrange for alternative sources of financial aid for our students and require us to modify our practices in order for our schools to comply fully with Title IV Program requirements.
Under this definition, for DOE purposes as of December 31, 2023 we had the following three institutions, collectively consisting of three main campuses and 19 additional locations: Main Institution/Campus(es) Additional Location(s) Iselin, NJ Moorestown, NJ Paramus, NJ Lincoln, RI Marietta, GA Las Vegas, NV (Summerlin) New Britain, CT Shelton, CT Philadelphia, PA East Windsor, CT Melrose Park, IL Allentown, PA Columbia, MD East Point, GA 1 Indianapolis, IN Grand Prairie, TX Nashville, TN Denver, CO Union, NJ Mahwah, NJ Queens, NY South Plainfield, NJ 1 Applied to participate in Title IV programs.
Under this definition, for DOE purposes as of December 31, 2024 we had the following three institutions, collectively consisting of three main campuses and 19 additional locations: 10 Index Main Institution/Campus(es) Additional Location(s) Iselin, NJ Moorestown, NJ Paramus, NJ Lincoln, RI Marietta, GA New Britain, CT Shelton, CT Philadelphia, PA East Windsor, CT Melrose Park, IL Allentown, PA Columbia, MD East Point, GA Indianapolis, IN Grand Prairie, TX Nashville, TN Denver, CO Union, NJ Mahwah, NJ Queens, NY South Plainfield, NJ Each institution must periodically apply to the DOE for continued certification to participate in Title IV Programs.
The potential for changes that may be adverse to us and other for-profit schools like ours may increase as a result of changes in political leadership.
The potential for changes related to the DOE or Title IV Programs that may be adverse to us and other for-profit schools like ours may increase as a result of changes in political leadership.
It is not possible at this time to predict whether the settlement will be upheld on appeal, what actions the DOE might take if the settlement is upheld on appeal, or whether the DOE or other agencies might take actions against Lincoln institutions before the appeal is decided.
It is not possible at this time to predict whether the settlement will continue to be upheld on appeal, what additional actions the DOE might take as the settlement continues to be upheld on appeal, or whether the DOE or other agencies might take actions against Lincoln institutions.
We enroll students continuously throughout the year, with our largest classes enrolling in late summer or early fall following high school graduation. As of December 31, 2023, we had 13,270 students enrolled at 21 campuses and our average enrollment during the fiscal year ended December 31, 2023 was 12,941 students. Retention.
We enroll students continuously throughout the year, with our largest classes enrolling in late summer or early fall following high school graduation. As of December 31, 2024, we had 15,138 students enrolled at 21 campuses and our average enrollment during the fiscal year ended December 31, 2024 was 14,426 students. Retention.
For example, each of our schools that offer nursing, cosmetology, or massage therapy programs is required to obtain and periodically renew approvals from the applicable occupational agencies that regulate these programs in the state in which the schools are physically located.
For example, each of our schools that offers a nursing program is required to obtain and periodically renew approvals from the applicable occupational agencies that regulate these programs in the state in which the schools are physically located.
Our average enrollment for the fiscal year ended December 31, 2023 was 12,941 students and our revenues were $378.1 million, which represented an increase of 8.6% over the prior fiscal year. For more information relating to our revenues, profits and financial condition, please refer to our Consolidated Financial Statements included in this Annual Report on Form 10-K.
Our average enrollment for the fiscal year ended December 31, 2024 was 14,426 students and our revenues were $440.1 million, which represented an increase of 16.4% over the prior fiscal year. For more information relating to our revenues, profits and financial condition, please refer to our Consolidated Financial Statements included in this Annual Report on Form 10-K.
As we moved to online delivery of instruction, we saw a slight decline in our student retention rate, but we believe this is temporary and will improve as our faculty becomes better skilled at hybrid teaching.
As we moved to online delivery of instruction, we saw a slight decline in our student retention rate, but we believe this is temporary and will improve as our faculty becomes better skilled at hybrid teaching. To ensure that this happens, we have developed online teacher training for all faculty.
The current regulations also establish processes for the DOE to seek recovery from the institution of the amount of discharged loans. On November 1, 2022, the DOE published final regulations on Borrower Defense to Repayment and other topics with a general effective date of July 1, 2023.
The regulations also establish processes for the DOE to seek recovery from the institution of the amount of discharged loans. On November 1, 2022, the DOE published new final BDR regulations with a general effective date of July 1, 2023 that also addressed other topics.
We have calculated that for the fiscal year ended December 31, 2023 our institutions’ 90/10 Rule percentages ranged from approximately 79% to 84%. For fiscal year 2023, none of our existing institutions derived more than 90% of its revenues from Title IV Programs.
We have calculated that for the fiscal year ended December 31, 2024, our institutions’ 90/10 Rule percentages ranged from approximately 80% to 84%. For fiscal year 2024, none of our existing institutions derived more than 90% of its revenues from Title IV Programs. Our calculations are subject to review by the DOE .
Our Board of Directors regularly reviews with management the following areas regarding our human capital management: Staffing Our Schools Our schools typically are staffed by a school president, a director of career services, a director of education, a director of administrative services, a director of admissions and, of course, a variety of instructors, all of whom are industry professionals with experience in the areas of study at that particular school.
Staffing Our Schools Our schools typically are staffed by a school president, a director of career services, a director of education, a director of administrative services, a director of admissions and a variety of instructors, all of whom are industry professionals with experience in the areas of study at that particular school.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest change“Business – Regulatory Environment – Negotiated Rulemaking.” If we cannot comply with the provisions of the HEA and the regulations of the DOE, as they may be revised, or if the cost of such compliance is excessive, or if funding is materially reduced, our revenues or profit margin could be materially adversely affected.
Biggest changeIf we cannot comply with the provisions of the HEA and the regulations of the DOE, as they may be revised, or with the terms of an executive order or other executive action, or if the cost of such compliance is excessive, or if funding is materially reduced, or if funding is materially reduced or disrupted by changes to Title IV Programs, our revenues or profit margin could be materially adversely affected. 23 Index We could be subject to liabilities, letter of credit requirements, and other sanctions under the DOE’s Borrower Defense to Repayment regulations.
Second, the proposed settlement included new procedures for DOE to resolve pending borrower defense claims associated with other schools not on the list.
Second, the proposed settlement included new procedures for the DOE to resolve pending borrower defense claims associated with other schools not on the list.
Furthermore, our Amended and Restated Certificate of Incorporation and Bylaws: • authorize the issuance of blank check Preferred Stock that could be issued by our Board of Directors to thwart a takeover attempt; • prohibit cumulative voting in the election of directors, which would otherwise allow holders of less than a majority of stock to elect some directors; • require super-majority voting to effect amendments to certain provisions of our Amended and Restated Certificate of Incorporation; • limit who may call special meetings of both the Board of Directors and shareholders; • prohibit shareholder action by non-unanimous written consent and otherwise require all shareholder actions to be taken at a meeting of the shareholders; 34 Index • establish advance notice requirements for nominating candidates for election to the Board of Directors or for proposing matters that can be acted upon by shareholders at shareholders’ meetings; and • require that vacancies on the Board of Directors, including newly created directorships, be filled only by a majority vote of directors then in office.
Furthermore, our Amended and Restated Certificate of Incorporation and Bylaws: • authorize the issuance of blank check Preferred Stock that could be issued by our Board of Directors to thwart a takeover attempt; • prohibit cumulative voting in the election of directors, which would otherwise allow holders of less than a majority of stock to elect some directors; • require super-majority voting to effect amendments to certain provisions of our Amended and Restated Certificate of Incorporation; • limit who may call special meetings of both the Board of Directors and shareholders; • prohibit shareholder action by non-unanimous written consent and otherwise require all shareholder actions to be taken at a meeting of the shareholders; • establish advance notice requirements for nominating candidates for election to the Board of Directors or for proposing matters that can be acted upon by shareholders at shareholders’ meetings; and • require that vacancies on the Board of Directors, including newly created directorships, be filled only by a majority vote of directors then in office.
The DOE has placed all of our institutions on provisional certification based on findings in recent audits of the institutions’ Title IV compliance that the DOE alleges identified deficiencies in regulations related to DOE regulations regarding an institutions’ level of administrative capability. See Part I, Item 1.
The DOE has placed all of our institutions in provisional certification status based on findings in recent audits of the institutions’ Title IV compliance that the DOE alleges identified deficiencies in regulations related to DOE regulations regarding an institutions’ level of administrative capability. See Part I, Item 1.
“Business - Regulatory Environment – Regulation of Federal Student Financial Aid Programs.” Congress and the DOE may make changes to the laws and regulations applicable to, or reduce funding for, Title IV Programs, which could reduce our student population, revenues or profit margin.
“Business - Regulatory Environment – Regulation of Federal Student Financial Aid Programs.” Congress, the President and the DOE may make changes to the DOE or the laws and regulations applicable to, or reduce funding for, Title IV Programs, which could reduce our student population, revenues or profit margin.
The DOE’s current Borrower Defense to Repayment regulations establish processes for borrowers to receive from the DOE a discharge of the obligation to repay certain Title IV Program loans based on certain acts or omissions by the institution or a covered party.
The DOE’s Borrower Defense to Repayment regulations establish processes for borrowers to receive from the DOE a discharge of the obligation to repay certain Title IV Program loans based on certain acts or omissions by the institution or a covered party.
“Business – Regulatory Environment – Scrutiny of the For-Profit Postsecondary Education Sector.” Any laws that are adopted that limit our or our students’ participation in Title IV Programs or in programs to provide funds for active duty service members and veterans or the amount of student financial aid for which our students are eligible, or any decreases in enrollment related to the congressional activity concerning this sector, could have a material adverse effect on our academic or operational initiatives, cash flows, results of operations, or financial condition.
“Business – Regulatory Environment – Scrutiny of the For-Profit Postsecondary Education Sector.” Any laws or other actions that are adopted that limit our or our students’ participation in Title IV Programs or in programs to provide funds for active duty service members and veterans or the amount of student financial aid for which our students are eligible, or any decreases in enrollment related to the congressional activity concerning this sector, could have a material adverse effect on our academic or operational initiatives, cash flows, results of operations, or financial condition.
Substantially all of our campuses are located at leased premises in various areas some of which can experience hurricanes, severe storms, floods, coastal storms, tornadoes, power outages and other severe weather events.
All of our campuses are located at leased premises in various areas some of which can experience hurricanes, severe storms, floods, coastal storms, tornadoes, power outages and other severe weather events.
“Business - Regulatory Environment – Regulation of Federal Student Financial Aid Programs.” The DOE typically places an institution on provisional certification following a change in ownership resulting in a change of control, and may provisionally certify an institution for other reasons including, but not limited to, failure to comply with certain standards of administrative capability or financial responsibility.
“Business - Regulatory Environment – Regulation of Federal Student Financial Aid Programs.” The DOE typically places an institution in provisional certification status following a change in ownership resulting in a change of control, and may provisionally certify an institution for other reasons including, but not limited to, failure to comply with certain standards of administrative capability or financial responsibility.
Some of our competitors also have substantially greater financial and other resources than we have which may, among other things, allow our competitors to secure strategic relationships with some or all of our existing strategic partners or develop other high profile strategic relationships, or devote more resources to expanding their programs and their school network, or provide greater financing alternatives to their students, all of which could affect the success of our marketing programs.
Some of our competitors also have substantially greater financial and other resources than we have which may, among other things, allow our competitors to secure strategic relationships with some or all of the companies with which we have existing relationships or develop other high profile strategic relationships, or devote more resources to expanding their programs and their school network, or provide greater financing alternatives to their students, all of which could affect the success of our marketing programs.
In this event, the amount is written down to fair value. Under current accounting rules, this would result in a charge to operating earnings. Any determination requiring the write-off of a significant portion of goodwill would negatively affect our results of operations and total capitalization, which could be material. See Part II. Item 8.
In this event, the amount is written down to fair value. Under current accounting rules, this would result in a charge to operating earnings. Any determination requiring the write-off of goodwill would negatively affect our results of operations and total capitalization, which could be material. See Part II. Item 8.
We cannot assure you that a breach, loss, or theft of personal information will not occur. Changes in U.S. tax laws or adverse outcomes from examination of our tax returns could have an adverse effect upon our financial results. We are subject to income tax requirements in various jurisdictions in the United States.
We cannot assure you that a breach, loss, or theft of personal information will not occur. 31 Index Changes in U.S. tax laws or adverse outcomes from examination of our tax returns could have an adverse effect upon our financial results. We are subject to income tax requirements in various jurisdictions in the United States.
These factors include: • general economic conditions; • general conditions in the for-profit, post-secondary education industry; • negative media coverage of the for-profit, post-secondary education industry; • failure of certain of our schools or programs to maintain compliance under the gainful employment regulation, 90/10 Rule or with financial responsibility standards; • the impact of DOE rulemaking and other changes in the highly regulated environment in which we operate; • the initiation, pendency or outcome of litigation, accreditation reviews and regulatory reviews, inquiries and investigations; • loss of key personnel; • quarterly variations in our operating results; • our ability to meet or exceed, or changes in, expectations of investors and analysts, or the extent of analyst coverage of us; and decisions by any significant investors to reduce their investment in our Common Stock.
These factors may include: • general economic conditions; • general conditions in the for-profit, postsecondary education industry; • negative media coverage of the for-profit, postsecondary education industry; • failure of certain of our schools or programs to maintain compliance under the gainful employment regulation, 90/10 Rule or with financial responsibility standards; • the impact of DOE rulemaking and other changes in the highly regulated environment in which we operate; • the initiation, pendency or outcome of litigation, accreditation reviews and regulatory reviews, inquiries and investigations; • loss of key personnel; • quarterly variations in our operating results; • our ability to meet or exceed, or changes in, expectations of investors and analysts, or the extent of analyst coverage of us; and decisions by any significant investors to reduce their investment in our Common Stock.
We depend on our students, suppliers, and other business partners to implement and verify adequate controls and safeguards to protect against and report cybersecurity incidents. If they fail to deter, detect or report cybersecurity incidents in a timely manner, we may suffer financial and other harm, including to our information, operations, performance, employees and reputation.
We depend on our students, suppliers, and other business entities to implement and verify adequate controls and safeguards to protect against and report cybersecurity incidents. If they fail to deter, detect or report cybersecurity incidents in a timely manner, we may suffer financial and other harm, including to our information, operations, performance, employees and reputation.
The implementation and enforcement of these Borrower Defense to Repayment and closed school loan discharge regulations could have a material adverse effect on our business and results of operations. See Part I, Item 1. “Business - Regulatory Environment – Borrower Defense to Repayment Regulations” and “Business – Regulatory Environment – Closed School Loan Discharges.” 24 Index The U.S.
The implementation and enforcement of these Borrower Defense to Repayment and closed school loan discharge regulations could have a material adverse effect on our business and results of operations. See Part I, Item 1. “Business - Regulatory Environment – Borrower Defense to Repayment Regulations” and “Business – Regulatory Environment – Closed School Loan Discharges.” The U.S.
In addition, we could issue Preferred Stock to prevent a change in control of our Company, depriving common shareholders of an opportunity to sell their stock at a price in excess of the prevailing market price. The trading price of our Common Stock may continue to fluctuate substantially in the future.
In addition, we could issue Preferred Stock to prevent a change in control of our Company, depriving common shareholders of an opportunity to sell their stock at a price in excess of the prevailing market price. 33 Index The trading price of our Common Stock may continue to fluctuate substantially in the future.
The current regulations also establish processes for the DOE to seek recovery from the institution of the amount of discharged loans.
The regulations also establish processes for the DOE to seek recovery from the institution of the amount of discharged loans.
If we or any of our schools fail to comply with applicable federal, state, or accrediting agency requirements, our regulators could take a variety of adverse actions against us, and our schools could be subject to, among other things, a) the loss of, or placement of material restrictions or conditions on (i) state licensure or accreditation, (ii) eligibility to participate in and receive funds under the Title IV Programs or other federal or state financial assistance programs, or (iii) capacity to grant degrees, diplomas and certificates or b) the imposition of liabilities or monetary penalties, any of which could have a material adverse effect on academic or operational initiatives, revenues or financial condition, and impose significant operating restrictions upon us.
If we or any of our schools fail to comply with applicable federal, state, or accrediting agency requirements, our regulators could take a variety of adverse actions against us, and our schools could be subject to, among other things, a) the loss of, or placement of material restrictions or conditions on (i) state licensure or accreditation, (ii) eligibility to participate in and receive funds under the Title IV Programs or other federal or state financial assistance programs, or (iii) capacity to grant degrees, diplomas and certificates or b) the imposition of liabilities or monetary penalties, or a requirement to provide a letter of credit or other financial protection, any of which could have a material adverse effect on academic or operational initiatives, revenues or financial condition, and impose significant operating restrictions upon us.
Adverse market conditions for consumer and federally guaranteed student loans could result in providers of alternative loans reducing the attractiveness and/or decreasing the availability of alternative loans to post-secondary students, including students with low credit scores who would not otherwise be eligible for credit-based alternative loans.
Adverse market conditions for consumer and federally guaranteed student loans could result in providers of alternative loans reducing the attractiveness and/or decreasing the availability of alternative loans to postsecondary students, including students with low credit scores who would not otherwise be eligible for credit-based alternative loans.
Prospective students may find that these increased financing costs make borrowing prohibitively expensive and abandon or delay enrollment in post-secondary education programs. Private lenders could also require that we pay them new or increased fees in order to provide alternative loans to prospective students.
Prospective students may find that these increased financing costs make borrowing prohibitively expensive and abandon or delay enrollment in postsecondary education programs. Private lenders could also require that we pay them new or increased fees in order to provide alternative loans to prospective students.
See Part I, Item 1. “Business - Regulatory Environment – Gainful Employment.” If one or more of our educational programs were to yield debt-to-earnings rates or a median earnings measure that do not comply with regulatory benchmarks for two of three consecutive years, we would lose Title IV eligibility for each of the impacted educational programs.
See Part I, Item 1. “Business - Regulatory Environment – Gainful Employment.” If one or more of our educational programs were to yield debt-to-earnings rates or an earnings premium measure that do not comply with regulatory benchmarks for two of three consecutive years, we would lose Title IV eligibility for each of the impacted educational programs.
At December 31, 2023 goodwill associated with our acquisitions decreased to approximately 3.1% from 5.0% of total assets at December 31, 2022. On at least an annual basis, we assess whether there has been an impairment in the value of goodwill. If the carrying value of the tested asset exceeds its estimated fair value, impairment is deemed to have occurred.
At December 31, 2024, goodwill associated with our acquisitions decreased to approximately 2.5% from 3.1% of total assets at December 31, 2023. On at least an annual basis, we assess whether there has been an impairment in the value of goodwill. If the carrying value of the tested asset exceeds its estimated fair value, impairment is deemed to have occurred.
“Business - Regulatory Environment.” 23 Index If we are found to have not satisfied the HEA or the DOE's requirements for Title IV Programs funding, one or more of our institutions, including its additional locations, could be limited in its access to, or lose, Title IV Program funding, which could adversely affect our revenue, as we received approximately 81% of our revenue (calculated based on cash receipts) from Title IV Programs during the fiscal year ended December 31, 2023, and have a significant impact on our business and results of operations.
“Business - Regulatory Environment.” If we are found to have not satisfied the HEA or the DOE's requirements for Title IV Programs funding, one or more of our institutions, including its additional locations, could be limited in its access to, or lose, Title IV Program funding, which could adversely affect our revenue, as we received approximately 82% of our revenue (calculated based on cash receipts) from Title IV Programs during the fiscal year ended December 31, 2024, and have a significant impact on our business and results of operations.
“Business - Regulatory Environment – Congressional Action.” Because a significant percentage of our revenues is derived from the Title IV Programs, any action by Congress or the DOE that significantly reduces funding for Title IV Programs or that limits the ability of our schools, programs, or students to receive funding through such programs or that imposes new restrictions upon our business or operations could reduce our student enrollment and our revenues, increase our administrative costs, require us to arrange for alternative sources of financial aid for our students, and require us to modify our practices in order to fully comply.
Because a significant percentage of our revenues is derived from the Title IV Programs, any action by Congress, the President, or the DOE that significantly reduces funding for Title IV Programs or that limits the ability of our schools, programs, or students to receive funding through such programs, that disrupts the operations of such programs, or that imposes new restrictions upon our business or operations could reduce our student enrollment and our revenues, increase our administrative costs, require us to arrange for alternative sources of financial aid for our students, and require us to modify our practices in order to fully comply.
“Business – Regulatory Environment – Negotiated Rulemaking.” If we cannot comply with the provisions of these or other regulations, as they currently exist or may be revised, or if the cost of such compliance is excessive, or if funding is materially reduced, our revenues or profit margin could be materially adversely affected.
See Part I, Item 1. “Business – Regulatory Environment – Negotiated Rulemaking.” If we cannot comply with the provisions of these or other regulations, as they currently exist or may be revised, or if the cost of such compliance is excessive, or if funding is materially reduced, our revenues or profit margin could be materially adversely affected.
In the event that our schools do not achieve satisfactory operating results, we may be required to write-off a significant portion of the goodwill which would negatively affect our results of operations. Our total assets reflect substantial amount of goodwill.
In the event that our schools do not achieve satisfactory operating results, we may be required to write-off a significant portion of the goodwill which would negatively affect our results of operations. Our total assets reflect amounts for goodwill.
This could adversely affect our revenue, as we received approximately 81% of our revenue (calculated based on cash receipts) from Title IV Programs in 2023, which would have a significant impact on our business and results of operations.
This could adversely affect our revenue, as we received approximately 82% of our revenue (calculated based on cash receipts) from Title IV Programs in 2024, which would have a significant impact on our business and results of operations.
An institution with revenues exceeding 90% for a single fiscal year will be placed on provisional certification and may be subject to other enforcement measures.
An institution with revenues exceeding 90% for a single fiscal year will be placed in provisional certification status and may be subject to other enforcement measures.
The loss of the services of any of our key personnel, or our failure to attract and retain other qualified and experienced personnel on acceptable terms, could have an adverse effect on our ability to operate our business efficiently and to execute our growth strategy. Our total assets include a substantial amount of goodwill.
The loss of the services of any of our key personnel, or our failure to attract and retain other qualified and experienced personnel on acceptable terms, could have an adverse effect on our ability to operate our business efficiently and to execute our growth strategy. 30 Index Our total assets include goodwill.
In addition, we contribute to multiemployer benefit plans that could result in liabilities to us if these plans are terminated or we withdraw from them. As of December 31, 2023, the teaching professionals at six of our campuses are represented by unions and covered by collective bargaining agreements that expire between 2024 and 2026.
In addition, we contribute to multiemployer benefit plans that could result in liabilities to us if these plans are terminated or we withdraw from them. As of December 31, 2024, the teaching professionals at seven of our campuses are represented by unions and covered by collective bargaining agreements that expire between 2025 and 2027.
On October 10, 2023, the DOE published final gainful employment regulations on October 10, 2023 which have a general effective date of July 1, 2024 and which establish rules for annually evaluating each of our educational programs based on the calculation of debt-to-earnings rates (an annual debt-to-earnings rate and a discretionary debt-to-earnings rate) and a median earnings measure under complex regulatory formulas outlined in the regulations.
On October 10, 2023, the DOE published final gainful employment and financial value transparency regulations, which had a general effective date of July 1, 2024 and which establish rules for annually evaluating each of our educational programs based on the calculation of debt-to-earnings rates (an annual debt-to-earnings rate and a discretionary debt-to-earnings rate) and an earnings premium measure based on an evaluation of median annual earnings under complex regulatory formulas outlined in the regulations.
It is not possible at this time to predict whether the settlement will be upheld on appeal, what actions the DOE might take if the settlement is upheld on appeal, or whether the DOE or other agencies might take actions against Lincoln institutions before the appeal is decided.
It is not possible at this time to predict whether the settlement will continue to be upheld on appeal, what additional actions the DOE might take as the settlement continues to be upheld on appeal, or whether the DOE or other agencies might take actions against Lincoln institutions.
The regulations also include provisions for providing certifications and reporting data to the DOE and providing required student disclosures related to gainful employment. 25 Index The regulations include gainful employment rates and measures that will be based in part on data that is not readily accessible to us and other institutions, which make it difficult for us to predict with certainty how our educational programs will perform under the new gainful employment benchmarks and the extent to which certain programs could become ineligible for Title IV participation.
The regulations include gainful employment rates and measures that will be based in part on data that is not readily accessible to us and other institutions, which make it difficult for us to predict with certainty how our educational programs will perform under the new gainful employment benchmarks and the extent to which certain programs could become ineligible for Title IV participation.
In addition, if we are unable to adequately anticipate the requirements of the employers we serve, we may offer programs that do not teach skills useful to prospective employers, which could affect our placement rates and our ability to attract and retain students, causing our revenues to be adversely affected. 30 Index Competition could decrease our market share and cause us to lower our tuition rates.
In addition, if we are unable to adequately anticipate the requirements of the employers we serve, we may offer programs that do not teach skills useful to prospective employers, which could affect our placement rates and our ability to attract and retain students, causing our revenues to be adversely affected.
Public health pandemics, epidemics or outbreaks, including the COVID-19 pandemic, could have a material adverse effect on our business and operations. Public health pandemics, epidemics or outbreaks such as the COVID-19 pandemic and the resulting containment measures to be taken in response to such events have caused and may in the future cause economic and financial disruptions globally.
Public health pandemics, epidemics or outbreaks, such as the COVID-19 pandemic, and the resulting containment measures to be taken in response to such events have caused and may in the future cause economic and financial disruptions globally.
An increase in interest rates could adversely affect our ability to attract and retain students. Our students and their families have benefitted from historic lows on student loan interest rates in recent years. Much of the financing our students receive is tied to floating interest rates.
An increase in interest rates could adversely affect our ability to attract and retain students. Our students and their families have benefitted from historic lows on student loan interest rates in prior years. Much of the financing our students receive is tied to floating interest rates. Recently, student loan interest rates have been higher, making borrowing for education more expensive.
In order to maintain our growth, we will need to attract a larger percentage of students in existing markets and increase our addressable market by adding locations in new markets and rolling out new academic programs.
In order to maintain our growth, we will need to attract a larger percentage of students in existing markets and increase our addressable market by adding locations in new markets and rolling out new academic programs. Any failure to accomplish this may have a material adverse effect on our future growth.
If any of our institutions loses eligibility to participate in Title IV Programs, that loss would also adversely affect our students’ access to various government-sponsored student financial aid programs, and would have a significant impact on the rate at which our students enroll in our programs and on our business and results of operations. 27 Index Our institutions would lose eligibility to participate in Title IV Programs if their former students defaulted on repayment of their federal student loans in excess of specified levels, which could reduce our student population and revenues.
If any of our institutions loses eligibility to participate in Title IV Programs, that loss would also adversely affect our students’ access to various government-sponsored student financial aid programs, and would have a significant impact on the rate at which our students enroll in our programs and on our business and results of operations.
“Business – Regulatory Environment – Regulation of Federal Student Financial Aid Programs.” Any adverse action by the DOE or increased regulatory burdens as a result of the provisional status of one of our institutions could have a material adverse effect on enrollments and our revenues, financial condition, cash flows and results of operations. 28 Index Regulatory agencies or third parties may conduct compliance reviews, bring claims or initiate litigation against us.
“Business – Regulatory Environment – Regulation of Federal Student Financial Aid Programs.” Any adverse action by the DOE or increased regulatory burdens as a result of the provisional certification status of one of our institutions could have a material adverse effect on enrollments and our revenues, financial condition, cash flows and results of operations.
The failure to obtain applicable approvals from the DOE and other applicable regulators without delay or material condition in connection with the addition of a new location or educational program could have a significant impact on our business and results of operations.
The failure to obtain applicable approvals from the DOE and other applicable regulators without delay or material condition in connection with the addition of a new location or educational program could have a significant impact on our business and results of operations. 28 Index Public health pandemics, epidemics or outbreaks, such as the COVID-19 pandemic, could have a material adverse effect on our business and operations.
The post-secondary education market is highly competitive. We compete for students and faculty with traditional public and private two-year and four-year colleges and universities and other proprietary schools, many of which have greater financial resources than we do.
Competition could decrease our market share and cause us to lower our tuition rates. The postsecondary education market is highly competitive. We compete for students and faculty with traditional public and private two-year and four-year colleges and universities and other proprietary schools, many of which have greater financial resources than we do.
Our institutions would lose eligibility to participate in Title IV Programs if the percentage of their revenues derived from those programs exceeds 90%, which could reduce our student population and revenues.
Failure to obtain or maintain such programmatic accreditation may lead to a decline in enrollments in such programs. Our institutions would lose eligibility to participate in Title IV Programs if the percentage of their revenues derived from those programs exceeds 90%, which could reduce our student population and revenues.
The DOE’s Gainful Employment regulations could have a significant impact on our business and results of operations.
“Business – Regulatory Environment – Borrower Defense to Repayment Regulations.” The DOE’s Gainful Employment regulations could have a significant impact on our business and results of operations.
Congress or by states that significantly reduce funding for Title IV Programs or other student financial assistance programs, or the ability of our students to participate in these programs, or establish different or more stringent requirements for our schools to participate in those programs, could have a significant impact on our student population, results of operations and cash flows. 31 Index We cannot predict our future capital needs, and if we are unable to secure additional financing when needed, our operations and revenues would be adversely affected.
Congress or by states that significantly reduce funding for Title IV Programs or other student financial assistance programs, or the ability of our students to participate in these programs, or establish different or more stringent requirements for our schools to participate in those programs, could have a significant impact on our student population, results of operations and cash flows.
Like other companies in our industry, the performance and reliability of our computer networks is essential to our existing operations, our ability to attract and retain students and our reputation.
Our business could be negatively impacted by cybersecurity and other security threats or disruptions. Like other companies in our industry, the performance and reliability of our computer networks is essential to our existing operations, our ability to attract and retain students and our reputation.
“Business - Regulatory Environment – Student Loan Defaults.” If former students defaulted on repayment of their federal student loans in excess of specified levels, our institutions would lose eligibility to participate in Title IV Programs, would also adversely affect our students’ access to various government-sponsored student financial aid programs, and would have a significant impact on the rate at which our students enroll in our programs and on our business and results of operations.
“Business - Regulatory Environment – Student Loan Defaults.” If former students defaulted on repayment of their federal student loans in excess of specified levels, our institutions would lose eligibility to participate in Title IV Programs, would also adversely affect our students’ access to various government-sponsored student financial aid programs, and would have a significant impact on the rate at which our students enroll in our programs and on our business and results of operations. 26 Index We are subject to sanctions if we fail to correctly calculate and timely return Title IV Program funds for students who withdraw before completing their educational programs, which could increase our cost of regulatory compliance and decrease our profit margin.
The DOE recently published new regulations on a variety of topics with a general effective date of July 1, 2024 and is currently engaged in additional rulemaking processes in 2024 that are expected to result in new regulations on a broad range of topics that could adversely impact institutions including our institutions. See Part I, Item 1.
The DOE recently published new regulations on a variety of topics with a general effective date of July 1, 2024 and other regulations with a general effective date of July 1, 2026 and could engage in additional rulemaking processes in the future that could result in new regulations that could adversely impact institutions including our institutions.
“Business - Regulatory Environment - School Acquisitions/Change of Control.” Thus, any plans to expand our business through acquisition of additional schools and have them certified by the DOE to participate in Title IV Programs must take into account the approval requirements of the DOE and the relevant state education agencies and accrediting commissions. 29 Index In addition, a change of control could occur as a result of future transactions in which the Company or our schools are involved and require our schools to obtain approval of the DOE, ACCSC, and the applicable state authorizing agencies to continue operating and participating in Title IV Programs.
“Business - Regulatory Environment - School Acquisitions/Change of Control.” Thus, any plans to expand our business through acquisition of additional schools and have them certified by the DOE to participate in Title IV Programs must take into account the approval requirements of the DOE and the relevant state education agencies and accrediting commissions.
In addition, current requirements for Title IV Program participation may change or the present Title IV Programs could be replaced by other programs with materially different eligibility requirements. The potential for changes that may be adverse to us and other for-profit schools like ours may increase as a result of changes in political leadership.
The potential for changes to the DOE or the Title IV Programs that may be adverse to us and other for-profit schools like ours may increase as a result of changes in political leadership.
First, it set forth a list of approximately 150 institutions, including Lincoln Technical Institute and Lincoln College of Technology, and, under the settlement, the DOE would agree to discharge loans and refund prior loan payments to class members with loan debt associated with an institution on the list (which includes Lincoln institutions).
First, the DOE would agree to discharge loans and refund prior loan payments to class members with loan debt associated with an institution on the list included in the settlement (which includes Lincoln institutions).
Although programmatic accreditation is not generally necessary for Title IV Program eligibility, such accreditation may be required to allow students to sit for certain licensure exams or to work in a particular profession or career or to meet other requirements. Failure to obtain or maintain such programmatic accreditation may lead to a decline in enrollments in such programs.
Programmatic accreditation is the process through which specific programs are reviewed and approved by industry- and program-specific accrediting entities. Although programmatic accreditation is not generally necessary for Title IV Program eligibility, such accreditation may be required to allow students to sit for certain licensure exams or to work in a particular profession or career or to meet other requirements.
RISKS RELATED TO OUR INDUSTRY Our failure to comply with the extensive regulatory requirements applicable to our participation in Title IV Programs and our school operations could result in financial penalties, restrictions on our operations and loss of external financial aid funding, which could affect our revenues and impose significant operating restrictions upon us.
Investors should consider carefully the risks and uncertainties described below in addition to other information contained in this Annual Report on Form 10-K, including our Consolidated Financial Statements and related notes. 22 Index RISKS RELATED TO OUR INDUSTRY Our failure to comply with the extensive regulatory requirements applicable to our participation in Title IV Programs and our school operations could result in financial penalties, restrictions on our operations and loss of external financial aid funding, which could affect our revenues and impose significant operating restrictions upon us.
Cal.)) has approved a class action settlement that could result in the granting of all borrower defense applications submitted to the DOE concerning our institutions and, potentially, could lead to the DOE seeking recoupment from us of all loan amounts in the granted applications, even though we have appealed the District Court’s judgment approving the settlement.
District Court for the Northern District of California ( Sweet v. Cardona , No. 3:19-cv-3674 (N.D. Cal.)) has approved a class action settlement that could result in the granting of all borrower defense applications submitted to the DOE concerning our institutions and, potentially, could lead to the DOE seeking recoupment from us of all loan amounts in the granted applications.
In addition, key personnel may leave us and subsequently compete against us. Furthermore, we do not currently carry "key man" life insurance on any of our employees.
Due to the nature of our business, we face significant competition in the attraction and retention of personnel who possess the skill sets that we seek. In addition, key personnel may leave us and subsequently compete against us. Furthermore, we do not currently carry "key man" life insurance on any of our employees.
If our schools do not maintain their state licensure and accreditation, they may not participate in Title IV Programs, which could adversely affect our student population and revenues. An institution must be accredited by an accrediting commission recognized by the DOE and by applicable state educational agencies in order to participate in Title IV Programs. See Part I, Item 1.
An institution must be accredited by an accrediting commission recognized by the DOE and by applicable state educational agencies in order to participate in Title IV Programs. See Part I, Item 1.
The implementation of new gainful employment regulations could require us to eliminate or modify certain educational programs, could result in the loss of our students’ access to Title IV Program funds for the affected programs, and could have a significant impact on the rate at which students enroll in our programs and on our business and results of operations.
The DOE announced at the time it released the final gainful employment regulations that the first official outcome rates will be published in early 2025 and that programs that fail the same gainful employment metric in the first two years the rates are issued will become ineligible in 2026 24 Index The implementation of new gainful employment regulations could require us to eliminate or modify certain educational programs, could result in the loss of our students’ access to Title IV Program funds for the affected programs, and could have a significant impact on the rate at which students enroll in our programs and on our business and results of operations.
If the results of these reviews or claims are unfavorable to us, our results of operations and financial condition could be adversely affected. Because we operate in a highly regulated industry, we are subject to compliance reviews and claims of noncompliance and lawsuits by government agencies and third parties.
Because we operate in a highly regulated industry, we are subject to compliance reviews and claims of noncompliance and lawsuits by government agencies and third parties.
We may be required to expend significant resources to protect against system errors, failures or disruptions or to repair problems caused by any actual errors, disruptions or failures. 32 Index We are subject to privacy and information security laws and regulations due to our collection and use of personal information, and any violations of those laws or regulations, or any breach, theft or loss of that information, could adversely affect our reputation and operations.
We are subject to privacy and information security laws and regulations due to our collection and use of personal information, and any violations of those laws or regulations, or any breach, theft or loss of that information, could adversely affect our reputation and operations.
Our financial performance depends in part on our ability to continue to develop awareness and acceptance of our programs among high school graduates and working adults looking to return to school. The awareness of our programs among high school graduates and working adults looking to return to school is critical to the continued acceptance and growth of our programs.
The awareness of our programs among high school graduates and working adults looking to return to school is critical to the continued acceptance and growth of our programs. Our inability to continue to develop awareness of our programs could reduce our enrollments and impair our ability to increase our revenues or maintain profitability.
Although we believe that we have good relationships with these unions and with our employees, any strikes or work stoppages by our employees could adversely impact our relationships with our students, hinder our ability to conduct business and increase costs. We also contribute to multiemployer pension plans for some employees covered by collective bargaining agreements.
The faculty of the Company’s Union, New Jersey campus voted to be represented through collective bargaining in 2024. Although we believe that we have good relationships with these unions and with our employees, any strikes or work stoppages by our employees could adversely impact our relationships with our students, hinder our ability to conduct business and increase costs.
These plans are not administered by us, and contributions are determined in accordance with provisions of negotiated labor contracts.
We also contribute to multiemployer pension plans for some employees covered by collective bargaining agreements. These plans are not administered by us, and contributions are determined in accordance with provisions of negotiated labor contracts.
Any adverse legislation, regulations, or investigations regarding private student lending could limit the availability of private student loans to our students or lead to sanctions or liabilities, which could have a significant impact on our business and operations.
Any adverse legislation, regulations, or investigations regarding private student lending could limit the availability of private student loans to our students or lead to sanctions or liabilities, which could have a significant impact on our business and operations. 27 Index Changes in the executive branch of our federal government as a result of the outcome of elections or other events could result in further legislation, appropriations, executive orders, regulations and enforcement actions that could materially or adversely affect our business.
Our inability to obtain a required letter of credit or limitations on, or termination or revocation of, our participation in Title IV Programs could limit our students’ access to various government-sponsored student financial aid programs, which could significantly reduce our student population and revenues. 26 Index We are subject to fines and other sanctions if we make incentive payments to individuals involved in certain recruiting, admissions or financial aid activities, which could increase our cost of regulatory compliance and adversely affect our results of operations.
Our inability to obtain a required letter of credit or limitations on, or termination or revocation of, our participation in Title IV Programs could limit our students’ access to various government-sponsored student financial aid programs, which could significantly reduce our student population and revenues.
Successful attacks could lead to losses or misuse of sensitive information or capabilities; theft or corruption of data; harm to personnel, infrastructure or products; financial costs and liabilities; protracted disruptions in our operations and performance; as well as damage to our reputation as a provider of educational services.
Successful attacks could lead to losses or misuse of sensitive information or capabilities; theft or corruption of data; harm to personnel, infrastructure or products; financial costs and liabilities; protracted disruptions in our operations and performance; as well as damage to our reputation as a provider of educational services. 32 Index Our students and corporate business entities to whom we entrust confidential data, and on whom we rely to provide services, face similar threats and growing requirements, including ones for which others may seek to hold us responsible.
We may need to raise additional capital in the future to fund acquisitions, working capital requirements, expand our markets and program offerings or respond to competitive pressures or perceived opportunities. We cannot be sure that additional financing will be available to us on favorable terms, or at all.
We cannot predict our future capital needs, and if we are unable to secure additional financing when needed, our operations and revenues would be adversely affected. We may need to raise additional capital in the future to fund acquisitions, working capital requirements, expand our markets and program offerings or respond to competitive pressures or perceived opportunities.
If we are found to have violated this law, we could be fined or otherwise sanctioned by the DOE or we could face litigation filed under the qui tam provisions of the Federal False Claims Act.
If we are found to have violated this law, we could be fined or otherwise sanctioned by the DOE or we could face litigation filed under the qui tam provisions of the Federal False Claims Act. 25 Index If our schools do not maintain their state licensure and accreditation, they may not participate in Title IV Programs, which could adversely affect our student population and revenues.
We cannot be sure that we will be able to compete successfully against current or future competitors or that the competitive pressures we face will not adversely affect our revenues and profitability.
We cannot be sure that we will be able to compete successfully against current or future competitors or that the competitive pressures we face will not adversely affect our revenues and profitability. 29 Index Our financial performance depends in part on our ability to continue to develop awareness and acceptance of our programs among high school graduates and working adults looking to return to school.
Such actions could have a material adverse effect on our business and results of operations. Even if the Ninth Circuit rules in our favor and if the approval of the settlement is overturned, the DOE already may have discharged by that time the loans associated with some or all of the pending applications.
Such actions could have a material adverse effect on our business and results of operations. We believe the DOE already may have discharged some or all of the pending applications. See Part I, Item I.
More recently, the DOE is engaged in a negotiated rulemaking process on a number of topics including plans to amend the regulations on the requirements for institutions to return unearned Title IV funds to students who withdraw from their educational programs before completing them .
More recently, on January 3, 2025, the DOE issued amendments to the regulations on the requirements for institutions to return unearned Title IV funds to students who withdraw from their educational programs before completing them . See Part I, Item 1.
On June 22, 2022, the plaintiff student loan borrowers in a class action against the DOE in federal court in California ( Sweet v. Cardona , No. 3:19-cv-3674 (N.D. Cal.)) and the DOE announced a proposed settlement agreement to resolve claims that the DOE has failed to timely decide Borrower Defense to Repayment applications submitted to the DOE.
On June 22, 2022, the DOE and the plaintiff student loan borrowers in a class action against the DOE initiated on June 25, 2019 in the U.S. District Court for the Northern District of California ( Sweet v. Cardona , No. 3:19-cv-3674 (N.D.
If adequate funds are unavailable when required or on acceptable terms, we may be forced to forego attractive acquisition opportunities, or cease operations. Even if we are able to continue our operations, our ability to increase student enrollment and revenues would be adversely affected.
We cannot be sure that additional financing will be available to us on favorable terms, or at all. If adequate funds are unavailable when required or on acceptable terms, we may be forced to forego attractive acquisition opportunities, or cease operations.
We may not be able to retain our key personnel or hire and retain the personnel we need to sustain and grow our business. Our success has depended, and will continue to depend, largely on the skills, efforts and motivation of our executive officers who generally have significant experience within the post-secondary education industry.
Our success has depended, and will continue to depend, largely on the skills, efforts and motivation of our executive officers who generally have significant experience within the postsecondary education industry. Our success also depends in large part upon our ability to attract and retain highly qualified faculty, school directors, administrators and corporate management.
The proposed settlement included three categories of relief for student loan borrowers.
Cal.)) announced a proposed settlement agreement to resolve claims that the DOE had failed to timely decide Borrower Defense to Repayment applications submitted to the DOE. The proposed settlement included three categories of relief for student loan borrowers.
The three appealing schools also sought to stay the implementation of the settlement while their appeals were being decided, but the requested stay was denied by the district court, the Ninth Circuit, and the U.S. Supreme Court. As a result, the DOE is implementing the settlement relief while the three schools appeal the settlement’s final approval.
On November 16, 2022, the federal district court approved the settlement as proposed and the DOE began implementing the settlement relief while Lincoln and other parties appealed the settlement’s final approval to the U.S. Court of Appeals for the Ninth Circuit. On November 5, 2024, the Ninth Circuit upheld the settlement on appeal.
Changes in the executive branch of our federal government as a result of the outcome of elections or other events could result in further legislation, appropriations, regulations and enforcement actions that could materially or adversely affect our business. Our industry is subject to an intensive ongoing federal and state regulatory environment that affects our industry.
Our industry is subject to an intensive ongoing federal and state regulatory environment that affects our industry.
Removed
Investors should consider carefully the risks and uncertainties described below in addition to other information contained in this Annual Report on Form 10-K, including our Consolidated Financial Statements and related notes.
Added
See Part I, Item 1. “Business - Regulatory Environment – Congressional Action.” Similarly, the President could issue executive orders or take other actions and the DOE could establish new regulations, that could make it more difficult for our schools to operate and comply with applicable regulations.
Removed
We could be subject to liabilities, letter of credit requirements, and other sanctions under the DOE’s Borrower Defense to Repayment regulations.
Added
Moreover, Congress, or the President, could take action to downsize or eliminate the DOE or transfer some or all of the DOE’s authority or responsibilities to another agency or to the States.
Removed
District Court for the Northern District of California ( Sweet v. Cardona , No. 3:19-cv-3674 (N.D.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

2 edited+0 added−0 removed13 unchanged
Biggest changeWe maintain cybersecurity insurance coverage in amounts that we believe are adequate to address any incidents such as data destruction, extortion, theft, hacking, denial of service attacks and other such incidents. For more information concerning the risks that we face from cybersecurity threats, please see Part I, Item IA, “Risk Factors”. 36 Index
Biggest changeWe maintain cybersecurity insurance coverage in amounts that we believe are adequate to address any incidents such as data destruction, extortion, theft, hacking, denial of service attacks and other such incidents. For more information concerning the risks that we face from cybersecurity threats, please see Part I, Item 1A, “Risk Factors”. 35 Index
In the event of a perceived threat or possible cybersecurity incident, the cybersecurity team is trained to assess, among other factors, student safety impact, data and personal information impact, the possibility of business operations disruption, projected cost, if any, and potential for reputational harm, with support from external technical, legal and law enforcement support, as appropriate. 35 Index Our Board of Directors, in coordination with our Audit Committee, is responsible for overseeing our enterprise risk management.
In the event of a perceived threat or possible cybersecurity incident, the cybersecurity team is trained to assess, among other factors, student safety impact, data and personal information impact, the possibility of business operations disruption, projected cost, if any, and potential for reputational harm, with support from external technical, legal and law enforcement support, as appropriate. 34 Index Our Board of Directors, in coordination with our Audit Committee, is responsible for overseeing our enterprise risk management.

Item 2. Properties

Properties — owned and leased real estate

5 edited+2 added−3 removed0 unchanged
Biggest changeThe following table provides information relating to our facilities as of December 31, 2023, including our corporate office: Current Locations Brand Approximate Square Footage Las Vegas, Nevada Euphoria Institute 23,000 Columbia, Maryland Lincoln College of Technology 111,000 Denver, Colorado Lincoln College of Technology 213,000 Grand Prairie, Texas Lincoln College of Technology 157,000 Indianapolis, Indiana Lincoln College of Technology 126,000 Marietta, Georgia Lincoln College of Technology 30,000 Melrose Park, Illinois Lincoln College of Technology 88,000 Allentown, Pennsylvania Lincoln Technical Institute 25,000 East Windsor, Connecticut Lincoln Technical Institute 289,000 Iselin, New Jersey Lincoln Technical Institute 32,000 Lincoln, Rhode Island Lincoln Technical Institute 66,000 Mahwah, New Jersey Lincoln Technical Institute 79,000 Moorestown, New Jersey Lincoln Technical Institute 48,000 New Britain, Connecticut Lincoln Technical Institute 36,000 Paramus, New Jersey Lincoln Technical Institute 30,000 Philadelphia, Pennsylvania Lincoln Technical Institute 30,000 Queens, New York Lincoln Technical Institute 48,000 Shelton, Connecticut Lincoln Technical Institute and Lincoln Culinary Institute 57,000 South Plainfield, New Jersey Lincoln Technical Institute 60,000 Union, New Jersey Lincoln Technical Institute 56,000 Nashville, Tennessee Lincoln College of Technology 292,000 Parsippany, New Jersey Corporate Office 17,000 Future Locations Brand Approximate Square Footage Houston, Texas 1 Lincoln College of Technology 100,000 Levittown, Pennsylania 3 Lincoln Technical Institute 90,000 East Point, Georgia 4 Lincoln Technical Institute 55,000 Nashville, Tennessee 2 Lincoln College of Technology 120,000 We believe that our facilities are suitable for their intended purposes. 1 On October 31, 2023, the Company entered into a lease for approximately 100,000 square feet of space to serve as the Company’s new campus in Houston, Texas.
Biggest changeThe following table provides information relating to our facilities as of December 31, 2024, including our corporate office: Current Locations Brand Approximate Square Footage Columbia, Maryland Lincoln College of Technology 111,000 Denver, Colorado Lincoln College of Technology 213,000 Grand Prairie, Texas Lincoln College of Technology 158,000 Indianapolis, Indiana Lincoln College of Technology 126,000 Marietta, Georgia Lincoln College of Technology 30,000 Melrose Park, Illinois Lincoln College of Technology 88,000 Allentown, Pennsylvania Lincoln Technical Institute 25,000 East Windsor, Connecticut Lincoln Technical Institute 289,000 Iselin, New Jersey Lincoln Technical Institute 32,000 Lincoln, Rhode Island Lincoln Technical Institute 66,000 Mahwah, New Jersey Lincoln Technical Institute 79,000 Moorestown, New Jersey Lincoln Technical Institute 49,000 New Britain, Connecticut Lincoln Technical Institute 36,000 Paramus, New Jersey Lincoln Technical Institute 30,000 Philadelphia, Pennsylvania Lincoln Technical Institute 30,000 Queens, New York Lincoln Technical Institute 50,000 Shelton, Connecticut Lincoln Technical Institute 57,000 South Plainfield, New Jersey Lincoln Technical Institute 60,000 Union, New Jersey Lincoln Technical Institute 56,000 Nashville, Tennessee Nashville Auto Diesel College 292,000 East Point, Georgia Lincoln Technical Institute 56,000 Parsippany, New Jersey Corporate Office 17,000 Future Locations Brand Approximate Square Footage Hicksville, New York 1 Lincoln Technical Institute 65,000 Houston, Texas 2 Lincoln College of Technology 100,000 Nashville, Tennessee 3 Nashville Auto Diesel College 124,000 Levitttown, Pennsylania 4 Lincoln Technical Institute 91,000 We believe that our facilites are suitable for their intendedn puposes. 1 On December 12, 2024, the Company entered into a lease for approximately 65,000 square feet of space to serve as the Company’s new campus in Hicksville, New York.
The lease term commenced on January 2, 2024, with an initial lease term of 21-years and 6 months with three five-year renewal options. 2 On October 18, 2023, the Company entered into a lease for approximately 120,000 square feet of space. to serve as the Company’s new Nashville, Tennessee campus.
The lease term commenced on January 2, 2024, with an initial lease term of 21-years and 6 months with three five-year renewal options. 3 On October 18, 2023, the Company entered into a lease for approximately 120,000 square feet of space. to serve as the Company’s new Nashville, Tennessee campus.
The lease term commenced on November 1, 2023, with an initial lease term of 15-years with two five-year renewal options. 3 On September 28, 2023, the Company purchased a 90,000 square foot property located at 311 Veterans Highway, Levittown, Pennsylvania for approximately $10.2 million and, subsequently on January 30, 2024, entered into a sale-leaseback transaction for this property.
The lease term commenced on November 1, 2023, with an initial lease term of 15-years with two five-year renewal options. 4 On September 28, 2023, the Company purchased a 90,000 square foot property located at 311 Veterans Highway, Levittown, Pennsylvania for approximately $10.2 million and, subsequently on January 30, 2024, entered into a sale-leaseback transaction for this property.
ITEM 2. PROPERTIES As of December 31, 2023, we leased all of our facilities, except the Levittown, Pennsylvania campus, for which we entered into a sale lease-back transaction on January 30, 2024. We continue to reevaluate our facilities to maximize our facility utilization and efficiency and to allow us to introduce new programs and attract more students.
ITEM 2. PROPERTIES As of December 31, 2024, we lease all of our properties. We continue to reevaluate our facilities to maximize our facility utilization and efficiency and to allow us to introduce new programs and attract more students. As of December 31, 2024, all of our existing leases expire between 2025 and 2045.
As of December 31, 2023, this property was classified as held-for-sale on the Consolidated Balance Sheets. 4 On June 30, 2022, the Company executed a lease for approximately 55,000 square feet of space to serve as the Company’s new campus, in East Point, Georgia.
As of December 31, 2023, this property was classified as held-for-sale on the Consolidated Balance Sheets. 36 Index
Removed
As of December 31, 2023, all of our existing leases expire between 2024 and 2045.
Added
The lease term is currently planned to commence on or about May 1, 2025, with an initial lease term of 15 years and 9 months.
Removed
The lease term commenced in August 2022 with an initial lease term of 12 years term with two five-year renewal options. The Company had no involvement in the construction or design of the facilities on the property and was not deemed to be in control of the asset prior to the lease commencement date.
Added
The lease contains a renewal option allowing for either a 10-year renewal or two five-year renewals. 2 On October 31, 2023, the Company entered into a lease for approximately 100,000 square feet of space to serve as the Company’s new campus in Houston, Texas.
Removed
For the year ended December 31, 2023, the Company incurred approximately $0.8 million in rent expenses. 37 Index

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

9 edited+1 added−12 removed3 unchanged
Biggest changeThe three appealing schools also sought to stay the implementation of the settlement while their appeals were being decided, but the requested stay was denied by the district court, the Ninth Circuit, and the U.S. Supreme Court. As a result, the DOE is implementing the settlement relief while the three schools appeal the settlement’s final approval.
Biggest changeOn November 16, 2022, the federal district court approved the settlement as proposed and the DOE began implementing the settlement relief while Lincoln and other parties appealed the settlement’s final approval to the U.S. Court of Appeals for the Ninth Circuit. On November 5, 2024, the Ninth Circuit upheld the settlement on appeal.
Second, the proposed settlement included new procedures for DOE to resolve pending borrower defense claims associated with other schools not on the list.
Second, the proposed settlement included new procedures for the DOE to resolve pending borrower defense claims associated with other schools not on the list.
We cannot predict the ultimate resolution of these lawsuits, investigations, regulatory proceedings and other claims asserted against us, but we do not believe that any of these matters will have a material adverse effect on our business, financial condition, results of operations or cash flows. 38 Index ITEM 4. MINE SAFETY DISCLOSURES Not applicable. PART II.
We cannot predict the ultimate resolution of these lawsuits, investigations, regulatory proceedings and other claims asserted against us, but we do not believe that any of these matters will have a material adverse effect on our business, financial condition, results of operations or cash flows. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. PART II.
Cal.)) and the DOE announced a proposed settlement agreement to resolve claims that the DOE has failed to timely decide Borrower Defense to Repayment applications submitted to the DOE. The proposed settlement included three categories of relief for student loan borrowers.
Cal.)) announced a proposed settlement agreement to resolve claims that the DOE had failed to timely decide Borrower Defense to Repayment applications submitted to the DOE. The proposed settlement included three categories of relief for student loan borrowers.
In addition to the foregoing, in the ordinary conduct of our business, we are subject to additional periodic lawsuits, investigations, regulatory proceedings and other claims, including, but not limited to, claims involving students or graduates, routine employment matters and business disputes.
“Business – Regulatory Environment – Borrower Defense to Repayment Regulations.” In addition to the foregoing, in the ordinary conduct of our business, we are subject to additional periodic lawsuits, investigations, regulatory proceedings and other claims, including, but not limited to, claims involving students or graduates, routine employment matters and business disputes.
It is not possible at this time to predict whether the settlement will be upheld on appeal, what actions the DOE might take if the settlement is upheld on appeal, or whether the DOE or other agencies might take actions against Lincoln institutions before the appeal is decided.
It is not possible at this time to predict whether the settlement will continue to be upheld on appeal, what additional actions the DOE might take as the settlement continues to be upheld on appeal, or whether the DOE or other agencies might take actions against Lincoln institutions.
ITEM 3. LEGAL PROCEEDINGS On June 22, 2022, the plaintiff student loan borrowers in a class action against the DOE in federal court in California ( Sweet v. Cardona , No. 3:19-cv-3674 (N.D.
ITEM 3. LEGAL PROCEEDINGS On June 22, 2022, the DOE and the plaintiff student loan borrowers in a class action against the DOE initiated on June 25, 2019 in the U.S. District Court for the Northern District of California ( Sweet v. Cardona , No. 3:19-cv-3674 (N.D.
First, it set forth a list of approximately 150 institutions, including Lincoln Technical Institute and Lincoln College of Technology, and, under the settlement, the DOE would agree to discharge loans and refund prior loan payments to class members with loan debt associated with an institution on the list (which includes Lincoln institutions).
First, the DOE would agree to discharge loans and refund prior loan payments to class members with loan debt associated with an institution on the list included in the settlement (which includes Lincoln institutions).
Such actions could have a material adverse effect on our business and results of operations. Even if the Ninth Circuit rules in our favor and if the approval of the settlement is overturned, the DOE already may have discharged by that time the loans associated with some or all of the pending applications.
Such actions could have a material adverse effect on our business and results of operations. We believe the DOE already may have discharged some or all of the pending applications. See Part I, Item I.
Removed
At the time the plaintiffs and DOE announced the proposed settlement, Lincoln was not a party to the lawsuit and none of the named plaintiffs had attended a Lincoln institution.
Added
One or more schools are expected to continue to appeal the final approval of the settlement, but Lincoln does not intend to continue participating in the appeal.
Removed
In August 2022, Lincoln and three other schools were granted permission to intervene in the lawsuit to protect their interests in the finalization and implementation of any settlement agreement the court might approve.
Removed
In October 2022, the four intervening schools, including Lincoln, filed objections to the final approval of the settlement, asserting reputational harms from the schools’ inclusion on the settlement’s list of schools and denial of schools’ due process rights under the DOE’s borrower defense regulations.
Removed
On November 16, 2022, the federal district court overruled the four schools’ objections and approved the settlement as proposed.
Removed
On January 13, 2023, Lincoln appealed the settlement’s final approval to the U.S. Court of Appeals for the Ninth Circuit. Two of the three other intervenor schools also appealed on the same date.
Removed
Lincoln and the two other appealing schools filed their opening appellate brief in the Ninth Circuit on May 3, 2023. The plaintiffs and the DOE filed their opposition appellate briefs on August 2, 2023. Lincoln and the two other appealing schools filed their reply appellate brief on September 22, 2023.
Removed
The Ninth Circuit heard oral argument on December 5, 2023, and is currently considering the appeal.
Removed
We have seen evidence that the DOE already may have discharged some of the loans associated with some of the pending applications, but the DOE has not furnished definitive data to us necessary to determine the extent to which applications have been granted.
Removed
The DOE may or may not attempt to seek recoupment from applicable schools relating to approval of borrower defense applications. The settlement also requires the DOE to review and decide borrower defense applications submitted after June 22, 2022 and before November 16, 2022 within 36 months of the final settlement date.
Removed
If the DOE grants some or all of these applications, the DOE also could attempt to recoup from us the loan amounts relating to these applications.
Removed
If the DOE approves borrower defense applications concerning us and attempts to recoup from us the loan amounts in the approved applications, we would consider our options for challenging the legal and factual bases for such actions.
Removed
We cannot predict what other actions the DOE might take if the settlement is fully implemented, including the amount of borrower defense applications that the DOE might grant or the amount of any recoupment that the DOE might seek from us, if any. We also cannot predict the outcome of any challenges we might make to such actions.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

5 edited+0 added−0 removed7 unchanged
Biggest changeDepartment of Education; • the effect of current and future Title IV Program regulations arising out of negotiated rulemakings, including any potential reductions in funding or restrictions on the use of funds received through Title IV Programs; • successful updating and expansion of the content of existing programs and developing new programs in a cost-effective manner or on a timely basis; • uncertainties regarding our ability to comply with federal laws and regulations regarding the 90/10 Rule and cohort default rates; • successful implementation of our strategic plan; • our inability to maintain eligibility for or to process federal student financial assistance; • regulatory investigations of, or actions commenced against, us or other companies in our industry; • changes in the state regulatory environment or budgetary constraints; • enrollment declines or challenges in our students’ ability to find employment as a result of economic conditions; • maintenance and expansion of existing industry relationships and develop new industry relationships; • a loss of members of our senior management or other key employees; • uncertainties associated with opening of new campuses and closing existing campuses; • uncertainties associated with integration of acquired schools; • industry competition; • the effect of any cybersecurity incident; • the effect of public health outbreaks, epidemics and pandemics including, without limitation, COVID-19 conditions and trends in our industry; • general economic conditions; and • other factors discussed under the headings “Business,” “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Forward-looking statements speak only as of the date the statements are made.
Biggest changeDepartment of Education; • the effect of current and future Title IV Program regulations arising out of negotiated rulemakings, including any potential reductions in funding or restrictions on the use of funds received through Title IV Programs; • successful updating and expansion of the content of existing programs and developing new programs in a cost-effective manner or on a timely basis; • uncertainties regarding our ability to comply with federal laws and regulations regarding the 90/10 Rule and cohort default rates; • successful implementation of our strategic plan; • our inability to maintain eligibility for or to process federal student financial assistance; • regulatory investigations of, or actions commenced against, us or other companies in our industry; • changes in the state regulatory environment or budgetary constraints; • enrollment declines; • challenges in our students’ ability to find employment as a result of economic conditions; • maintenance and expansion of existing industry relationships and develop new industry relationships; • a loss of members of our senior management or other key employees; • uncertainties associated with opening of new campuses and closing existing campuses; • uncertainties associated with integration of acquired schools; • industry competition; • the effect of any cybersecurity incident; • the effect of public health outbreaks, epidemics and pandemics; • conditions and trends in our industry; • general economic conditions; and • other factors discussed under the headings “Business,” “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Forward-looking statements speak only as of the date the statements are made.
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE 54 ITEM 11. EXECUTIVE COMPENSATION 54 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS 54 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE 54 ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES 54 PART IV. 54 ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES 54 ITEM 16.
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE 58 ITEM 11. EXECUTIVE COMPENSATION 58 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS 58 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE 58 ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES 58 PART IV. 58 ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES 58 ITEM 16.
ITEM 4. MINE SAFETY DISCLOSURES 39 PART II. 39 ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES 39 ITEM 6. [RESERVED] 40 ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 41 ITEM 7A.
ITEM 4. MINE SAFETY DISCLOSURES 37 PART II. 37 ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES 37 ITEM 6. [RESERVED] 40 ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 41 ITEM 7A.
FORM 10-K SUMMARY 56 SIGNATURES Index Forward-Looking Statements This Annual Report on Form 10-K and the documents incorporated by reference contain “forward-looking statements,” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, which include information relating to future events, future financial performance, strategies, expectations, competitive environment, regulation and availability of resources.
FORM 10-K SUMMARY 60 SIGNATURES 61 Index Cautionary Note Regarding Forward-Looking Statements This Annual Report on Form 10-K and the documents incorporated by reference contain “forward-looking statements,” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, which include information relating to future events, future financial performance, strategies, expectations, competitive environment, regulation and availability of resources.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 52 ITEM 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 52 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE 52 ITEM 9A. CONTROLS AND PROCEDURES 53 ITEM 9B. OTHER INFORMATION 53 ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS 53 PART III. 53 ITEM 10.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 56 ITEM 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 57 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE 57 ITEM 9A. CONTROLS AND PROCEDURES 57 ITEM 9B. OTHER INFORMATION 57 ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS 57 PART III. 58 ITEM 10.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

9 edited+4 added−0 removed3 unchanged
Biggest changeInformation regarding these securities as of December 31, 2023, is as follows: Plan Category Number of Securities to be issued upon exercise of outstanding options, warrants and rights Weighted- average exercise price of outstanding options, warrants and rights Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (a) Equity compensation plans approved by security holders - $ - 127,507 Equity compensation plans not approved by security holders - - - Total - $ - 127,507
Biggest changeInformation regarding these securities as of December 31, 2024, is as follows: Plan Category Number of Securities to be issued upon exercise of outstanding options, warrants and rights (a) Weighted- average exercise price of outstanding options, warrants and rights Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) Equity compensation plans approved by security holders - $ - 1,684,587 Equity compensation plans not approved by security holders - - - Total - $ - 1,684,587 38 Index Stock Performance Graph This stock performance graph compares our total cumulative stockholder return on our Common Stock for the five years ended December 31, 2024 with the cumulative return on the Russell 2000 Index, S&P 500 and an index of peer companies.
Subsequently, on February 27, 2023, the Board of Directors extended the share repurchase program for an additional 12 months and authorized the repurchase of an additional $10.0 million of the Company’s Common Stock, for an aggregate of up to $30.6 million in additional repurchases.
On February 27, 2023, the Board of Directors extended the share repurchase program for an additional 12 months and authorized the repurchase of an additional $10.0 million of the Company’s Common Stock, for an aggregate of up to $30.6 million in additional repurchases.
Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publically Announced Plan Maximum Dollar Value of Shares Remaining to be Purchased Under the Plan October 1, 2023 to October 31, 2023 - $ - - $ 29,663,667 November 1, 2023 to November 30, 2023 - - - - December 1, 2023 to December 31, 2023 - - - - Total - - - For more information on the share repurchase program, See Part II.
Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publically Announced Plan Maximum Dollar Value of Shares Remaining to be Purchased Under the Plan October 1, 2024 to October 31, 2024 - $ - - $ 29,663,667 November 1, 2024 to November 30, 2024 - - - - December 1, 2024 to December 31, 2024 - - - - Total - - - For more information on the share repurchase program, See Part II.
During the fiscal year ended December 31, 2022, the Company paid a total of $1.1 million in cash dividends to holders of its Series A Convertible Preferred Stock (the “Series A Preferred Stock”) pursuant to the Securities Purchase Agreement entered into on November 14, 2019 and the Company’s Amended and Restated Certificate of Incorporation.
During the fiscal year ended December 31, 2022, the Company paid a total of $1.1 million in cash dividends to holders of its Series A Convertible Preferred Stock (the “Series A Preferred Stock”) pursuant to the Securities Purchase Agreement entered into on November 14, 2019 and the Company’s Amended and Restated Certificate of Incorporation. 37 Index On November 30, 2022, the Company exercised in full its right of mandatory conversion of the Company’s Series A Preferred Stock.
On February 29, 2024, the last reported sale price of our Common Stock on the Nasdaq Global Select Market was $10.06 per share. As of February 29, 2024, based on the information provided by Continental Stock Transfer & Trust Company, there were 42 shareholders of record of our Common Stock.
On February 26, 2025, the last reported sale price of our Common Stock on the Nasdaq Global Select Market was $18.29 per share. Holders As of February 26, 2025, based on the information provided by Continental Stock Transfer & Trust Company, there were 42 shareholders of record of our Common Stock.
The following table presents the number and average price of shares purchased during the three months ended December 31, 2023. The remaining authorized amount for share repurchases under the program at December 31, 2023 was approximately $29.7 million.
During the year ended December 31, 2024, the Company did not repurchase any shares. 39 Index The following table presents the number and average price of shares purchased during the three months ended December 31, 2024. The remaining authorized amount for share repurchases under the program at December 31, 2024 was approximately $29.7 million.
On November 30, 2022, the Company exercised in full its right of mandatory conversion of the Company’s Series A Preferred Stock. In connection with the conversion, each share of Series A Preferred Stock has been cancelled and converted into 423.729 shares of the Company’s Common Stock, no par value per share.
In connection with the conversion, each share of Series A Preferred Stock has been cancelled and converted into 423.729 shares of the Company’s Common Stock, no par value per share. Shares of the Series A Preferred Stock are no longer outstanding and all rights of the holders to receive future dividends have terminated.
Item 8. “Financial Statements and Supplemental Data - Notes to Consolidated Financial Statements – Note 12 Stockholders Equity.” 39 Index Equity Compensation Plan Information We have various equity compensation plans under which equity securities are authorized for issuance.
Item 8. “Financial Statements and Supplemental Data - Notes to Consolidated Financial Statements – Note 12 Stockholders Equity.”
Shares of the Series A Preferred Stock are no longer outstanding and all rights of the holders to receive future dividends have terminated. As a result of the conversion, the aggregate 12,700 shares of Series A Preferred Stock were converted into 5,381,356 shares of Common Stock.
As a result of the conversion, the aggregate 12,700 shares of Series A Preferred Stock were converted into 5,381,356 shares of Common Stock. Equity Compensation Plan Information We have various equity compensation plans under which equity securities are authorized for issuance.
Added
The companies in the index of peer issuers, which were selected in good faith on the basis of the similar nature of their business as postsecondary educational institutions, include American Public Education, Inc., Adtalem Global Education Inc., Strategic Education, Inc., Universal Technical Institute, Inc., and Perdoceo Education Corporation.
Added
The graph assumes that $100 was invested on December 31, 2019 and any dividends were reinvested on the date on which they were paid.
Added
The information provided under the heading "Stock Performance Graph" shall not be considered "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 or incorporated by reference in any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent that we specifically incorporate it by reference into a filing.
Added
On May 7, 2024, the Company announced that its Board of Directors had authorized an extension of its share repurchase program for an additional 12 months through May 24, 2025.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

83 edited+74 added−22 removed90 unchanged
Biggest changeDuring the fiscal years ended December 31, 2023 and 2022, we did not record any interest and penalties expense associated with uncertain tax positions, as we do not have any uncertain tax positions. 45 Index Results of Operations for the Two Years Ended December 31, 2023 and December 31, 2022 The following table sets forth selected consolidated statements of operations data as a percentage of revenues for each of the periods indicated: Year Ended Dec 31, 2023 2022 Revenue 100.0 % 100.0 % Costs and expenses: Educational services and facilities 42.9 % 42.7 % Selling, general and administrative 55.3 % 52.4 % Gain on sale of assets -8.2 % -0.1 % Impairment of goodwill and long-lived assets 1.1 % 0.3 % Total costs and expenses 91.2 % 95.3 % Operating income 8.8 % 4.7 % Interest expense, net 0.6 % 0.0 % Income from operations before income taxes 9.4 % 4.7 % Provision for income taxes 2.6 % 1.1 % Net income 6.8 % 3.6 % Year Ended December 31, 2023 Compared to Year Ended December 31, 2022 Consolidated Results of Operations Revenue.
Biggest changeResults of Operations for the Three Years Ended December 31, 2024 The following table sets forth selected consolidated statements of operations data as a percentage of revenues for each of the periods indicated: Year Ended Dec 31, 2024 2023 2022 Revenue 100.0 % 100.0 % 100.0 % Costs and expenses: Educational services and facilities 41.3 % 42.9 % 42.7 % Selling, general and administrative 55.4 % 55.3 % 52.4 % Loss (gain) on sale of assets 0.5 % -8.2 % -0.1 % Gain on insurance proceeds -0.6 % 0.0 % 0.0 % Impairment of goodwill and long-lived assets 0.0 % 1.1 % 0.3 % Total costs and expenses 96.6 % 91.2 % 95.3 % Operating income 3.4 % 8.8 % 4.7 % Interest expense, net -0.1 % 0.6 % 0.0 % Income from operations before income taxes 3.3 % 9.4 % 4.7 % Provision for income taxes 1.1 % 2.6 % 1.1 % Net income 2.2 % 6.8 % 3.6 % Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 Consolidated Results of Operations Revenue.
In addition, the Company is experiencing higher staffing levels at several campuses that have launched the hybrid teaching model as the Company is providing instruction through both the new and traditional learning models for an interim period of time.
In addition, the Company is experiencing higher staffing levels at several campuses that have launched the hybrid teaching model as the Company is providing instruction through both the new and traditional learning models for an interim period of time.
In connection with the sale of the Nashville, Tennessee property, the Company entered into a lease agreement allowing the Company to continue to occupy the campus and operate it on a rent-free basis for a period of 15 months.
In connection with the sale of the Nashville, Tennessee property, the Company entered into a lease agreement allowing the Company to continue to occupy the campus and operate it on a rent-free basis for a period of 15 months.
At the consummation of the sale, the Company took the fair value of the 15-month rent free period, valued at $2.3 million, and included the balance in prepaid expenses and other current assets on the Company’s Consolidated Balance Sheets. During the 15-month rent-free period, the Company will straight-line the expense until the rent-free period has expired.
At the consummation of the sale, the Company took the fair value of the 15-month rent free period, valued at $2.3 million, and included the balance in prepaid expenses and other current assets on the Company’s Consolidated Balance Sheets. During the 15-month rent-free period, the Company will straight-line the expense until the rent-free period has expired.
On February 16, 2024, the Company entered into a secured credit agreement (the “Fifth Third Credit Agreement”) with Fifth Third Bank, National Association (the “Bank”), pursuant to which the Company, as borrower, has obtained a revolving credit facility in the aggregate principal amount of $40.0 million including a $10.0 million letter of credit sublimit and a $20.0 million accordion feature (the “Facility”), the proceeds of which are to be used for working capital, general corporate and certain other permitted purposes.
Credit Facility On February 16, 2024, the Company entered into a secured credit agreement (the “Fifth Third Credit Agreement”) with Fifth Third Bank, National Association (the “Bank”), pursuant to which the Company, as borrower, has obtained a revolving credit facility in the aggregate principal amount of $40.0 million including a $10.0 million letter of credit sublimit and a $20.0 million accordion feature (the “Facility”), the proceeds of which are to be used for working capital, general corporate and certain other permitted purposes.
Facilities expense increased by approximately $4.5 million, driven primarily by a $2.4 million increase in rent expense relating to lease extensions at several campuses, additional space taken at one of our campuses, and non-cash rent expense relating to the new East Point, Georgia campus and the sale-leaseback of our existing Nashville, Tennessee property.
Facilities expense increased by approximately $4.4 million, driven primarily by a $2.4 million increase in rent expense relating to lease extensions at several campuses, additional space taken at one of our campuses, non-cash rent expense relating to the new East Point, Georgia campus, and the sale-leaseback of our existing Nashville, Tennessee property.
The change in cash position from prior year was primarily driven by several factors including the sale of our Nashville, Tennessee property, which yielded approximately $33.3 million in proceeds, cashflow generated from operations of $25.9 million, and an increase of $2.1 million relating to additional interest income driven by the investment of cash reserves into various short-term investment vehicles during the year ended December 31, 2023.
The change in cash position from the prior year was primarily driven by several factors including the sale of our Nashville, Tennessee property, which yielded approximately $33.3 million in proceeds, cash flow generated from operations of $25.9 million, and an increase of $2.1 million relating to additional interest income driven by the investment of cash reserves into various short-term investment vehicles during the year ended December 31, 2023.
As a result of the adoption, the Company has revised the way in which it calculates reserves on outstanding student accounts receivable balances. Details considered by management in the estimate include the following: 43 Index We extend credit to a portion of the students who are enrolled at our academic institutions for tuition and certain other educational costs.
As a result of the adoption, the Company has revised the way in which it calculates reserves on outstanding student accounts receivable balances. Details considered by management in the estimate include the following: We extend credit to a portion of the students who are enrolled at our academic institutions for tuition and certain other educational costs.
Changes in, among other things, income tax legislation, statutory income tax rates or future income levels could materially impact the Company’s valuation of income tax assets and liabilities and could cause our income tax provision to vary significantly among financial reporting periods. We recognize accrued interest and penalties related to unrecognized tax benefits in income tax expense.
Changes in, among other things, income tax legislation, statutory income tax rates or future income levels could materially impact the Company’s valuation of income tax assets and liabilities and could cause our income tax provision to vary significantly among financial reporting periods. 45 Index We recognize accrued interest and penalties related to unrecognized tax benefits in income tax expense.
We have assessed the costs incurred to obtain a contract with a student and determined them to be immaterial. Allowance for Credit Losses. On January 1, 2023, the Company adopted Accounting Standards Update (“ASU”) 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments .
We have assessed the costs incurred to obtain a contract with a student and determined them to be immaterial. 43 Index Allowance for Credit Losses. On January 1, 2023, the Company adopted Accounting Standards Update (“ASU”) 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments .
The largest of these programs are Title IV Programs which represented approximately 81% and 74% of our revenue on a cash basis while the remainder is primarily derived from state grants and cash payments made by students during fiscal years 2023 and 2022, respectively.
The largest of these programs are Title IV Programs which represented approximately 82%, 81%, and 74% of our revenue on a cash basis while the remainder is primarily derived from state grants and cash payments made by students during fiscal years 2024, 2023, and 2022, respectively.
Increased investments were driven in part by continued incremental marketing support for the two new programs that were launched in the third quarter, which included Medical Assistant at our Columbia, MD campus and Electrical & Electronic Systems Technology at our Grand Prairie, TX campus.
Increased investments were driven in part by continued incremental marketing support for the two new programs that were launched in the third quarter of 2023, which included Medical Assistant at our Columbia, MD campus and Electrical & Electronic Systems Technology at our Grand Prairie, TX campus.
The increase in net interest income was primarily driven by the Company’s investment of its cash reserves into various short-term investments for the full fiscal year ended December 31, 2023, compared to investing cash reserves in the fourth quarter of the prior year.
The increase in net interest income was primarily driven by the Company’s investment of its cash reserves into various short-term investments for the full fiscal year ended December 31, 2023, compared to investing cash reserves in the fourth quarter of 2022.
A 1% increase in our bad debt expense as a percentage of revenues for the fiscal years ended December 31, 2023 and 2022 would have resulted in an increase in bad debt expense of $3.8 million and $3.5 million, respectively.
A 1% increase in our bad debt expense as a percentage of revenues for the fiscal years ended December 31, 2024, 2023, and 2022 would have resulted in an increase in bad debt expense of $4.4 million, $3.8 million, and $3.5 million, respectively.
Educational services and facilities expense, as a percentage of revenue, increased to 42.9% from 42.7% for the fiscal years ended December 31, 2023 and 2022, respectively. 46 Index Selling, general and administrative expense.
Educational services and facilities expense, as a percentage of revenue, increased to 42.9% from 42.7% for the fiscal years ended December 31, 2023 and 2022, respectively. Selling, general and administrative expense.
Further increases resulted from student testing, primarily relating to our nursing program and increased consumables costs driven by a higher student population and inflation. 48 Index o Facilities expense increased by approximately $4.5 million, driven primarily by a $2.4 million increase in rent expense relating to lease extensions at several campuses, additional space taken at one of our campuses, and non-cash rent expense relating to the new East Point, Georgia campus and the sale-leaseback of our existing Nashville, Tennessee property.
Further increases resulted from student testing, primarily related to our nursing program, and increased consumables costs driven by a higher student population and inflation. 52 Index o Facilities expense increased by approximately $4.4 million, driven primarily by a $2.4 million increase in rent expense relating to lease extensions at several campuses, additional space taken at one of our campuses, non-cash rent expense relating to the new East Point, Georgia campus, and the sale-leaseback of our existing Nashville, Tennessee property.
The majority of students enrolled at our schools rely on funds received under various government-sponsored student financial aid programs to pay a substantial portion of their tuition and other education-related expenses. The most significant source of student financing is Title IV Programs, which represented approximately 81% of our cash receipts relating to revenues in 2023.
The majority of students enrolled at our schools rely on funds received under various government-sponsored student financial aid programs to pay a substantial portion of their tuition and other education-related expenses. The most significant source of student financing is Title IV Programs, which represented approximately 82% of our cash receipts relating to revenues in 2024.
Our diploma/certificate programs range in duration from 19 to 104 weeks, our associate’s degree programs range in duration from 69 to 92 weeks, and students attend classes for different amounts of time per week depending on the school and program in which they are enrolled. Because we start new students every month, our total student population changes monthly.
Our diploma/certificate programs range in duration from 27 to 104 weeks, our associate’s degree programs range in duration from 69 to 94 weeks, and students attend classes for different amounts of time per week depending on the school and program in which they are enrolled. Because we start new students every month, our total student population changes monthly.
Further increases resulted from student testing, primarily relating to our nursing program and increased consumables costs driven by a higher student population and inflation.
Further increases resulted from student testing, primarily related to our nursing program, and increased consumables costs driven by a higher student population and inflation.
As a result of the Nashville sale discussed above, the Company also recorded a pre-tax non-cash impairment charge of $0.4 million relating to long-lived assets. On December 31, 2022, as a result of impairment testing it was determined that there was a long-lived asset impairment of $1.0 million.
During the year ended December 31, 2023, as a result of the Nashville sale discussed above, the Company also recorded a pre-tax non-cash impairment charge of $0.4 million relating to long-lived assets. On December 31, 2022, as a result of impairment testing, it was determined that there was a long-lived asset impairment of $1.0 million.
Increased costs were driven by the following: Administrative costs increased $20.8 million, driven by several factors including a) an increase in performance-based incentives driven by improved financial performance above plan, b) increased stock-based compensation due to achieving financial targets, c) additional bad debt expense driven by revenue growth of $35.2 million and a slight deterioration in collection rates and d) higher legal costs.
Increased costs were driven by the following: Administrative costs increased $20.3 million, driven by several factors including a) an increase in performance-based incentives driven by improved financial performance above plan, b) increased stock-based compensation due to achieving financial targets, c) additional bad debt expense driven by revenue growth of $36.3 million and a slight deterioration in collection rates and d) higher legal costs.
We offer programs in areas of study that we believe are typically underserved by traditional providers of post-secondary education and for which we believe there exists significant demand among students and employers.
We offer programs in areas of study that we believe are typically underserved by traditional providers of postsecondary education and for which we believe there exists significant demand among students and employers.
The Company’s hybrid teaching model increases program efficiency and delivers accelerated revenue recognition in certain evening programs. Educational services and facilities expense. Our educational services and facilities expense increased $13.5 million, or 9.1% to $162.3 million for the fiscal year ended December 31, 2023 from $148.7 million in the prior year comparable period.
The Company’s hybrid teaching model increases program efficiency and delivers accelerated revenue recognition in certain evening programs. Educational services and facilities expense. Our educational services and facilities expense increased $13.5 million, or 9.1% to $162.3 million for the fiscal year ended December 31, 2023 from $148.7 million during the fiscal year ended December 31, 2022.
Our income tax provision for the year ended December 31, 2023 was $9.6 million, or 27.1% of pre-tax income compared to $3.8 million, or 23.1% of pre-tax income in the prior year.
Our income tax provision for the year ended December 31, 2023 was $9.6 million, or 27.1% of pre-tax income compared to $3.8 million, or 23.1% of pre-tax income for the year ended December 31, 2022.
Our bad debt expense as a percentage of revenues for the fiscal years ended December 31, 2023 and 2022 was 11.0% and 10.0%, respectively.
Our bad debt expense as a percentage of revenues for the fiscal years ended December 31, 2024, 2023, and 2022 was 12.9%, 11.0%, and 10.0%, respectively.
In addition, in December of the current year, the Company provided all employees, who are not part of the Company’s bonus incentive plan with a holiday bonus. Marketing investments increased $4.4 million, helping drive additional student starts, up 11.4% year-over-year.
In addition, at December 31, 2023, the Company provided all employees, who are not part of the Company’s bonus incentive plan with a holiday bonus. Marketing investments increased $4.1 million, helping drive additional student starts, up 11.4% year-over-year.
Partially offsetting the cash inflows was an increase in investments in capital expenditures of $31.7 million, which was primarily driven by the buildout of the new East Point, Georgia campus and the purchase of the new Levittown, Pennsylvania property for approximately $10.2 million, which was consummated on September 28, 2023.
Partially offsetting the cash inflows was an increase in investments in capital expenditures of $31.7 million, which was primarily driven by the buildout of the new East Point, Georgia campus and the purchase of the new Levittown, Pennsylvania property for approximately $10.2 million, which was consummated on September 28, 2023. We currently lease all of our campuses.
Corporate and other expenses were $43.2 million and $33.0 million after excluding a $30.9 million gain in the current year, resulting from the sale of our Nashville, Tennessee property and a $0.2 million gain in the prior year driven by the sale of our former campus property in Suffield, Connecticut.
Corporate and other expenses were $43.2 million and $33.0 million after excluding a $30.9 million gain in 2023, resulting from the sale of our Nashville, Tennessee property and a $0.2 million gain in 2022 driven by the sale of our former campus property in Suffield, Connecticut.
If we determine that impairment has occurred, we record a write-down of the carrying value and charge the impairment as an operating expense in the period the determination is made. As of December 31, 2023, goodwill was approximately $10.7 million, or 3.1%, of our total assets.
If we determine that impairment has occurred, we record a write-down of the carrying value and charge the impairment as an operating expense in the period the determination is made. As of December 31, 2024, goodwill was approximately $10.7 million, or 2.5%, of our total assets.
Also contributing to the increased costs were higher utility expense driven by inflation and an increase in repairs and maintenance at several campuses. Books and tools expense increased $3.0 million, driven by a 11.4% increase in student starts year-over-year and vendor price increases.
Also contributing to the increased costs were higher utility expense driven by inflation and an increase in repairs and maintenance at several campuses. Books and tools expense increased $3.2 million, driven by a 14.6% increase in student starts year-over-year and vendor price increases.
The remaining increase in revenue was driven by several factors including student start growth of 11.4% and an increase in average revenue per student of 8.0%, driven in part by the continuing rollout of the Company’s hybrid teaching model in combination with tuition increases.
The remaining increase in revenue was driven by several factors including student start growth of 13.3% and an increase in average revenue per student of 7.8%, driven in part by the continuing rollout of the Company’s hybrid teaching model in combination with tuition increases.
The increase in revenue was driven by several factors including student start growth of 11.4% and an increase in average revenue per student of 8.0%, driven in part by the continuing rollout of the Company’s hybrid teaching model in combination with tuition increases.
The increase in revenue was driven by several factors including student start growth of 13.3% and an increase in average revenue per student of 7.8%, driven in part by the continuing rollout of the Company’s hybrid teaching model in combination with tuition increases.
Our revenues are reduced by scholarships granted by us to some of our students. We recognize revenues from tuition and one-time fees, such as application fees, ratably over the length of a program, including internships or externships that take place prior to graduation. We also earn revenues from our bookstores, dormitories, cafeterias and contract training services.
We recognize revenues from tuition and one-time fees, such as application fees, ratably over the length of a program, including internships or externships that take place prior to graduation. We also earn revenues from our bookstores, dormitories, cafeterias and contract training services.
Approximately $0.6 million of the Company’s ROU asset was impaired in addition to $0.4 million of long-lived assets. Net interest income. Net interest income was $2.3 million for the fiscal year ended December 31, 2023 compared to $0.2 million in the prior year comparable period.
Approximately $0.6 million of the Company’s ROU asset was impaired in addition to $0.4 million of long-lived assets. 48 Index Net interest income. Net interest income was $2.3 million for the fiscal year ended December 31, 2023 compared to $0.2 million during the fiscal year ended December 31, 2022.
Increased costs were driven by several factors including additional performance-based incentives, stock-based compensation, and an increase in legal costs. LIQUIDITY AND CAPITAL RESOURCES Our primary capital requirements are for maintenance and expansion of our facilities and the development of new programs.
Increased costs were driven by several factors including additional performance-based incentives, stock-based compensation, and an increase in legal costs. LIQUIDITY AND CAPITAL RESOURCES Our primary capital requirements are for maintenance and expansion of our facilities and the development of new programs. Our principal source of liquidity has been cash provided by operating activities.
Increases in accounts receivable were primarily driven by a $29.8 million increase in revenue year-over-year. Investing Activities Net cash provided by investing activities was $7.3 million for the fiscal year ended December 31, 2023 compared to net cash used in investing activities of $21.4 million in the prior year comparable period.
Increases in accounts receivable were primarily driven by a $29.8 million increase in revenue year-over-year. Investing Activities Net cash used in investing activities was $47.0 million for the fiscal year ended December 31, 2024, compared to net cash provided by investing activities of $7.3 million for the fiscal year ended December 31, 2023.
Our selling, general and administrative expense increased $26.7 million, or 14.7% to $209.1 million for the fiscal year ended December 31, 2023, from $182.4 million in the prior year comparable period.
Our selling, general and administrative expense increased $26.7 million, or 14.7% to $209.1 million for the fiscal year ended December 31, 2023, from $182.4 million during the fiscal year ended December 31, 2022.
Our average enrollment for the fiscal year ended December 31, 2023 was 12,941 students and our revenues were $378.1 million, which represented an increase of 8.6% over the prior fiscal year. For more information relating to our revenues, profits and financial condition, please refer to our Consolidated Financial Statements included in this Annual Report on Form 10-K.
Our average enrollment for the fiscal year ended December 31, 2024 was 14,426 students and our revenues were $440.1 million, which represented an increase of 16.4% over the prior fiscal year. For more information relating to our revenues, profits and financial condition, please refer to our Consolidated Financial Statements included in this Annual Report on Form 10-K.
On February 27, 2023, the Board of Directors extended the share repurchase program for an additional 12 months and authorized the repurchase of an additional $10.0 million of the Company’s Common Stock, for an aggregate of up to $30.6 million in additional repurchases. As of December 31, 2023, the Company has approximately $29.7 million remaining for repurchases.
On February 27, 2023, the Board of Directors extended the share repurchase program for an additional 12 months and authorized the repurchase of an additional $10.0 million of the Company’s Common Stock, for an aggregate of up to $30.6 million in additional repurchases.
Selling, general and administrative expense, as a percentage of revenue, increased to 55.3% from 52.4% for the fiscal year ended December 31, 2023 and 2022, respectively. Gain on sale of assets.
Selling, general and administrative expense, as a percentage of revenue, increased slightly to 55.4% from 55.3% for the fiscal years ended December 31, 2024 and 2023, respectively. Loss on sale of assets.
Lincoln Educational Services Corporation offers programs in skilled trades (which include HVAC, welding and computerized numerical control and electrical and electronic systems technology, among other programs), automotive technology, healthcare services (which include nursing, dental assistant and medical administrative assistant, among other programs) and hospitality services and information technology (which include culinary, therapeutic massage, cosmetology and aesthetics and information technology programs).
Lincoln Educational Services Corporation offers programs in skilled trades (which include Heating Ventilation and Air Conditioning (“HVAC”), welding and computerized numerical control and electrical and electronic systems technology, among other programs), automotive technology, healthcare services (which include nursing, dental assistant and medical assistant, among other programs) and hospitality services and information technology (which include culinary and aesthetics and information technology programs).
The following chart summarizes the principal elements of our cash flow for each of the two fiscal years in the period ended December 31, 2023: Cash Flow Summary Year Ended December 31, 2023 2022 (In thousands) Net cash provided by operating activities $ 25,558 $ 882 Net cash provided by (used in) investing activities $ 7,369 $ (21,354 ) Net cash used in financing activities $ (2,945 ) $ (12,548 ) 49 Index As of December 31, 2023, the Company had $80.3 million in cash and cash equivalents and restricted cash, compared to $50.3 million in cash and cash equivalents and restricted cash, including $14.7 million in short-term investments as of December 31, 2022.
The following chart summarizes the principal elements of our cash flow for each of the three fiscal years in the period ended December 31, 2024: Cash Flow Summary Year Ended December 31, 2024 2023 2022 (In thousands) Net cash provided by operating activities $ 29,306 $ 25,558 $ 882 Net cash (used in) provided by investing activities $ (46,971 ) $ 7,369 $ (21,354 ) Net cash used in financing activities $ (3,331 ) $ (2,945 ) $ (12,548 ) As of December 31, 2024, the Company had $59.3 million in cash and cash equivalents, compared to $80.3 million in cash and cash equivalents and restricted cash as of December 31, 2023.
As of December 31, 2023, we have no debt outstanding. We lease offices, educational facilities and various items of equipment for varying periods through the year 2045 under basic annual rentals.
Contractual Obligations Current portion of Long-Term Debt, Long-Term Debt and Lease Commitments. As of December 31, 2024, we have no debt outstanding. We lease offices, educational facilities, and various items of equipment for varying periods through the year 2045 under basic annual rentals.
Five of the campuses are destination schools, which attract students from across the United States and, in some cases, from abroad. The Company’s other campuses primarily attract students from their local communities and surrounding areas. All of the campuses are nationally accredited and are eligible to participate in federal financial aid programs administered by the U.S.
The Company’s other campuses primarily attract students from their local communities and surrounding areas. All of the campuses are nationally accredited and are eligible to participate in federal financial aid programs administered by the U.S.
Instructional expenses increased $7.0 million, driven primarily by higher instructional salaries resulting from higher staffing levels due to increases in our student population and merit salary increases.
Increased costs were primarily concentrated in instructional expense, facilities expense and books and tools expense. 47 Index Instructional expenses increased $7.0 million, driven primarily by higher instructional salaries resulting from higher staffing levels due to increases in our student population and merit salary increases.
Excluding the Transitional segment selling, general and administrative expense of $1.5 million and $4.1 million for the fiscal year ended December 31, 2023 and 2022, respectively, our selling general and administrative expense would have increased $29.3 million, or 16.4%.
Excluding the Transitional segment selling, general and administrative expense of $6.5 million and $8.0 million for the fiscal years ended December 31, 2023 and 2022, respectively, our selling general and administrative expense would have increased $28.3 million, or 16.2%.
Our expenses, however, typically do not vary significantly over the course of the year with changes in our student population and revenue.
Our expenses, however, typically do not vary significantly over the course of the year with changes in our student population and revenue. Effect of Inflation Inflation has not had a material effect on our operations.
The Company’s hybrid teaching model increases program efficiency and delivers accelerated revenue recognition in certain evening programs. • Educational services and facilities expense increased $14.8 million, or 10.2% to $160.4 million for the fiscal year ended December 31, 2023 from $145.6 million in the prior year comparable period.
The Company’s hybrid teaching model increases program efficiency and delivers accelerated revenue recognition in certain evening programs. • Educational services and facilities expense increased $14.9 million, or 10.6% to $155.5 million for the fiscal year ended December 31, 2023 from $140.7 million during the fiscal year ended December 31, 2022.
Also contributing to the increased costs were higher utility expense driven by inflation and an increase in repairs and maintenance at several campuses. o Books and tools expense increased $3.0 million, driven by a 11.4% increase in student starts year-over-year. • Selling, general and administrative expense increased $19.1 million, or 13.1% to $164.4 million for the fiscal year ended December 31, 2023, from $145.3 million in the prior year comparable period.
Also contributing to the increased costs were higher utility expense driven by inflation and an increase in repairs and maintenance at several campuses. o Books and tools expense increased $3.2 million, driven by a 14.6% increase in student starts year-over-year. • Selling, general and administrative expense increased $18.0 million, or 12.8% to $159.4 million for the fiscal year ended December 31, 2023, from $141.4 million during the fiscal year ended December 31, 2022.
If the Company determines that an asset’s carrying value is impaired, it will record a write-down of the carrying value of the asset and charge the impairment as an operating expense in the period in which the determination is made.
If the Company determines that an asset’s carrying value is impaired, it will record a write-down of the carrying value of the asset and charge the impairment as an operating expense in the period in which the determination is made. For the year ended December 31, 2024, there were no impairments related to long-lived assets.
We had no off-balance sheet arrangements as of December 31, 2023, except for existing surety bonds. We are required to post surety bonds on behalf of our campuses and education representatives with multiple states to maintain authorization to conduct our business. At December 31, 2023, we posted surety bonds in the aggregate amount of approximately $16.0 million.
We are required to post surety bonds on behalf of our campuses and education representatives with multiple states to maintain authorization to conduct our business. At December 31, 2024, we posted surety bonds in the aggregate amount of approximately $17.0 million. These off-balance sheet arrangements do not adversely impact our liquidity or capital resources.
Excluding the Transitional segment educational services and facilities expense of $1.9 million and $3.2 million for the fiscal year ended December 31, 2023 and 2022, respectively, our educational services and facilities expense would have increased $14.9 million, or 10.2%. Increased costs were primarily concentrated in instructional expense, facilities expense and books and tools expense.
Excluding the Transitional segment educational services and facilities expense of $6.7 million and $8.1 million for the fiscal years ended December 31, 2023 and 2022, respectively, our educational services and facilities expense would have increased $14.9 million, or 10.6%.
We believe these job skills enable our students to compete effectively for employment opportunities and to pursue salary and career advancement. 41 Index In the last two years, we have further implemented our plan of improving the student experience by, among other things, further improving our campuses.
We believe these job skills enable our students to compete effectively for employment opportunities and to pursue salary and career advancement. 41 Index In the last several years, we have further implemented our plan of improving the student experience by adding program offerings, enhancing existing program offerings and expanding geographically with new state of the art campuses. See Part II.
All marketing and student enrollment expenses are recognized in the period incurred. 42 Index Real Estate Transactions Purchase and Sale-leaseback Transaction – Philadelphia, Pennsylvania Area Campus On September 28, 2023, the Company purchased a 90,000 square foot property located at 311 Veterans Highway, Levittown, Pennsylvania for approximately $10.2 million and on January 30, 2024, the Company has subsequently entered into a sale-leaseback transaction for this property.
The sale of the campus was consummated effective January 1, 2025. Purchase and Sale-leaseback Transaction – Philadelphia, Pennsylvania Area Campus On September 28, 2023, the Company purchased a 90,000 square foot property located at 311 Veterans Highway, Levittown, Pennsylvania for approximately $10.2 million and subsequently on January 30, 2024 entered into a sale-leaseback transaction for the same property.
The Company was incorporated in New Jersey in 2003 as the successor-in-interest to various acquired schools including Lincoln Technical Institute, Inc. which opened its first campus in Newark, New Jersey in 1946. As of January 1, 2023, the Company’s business has been organized into two reportable business segments: (a) Campus Operations; and (b) Transitional.
The Company was incorporated in New Jersey in 2003 as the successor-in-interest to various acquired schools including Lincoln Technical Institute, Inc. which opened its first campus in Newark, New Jersey in 1946.
Net cash provided by operating activities was $25.5 million for the fiscal year ended December 31, 2023 compared to $0.8 million in the prior year comparable period.
Net cash provided by operating activities for the years ended December 31, 2023 and 2022 was $25.5 million and $0.8 million, respectively.
During the year ended December 31, 2023, the increase in effective tax rate was mainly due to a lesser tax benefit derived from restricted stock vesting and higher pre-tax income. Segment Results of Operations As of January 1, 2023, the Company’s business is now organized into two reportable business segments: (a) Campus Operations; and (b) Transitional.
During the year ended December 31, 2023, the increase in effective tax rate was mainly due to a lesser tax benefit derived from restricted stock vesting and higher pre-tax income.
The change year-over-year was mainly driven by the following factors: • Revenue increased $35.2 million, or 10.3% to $376.6 million for the fiscal year ended December 31, 2023 from $341.4 million in the prior year comparable period.
The change year-over-year was mainly driven by the following factors: • Revenue increased $65.7 million, or 17.9% to $432.9 million for the fiscal year ended December 31, 2024 from $367.2 million in the prior year.
“Financial Statements and Supplemental Data” - Notes to Consolidated Financial Statements – Note 8 Real Estate Transactions”). The result of the sale created a change in the trajectory of the fair value of the Nashville, Tennessee operations and as such, the Company recorded a pre-tax non-cash impairment charge of $3.8 million relating to goodwill.
The result of the sale created a change in the trajectory of the fair value of the Nashville, Tennessee operations, and as such, the Company recorded a pre-tax non-cash impairment charge of $3.8 million relating to goodwill and an additional $0.4 million impairment relating to long-lived assets. Net interest expense / income.
The carrying value of the campus is approximately $4.5 million and the estimated fair value of the rent for the 15-month rent-free period was approximately $2.3 million at the consummation of the lease. As of December 31, 2023, approximately $1.3 million remains and is included in prepaid expenses and other current assets on the Company’s Consolidated Balance Sheets.
The carrying value of the campus is approximately $4.5 million and the estimated fair value of the rent for the 15-month rent-free period was approximately $2.3 million at the consummation of the lease. As of December 31, 2024, the total rent free period has been fully expensed.
Revenue increased $29.8 million, or 8.6% to $378.1 million for the fiscal year ended December 31, 2023 from $348.3 million in the prior year comparable period. Excluding the Transitional segment revenue of $1.5 million and $6.8 million for the fiscal year ended December 31, 2023 and 2022, respectively, our revenue would have increased $35.2 million, or 10.3%.
Excluding the Transitional segment revenue of $10.8 million and $17.4 million for the fiscal year ended December 31, 2023, and 2022, respectively, our revenue would have increased $36.3 million, or 11.0%.
We expect to fund future capital expenditures with cash generated from operating activities and cash on hand. 50 Index Financing Activities Net cash used in financing activities for the fiscal year ended December 31, 2023 and 2022 was $2.9 million and $12.5 million, respectively.
Net cash used in financing activities for the fiscal years ended December 31, 2023 and 2022 was $2.9 million and $12.5 million, respectively.
For the year ended December 31, 2023, the Company incurred approximately $0.8 million in rent expenses. See Part II. Item 8. “Financial Statements and Supplemental Data - Notes to Consolidated Financial Statements – Note 6 Leases and Note 8 Real Estate Transactions.” Our revenues consist primarily of student tuition and fees derived from the programs we offer.
Item 8. “Financial Statements and Supplemental Data - Notes to Consolidated Financial Statements – Note 6 Leases and Note 8 Real Estate Transactions.” Our revenues consist primarily of student tuition and fees derived from the programs we offer. Our revenues are reduced by scholarships granted by us to some of our students.
Overall, our allowance estimation process for student receivables is validated by trending analysis and comparing estimated and actual performance. Management makes a series of assumptions to determine what is believed to be the appropriate level of allowance for credit losses.
Management makes a series of assumptions to determine what is believed to be the appropriate level of allowance for credit losses.
For the year ended December 31, 2022, there were no impairments related to goodwill. Impairment of Long-Lived Assets . The Company reviews the carrying value of its long-lived assets and identifiable intangibles for possible impairment whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable.
The Company reviews the carrying value of its long-lived assets and identifiable intangibles for possible impairment whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable. For other long-lived assets, including right-of-use (“ROU”) lease assets, the Company evaluates assets for recoverability when there is an indication of potential impairment.
Historically, our schools have had lower student populations in our first and second quarters and we have experienced larger class starts in the third quarter and higher student attrition in the first half of the year. The growth that we generally experience in the second half of the year is largely dependent on a successful high school recruiting season.
Student population varies due to new student enrollments, graduations and student attrition. Historically, our schools have had lower student populations in our first and second quarters and we have experienced larger class starts in the third quarter and higher student attrition in the first half of the year.
GENERAL Lincoln Educational Services Corporation and its subsidiaries (collectively, the “Company”, “we”, “our” and “us”, as applicable) provide diversified career-oriented post-secondary education to recent high school graduates and working adults. The Company, which currently operates 21 campuses, in 13 states has added two additional campuses, one located in East Point, Georgia and the other in Houston, Texas.
GENERAL Lincoln Educational Services Corporation and its subsidiaries (collectively, the “Company”, “we”, “our” and “us”, as applicable) provide diversified career-oriented postsecondary education to recent high school graduates and working adults.
Corporate and Other This category includes unallocated expenses incurred on behalf of the entire Company.
Corporate and Other This category includes unallocated expenses incurred on behalf of the entire Company. Corporate and other expenses were $46.3 million and $12.3 million for the years ended December 31, 2024 and 2023, respectively.
Additionally, we obtain independent market metrics for the industry and our peers to assist in the development of these key assumptions. This process is consistent with our internal forecasts and operating plans. On June 8, 2023, the Company consummated the sale of its Nashville, Tennessee property (see Part II. Item 8.
Additionally, we obtain independent market metrics for the industry and our peers to assist in the development of these key assumptions. This process is consistent with our internal forecasts and operating plans. For the year ended December 31, 2024, there were no impairments related to goodwill.
The campus has been fully taught-out, and total costs to close the campus were approximately $2.0 million. • Revenue decreased $5.3 million, or 78.6% to $1.5 million for the fiscal year ended December 31, 2023, from $6.8 million in the prior year comparable period. • Total operating expenses decreased $3.9 million, or 53.6% to $3.4 million for the fiscal year ended December 31, 2023, from $7.3 million in the prior year comparable period.
It was fully taught-out as of December 31, 2023 and was classified in the Transitional segment in the prior year’s statement of operations. • Revenue decreased $3.7 million, or 34.5% to $7.1 million for the fiscal year ended December 31, 2024, from $10.8 million in the prior year. • Total operating expenses decreased $4.1 million, or 30.8% to $9.1 million for the fiscal year ended December 31, 2024, from $13.2 million in the prior year.
The full extension of credit amount is not guaranteed unless the student completes the program. The institutional extensions of credit are considered commitments because the students are required to fund their education using these funds and they are not reported in our Consolidated Financial Statements.
The institutional extensions of credit are considered commitments because the students are required to fund their education using these funds and they are not reported in our Consolidated Financial Statements. SEASONALITY AND OUTLOOK Seasonality Our revenue and operating results normally fluctuate as a result of seasonal variations in our business, principally due to changes in total student population.
These off-balance sheet arrangements do not adversely impact our liquidity or capital resources. As of the fiscal year ended December 31, 2023 and 2022, we had outstanding extensions of credit commitments to our active students of $33.6 million and $30.5 million, respectively. These are institutional extensions of credit and no cash is advanced to students.
As of December 31, 2024 and 2023, we had outstanding extensions of credit commitments to our active students of $44.6 million and $33.6 million, respectively. These are institutional extensions of credit and no cash is advanced to students. The full extension of credit amount is not guaranteed unless the student completes the program.
The following table presents results for the activity for our reportable operating segments for the fiscal years ended December 31, 2023 and 2022: Year Ended December 31, 2023 2022 % Change Revenue: Campus Operations $ 376,602 $ 341,440 10.3 % Transitional 1,468 6,847 -78.6 % Total $ 378,070 $ 348,287 8.6 % Operating Income (Loss): Campus Operations $ 47,579 $ 49,524 -3.9 % Transitional (1,914 ) (430 ) -345.1 % Corporate (12,307 ) (32,816 ) 62.5 % Total $ 33,358 $ 16,278 104.9 % Starts: Campus Operations 16,199 14,541 11.4 % Transitional - 379 -100.0 % Total 16,199 14,920 8.6 % Average Population: Campus Operations 12,875 12,602 2.2 % Transitional 66 292 -77.4 % Total 12,941 12,894 0.4 % End of Period Population: Campus Operations 13,270 12,196 8.8 % Transitional - 192 -100.0 % Total 13,270 12,388 7.1 % Year Ended December 31, 2023 Compared to Year Ended December 31, 2022 Campus Operations Operating income was $47.6 million and $49.5 million for the fiscal years ended December 31, 2023 and 2022, respectively.
The increase in expense from the prior year is primarily related to additional salaries and benefits expense, partially offset by reduced stock compensation expense. 51 Index The following table presents results for the activity for our reportable operating segments for the fiscal years ended December 31, 2023 and 2022: Year Ended December 31, 2023 2022 % Change Revenue: Campus Operations $ 367,233 $ 330,896 11.0 % Transitional 10,837 17,391 -37.7 % Total $ 378,070 $ 348,287 8.6 % Operating Income (Loss): Campus Operations $ 48,031 $ 47,799 0.5 % Transitional (2,366 ) 1,295 282.7 % Corporate (12,307 ) (32,816 ) 62.5 % Total $ 33,358 $ 16,278 104.9 % Starts: Campus Operations 15,526 13,709 13.3 % Transitional 673 1,211 -44.4 % Total 16,199 14,920 8.6 % Average Population: Campus Operations 12,436 12,079 3.0 % Transitional 505 815 -38.0 % Total 12,941 12,894 0.4 % End of Period Population: Campus Operations 12,900 11,703 10.2 % Transitional 370 685 -46.0 % Total 13,270 12,388 7.1 % Year Ended December 31, 2023 Compared to Year Ended December 31, 2022 Campus Operations Operating income was $48.0 million and $47.8 million for the fiscal years ended December 31, 2023 and 2022, respectively.
As of December 31, 2023, the only campus classified in the Transitional segment is the Somerville, Massachusetts campus. As of December 31, 2023, we had 13,270 students enrolled at 21 campuses.
It was fully taught-out as of December 31, 2023. This campus is classified in the Transitional segment in the prior year’s statement of operations. As of December 31, 2024, we had 15,138 students enrolled at 21 campuses.
As of December 31, 2023, the only campus classified in the Transitional segment is the Somerville, Massachusetts campus. The campus has been fully taught-out and total costs to close the campus were approximately $2.0 million. We evaluate performance based on operating results.
It was fully taught-out as of December 31, 2023. This campus is classified in the Transitional segment in the prior year’s statement of operations. We evaluate performance based on operating results.
The schools operate under Lincoln Technical Institute, Lincoln College of Technology, Lincoln Culinary Institute, and Euphoria Institute of Beauty Arts and Sciences and associated brand names. Most of the campuses serve major metropolitan markets and each typically offers courses in multiple areas of study.
The schools operate under the brands Lincoln Technical Institute, Lincoln College of Technology and Nashville Auto Diesel College. Most of the Company’s campuses serve major metropolitan markets and each typically offers courses in multiple areas of study. Five of the campuses are destination schools, which attract students from across the United States and, in some cases, from abroad.
Marketing investment in the fourth quarter also included the start of an awareness building media campaign for the new East Point, GA campus that is projecting to hold its initial program start in the first quarter of 2024.
Marketing investment in the fourth quarter of 2023 also included the start of an awareness building media campaign for the new East Point, GA campus. Despite additional investments in marketing for the year, the total cost to obtain a student remained flat demonstrating the effectiveness of the current marketing campaign.
The Credit Facility was secured by a first priority lien in favor of the Lender on substantially all of the personal property owned by the Company as well as a pledge of the stock and other rights in the Company’s subsidiaries and mortgages on parcels of real property owned by the Company.
The Facility is guaranteed by the Company’s wholly-owned subsidiaries and is secured by a first priority lien in favor of the Bank on substantially all of the personal property owned by the Company and its subsidiaries. The term of the Facility is 36 months, maturing on February 16, 2027.
We currently lease the majority of all our campuses, except for our Levittown, Pennsylvania property. This property was purchased in September of 2023 for approximately $10.2 million and as of December 31, 2023 has been classified on the Consolidated Balance Sheets as held for sale. Subsequently, on January 30, 2024, the Company closed on a sale-leaseback for this property.
As of December 31, 2023, this property was classified as held-for-sale on the Consolidated Balance Sheets. During the year ended December 31, 2024, the Company has invested approximately $11.7 million in capital investments.
As a result, the Company has shifted its focus to the two new segments as defined below: Campus Operations – The Campus Operations segment includes all campuses that are continuing in operation and contribute to the Company’s core operations and performance. 47 Index Transitional – The Transitional segment refers to businesses that are marked for closure and are currently being taught-out.
The Company manages its business, evaluates performance and allocates resources based on two reportable business segments, Campus Operations and Transitional: Campus Operations - The Campus Operations segment includes campuses that are continuing in operation and contribute to the Company’s core operations and performance. All of the campuses continuing in operation are classified in this segment.

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