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What changed in PERDOCEO EDUCATION Corp's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of PERDOCEO EDUCATION 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.

+501 added−584 removedSource: 10-K (2025-02-18) vs 10-K (2024-02-21)

Top changes in PERDOCEO EDUCATION Corp's 2024 10-K

501 paragraphs added · 584 removed · 364 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

277 edited+102 added−156 removed305 unchanged
Biggest changeWe are unable to determine the potential impact of any future final regulations on our business at this time. 2024 Negotiated Rulemaking The Department has convened a negotiating committee to develop proposed regulations pertaining to the following topics: • The Federal TRIO programs • The Secretary's recognition of accrediting agencies • State authorization • Return to Title IV funds • Cash Management • The definition of "distance education" as it pertains to clock hour programs and reporting for students who enroll primarily online The policy proposals offered by the Department and many of the partisan negotiators selected by the Department to participate as part of these negotiated rulemakings appear to be an effort by one part of the regulatory triad (federal) to impose its political will and directives on the other two members of the regulatory triad (state and accreditor).
Biggest changeOn December 26, 2024, the Department withdrew its notice of proposed rulemaking for both rules. 2024 Negotiated Rulemaking The Department convened a negotiating committee to develop proposed regulations pertaining to the following topics: • The Federal TRIO programs; • The Secretary's recognition of accrediting agencies; • State authorization; • Return to Title IV funds (" R2T4 "); 19 • Cash Management; and • The definition of "distance education" as it pertains to clock hour programs and reporting for students who enroll primarily online.
We pursue a student-first mindset in our efforts to provide student support throughout the academic life cycle, from enrollment and orientation through ongoing coaching and learning leading up to graduation, which we believe enhances overall student learning experiences and academic outcomes.
We pursue a student-first mindset in our efforts to provide support throughout the academic life cycle, from enrollment and orientation through ongoing coaching and learning leading up to graduation, which we believe enhances overall student learning experiences and academic outcomes.
Students who attend our institutions from these employers are awarded grants from the applicable university to partially offset their tuition costs, the amount of which can vary and depend on the employer’s approach to supporting the educational pursuits of its workforce.
Students from these employers who attend our institutions are awarded grants from the applicable university to partially offset their tuition costs, the amount of which can vary and depend on the employer’s approach to supporting the educational pursuits of its workforce.
As a provider of postsecondary education and a participant in federal and state programs providing financial assistance to students, we are subject to extensive laws and regulation at both the federal and state levels and as well as by accrediting agencies. These requirements cover virtually all aspects of our business.
As a provider of postsecondary education and a participant in federal and state programs providing financial assistance to students, we are subject to extensive laws and regulation at both the federal and state levels as well as by accrediting agencies. These requirements cover virtually all aspects of our business.
We have been named as defendants currently and/or in the past in various lawsuits, investigations and claims covering a range of matters, including, but not limited to, violations of the federal securities laws, breaches of fiduciary duty and claims made by current and former students and employees of our institutions.
We have been named as defendants currently and/or in the past in various lawsuits, investigations and claims covering a range of matters, including, but not limited to, violations of federal securities laws, breaches of fiduciary duty and claims made by current and former students and employees of our institutions.
In addition to being subject to privacy and information security laws and regulations in the U.S., because our services can be accessed globally via the Internet, we may also be subject to privacy laws in countries outside the U.S. from which students access our services, which laws may constrain the way we market and provide our services.
In addition to being subject to privacy and information security laws and regulations in the U.S., because our services can be accessed globally via the internet, we may also be subject to privacy and information security laws in countries outside the U.S. from which students access our services, which laws may constrain the way we market and provide our services.
Examples of discretionary triggers include: an accrediting agency or a federal, state, or other authority places the institution on probation, show cause, or comparable status; the institution is 17 subject to a default or other specified adverse condition under a credit or financing arrangement (unless due to an action by the Department, which is a mandatory trigger); a “significant fluctuation” in Direct Loan or Pell Grant funds received by the institution over different award years that cannot be accounted for by changes in those programs; the institution has high annual dropout rates as calculated by the Department; the institution is under prior financial reporting obligations to the Department and has any of the following occurrences: negative cash flows, failure of other financial ratios, cash flows that significantly miss projections submitted to the Department, significant increases in withdrawal rates or other indicators of a significant change in the institution’s financial condition; pending group-process BDR claims; a discontinuation of programs that enroll more than 25% of the institution’s students who receive Title IV funds; a closure of locations that enroll more than 25% of its students who receive Title IV funds; a citation by a state licensing agency for failing to meet its requirements; the institution or a program loses eligibility to participate in another federal educational assistance program due to an administrative action; for an institution owned at least 50% by a publicly traded entity, a disclosure by the entity in a public filing that its owner is under investigation for possible violations of state, federal or foreign law; a citation and potential loss of education assistance funds from another federal agency if it does not comply with agency requirements; the institution is required to submit a teach-out plan or agreement, including programmatic teach-outs, by a state, the Department or another federal agency, an accrediting agency, or other oversight body; or any other event or condition that the Department learns about from the institution or other parties where the Department determines that the event or condition is likely to have a significant adverse effect on the financial condition of the institution.
Examples of discretionary triggers include: an accrediting agency or a federal, state, or other authority places the institution on probation, show cause, or comparable status; the institution is subject to a default or other specified adverse condition under a credit or financing arrangement (unless due to an action by the Department, which is a mandatory trigger); a “significant fluctuation” in Direct Loan or Pell Grant funds received by the institution over different award years that cannot be accounted for by changes in those programs; the institution has high annual dropout rates as calculated by the Department; the institution is under prior financial reporting obligations to the Department and has any of the following occurrences: negative cash flows, failure of other financial ratios, cash flows that significantly miss projections submitted to the Department, significant increases in withdrawal rates or other indicators of a significant change in the institution’s financial condition; pending group-process BDR claims; a discontinuation of programs that enroll more than 25% of the institution’s students who receive Title IV funds; a closure of locations that enroll more than 25% of its students who receive Title IV funds; a citation by a state licensing agency for failing to meet its requirements; the institution or a program loses eligibility to participate in another federal educational assistance program due to an administrative action; for an institution owned at least 50% by a publicly traded entity, a disclosure by the entity in a public filing that its owner is under investigation for possible violations of state, federal or foreign law; a citation and potential loss of education assistance funds from another federal agency if it does not comply with agency requirements; the institution is required to submit a teach-out plan or agreement, including programmatic teach-outs, by a state, the Department or another federal agency, an accrediting agency, or other oversight body; or any other event or condition that the Department learns about from the institution or other parties where the Department determines that the event or condition is likely to have a significant adverse effect on the financial condition of the institution.
The information technology networks and systems owned, operated, controlled or used by us, our third-party vendors or other external agencies may be vulnerable to damage, disruptions or shutdowns, software or hardware vulnerabilities, data breaches, security incidents, failures during the process of upgrading or replacing software or databases or components thereof, power outages, natural disasters, hardware failures, attacks by computer hackers, telecommunication failures, user errors, user malfeasance, computer viruses, unauthorized access, phishing or social engineering attacks, ransomware attacks, distributed denial-of-service attacks, brute force attacks, robocalls and other real or perceived cyberattacks or catastrophic events, all of which may not be prevented by our efforts to secure our networks and systems.
The information technology networks and systems owned, operated, controlled or used by us, our third-party vendors or other external agencies may be vulnerable to damage, disruptions or shutdowns, software or hardware vulnerabilities, data breaches, security incidents, failures during the process of upgrading or replacing software or databases or components thereof, power outages, natural disasters, hardware failures, attacks by computer hackers, telecommunication failures, user errors, user malfeasance, computer viruses, unauthorized access, phishing or social engineering attacks, ransomware attacks, distributed denial-of-service attacks, brute 38 force attacks, robocalls and other real or perceived cyberattacks or catastrophic events, all of which may not be prevented by our efforts to secure our networks and systems.
Some of the factors that could prevent us from successfully conducting outreach and recruitment for our institutions and the programs that they offer include, but are not limited to: student or employer dissatisfaction with our educational programs and services; diminished access to prospective students; our failure to maintain or expand our brand names or other factors related to our marketing or advertising practices; FTC or Federal Communications Commission restrictions on contacting prospective students, Internet, mobile phone and other advertising and marketing media; costs and effectiveness of Internet, mobile phone and other advertising programs; and changing media preferences of our target audiences.
Some of the factors that could prevent us from successfully conducting outreach and recruitment for our institutions and the programs that they offer include, but are not limited to: student or employer dissatisfaction with our educational programs and services; diminished access to prospective students; our failure to maintain or expand our brand names or other factors related to our marketing or advertising practices; FTC or Federal Communications Commission restrictions on contacting prospective students and the use of internet, mobile phone and other advertising and marketing media; costs and effectiveness of internet, mobile phone and other advertising programs; and changing media preferences of our target audiences.
Our strategic priorities that we believe will support our goal to become a leading provider of online postsecondary education to non-traditional students and position the Company for long-term sustainable and responsible growth are: • optimize student enrollment processes; • enhance student retention and engagement; • use technology as a differentiator; • leverage efficient and effective scalable shared services to support organic growth at our universities and as a key enabler for inorganic growth strategies; and 2 • invest in student-serving processes that support our overall academic operations.
Our strategic priorities that we believe will support our goal to become a leading provider of online postsecondary education to non-traditional students and position the Company for long-term sustainable and responsible growth are: • optimize student enrollment processes; • enhance student retention and engagement; • use technology as a differentiator; • leverage efficient and effective scalable shared services to support organic growth at our universities and as a key enabler for inorganic growth strategies; and • invest in student-serving processes that support our overall academic operations.
In the event the extensive changes in the overall federal and state regulatory construct results in additional statutory or regulatory bases for these types of matters, or other events result in more of such claims or unfavorable outcomes to such claims, there exists the possibility of a material adverse impact on our business, reputation, financial position, cash flows and results of operations for the periods in which the effects of any such matter or matters becomes probable and reasonably estimable.
In the event that extensive changes in the overall federal and state regulatory construct results in additional statutory or regulatory bases for these types of matters, or other events result in more of such claims or unfavorable outcomes to such claims, there exists the possibility of a material adverse impact on our business, reputation, financial position, cash flows and results of operations for the periods in which the effects of any such matter or matters becomes probable and reasonably estimable.
Given the highly regulated nature of our industry, we and our institutions are also subject to and have regular audits, compliance reviews, inquiries, investigations, and claims of non-compliance by the Department, federal and state regulatory agencies, accrediting agencies, state attorney general offices, present and former students and employees, and others that may allege violations of statutes, regulations, accreditation standards, consumer protection and other legal and regulatory requirements applicable to us or our institutions.
Given the highly regulated nature of our industry, we and our institutions are subject to and have regular audits, compliance reviews, inquiries, investigations, and claims of non-compliance by the Department, federal and state regulatory agencies, accrediting agencies, state attorney general offices, present and former students and employees, and others that may allege violations of statutes, regulations, accreditation standards, consumer protection and other legal and regulatory requirements applicable to us or our institutions.
States, districts and territories apply to become members of SARA (which, in many cases, requires action by the state legislature) and if accepted, institutions approved in their “home” state may apply to become participants in the SARA compact and the “home” state authorization is deemed acceptable to operate an online 8 program in other states that also participate in SARA as long as they do not establish a “physical presence” in those other states (as defined by SARA).
States, districts and territories apply to become members of SARA (which, in many cases, requires action by the state legislature) and if accepted, institutions approved in their “home” state may apply to become participants in the SARA compact and the “home” state authorization is deemed acceptable to operate an online program in other states that also participate in SARA as long as they do not establish a “physical presence” in those other states (as defined by SARA).
The new regulations from the October 28, 2022 Final Rule include the following topics: 15 • adopting new regulations to calculate the percentage of a for-profit school’s revenue that is derived from federal education assistance, referred to as the “90-10 Rule”; • placing additional requirements and limits on changes of ownership or control; and • Pell Grant eligibility for prison education programs.
The new regulations from the October 28, 2022 Final Rule include the following topics: • adopting new regulations to calculate the percentage of a for-profit school’s revenue that is derived from federal education assistance, referred to as the “90-10 Rule”; • placing additional requirements and limits on changes of ownership or control; and • Pell Grant eligibility for prison education programs.
The previously adopted and rescinded GE regulation is discussed above in this “Legislative Action and Recent Department Regulatory Initiatives” section, and please see the “ Compliance with Federal Regulatory Standards and Effect of Federal Regulatory Violations ” section below for an overview of the current rules relating to the 90-10 Rule, change of ownership or control, financial responsibility and administrative capability.
The previously adopted and rescinded GE regulation is discussed above in this “Legislative Action and Recent Department Regulatory Initiatives” section, and see the “ Compliance with Federal Regulatory Standards and Effect of Federal Regulatory Violations ” section below for an overview of the current rules relating to the 90-10 Rule, change of ownership or control, financial responsibility and administrative capability.
We and our institutions are regularly subject to audits and compliance reviews and periodically subject to inquiries, lawsuits, investigations, and/or claims of non-compliance from federal and state regulatory agencies, accrediting agencies, the Department, based on claims by present and former students and employees, and others that may allege violations of statutes, regulations, accreditation standards or other regulatory requirements applicable to us or our institutions.
We and our institutions are regularly subject to audits and compliance reviews and periodically subject to inquiries, lawsuits, investigations, and/or claims of non-compliance from federal and state regulatory agencies, accrediting agencies, the Department, based on claims by present and former students and employees, and others that may 20 allege violations of statutes, regulations, accreditation standards or other regulatory requirements applicable to us or our institutions.
The FTC passed an amendment to the Safeguards Rule under the Gramm-Leach-Bliley Act (" GLBA "), effective on June 9, 2023, that updated data security requirements for financial institutions, including all Title IV institutions of higher education. The Department has increased enforcement authority by requiring auditors to verify an institution’s compliance with components of the Safeguards Rule.
The FTC passed an amendment to the Safeguards Rule under the Gramm-Leach-Bliley Act (the “ GLBA ”), effective on June 9, 2023, that updated data security requirements for financial institutions, including all Title IV institutions of higher education. The Department has increased enforcement authority by requiring auditors to verify an institution’s compliance with components of the Safeguards Rule.
For example, in 2023, we materially reduced prospective student enrollment, marketing and outreach processes at AIUS during the year to limit the volume of new federal funding that the institution would receive to preserve available funding for existing students. Any necessary 30 business changes could materially impact our revenue, operating costs and opportunities for growth.
For example, in 2023, we materially reduced prospective student enrollment, marketing and outreach processes at AIUS during the year to limit the volume of new federal funding that the institution would receive to preserve available funding for existing students. Any necessary business changes could materially impact our revenue, operating costs and opportunities for growth.
In particular, limitations on participation in Title IV Programs resulting from the failure to demonstrate financial responsibility or administrative capability could materially reduce the enrollments and revenue at the impacted institution, and a termination of participation would cause a dramatic decline in revenue and we would be unable to continue our business as it currently is conducted.
In particular, limitations 31 on participation in Title IV Programs resulting from the failure to demonstrate financial responsibility or administrative capability could materially reduce the enrollments and revenue at the impacted institution, and a termination of participation would cause a dramatic decline in revenue and we would be unable to continue our business as it currently is conducted.
These regulations have been negotiated and revised multiple times by the Department, who has created competing standards and outcomes for institutions and student borrowers. Since 22 their initial adoption in 2016 and with their subsequent modifications in 2019 and 2022, the Department’s BDR regulations have also been the subject of numerous legal challenges in different jurisdictions around the country.
These regulations have been negotiated and revised multiple times by the Department, who has created competing standards and outcomes for institutions and student borrowers. Since their initial adoption in 2016 and with their subsequent modifications in 2019 and 2022, the Department’s BDR regulations have also been the subject of numerous legal challenges in different jurisdictions around the country.
Faculty hired by our academic institutions are evaluated for proficiency in the following competencies: • communication; • assessment of student learning; • instructional methodology (pedagogy); • subject matter expertise; • utilization of technology to enhance teaching and learning; • acknowledgement and accommodation of diversity in learners; • student engagement; • promotion of active student learning; • compliance with academic institution policy; and 5 • demonstration of scholarship.
Faculty hired by our academic institutions are evaluated for proficiency in the following competencies: • communication; • assessment of student learning; • instructional methodology (pedagogy); • subject matter expertise; • utilization of technology to enhance teaching and learning; • acknowledgement and accommodation of diversity in learners; • student engagement; • promotion of active student learning; • compliance with academic institution policy; and • demonstration of scholarship.
The rules also increase the burden on institutions to maintain and provide documentation to refute student claims. As a result, an institution’s failure to maintain and provide 14 timely and responsive information that goes beyond the contents of a typical student’s academic file in response to future BDR applications could form the basis for loan forgiveness.
The rules also increase the burden on institutions to maintain and provide documentation to refute student claims. As a result, an institution’s failure to maintain and provide timely and responsive information that goes beyond the contents of a typical student’s academic file in response to future BDR applications could form the basis for loan forgiveness.
The grounds on which a student may make a claim for BDR under these new rules include: 23 • substantial misrepresentation, • substantial omission of fact, • breach of contract, • aggressive and deceptive recruitment, or • a federal, state judgment, departmental adverse action against an institution that could give rise to a borrower defense claim.
The grounds on which a student may make a claim for BDR under these new rules include: • substantial misrepresentation, • substantial omission of fact, • breach of contract, • aggressive and deceptive recruitment, or • a federal, state judgment, departmental adverse action against an institution that could give rise to a borrower defense claim.
We maintain policies and practices and operational safeguards, measures and controls aimed at reducing our cyber risk, protecting and recovering our data and ensuring business continuity, which include reasonable efforts to ensure that our third-party vendors maintain reasonable security, including encryption and authentication technology, and will notify us promptly if a security incident occurs.
We maintain policies and practices and operational safeguards, measures and controls aimed at reducing our cyber risk, protecting and recovering our data and ensuring business continuity, which include reasonable efforts that aim to ensure that our third-party vendors maintain reasonable security, including encryption and authentication technology, and will notify us promptly if a security incident occurs.
CCST initiated the lawsuit in an effort to set aside the BDR rule on the grounds that it violates the U.S. Constitution and the Administrative Procedure Act. On August 7, 2023, a three-judge Fifth Circuit Court of Appeals panel granted a motion for an injunction pending appeal in the lawsuit.
CCST initiated the lawsuit in an effort to set aside the BDR rule on the grounds that it violates the U.S. Constitution and the Administrative Procedure Act. On August 7, 2023, a three-judge Fifth Circuit Court of Appeals panel granted a 24 motion for an injunction pending appeal in the lawsuit.
If an institution fails to satisfy any of the Department’s criteria for administrative capability, the Department may require the repayment of Title IV Program funds disbursed by the institution, place the institution on provisional certification status, require the institution to receive Title IV Program funds under another funding arrangement, impose fines or limit or terminate the participation of the institution in Title IV Programs.
If an institution fails to satisfy any of the Department’s criteria for 18 administrative capability, the Department may require the repayment of Title IV Program funds disbursed by the institution, place the institution on provisional certification status, require the institution to receive Title IV Program funds under another funding arrangement, impose fines or limit or terminate the participation of the institution in Title IV Programs.
Existing students may also decrease their use of our services or cease using our services altogether. The impact of these security threats, incidents and other disruptions are difficult to predict. Our insurance coverage for such security threats, incidents and other disruptions may not be adequate to cover all related costs, and we may not otherwise be fully indemnified for them.
Existing students may also decrease their use of our services or cease using our services altogether. The impact of security threats, incidents and other disruptions are difficult to predict. Our insurance coverage for such security threats, incidents and other disruptions may not be adequate to cover all related costs, and we may not otherwise be fully indemnified for them.
This may result in an increase in our costs for insurance or insurance not being available to us on economically feasible terms or at all. Insurers may also deny us coverage as to any future claim. Any of these results could harm our growth prospects, financial condition, business and reputation.
This may result in an increase in our costs for insurance or insurance not being available to us on economically feasible terms or at all. Insurers may also deny us coverage as to any future claim. Any of these results could materially harm our growth prospects, financial condition, business and reputation.
Institutions may be given provisional program participation agreements for very nominal or arbitrary reasons and we have seen in some instances without justification, including the existence of an open and pending audit or review within the Department’s discretion or unspecified issues arising out of past administrative capability issues.
Institutions may be given provisional program participation agreements for nominal or arbitrary reasons and we have seen in some instances without justification, including the existence of an open and pending audit or review within the Department’s discretion or unspecified issues arising out of past administrative capability issues.
By choosing this option, the institution qualifies as a financially responsible institution. • Provisional Certification . If an institution fails to meet one of the standards of financial responsibility, including by having a composite score less than 1.5, the Department may permit the institution to participate under provisional certification for up to three 24 years.
By choosing this option, the institution qualifies as a financially responsible institution. • Provisional Certification . If an institution fails to meet one of the standards of financial responsibility, including by having a composite score less than 1.5, the Department may permit the institution to participate under provisional certification for up to three years.
Regular patching of each of our respective computer systems and frequent updates to our virus detection and prevention 40 software with the latest virus and malware signatures may not catch newly introduced malware, ransomware, viruses or “zero-day” viruses prior to their infecting our, our third-party vendors and/or external agencies’ computer systems or networks.
Regular patching of each of our respective computer systems and frequent updates to our virus detection and prevention software with the latest virus and malware signatures may not catch newly introduced malware, ransomware, viruses or “zero-day” viruses prior to their infecting our, our third-party vendors and/or external agencies’ computer systems or networks.
While the eligibility tests and disclosures associated with the 2015 gainful employment regulation were no longer required, the term “gainful employment” continues to exist in the Higher Education Act and CTU’s and AIUS’ Title IV eligible programs will continue to need to be career focused educational programs.
While the eligibility tests and disclosures associated with the 2015 gainful employment regulation were no longer required, the term “gainful employment” continues to exist in the Higher Education Act and CTU’s, AIUS’ and USAHS' Title IV eligible programs will continue to need to be career focused educational programs.
The Certification rule adds additional events that lead to provisional certification, such as if an institution is required to post a letter of credit because of a mandatory or discretionary triggers in the financial responsibility regulations, the Department determines the institution is at risk of closure, or the institution fails the 90-10 rule.
This rule adds additional events that lead to provisional certification, such as if an institution is required to post a letter of credit because of a mandatory or discretionary triggers in the financial responsibility regulations, the Department determines the institution is at risk of closure, or the institution fails the 90-10 rule.
This is determined by an institution’s cohort default rate which is calculated on an annual basis as a measure of administrative capability. Each cohort is the group of students who first enter into student loan repayment during a federal fiscal year (ending September 30).
This is determined by an institution’s cohort default rate which is calculated on an annual basis as a measure of administrative capability. Each cohort is the 21 group of students who first enter into student loan repayment during a federal fiscal year (ending September 30 of each year).
Furthermore, with the resumption of repayment, the Department also implemented a new repayment option called the “SAVE” plan. This plan was designed to generally be more favorable than all the other existing repayment plans, eliminating several options and therefore simplifying the repayment choices for borrowers.
Furthermore, with the resumption of repayment, the Department also implemented a new repayment option called the “SAVE” plan. This plan was designed to generally be more favorable than all the other existing repayment plans, eliminating several options 22 and therefore simplifying the repayment choices for borrowers.
If we were to undergo a change of 25 control and our institutions failed to obtain the required approvals from applicable regulatory agencies in a timely manner, our student population, financial condition, results of operations and cash flows could be materially adversely affected.
If we were to undergo a change of control and our institutions failed to obtain the required approvals from applicable regulatory agencies in a timely manner, our student population, financial condition, results of operations and cash flows could be materially adversely affected.
Any of these incidents could lead to interruptions or shutdowns of our platforms, disruptions in our ability to process service requests, record or analyze the use of our services, loss or corruption of data, or unauthorized access to, or acquisition of, personal information or other sensitive information, such as our intellectual property.
Any of these incidents could lead to interruptions or shutdowns of our platforms, disruptions in our ability to process service requests and record or analyze the use of our services, the loss or corruption of data or unauthorized access to, or acquisition of, personal information or other sensitive information, such as our intellectual property.
We rely on proprietary rights and intellectual property in conducting our business, which may not be adequately protected under current laws, and we may encounter disputes from time to time relating to our use of intellectual property of third parties. Our success depends in part on our ability to protect our proprietary rights.
We rely on proprietary rights and intellectual property in conducting our business, which may not be adequately protected under current laws, and we may encounter disputes from time to time relating to our use of the intellectual property of third parties. Our success depends in part on our ability to protect our proprietary rights.
The Improvements Act did not change the Post-9/11 GI Bill’s provision that allows veterans to receive up to $1,000 per academic year for books, supplies, equipment and other education costs. U.S.
The Improvements Act did not change the Post-9/11 GI Bill’s provision that allows veterans to receive up to $1,000 per academic year for books, supplies, equipment and other education costs. 12 U.S.
BDR applications for over 150 schools pending at the time of the settlement agreement were approximately 286,000, but expanded by an addition 180,000 applications prior to the court’s final approval following publicity about the opportunity afforded by the settlement.
BDR applications for over 150 schools pending at the time of the settlement agreement were approximately 286,000, but expanded by an addition 180,000 applications prior to the court’s final 23 approval following publicity about the opportunity afforded by the settlement.
If the Department determined that an institution’s compensation practices violated these 26 standards, the Department could subject the institution to substantial monetary fines, penalties or other sanctions, and exposure to increased risk of action under the False Claims Act.
If the Department determined that an institution’s compensation practices violated these standards, the Department could subject the institution to substantial monetary fines, penalties or other sanctions, and exposure to increased risk of action under the False Claims Act.
Considering the broad definition of “substantial misrepresentation,” it is possible that, despite our training efforts and compliance programs, our institutions' employees or service providers may make statements that could be construed as substantial misrepresentations.
Considering the broad definition of “substantial misrepresentation,” it is possible that, despite our training efforts and compliance programs, our institutions' employees or service providers may make 27 statements that could be construed as substantial misrepresentations.
Furthermore, accrediting agencies that evaluate institutions offering online programs, must require such institutions to have processes through which the institution establishes that a student who registers for such a program is the same student who participates in and receives credit for the program.
Furthermore, accrediting agencies that evaluate institutions offering online programs, must require such institutions to have processes through which the institution establishes that a student who registers for such a program is the same student who participates in and receives 32 credit for the program.
“90-10 Rule” Under a provision of the Higher Education Act commonly referred to as the “90-10 Rule,” any of our institutions that, on modified cash basis accounting, derives more than 90% of its cash receipts from federal sources for a fiscal year will be placed on provisional participation status for its next two fiscal years, is required to provide warning notices to students regarding the potential loss of Title IV and may be required to post a letter of credit with the Department.
“90-10 Rule” Under a provision of the Higher Education Act commonly referred to as the “90-10 Rule,” any of our institutions that, on modified cash basis accounting, derives more than 90% of its cash receipts from federal sources for a fiscal year will be placed on provisional participation status for its next two fiscal years, is required to provide warning notices to students regarding the potential loss of Title IV and would be required to post a letter of credit with the Department.
For example, the MOU requires an institution to agree to 11 support DoD regulatory guidance, adhere to a bill of rights that is specified in the regulations, and participate in the proposed Military Voluntary Education Review program.
For example, the MOU requires an institution to agree to support DoD regulatory guidance, adhere to a bill of rights that is specified in the regulations, and participate in the proposed Military Voluntary Education Review program.
To be eligible for the 10 additional Pell Grant funds, the student must be enrolled at least half-time in the payment period(s) for which the student receives the additional Pell Grant funds in excess of 100% of the student’s regular Pell Grant award.
To be eligible for the additional Pell Grant funds, the student must be enrolled at least half-time in the payment period(s) for which the student receives the additional Pell Grant funds in excess of 100% of the student’s regular Pell Grant award.
See Item 1A, “ Risk Factors – Risks Related to the Highly Regulated Field in Which We Operate – The extensive regulatory requirements applicable to our business may change, in particular as a result of the scrutiny of the for-profit postsecondary education sector and efforts of the current administration, which could require us to make substantial changes to our business, reduce our profitability and make compliance more difficult." There continues to be significant uncertainty around the requirements and approach to handling applications for “borrower defense to repayment” due to a series of rulemakings and competing regulations published in 2016, 2019 and again in 2022 along with a number of legal challenges of those rulemakings and the Department's application of these rules to select institutions.
See Item 1A, “ Risk Factors – Risks Related to the Highly Regulated Field in Which We Operate – The extensive regulatory requirements applicable to our business may change, in particular as a result of the scrutiny of the for-profit postsecondary education sector, which could require us to make substantial changes to our business, reduce our profitability and make compliance more difficult." There continues to be significant uncertainty around the requirements and approach to handling applications for “borrower defense to repayment” due to a series of rulemakings and competing regulations published in 2016, 2019 and again in 2022 along with a number of legal challenges of those rulemakings and the Department's application of these rules to select institutions.
The Department requires institutions that participate in Title IV Programs to refer to the Department’s Office of the Inspector General credible information about fraud or other illegal conduct involving Title IV programs.
The Department requires institutions that participate in Title IV Programs to refer to the Department’s Office of the Inspector General (" OIG ") credible information about fraud or other illegal conduct involving Title IV programs.
The MOU also incorporates the development and implementation of the “VA Shopping Sheet,” a standardized cost form with federal aid information which has evolved into what is now referred to by the Department as the “College Financing Plan”. The MOU conveys the commitments and agreements between the educational institution and DoD prior to accepting funds under the tuition assistance program.
The MOU also incorporates the development and implementation of the “VA Shopping Sheet,” a standardized cost form with federal aid information which has evolved into what is now referred to by the Department as the “College Financing Plan.” The MOU conveys the commitments and agreements between the educational institution and DoD prior to accepting funds under the tuition assistance program.
On December 21, 2022, the Department published in the Federal Register the list of Federal Education Assistance to be included as “federal educational assistance” under the revised rule.
On December 21, 2022, the Department published in the Federal Register the list of sources of Federal Education Assistance to be included as “federal educational assistance” under the revised rule.
However, an institution that is certified to participate in Title IV Programs may establish a start-up branch campus or location and participate in Title IV Programs at the start-up campus without reference to the two-year requirement if the start-up campus has received all of the necessary state and accrediting agency approvals, has been reported to the Department, and meets certain other criteria as defined by the Department.
However, an institution that is certified to participate in Title IV Programs may establish a start-up branch campus or location and participate in Title IV Programs at the start-up campus without satisfying the two-year requirement if the start-up campus has received all of the necessary state and accrediting agency approvals, has been reported to the Department, and meets certain other criteria as defined by the Department.
Any reduction or elimination of dividends may cause the market price of our common stock to decline. ITEM 1B. UNRESOLVE D STAFF COMMENTS None. 42
Any reduction or elimination of dividends may cause the market price of our common stock to decline. ITEM 1B. UNRESOLVE D STAFF COMMENTS None.
Securities and Exchange Commission (“SEC”) . Also, the SEC maintains an Internet site at www.sec.gov that contains reports, proxy and information statements, and other information that we file electronically with the SEC. Information contained on our website is expressly not incorporated by reference into this Form 10-K. 27 Item 1 A.
Securities and Exchange Commission (“SEC”) . Also, the SEC maintains an Internet site at www.sec.gov that contains reports, proxy and information statements, and other information that we file electronically with the SEC. Information contained on our website is expressly not incorporated by reference into this Form 10-K. 28 Item 1 A.
These matters often require the expenditure of substantial time and resources to address and may damage our reputation, even if such actions are eventually determined to be without merit. For example, the Department has broad powers to request information and review records of an institution participating in Title IV Programs.
These matters often require the expenditure of substantial time and resources to address and, additionally, they may damage our reputation, even if such actions are eventually determined to be without merit. For example, the Department has broad powers to request information and review records of an institution participating in Title IV Programs.
Our ability to effectively train our student support personnel and the length of time it takes them to become productive also impacts 38 our results of operations.
Our ability to effectively train our student support personnel and the length of time it takes them to become productive also impacts our results of operations.
You may not receive the level of dividends previously provided under the dividend policy our Board of Directors has adopted, or any dividends at all. We declared our first quarterly cash dividend in the third quarter of 2023 and have paid a quarterly dividend since then. However, we are not obligated to pay dividends on our common stock.
Shareholders may not receive the level of dividends previously provided under the dividend policy our Board of Directors has adopted, or any dividends at all. We declared our first quarterly cash dividend in the third quarter of 2023 and have paid a quarterly dividend since then. However, we are not obligated to pay dividends on our common stock.
If an institution does not satisfy the 90-10 Rule for two consecutive fiscal years, it will lose its eligibility to participate in Title IV Programs for at least two fiscal years. We have substantially no control over the amount of federal funding sought by or awarded to our students.
If an institution does not satisfy the 90-10 Rule for two consecutive fiscal years, it will lose its eligibility to participate in Title IV Programs for at least two fiscal years. We have essentially no control over the amount of federal funding sought by or awarded to our students.
If the systems and processes that our institutions have established to detect and prevent fraud are inadequate, the Department may find that our institutions do not satisfy the Department’s administrative capability requirements, which could have the adverse effects described in the risk factor captioned “ A failure to demonstrate "financial responsibility" or "administrative capability" or meet new "certification" requirements would have negative impacts on our operations. ” In addition, our ability to participate in Title IV Programs is conditioned on maintaining 35 accreditation by an accrediting agency that is recognized by the Department.
If the systems and processes that our institutions have established to detect and prevent fraud are inadequate, the Department may find that our institutions do not satisfy the Department’s administrative capability requirements, which could have the adverse effects described in the risk factor captioned “A failure to demonstrate "financial responsibility" or "administrative capability" or meet new "certification" requirements would have negative impacts on our operations.” In addition, our ability to participate in Title IV Programs is conditioned on maintaining accreditation by an accrediting agency that is recognized by the Department.
Programs offered by both AIUS and CTU are subject to the GE rule and could lose Title IV eligibility if their programs fail to pass the D/E rates and/or the EP measures. The rule also requires our institutions to warn current and prospective students if a program fails any metric in any year.
Programs offered by AIUS, CTU and USAHS are subject to the GE rule and could lose Title IV eligibility if their programs fail to pass the D/E rates and/or the EP measures. The rule also requires our institutions to warn current and prospective students if a program fails any metric in any year.
Financial Responsibility Negotiated Rulemaking On October 31, 2023, the Department published new regulations on financial responsibility that become effective July 1, 2024. The Financial Responsibility regulations, among other things, significantly modify and expand the mandatory and discretionary triggering events that require an institution to post a letter of credit or other form of financial protection with the Department.
Financial Responsibility Negotiated Rulemaking On October 31, 2023, the Department published new regulations on financial responsibility that became effective July 1, 2024. The Financial Responsibility regulations, among other things, significantly modify and expand the mandatory and discretionary triggering events that require an institution to post a letter of credit or other form of financial protection with the Department.
Continued Title IV program eligibility is critical to the operation of our business. If either of our institutions becomes ineligible to participate in Title IV Programs, or have that participation significantly conditioned, it could not conduct its business as currently conducted and we would experience a dramatic decline in revenue.
Continued Title IV Program eligibility is critical to the operation of our business. If any of our institutions becomes ineligible to participate in Title IV Programs, or have that participation significantly conditioned, it could not conduct its business as currently conducted and we would experience a dramatic decline in revenue.
Programs offered by both AIUS and CTU are subject to the GE Rule and could lose Title IV eligibility if their programs fail to pass the D/E rates and/or the EP measures. The rule also requires our institutions to warn current and prospective students if a program fails any metric in any year.
Programs offered by AIUS, CTU and USAHS are subject to the GE Rule and could lose Title IV eligibility if their programs fail to pass the D/E rates and/or the EP measures. The rule also requires our institutions to warn current and prospective students if a program fails any metric in any year.
Pursuant to provisions of the Higher Education Act, the Department relies on accrediting agencies to determine whether institutions’ educational programs qualify the institutions to participate in Title IV Programs. The Higher Education Act and its implementing regulations specify certain standards that all recognized accrediting agencies must adopt in connection with their review of postsecondary institutions.
Pursuant to provisions of the Higher Education Act, the Department relies on institutional accrediting agencies recognized by the Department to determine whether institutions’ educational programs qualify the institutions to participate in Title IV Programs. The Higher Education Act and its implementing regulations specify certain standards that all recognized accrediting agencies must adopt in connection with their review of postsecondary institutions.
Our institutions, and most other for-profit institutions, qualify for Title IV Program participation on the basis that they offer programs that, in addition to meeting other requirements, “prepare students for gainful employment in a recognized occupation.” On October 30, 2014, the Department published a new complex final regulation, effective July 1, 2015, to define “gainful employment” as meeting certain standards measuring the general amount students borrow for enrollment in a program against an amount of their reported earnings.
Our institutions, and most other for-profit institutions, qualify for Title IV Program participation on the basis that they offer programs that, in addition to meeting other requirements, “prepare students for gainful employment in a recognized occupation.” On October 30, 2014, the Obama Administration published a new complex final regulation, effective July 1, 2015, to define “gainful employment” as meeting certain standards measuring the general amount students borrow for enrollment in a program against an amount of their reported earnings.
Certification Procedures Negotiated Rulemaking On October 31, 2023, the Department published new regulations on certification procedures (the " Certification " rule) that become effective July 1, 2024. The revised Certification rule provides a more rigorous process for certifying institutions to participate in the Title IV programs, both initially and on an ongoing basis.
Certification Procedures Negotiated Rulemaking On October 31, 2023, the Department published new regulations on certification procedures (the " Certification " rule) that became effective July 1, 2024. The revised Certification rule provides a more rigorous process for certifying institutions to participate in the Title IV programs, both initially and on an ongoing basis.
The Department subsequently used the settlement of a lawsuit that was primarily seeking improvements in the Department's processing of claims as a means of providing loan forgiveness, including previously denied and/or meritless claims and further adopting yet a new BDR process and set of standards applicable to claims pending as of that date.
The Department subsequently used the settlement of a lawsuit (discussed below) that was primarily seeking improvements in the Department's processing of claims as a means of providing loan forgiveness, including previously denied and/or meritless claims and further adopting yet a new BDR process and set of standards applicable to claims pending as of that date.
Additionally, a number of recently adopted policies by the current administration have created disincentives for students to repay their loans, including forgoing a number of common consequences of nonpayment during this “on-ramp” period and frequently promoting a desire to provide broad based loan forgiveness.
Additionally, a number of recently adopted policies by the Biden Administration have created disincentives for students to repay their loans, including forgoing a number of common consequences of nonpayment during this “on-ramp” period and frequently promoting a desire to provide broad based loan forgiveness.
See Item 1A, “ Risk Factors – Risks Related to the Highly Regulated Field in Which We Operate – The extensive regulatory requirements applicable to our business may change, in particular as a result of the scrutiny of the for-profit postsecondary education sector and efforts of the current administration, which could require us to make substantial changes to our business, reduce our profitability and make compliance more difficult," for information about the potential impact of new regulations on our business.
See Item 1A, “ Risk Factors – Risks Related to the Highly Regulated Field in Which We Operate – The extensive regulatory requirements applicable to our business may change, in particular as a result of the scrutiny of the for-profit postsecondary education sector, which could require us to make substantial changes to our business, reduce our profitability and make compliance more difficult," for information about the potential impact of new regulations on our business.
See Item 1A, “ Risk Factors – Risks Related to the Highly Regulated Field in Which We Operate – The extensive regulatory requirements applicable to our business may change, in particular as a result of the scrutiny of the for-profit postsecondary education sector and efforts of the current administration, which could require us to make substantial changes to our business, reduce our profitability and make compliance more difficult," for information about the potential impact of new regulations on our business.
See Item 1A, “ Risk Factors – Risks Related to the Highly Regulated Field in Which We Operate – The extensive regulatory requirements applicable to our business may change, in particular as a result of the scrutiny of the for-profit postsecondary education sector, which could require us to make substantial changes to our business, reduce our profitability and make compliance more difficult," for information about the potential impact of new regulations on our business.
In particular, the Higher Education Act authorizes Title IV Programs and subjects participants to extensive regulation by the Department, state education authorizing agencies, and accrediting agencies. Our institutions’ participation in education assistance programs administered by the Departments of Defense and Veterans Affairs also subjects us to oversight by those agencies.
In particular, the Higher Education Act authorizes Title IV Programs and subjects participants to extensive regulations by the Department, state education authorizing agencies, and accrediting agencies. Our institutions’ participation in education assistance programs administered by the Departments of Defense and Veterans Affairs also subjects us to oversight by those agencies.
For example, for the year ended December 31, 2023, a majority of our students who were in a program of study at any date during that year participated in Title IV Programs, which resulted in Title IV Program cash receipts of approximately $484 million.
For example, for the year ended December 31, 2024, a majority of our students who were in a program of study at any date during that year participated in Title IV Programs, which resulted in Title IV Program cash receipts of approximately $484 million.
This remote work environment may exacerbate certain risks to our business, including increasing the stress on, and our vulnerability to disruptions of, our technology infrastructure and systems and the risks of phishing and other cybersecurity attacks, unauthorized dissemination of confidential information and social engineering attempts.
This remote work environment may exacerbate certain risks to our business, including increasing the stress on, and our vulnerability to disruptions of, our technological infrastructure and systems and the risks of phishing and other cybersecurity attacks, unauthorized dissemination of confidential information and social engineering attempts.
Finally, the new regulations require provisionally certified schools that have major consumer protection issues to recertify after no more than three years. For institutions alleged or found to have engaged in misrepresentation, aggressive recruiting, or incentive compensation violations, the Department may require that the institution engage a monitor and submit marketing materials to the Department for its review and approval.
Finally, the new rule requires provisionally certified schools that have major consumer protection issues to recertify after no more than three years. For institutions alleged or found to have engaged in misrepresentation, aggressive recruiting, or incentive compensation violations, the Department may require that the institution engage a monitor and submit marketing materials to the Department for its review and approval.
The regulations also add a provision to include all federal agencies and add state attorneys general to the list of entities that have the authority to share with each other and the Department any information pertaining to an institution’s eligibility for or participation in Title IV Programs or any information on fraud, abuse, or other violations of law.
The changes add a provision to include all federal agencies and add state attorneys general to the list of entities that have the authority to share with each other and the Department any information pertaining to an institution’s eligibility for or participation in Title IV programs or any information on fraud, abuse, or other violations of law.
Although the amount paid by these students results in lower revenue per student due to the grants awarded from the applicable university, the recruiting, marketing and support costs associated with these students are lower as well and many of these students are able to graduate from their chosen program of study with little or no debt.
Although the amount paid by these students results in lower revenue per student due to the grants awarded from the applicable university, the recruiting, marketing and support costs associated with these students are relatively lower as well and most of these students are able to graduate from their chosen program of study with little or no debt.
Our institutions have implemented the use of sophisticated personalized learning technologies through our virtual campus that provide intelligent, adaptive systems to power the delivery of personalized learning. We have a perpetual license to this technology and our personalized learning content was developed by teams of our own instructors and has been integrated across many of our curricula.
CTU and AIUS have implemented the use of sophisticated personalized learning technologies through our virtual campus that provide intelligent, adaptive systems to power the delivery of personalized learning. We have a perpetual license to this technology and our personalized learning content was developed by teams of our own instructors and has been integrated across many of our curricula.
The personal information that we collect may be vulnerable to breach, theft or loss which could adversely affect our reputation, operations and ability to attract and retain students.
The personal information that we collect may be vulnerable to breach, theft or loss, any of which could adversely affect our reputation, operations and ability to attract and retain students.
Our student advising model promotes collaboration between faculty and student advisors, which we believe enhances effectiveness and provides students with consistent support and communication. Student advisors continue to work with students throughout their academic program to provide relevant and specific feedback and guidance as they progress through their classes.
Our student advising model at AIUS and CTU promotes collaboration between faculty and student advisors, which we believe enhances effectiveness and provides students with consistent support and communication. Student advisors continue to work with students throughout their academic program to provide relevant and specific feedback and guidance as they progress through their classes.
The new regulations establish a non-exhaustive list of conditions that the Department may apply to provisionally certified institutions, such as the submission of teach-out plans, the release of holds on student transcripts, restrictions or limitations on the addition of new programs or locations, restrictions on growth in enrollments or Title IV volume, restrictions on the ability to provide a teach-out on behalf of another institution, restrictions on the acquisition of other institutions, additional financial reporting requirements, and limitations on entering into written arrangements with other institutions for the provision of educational instruction.
The regulations establish a non-exhaustive list of conditions that the Department may apply to provisionally certified institutions, such as the submission of teach-out plans, the release of holds on student transcripts, restrictions or limitations on the addition of new programs or locations, requirements related to enrollment in programs that lead to state licensure, restrictions on growth in enrollments or Title IV volume, restrictions on the ability to provide a teach-out on behalf of another institution, restrictions on the acquisition of other institutions, additional financial reporting requirements, and limitations on entering into written arrangements with other institutions for the provision of educational instruction.
The modified IDR plan calculates payments based on a borrower’s income and family size and not the loan balance and forgives outstanding balances after a certain number of years. The plan includes a feature that reduces many borrowers’ monthly payments to zero if their income level does not exceed certain levels.
The modified IDR plan calculates payments based on a borrower’s income and family size and not the loan balance and forgives outstanding balances after a certain number of years. The plan reduces many borrowers’ monthly payments to zero if their income level does not exceed certain levels.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWe describe whether and how risks from identified cybersecurity threats have materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations, or financial condition, under the headings “ If we, our third-party vendors, our regulators or any other quasi-governmental organization we are required to report information to are subject to cyberattacks, data breaches or other security incidents, or if there is a disruption or failure of our information technology systems or software, such events could expose us to liability and could adversely affect our financial condition and operating results ,” “ The personal information that we collect may be vulnerable to breach, theft or loss which could adversely affect our reputation, operations and ability to attract and retain students ,” and “ Our remote work environment may exacerbate the risks related to our business technology infrastructure, ” included as part of our risk factor disclosures within Item 1A of this Annual Report on Form 10-K.
Biggest changeWe describe whether and how risks from identified cybersecurity threats have materially affected or are reasonably likely to materially affect us , including our business strategy, results of operations, or financial condition, under the headings “ If we, our third-party vendors, our regulators or any other quasi-governmental organization we are required to report information to are subject to cyberattacks, data breaches or other security incidents, or if there is a disruption or failure of our information technology systems or software, such events could expose us to liability and could adversely affect our financial condition and operating results ,” “ The personal information that we collect may be vulnerable to breach, theft or loss, any of which could adversely affect our reputation, operations and ability to attract and retain students ,” and “ Our primarily remote work environment may exacerbate the risks related to our business technology infrastructure, ” included as part of our risk factor disclosures within Item 1A of this Annual Report on Form 10-K.
The Company also has a long-standing management-led Risk Committee (the “ Risk Committee ”) which is currently comprised of the President and Chief Executive Officer (who serves as the chair), Chief Financial Officer, General Counsel, Chief Compliance Officer, Chief Internal Auditor, Risk & Insurance Program Manager, Senior Vice President - American InterContinental University System, Senior Vice President - Colorado Technical University, Chief Information Officer and Vice President - Human Resources.
The Company has a long-standing management-led Risk Committee (the “ Risk Committee ”) which is currently comprised of the President and Chief Executive Officer (who serves as the chair), Chief Financial Officer, General Counsel, Chief Compliance Officer, Chief Internal Auditor, Risk & Insurance Program Manager, Senior Vice President - American InterContinental University System, Senior Vice President - Colorado Technical University, Chief Information Officer and Vice President - Human Resources.
We have not encountered risks from cybersecurity threats, including as a result of any previous cybersecurity incidents in the last three 43 fiscal years, which have materially affected or are reasonably likely to materially affect the Company, including our business strategy, results of operations, or financial condition, and the expense we have incurred from cybersecurity incidents were immaterial.
We have not encountered risks from cybersecurity threats, including as a result of any previous cybersecurity incidents in the last three fiscal years, which have materially affected or are reasonably likely to materially affect the Company, including our business strategy, results of operations, or financial condition, and the expense we have incurred from cybersecurity incidents were immaterial.
As part of these efforts to assess and mitigate the risks posed by cybersecurity incidents and cyber-attacks, we employ a range of tools and services, including regular network and endpoint monitoring, vulnerability assessments, penetration testing, and tabletop exercises to help inform our cybersecurity risk identification and assessment.
As part of these efforts to assess and mitigate the risks posed by cybersecurity incidents and cyber-attacks, we employ a range of tools and services, including regular network and endpoint monitoring, vulnerability assessments, penetration testing, and tabletop exercises to help inform our cybersecurity risk identification 41 and assessment.
We also have a cybersecurity specific risk assessment process, which helps identify our cybersecurity threat risks by comparing our processes to standards set by the Center for Internet Security (“ CIS ”).
We have a cybersecurity specific risk assessment process, which helps identify our cybersecurity threat risks by comparing our processes to standards set by the Center for Internet Security (“ CIS ”).

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeITEM 2. P ROPERTIES Our ground-based campuses located in Georgia (AIUS), Texas (AIUS) and Colorado (CTU) generally consist of teaching facilities, including classrooms and laboratories, and administrative offices. Additionally, we have administrative facilities located in the areas of Chicago, Illinois and Phoenix, Arizona, which are used for our universities and corporate functions.
Biggest changeITEM 2. P ROPERTIES We have ground-based campuses located in Georgia (AIUS), Texas (AIUS and USAHS), California (USAHS), Florida (USAHS) and Colorado (CTU), which generally consist of teaching facilities, including classrooms and laboratories, and administrative offices. Additionally, we have administrative facilities located in the areas of Chicago, Illinois and Phoenix, Arizona, which are used for our universities and corporate functions.
As of December 31, 2023, we leased approximately 0.4 million square feet under lease agreements that have remaining terms ranging from less than one year through 2032. The facility in Houston, Texas, is used by AIUS and is less than 0.1 million square feet of real property.
As of December 31, 2024, we leased approximately 0.8 million square feet under lease agreements that have remaining terms ranging from less than one year through 2049. The facility in Houston, Texas, is used by AIUS and is less than 0.1 million square feet of real property.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe Board of Directors approved the aforementioned stock repurchase programs believing it advantageous to the Company and its stockholders to repurchase shares of the Company’s common stock from time to time at prices below what the Board of Directors believed to be the intrinsic value of the Company’s common stock. 45 Issuer Purchases of Equity Securities Period Total Number of Shares Purchased (1) Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (2) December 31, 2022 $ 26,840,200 January 1, 2023 - January 31, 2023 - $ - - 26,840,200 February 1, 2023 - February 28, 2023 - - - 26,840,200 March 1, 2023 - March 31, 2023 225,154 13.43 59,920 26,023,778 April 1, 2023 - April 30, 2023 - - - 26,023,778 May 1, 2023 - May 31, 2023 161,074 11.88 161,074 24,107,027 June 1, 2023 - June 30, 2023 (3) 1,800,000 12.27 - 24,107,027 July 1, 2023 - July 31, 2023 - - - 24,107,027 August 1, 2023 - August 31, 2023 - - - 24,107,027 September 1, 2023 - September 30, 2023 - - - 24,107,027 October 1, 2023 - October 31, 2023 - - - 24,107,027 November 1, 2023 - November 30, 2023 318,832 17.48 318,832 18,528,794 December 1, 2023 - December 31, 2023 - - - 18,528,794 Total 2,505,060 539,826 (1) Includes 165,234 shares delivered back to the Company for payment of withholding taxes from employees for vesting restricted stock units pursuant to the terms of the Perdoceo Education Corporation Amended and Restated 2016 Incentive Compensation Plan.
Biggest changeThe Board of Directors approved the aforementioned stock repurchase programs believing it advantageous to the Company and its stockholders to repurchase shares of the Company’s common stock from time to time at prices below what the Board of Directors believed to be the intrinsic value of the Company’s common stock. 43 Issuer Purchases of Equity Securities Period Total Number of Shares Purchased (1) Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (2) December 31, 2023 $ 18,528,794 January 1, 2024 - January 31, 2024 - $ - - 18,528,794 February 1, 2024 - February 29, 2024 220,000 17.63 220,000 14,646,422 March 1, 2024 - March 31, 2024 358,669 17.64 164,571 47,106,022 April 1, 2024 - April 30, 2024 - - - 47,106,022 May 1, 2024 - May 31, 2024 - - - 47,106,022 June 1, 2024 - June 30, 2024 - - - 47,106,022 July 1, 2024 - July 31, 2024 - - - 47,106,022 August 1, 2024 - August 31, 2024 - - - 47,106,022 September 1, 2024 - September 30, 2024 - - - 47,106,022 October 1, 2024 - October 31, 2024 - - - 47,106,022 November 1, 2024 - November 30, 2024 - - - 47,106,022 December 1, 2024 - December 31, 2024 - - - 47,106,022 Total 578,669 384,571 (1) Includes 194,098 shares delivered back to the Company for payment of withholding taxes from employees for vesting restricted stock units pursuant to the terms of the Perdoceo Education Corporation Amended and Restated 2016 Incentive Compensation Plan.
COMPARISON OF CUMULATIVE FIVE-YEAR TOTAL RETURN (Based on $100 invested on December 31, 2018 and assumes the reinvestment of all dividends.) 46 The information contained in the performance graph shall not be deemed “soliciting material” or to be “filed” with the Securities and Exchange Commission nor shall such information be deemed incorporated by reference into any future filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, as both are amended from time to time, except to the extent specifically incorporated by reference into such filing.
COMPARISON OF CUMULATIVE FIVE-YEAR TOTAL RETURN (Based on $100 invested on December 31, 2019 and assumes the reinvestment of all dividends.) The information contained in the performance graph shall not be deemed “soliciting material” or to be “filed” with the Securities and Exchange Commission nor shall such information be deemed incorporated by reference into any future filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, as both are amended from time to time, except to the extent specifically incorporated by reference into such filing.
See Item 12, “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters,” for information as of December 31, 2023, with respect to shares of our common stock that may be issued under our existing share-based compensation plans.
See Item 12, “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters,” for information as of December 31, 2024, with respect to shares of our common stock that may be issued under our existing share-based compensation plans.
As of February 16, 2024, there were approximately 101 holders of record of our common stock, including The Depository Trust Company, which holds shares of our common stock on behalf of an indeterminate number of beneficial owners. Our common stock transfer agent and registrar is Computershare Trust Company, N.A. They can be contacted at P.O.
As of February 11, 2025, there were approximately 94 holders of record of our common stock, including The Depository Trust Company, which holds shares of our common stock on behalf of an indeterminate number of beneficial owners. Our common stock transfer agent and registrar is Computershare Trust Company, N.A. They can be contacted at P.O.
The stock repurchase program does not obligate the Company to purchase shares and the Company may, in its discretion, begin, suspend or terminate repurchases at any time, without any prior notice. As of December 31, 2023, approximately $18.5 million was available under the stock repurchase program.
The stock repurchase program does not obligate the Company to purchase shares and the Company may, in its discretion, begin, suspend or terminate repurchases at any time, without any prior notice. As of December 31, 2024, approximately $47.1 million was available under the stock repurchase program.
Included in the peer index are the following companies whose primary business is postsecondary education: Adtalem Global Education Inc., American Public Education, Inc., Grand Canyon Education, Inc., Laureate Education, Inc., and Strategic Education, Inc. The performance graph begins with Perdoceo’s $11.42 per share closing price on December 31, 2018.
Included in the peer index are the following companies whose primary business is postsecondary education: Adtalem Global Education Inc., American Public Education, Inc., Grand Canyon Education, Inc., Laureate 44 Education, Inc., and Strategic Education, Inc. The performance graph begins with Perdoceo’s $18.39 per share closing price on December 31, 2019.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOC KHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock is listed for trading on the Nasdaq Global Select Market (“Nasdaq”) under the symbol “PRDO”. The closing price of our common stock as reported on the Nasdaq on February 16, 2024 was $17.52 per share.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOC KHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock is listed for trading on the Nasdaq Global Select Market (“Nasdaq”) under the symbol “PRDO”. The closing price of our common stock as reported on the Nasdaq on February 11, 2025 was $28.39 per share.
On February 20, 2024, the Board of Directors of the Company approved a new stock repurchase program for up to $50.0 million which commences on March 1, 2024 (the “ 2024 Repurchase Program ”).
On February 20, 2024, the Board of Directors of the Company approved a new stock repurchase program for up to $50.0 million which commenced March 1, 2024 and expires September 30, 2025. The new stock repurchase program replaced the previous stock repurchase program.
(2) On January 27, 2022 the Board of Directors of the Company approved a stock repurchase program for up to $50.0 million (the " 2022 Repurchase Program ") which commenced on March 1, 2022 and originally expired on September 30, 2023.
(2) On February 20, 2024, the Board of Directors of the Company approved a new stock repurchase program of up to $50.0 million which commenced on March 1, 2024 and expires on September 30, 2025.
The other terms of the new stock repurchase program are consistent with the Company’s prior stock repurchase program which expired on February 28, 2022. During 2023, we repurchased 0.5 million shares of our common stock for approximately $8.3 million at an average price of $15.38 per share under the Company’s current stock repurchase program.
The other terms of the new stock repurchase program are consistent with the Company’s previous stock repurchase program. During 2024, we repurchased 0.4 million shares of our common stock for approximately $6.8 million at an average price of $17.60 per share under the Company’s current stock repurchase program.
Box# 43078, Providence, RI 02940-3078 or at their website www.computershare.com/investor . During 2023, the Company announced that its Board of Directors adopted a dividend policy. Pursuant to this policy, the Board of Directors intends to pay quarterly dividends, with the inaugural dividend paid on September 15, 2023 for holders of record of common stock as of September 1, 2023.
Box# 43078, Providence, RI 02940-3078 or at their website www.computershare.com/investor . In 2024, the Company's Board of Directors continued to implement its dividend policy. Under this policy, the Board plans to distribute dividends on a quarterly basis. The declaration and payment of dividends on our common stock are subject to the discretion of our Board of Directors.
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The declaration and payment of dividends on our common stock are subject to the discretion of our Board of Directors.
Removed
In addition, our ability to pay cash dividends on our common stock is also limited under the terms of our existing credit agreement. As of December 31, 2023, we are in compliance with the covenants of our credit agreement.
Removed
On January 27, 2022, the Board of Directors of the Company approved a new stock repurchase program for up to $50.0 million which commenced March 1, 2022 and originally expired on September 30, 2023. On July 27, 2023, the Board of Directors of the Company extended the expiration date of the program to September 30, 2024.
Removed
The 2024 Repurchase Program expires on September 30, 2025 and replaces and terminates the existing stock repurchase program that was originally set to expire on September 30, 2024. The other terms of the new stock repurchase program are consistent with the Company’s prior stock repurchase program.
Removed
On July 27, 2023, the Board of Directors of the Company extended the expiration date of the program to September 30, 2024. The 2022 Repurchase Program expired following the commencement of the 2024 Repurchase Program. Amounts relating to the 2024 Repurchase Program, if any, are not included in this chart because the program was approved after December 31, 2023.
Removed
(3) On June 30, 2023, the Company entered into a non-cash asset purchase agreement with Le Cordon Bleu International B.V.
Removed
(" LCBI "), a company incorporated in The Netherlands, to sell the Company’s outright rights to the Le Cordon Bleu (" LCB ") brand, trade names and rights for North America in exchange for 1.8 million outstanding shares of the Company’s common stock.
Removed
The fair value of the 1.8 million shares of the Company’s common stock repurchased was approximately $22.1 million. These shares were not repurchased under the 2022 Repurchase Program.

Item 7. Management's Discussion & Analysis

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

67 edited+35 added−54 removed63 unchanged
Biggest changePlease refer to Part II Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operation” in our Annual Report on Form 10-K for the year ended December 31, 2022 for a discussion of our results for the year ended December 31, 2021, as well as the year-over-year comparison of our 2022 financial performance to 2021. 53 For the Year Ended December 31, 2023 2022 2021 2023 vs 2022 % Change 2022 vs 2021 % Change REVENUE: CTU (1) $ 468,926 $ 419,617 $ 408,549 11.8 % 2.7 % AIUS (2) 240,300 274,479 283,360 -12.5 % -3.1 % Corporate and Other 778 1,112 1,125 NM NM Total $ 710,004 $ 695,208 $ 693,034 2.1 % 0.3 % OPERATING INCOME (LOSS): CTU (1) $ 144,008 $ 141,622 $ 148,481 1.7 % -4.6 % AIUS (2) 45,283 33,315 39,130 35.9 % -14.9 % Corporate and Other (38,845 ) (45,300 ) (38,595 ) -14.2 % 17.4 % Total $ 150,446 $ 129,637 $ 149,016 16.1 % -13.0 % OPERATING INCOME (LOSS) MARGIN: CTU (1) 30.7 % 33.8 % 36.3 % AIUS (2) 18.8 % 12.1 % 13.8 % Corporate and Other NM NM NM Total 21.2 % 18.6 % 21.5 % ______________________ (1) CTU’s results of operations include the Coding Dojo acquisition commencing on the December 1, 2022 date of acquisition and the Hippo acquisition commencing on the September 10, 2021 date of acquisition.
Biggest changeFor the Year Ended December 31, 2024 2023 2022 2024 vs 2023 % Change 2023 vs 2022 % Change REVENUE: CTU (1) $ 456,899 $ 468,926 $ 419,617 -2.6 % 11.8 % AIUS (2) 213,547 240,300 274,479 -11.1 % -12.5 % USAHS (3) 10,041 - - NM NA Corporate and Other 776 778 1,112 NM NM Total $ 681,263 $ 710,004 $ 695,208 -4.0 % 2.1 % OPERATING INCOME (LOSS): CTU (1) $ 171,260 $ 144,008 $ 141,622 18.9 % 1.7 % AIUS (2) 36,182 45,283 33,315 -20.1 % 35.9 % USAHS (3) (2,640 ) - - NM NA Corporate and Other (30,549 ) (38,845 ) (45,300 ) -21.4 % -14.2 % Total $ 174,253 $ 150,446 $ 129,637 15.8 % 16.1 % OPERATING INCOME (LOSS) MARGIN: CTU (1) 37.5 % 30.7 % 33.8 % AIUS (2) 16.9 % 18.8 % 12.1 % USAHS (3) NM NA NA Corporate and Other NM NM NM Total 25.6 % 21.2 % 18.6 % ______________________ (1) CTU includes results of operations from Coding Dojo beginning on the acquisition date of December 1, 2022.
These factors include, but are not limited to: internal repayment history, changes in the current economic, legislative or regulatory environments, internal cash collection forecasts and the ability to complete the federal financial aid process with the student. These factors are 55 monitored and assessed on a regular basis.
These factors include, but are not limited to: internal repayment history, changes in the current economic, legislative or regulatory environments, internal cash collection forecasts and the ability to complete the federal financial aid process with the student. These factors are monitored and assessed on a regular basis.
Disputes over interpretations of the tax laws may be subject to review/adjudication by the court systems in the various tax jurisdictions or may be settled with the taxing authority upon examination or audit.
Disputes over interpretations of the tax laws 54 may be subject to review/adjudication by the court systems in the various tax jurisdictions or may be settled with the taxing authority upon examination or audit.
Our cash flows from operating activities have historically been adequate to fulfill our liquidity requirements. We have historically financed our operating activities, organic growth and acquisitions primarily through cash generated from operations and existing cash balances. We generated cash in 2023 as a result of improved operating performance and expect to continue to do so in 2024.
Our cash flows from operating activities have historically been adequate to fulfill our liquidity requirements. We have historically financed our operating activities, organic growth and acquisitions primarily through cash generated from operations and existing cash balances. We generated cash in 2024 as a result of improved operating performance and expect to continue to do so in 2025.
SEGMENT RESULTS OF OPERATIONS The summary of segment financial information below should be referenced in connection with a review of the following discussion of our segment results from operations for the years ended December 31, 2023 and 2022 (dollars in thousands), including comparisons of our year-over-year performance between these years.
SEGMENT RESULTS OF OPERATIONS The summary of segment financial information below should be referenced in connection with a review of the following discussion of our segment results from operations for the years ended December 31, 2024 and 2023 (dollars in thousands), including comparisons of our year-over-year performance between these years.
Please refer to Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operation” in our Annual Report on Form 10-K for the year ended December 31, 2022 for a discussion of our results for the year ended December 31, 2021, as well as the year-over-year comparison of our 2022 financial performance to 2021.
Please refer to Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operation” in our Annual Report on Form 10-K for the year ended December 31, 2023 for a discussion of our results for the year ended December 31, 2022, as well as the year-over-year comparison of our 2023 financial performance to 2022.
We believe the items we are adjusting for are not normal operating expenses reflective of our underlying business. In evaluating the use of non-GAAP measures, investors should be aware that in the future we may incur expenses similar to the adjustments presented below.
We believe the items we are adjusting for are operating expenses which are not reflective of our underlying business. In evaluating the use of non-GAAP measures, investors should be aware that in the future we may incur expenses similar to the adjustments presented below.
A one percentage point change in our allowance for credit losses as a percentage of gross earned student receivables as of December 31, 2023 would have resulted in a change in pretax income of $0.7 million during the year then ended.
A one percentage point change in our allowance for credit losses as a percentage of gross earned student receivables as of December 31, 2024 would have resulted in a change in pretax income of $0.7 million during the year then ended.
CONSOLIDATED RESULTS OF OPERATIONS The summary of selected financial data table below should be referenced in connection with a review of the following discussion of our results of operations for the years ended December 31, 2023 and 2022 (dollars in thousands), including comparisons of our year-over-year performance between these years.
CONSOLIDATED RESULTS OF OPERATIONS 48 The summary of selected financial data table below should be referenced in connection with a review of the following discussion of our results of operations for the years ended December 31, 2024 and 2023 (dollars in thousands), including comparisons of our year-over-year performance between these years.
Congressional hearings and roundtable discussions were held regarding various aspects of the education industry, including issues surrounding student debt as well as publicly reported student outcomes that may be used as part of an institution’s recruiting and admissions practices, and reports were issued that are highly critical of for-profit colleges and universities.
Congressional hearings and roundtable discussions were previously held regarding certain aspects of the education industry, including issues surrounding student debt as well as publicly reported student outcomes that may be used as part of an institution’s recruiting and admissions practices, and reports were issued that are highly critical of for-profit 46 colleges and universities.
We maintain a balanced capital allocation strategy that focuses on maintaining a strong balance sheet and adequate liquidity, while (i) investing in organic projects at our universities, in particular technology-related initiatives which are designed to benefit our students, and (ii) evaluating diverse strategies to enhance stockholder value, including acquisitions, quarterly dividend payments and share repurchases.
We maintain a balanced capital allocation strategy that focuses on maintaining a strong balance sheet and adequate liquidity, while (i) investing in organic projects at our universities, in particular technology-related initiatives which are designed to benefit our students, as well as real estate updates, and (ii) evaluating diverse strategies to enhance stockholder value, including acquisitions, quarterly dividend payments and share repurchases.
The MD&A is organized as follows: • Overview • Consolidated Results of Operations • Segment Results of Operations • Summary of Critical Accounting Policies and Estimates • Liquidity, Financial Position and Capital Resources OVERVIEW Perdoceo’s accredited academic institutions offer a quality postsecondary education primarily online to a diverse student population, along with campus-based and blended learning programs.
The MD&A is organized as follows: • Overview • Consolidated Results of Operations • Segment Results of Operations • Summary of Critical Accounting Policies and Estimates • Liquidity, Financial Position and Capital Resources OVERVIEW Perdoceo’s accredited academic institutions offer a quality postsecondary education to a diverse student population, with fully online, campus-based and hybrid learning programs.
Assumptions and judgment: During the current year, we performed a qualitative assessment for the annual review of goodwill balances for impairment. Management first considered events and circumstances that may affect the fair value of the reporting unit to determine whether it was necessary to perform the quantitative impairment test.
Assumptions and judgment: During the current year, we performed a qualitative assessment for the annual review of goodwill balances for impairment. Management first considered events and circumstances, including business trends and current operating performance, that may affect the fair value of the reporting unit to determine whether it was necessary to perform the quantitative impairment test.
Investing Cash Flows During the years ended December 31, 2023 and 2022, net cash flows used in investing activities totaled $88.5 million and $326.8 million, respectively. Purchases and Sales of Available-for-Sale Investments.
Investing Cash Flows During the years ended December 31, 2024 and 2023, net cash flows used in investing activities totaled $107.8 million and $88.5 million, respectively. Purchases and Sales of Available-for-Sale Investments.
Under ASC Topic 350, we review goodwill for impairment on an annual basis or when an event or other circumstances change that would more likely than not reduce the fair value of the asset below its carrying value.
Under ASC Topic 350, we review goodwill for impairment on an annual basis or when an event or other circumstances change that would more likely than not reduce the fair value of the asset below its carrying value, by applying a fair-value-based test.
In addition, our financial performance is dependent on the level of student enrollments which could be impacted by external factors. See Item 1A, “ Risk Factors .” Sources and Uses of Cash Operating Cash Flows During the years ended December 31, 2023 and 2022, net cash flows provided by operating activities totaled $112.0 million and $148.2 million, respectively.
In addition, our financial performance is dependent on the level of student enrollments which could be impacted by external factors. See Item 1A, “ Risk Factors .” 55 Sources and Uses of Cash Operating Cash Flows During the years ended December 31, 2024 and 2023, net cash flows provided by operating activities totaled $161.6 million and $112.0 million, respectively.
For the years ended December 31, 2023 and 2022, approximately 76% and 79% of our institutions’ aggregate cash receipts from tuition payments came from Title IV Program funding.
For the years ended December 31, 2024 and 2023, approximately 77% and 76% of our institutions’ aggregate cash receipts from tuition payments came from Title IV Program funding.
Repurchases of stock during 2023 and 2022 were funded by cash generated from operating activities and existing cash balances. See Part II, Item 5 for more information. Release of cash held in escrow . During the years ended December 31, 2023 and 2022, we released $1.0 million and $4.2 million of escrow associated with acquisitions. Payments of cash dividends .
Repurchases of stock during 2024 and 2023 were funded by cash generated from operating activities and existing cash balances. See Part II, Item 5 for more information. Release of cash held in escrow . During the years ended December 31, 2024 and 2023, we released $0.3 million and $1.0 million of escrow associated with acquisitions.
The Company believes it is useful to present non-GAAP financial measures, which exclude certain significant and non-cash items, as a means to understand the performance of its operations. (See tables below for a GAAP to non-GAAP reconciliation.) Adjusted operating income was $174.9 million for the current year as compared to $164.0 million in the prior year.
The Company believes it is useful to present non-GAAP financial measures, which exclude certain significant and non-cash items, as a means to understand the performance of its operations. Adjusted operating income was $192.2 million for the current year as compared to $174.9 million for the prior year.
The Company’s academic institutions – Colorado Technical University (“ CTU ”) and the American InterContinental University System (“ AIUS ” or “ AIU System ”) – provide degree programs from the associate through doctoral level as well as non-degree seeking and professional development programs.
The Company’s academic institutions – Colorado Technical University (“ CTU ”), the American InterContinental University System (“ AIUS ” or “ AIU System ”) and University of St. Augustine for Health Sciences (" USAHS" ) – provide degree programs from the associate through doctoral level as well as non-degree seeking and professional development programs.
The decrease in cash flow from operations as compared to the prior year is primarily driven by a timing impact of certain working capital items. Our primary source of cash flows from operating activities is tuition collected from our students.
The increase in cash flow from operations as compared to the prior year is primarily driven by the increase in operating income as compared to the prior year as well as a negative working capital timing impact on the prior year operating cash flows. Our primary source of cash flows from operating activities is tuition collected from our students.
Ultimately, our goal is to deploy resources in a way that drives long term stockholder value while supporting and enhancing the academic value of our institutions. On January 27, 2022, the Board of Directors of the Company approved a stock repurchase program for up to $50.0 million, which commenced March 1, 2022 and originally expired on September 30, 2023.
Ultimately, our goal is to deploy resources in a way that drives long term stockholder value while supporting and enhancing the academic value of our institutions. On February 20, 2024, the Board of Directors of the Company approved a new stock repurchase program for up to $50.0 million which commenced March 1, 2024 and expires September 30, 2025.
Payments of employee tax associated with stock compensation were $2.2 million for the year ended December 31, 2023 and $1.6 million for the year ended December 31, 2022. Repurchase of stock.
Payments of employee tax associated with stock compensation were $3.4 million for the year ended December 31, 2024 and $2.2 million for the year ended December 31, 2023. Repurchase of stock.
Our universities charge tuition and fees at varying amounts, depending on the university, the type of program and specific curriculum. Our universities bill students a single charge that covers tuition, certain fees and required program materials, such as textbooks and supplies, which we treat as a single performance obligation.
Our universities charge tuition and fees at varying amounts and bill students a single charge that covers tuition, certain fees and required program materials, 52 such as textbooks and supplies, which we treat as a single performance obligation.
During the year ended December 31, 2023, we repurchased 0.5 million shares of our common stock for approximately $8.3 million at an average price of $15.38 per share as compared to 2.1 million shares of common stock repurchased for $23.1 million at an average price of $11.02 per share for the year ended December 31, 2022.
During the year ended December 31, 2024, we repurchased 0.4 million shares of our common stock for approximately $6.8 million at an average price of $17.60 per share as compared to 0.5 million shares of common stock repurchased for $8.3 million at an average price of $15.38 per share for the year ended December 31, 2023.
For the Year Ended December 31, 2023 % of Total Revenue 2022 % of Total Revenue 2021 % of Total Revenue TOTAL REVENUE $ 710,004 $ 695,208 $ 693,034 OPERATING EXPENSES Educational services and facilities (1) 130,324 18.4 % 116,723 16.8 % 108,743 15.7 % General and administrative (2) : Advertising and marketing 102,588 14.4 % 126,843 18.2 % 137,228 19.8 % Admissions 91,359 12.9 % 93,810 13.5 % 96,403 13.9 % Administrative 170,922 24.1 % 163,893 23.6 % 140,529 20.3 % Bad debt 33,215 4.7 % 41,574 6.0 % 44,349 6.4 % Total general and administrative expense 398,084 56.1 % 426,120 61.3 % 418,509 60.4 % Depreciation and amortization 16,887 2.4 % 19,734 2.8 % 16,766 2.4 % Asset impairment 14,263 2.0 % 2,994 0.4 % - 0.0 % OPERATING INCOME 150,446 21.2 % 129,637 18.6 % 149,016 21.5 % PRETAX INCOME 192,121 27.1 % 134,269 19.3 % 149,067 21.5 % PROVISION FOR INCOME TAXES 44,469 6.3 % 38,402 5.5 % 39,430 5.7 % Effective tax rate 23.1 % 28.6 % 26.4 % NET INCOME $ 147,652 20.8 % $ 95,867 13.8 % $ 109,637 15.8 % _______________ (1) Educational services and facilities expense includes costs attributable to the educational activities of our campuses, including: salaries and benefits of faculty, academic administrators and student support personnel, and costs of educational supplies and facilities, such as rents on leased facilities.
For the Year Ended December 31, 2024 % of Total Revenue 2023 % of Total Revenue 2022 % of Total Revenue TOTAL REVENUE $ 681,263 $ 710,004 $ 695,208 OPERATING EXPENSES Educational services and facilities (1) 120,860 17.7 % 130,324 18.4 % 116,723 16.8 % General and administrative (2) : Advertising and marketing 100,963 14.8 % 102,588 14.4 % 126,843 18.2 % Admissions 81,783 12.0 % 91,359 12.9 % 93,810 13.5 % Administrative 150,587 22.1 % 170,922 24.1 % 163,893 23.6 % Bad debt 33,719 4.9 % 33,215 4.7 % 41,574 6.0 % Total general and administrative expense 367,052 53.9 % 398,084 56.1 % 426,120 61.3 % Depreciation and amortization 14,645 2.1 % 16,887 2.4 % 19,734 2.8 % Asset impairment 4,453 0.7 % 14,263 2.0 % 2,994 0.4 % OPERATING INCOME 174,253 25.6 % 150,446 21.2 % 129,637 18.6 % PRETAX INCOME 201,440 29.6 % 192,121 27.1 % 134,269 19.3 % PROVISION FOR INCOME TAXES 53,850 7.9 % 44,469 6.3 % 38,402 5.5 % Effective tax rate 26.7 % 23.1 % 28.6 % NET INCOME $ 147,590 21.7 % $ 147,652 20.8 % $ 95,867 13.8 % _______________ (1) Educational services and facilities expense includes costs attributable to the educational activities of our campuses, including: salaries and benefits of faculty, academic administrators and student support personnel, and costs of educational supplies and facilities, such as rents on leased facilities.
As of December 31, 2023, there were no amounts outstanding under the revolving credit facility. The discussion above reflects management’s expectations regarding liquidity; however, as a result of the significance of the Title IV Program funds received by our students, we are highly dependent on these funds to operate our business.
The discussion above reflects management’s expectations regarding liquidity; however, as a result of the significance of the Title IV Program funds received by our students, we are highly dependent on these funds to operate our business.
Capital expenditures represented approximately 0.9% and 1.8% of revenue for the years ended December 31, 2023 and 2022, respectively. For the year ending December 31, 2024, we expect capital expenditures to be approximately 1.0% - 2.0% of revenue. Earnout payment related to business acquisition.
Capital expenditures represented approximately 0.7% and 0.9% of revenue for the years ended December 31, 2024 and 2023, respectively. For the year ending December 31, 2025, we expect capital expenditures to be approximately 2.0% of revenue.
Bad debt expense incurred by each of our segments during the years ended December 31, 2023, 2022 and 2021 was as follows (dollars in thousands): For the Year Ended December 31, 2023 % of Segment Revenue 2022 % of Segment Revenue 2021 % of Segment Revenue 2023 vs 2022 % Change 2022 vs 2021 % Change Bad debt expense by segment: CTU $ 20,223 4.3 % $ 21,640 5.2 % $ 20,150 4.9 % -6.5 % 7.4 % AIUS 13,008 5.4 % 19,971 7.3 % 24,249 8.6 % -34.9 % -17.6 % Corporate and Other (16 ) NM (37 ) NM (50 ) NM NM NM Total bad debt expense $ 33,215 4.7 % $ 41,574 6.0 % $ 44,349 6.4 % -20.1 % -6.3 % 52 Bad debt expense decreased by 20.1% or $8.4 million for the current year as compared to the prior year.
Bad debt expense incurred by each of our segments during the years ended December 31, 2024, 2023 and 2022 was as follows (dollars in thousands): For the Year Ended December 31, 2024 % of Segment Revenue 2023 % of Segment Revenue 2022 % of Segment Revenue 2024 vs 2023 % Change 2023 vs 2022 % Change Bad debt expense by segment: CTU $ 20,386 4.5 % $ 20,223 4.3 % $ 21,640 5.2 % 0.8 % -6.5 % AIUS 13,133 6.1 % 13,008 5.4 % 19,971 7.3 % 1.0 % -34.9 % USAHS (1) 201 NM - NA - NA NM NA Corporate and Other (1 ) NM (16 ) NM (37 ) NM NM NM Total bad debt expense $ 33,719 4.9 % $ 33,215 4.7 % $ 41,574 6.0 % 1.5 % -20.1 % _______________ (1) USAHS includes results of operations starting from the acquisition date on December 2, 2024. 50 Bad debt expense remained relatively consistent with a slight increase of 1.5% or $0.5 million for the current year as compared to the prior year.
General and Administrative Expense (dollars in thousands) For the Year Ended December 31, 2023 2022 2021 2023 vs 2022 % Change 2022 vs 2021 % Change General and administrative: Advertising and marketing $ 102,588 $ 126,843 $ 137,228 -19.1 % -7.6 % Admissions 91,359 93,810 96,403 -2.6 % -2.7 % Administrative 170,922 163,893 140,529 4.3 % 16.6 % Bad Debt 33,215 41,574 44,349 -20.1 % -6.3 % Total general and administrative expense $ 398,084 $ 426,120 $ 418,509 -6.6 % 1.8 % The general and administrative expense for the current year decreased by 6.6% or $28.0 million as compared to the prior year.
General and Administrative Expense (dollars in thousands) For the Year Ended December 31, 2024 2023 2022 2024 vs 2023 % Change 2023 vs 2022 % Change General and administrative: Advertising and marketing $ 100,963 $ 102,588 $ 126,843 -1.6 % -19.1 % Admissions 81,783 91,359 93,810 -10.5 % -2.6 % Administrative 150,587 170,922 163,893 -11.9 % 4.3 % Bad Debt 33,719 33,215 41,574 1.5 % -20.1 % Total general and administrative expense $ 367,052 $ 398,084 $ 426,120 -7.8 % -6.6 % The general and administrative expense for the current year decreased by 7.8% or $31.0 million, compared to the prior year.
Admissions expense decreased by 2.6% or $2.5 million as compared to the prior year primarily due to decreased expenses within AIUS as a result of short-term operational changes made during the current year.
Admissions expense decreased by 10.5% or $9.6 million as compared to the prior year. The current year improvement was primarily driven by decreased expenses within both CTU and AIUS as a result of operational changes made during the prior year.
Because a substantial portion of our revenue is derived from Title IV Programs, any legislative or regulatory action that significantly reduces the funding available under Title IV Programs, or the ability of our students or institutions to participate in Title IV Programs, would likely have a material impact on the realizability of our receivables.
Because a substantial portion of our revenue is derived from Title IV Programs, any legislative or regulatory action that significantly reduces the funding available under Title IV Programs, or the ability of our students or institutions to participate in Title IV Programs, would likely have a material impact on the realizability of our receivables. 53 Goodwill Impairment Description: Goodwill represents the excess of cost over fair market value of identifiable net assets acquired through business purchases.
Adjusted operating income for the years ended December 31, 2023 and 2022 is presented below (dollars in thousands, unless otherwise noted): For the Year Ended December 31, Adjusted Operating Income 2023 2022 Operating income $ 150,446 $ 129,637 Depreciation and amortization (1) 16,887 19,734 Legal fee expense related to certain matters (2) 7,579 14,597 Adjusted Operating Income $ 174,912 $ 163,968 For the Year Ended December 31, Adjusted Earnings Per Diluted Share 2023 2022 Reported Earnings Per Diluted Share $ 2.18 $ 1.39 Pre-tax adjustments included in operating expenses: Amortization for acquired intangible assets (1) 0.11 0.11 Legal fee expense related to certain matters (2) 0.11 0.21 Gain on sale of intangible assets (3) (0.32 ) - Total pre-tax adjustments (0.10 ) 0.32 Tax effect of adjustments (4) 0.02 (0.08 ) Total adjustments after tax (0.08 ) 0.24 Adjusted Earnings Per Diluted Share $ 2.10 $ 1.63 ___________________________ 50 (1) Amortization relates to definite-lived intangible assets associated with acquisitions.
Adjusted operating income for the years ended December 31, 2024 and 2023 is presented below (dollars in thousands, unless otherwise noted): For the Year Ended December 31, Adjusted Operating Income 2024 2023 Operating income $ 174,253 $ 150,446 Depreciation and amortization 14,645 16,887 Legal fee expense related to certain matters (1) 3,309 7,579 Adjusted Operating Income $ 192,207 $ 174,912 For the Year Ended December 31, Adjusted Earnings Per Diluted Share 2024 2023 Reported Earnings Per Diluted Share $ 2.19 $ 2.18 Pre-tax adjustments included in operating expenses: Amortization for acquired intangible assets 0.09 0.11 Legal fee expense related to certain matters (1) 0.05 0.11 Gain on sale of intangible assets (2) - (0.32 ) Total pre-tax adjustments 0.14 (0.10 ) Tax effect of adjustments (3) (0.04 ) 0.02 Total adjustments after tax 0.10 (0.08 ) Adjusted Earnings Per Diluted Share $ 2.29 $ 2.10 ___________________________ (1) Legal fee expense associated with (i) responses to the Department relating to borrower defense to repayment applications from former students, and (ii) acquisition efforts.
Purchases and sales of available-for-sale investments resulted in a net cash outflow of $76.1 million and $229.8 million for the years ended December 31, 2023 and 2022, respectively. 58 Capital Expenditures. Capital expenditures decreased to $6.4 million for the year ended December 31, 2023 as compared to $12.6 million for the year ended December 31, 2022.
Purchases and sales of available-for-sale investments resulted in a net cash inflow of $34.6 million for the year ended December 31, 2024 as compared to a net cash outflow of $76.1 million for the year ended December 31, 2023. Business acquisition.
CTU's academic calendar redesign may impact the comparability of revenue-earning days and enrollment results in any given quarter, with the impact on revenue and total student enrollments not necessarily having the same magnitude or directional impact.
CTU's academic calendar may impact the comparability of revenue-earning days and enrollment results in any given quarter, with the impact on revenue and total student enrollments not necessarily having the same magnitude or directional impact. Current year operating income for CTU increased by 18.9% or $27.3 million as compared to the prior year.
(4) The tax effect of adjustments was calculated by multiplying the pre-tax adjustments with a tax rate of 25%. This tax rate is intended to reflect federal and state taxable jurisdictions as well as the nature of the adjustments.
(2) Non-cash gain associated with the sale of the LCB tradename in exchange for outstanding shares of Perdoceo's stock. (3) The tax effect of adjustments was calculated by multiplying the pre-tax adjustments with a tax rate of 25%. This tax rate is intended to reflect federal and state taxable jurisdictions as well as the nature of the adjustments.
Provision for Income Taxes For the year ended December 31, 2023, we recorded a tax provision of $44.5 million, which includes a $4.5 million favorable adjustment related to the tax benefits associated with a previously disclosed prior year ordinary loss attributable to the stock of a worthless subsidiary, which decreased the effective tax rate by 2.4% and a $0.7 million favorable adjustment related to federal and state credits claimed for the 2022 tax return and anticipated for the 2023 tax year, which decreased the effective rate by 0.4%.
The prior year provision includes a $4.5 million favorable adjustment related to the tax benefits associated with a previously disclosed prior year ordinary loss attributable to the stock of a worthless subsidiary, which decreased the 2023 effective tax rate by 2.4%. For the full year 2025, we expect our effective tax rate to be between 25.5% and 26.5%.
Income Taxes Description : We are subject to the income tax laws of the U.S. and various state, local and foreign jurisdictions. These tax laws are complex and subject to interpretation. As a result, significant judgments and interpretations are required in determining our income tax provisions (benefits) and evaluating our uncertain tax positions.
These tax laws are complex and subject to interpretation. As a result, significant judgments and interpretations are required in determining our income tax provisions (benefits) and evaluating our uncertain tax positions. We account for income taxes in accordance with FASB ASC Topic 740 – Income Taxes .
During the year ended December 31, 2023, we paid $6.0 million as additional purchase consideration for the Coding Dojo acquisition. Financing Cash Flows During the years ended December 31, 2023 and 2022, net cash flows used in financing activities totaled $23.4 million and $27.7 million, respectively. Payments of employee tax associated with stock compensation.
Financing Cash Flows During the years ended December 31, 2024 and 2023, net cash flows used in financing activities totaled $41.1 million and $23.4 million, respectively. Payments of employee tax associated with stock compensation.
Non-GAAP financial measures should be considered as a supplement to, and not as a substitute for, or superior to, the respective financial results presented in accordance with GAAP. 2023 Review During the year ended December 31, 2023 (" current year "), we continued to focus on our key objectives of enhancing student experiences, retention and academic outcomes.
Non-GAAP financial measures should be considered as a supplement to, and not as a substitute for, or superior to, the respective financial results presented in accordance with GAAP. 2024 Review During the year ended December 31, 2024 (" current year "), our academic institutions continued to execute on our goal of changing lives through education and preparing learners for job skills necessary in today’s world.
Contractual Obligations As of December 31, 2023, future minimum cash payments due under contractual obligations for our non-cancelable operating lease arrangements were $30.7 million, with approximately $7.0 million due within the next 12 months.
Contractual Obligations As of December 31, 2024, future minimum cash payments due under contractual obligations for our non-cancelable operating and finance lease arrangements were $74.4 million and $18.5 million, respectively. Of these amounts, approximately $11.1 million for 56 operating leases and $6.3 million for finance leases are due within the next 12 months.
As of December 31, 2023, we were not a party to any off-balance sheet financing or contingent payment arrangements, nor do we have any unconsolidated subsidiaries.
We lease most of our administrative and educational facilities under non-cancelable operating leases expiring at various dates through 2049. As of December 31, 2024, we were not a party to any off-balance sheet financing or contingent payment arrangements, nor do we have any unconsolidated subsidiaries.
The decrease in revenue at AIUS was driven by the operational changes discussed above within " 2023 Review " which impacted student enrollment growth during the year and accordingly revenue. 51 Educational Services and Facilities Expense (dollars in thousands) For the Year Ended December 31, 2023 2022 2021 2023 vs 2022 % Change 2022 vs 2021 % Change Educational services and facilities: Academics & student related $ 120,023 $ 99,410 $ 91,426 20.7 % 8.7 % Occupancy 10,301 17,313 17,317 -40.5 % 0.0 % Total educational services and facilities $ 130,324 $ 116,723 $ 108,743 11.7 % 7.3 % Educational services and facilities expense for the current year increased by 11.7% or $13.6 million as compared to the prior year, driven by academic and student related expense primarily related to the 2022 acquisitions, which were not a part of the full comparative prior year period.
The current year's revenue benefited from the acquisition completed on December 2, 2024, which was not included in the full comparative period of the prior year. 49 Educational Services and Facilities Expense (dollars in thousands) For the Year Ended December 31, 2024 2023 2022 2024 vs 2023 % Change 2023 vs 2022 % Change Educational services and facilities: Academics & student related $ 112,216 $ 120,023 $ 99,410 -6.5 % 20.7 % Occupancy 8,644 10,301 17,313 -16.1 % -40.5 % Total educational services and facilities $ 120,860 $ 130,324 $ 116,723 -7.3 % 11.7 % Educational services and facilities expense for the current year decreased by 7.3% or $9.5 million as compared to the prior year, supported by improvements in both academics and student related costs and occupancy expenses, compared to the prior year.
(2) AIUS’ results of operations include the CalSouthern acquisition commencing on the July 1, 2022 date of acquisition and the DigitalCrafts acquisition commencing on the August 2, 2021 date of acquisition.
(2) AIUS includes results of operations from CalSouthern beginning on the acquisition date of July 1, 2022.
Generally, an impairment loss would reduce our net income for the reporting period being presented, and proportionally reduce the value of the assets and equity reflected on our balance sheet. 56 We did not record any goodwill impairment charges during the years ended December 31, 2023 and 2022, and have $241.2 million and $243.5 million of goodwill as of December 31, 2023 and 2022, respectively.
Generally, an impairment loss would reduce our net income for the reporting period being presented, and proportionally reduce the value of the assets and equity reflected on our balance sheet.
Operating Income Operating income for the current year increased by 16.1% or $20.8 million as compared to the prior year.
Operating income for the current year increased to $174.3 million as compared to operating income of $150.4 million in the prior year.
Goodwill Impairment Description: Goodwill represents the excess of cost over fair market value of identifiable net assets acquired through business purchases. Goodwill often involves estimates based on third-party valuations, or internal valuations based on discounted cash flow analyses or other valuation techniques.
Goodwill often involves estimates based on third-party valuations, or internal valuations based on discounted cash flow analyses or other valuation techniques.
We expect to continue to need to operate nimbly in this uncertain environment, making necessary changes to the extent possible to comply with the myriad of new vague or unclear rules or interpretations as well as new interpretations of existing rules.
In addition, the new Administration may interpret, apply, and enforce Title IV and other regulations in a manner different from current Department guidance and practice. We expect to continue to need to operate nimbly, making necessary changes to the extent possible to comply with new rules or interpretations as well as new interpretations of existing rules.
Perdoceo's institutions are committed to providing quality education that closes the gap between learners who seek to advance their careers and employers needing a qualified workforce. Our reporting segments are determined in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 280 – Segment Reporting and are based upon how the Company analyzes performance and makes decisions.
Our reporting segments are determined in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 280 – Segment Reporting and are based upon how the Company analyzes performance and makes decisions. Each segment represents a postsecondary education provider that offers a variety of academic programs. We organize our business across three reporting segments: CTU, AIUS and USAHS.
Management expects to optimize operating expenses for 2024 to mostly offset this expected decline in revenue. Financial Highlights Revenue for the current year increased by 2.1% or $14.8 million as compared to the prior year, resulting from an increase in revenue for CTU of 11.8% or $49.3 million partially offset with a decrease for AIUS of 12.5% or $34.2 million.
Financial Highlights Revenue for the current year decreased by 4.0% or $28.7 million as compared to the prior year, resulting from a decrease in revenue for CTU of 2.6% or $12.0 million and a decrease for AIUS of 11.1% or $26.8 million, which more than offset the revenue of $10.0 million from the USAHS acquisition in December of 2024.
Corporate and Other. This category includes unallocated costs that are incurred on behalf of the entire company. Total Corporate and Other operating loss for the current year decreased by 14.2% or $6.5 million as compared to the prior year, primarily as a result of decreased legal fee expense.
Total Corporate and Other operating loss for the current year improved by 21.4% or $8.3 million as compared to the prior year, primarily as a result of lower legal expenses.
Active students are defined as those students who are considered in attendance by participating in class related activities during the previous two weeks. Total student enrollments do not include learners pursuing: a) non-degree seeking and professional development programs, and b) degree seeking, non-Title IV, self-paced programs at our universities.
Total student enrollments do not include learners participating in: a) non-degree seeking and professional development programs, and b) degree seeking, non-Title IV, self-paced programs at our universities. Year Ended December 31, 2024 as Compared to the Year Ended December 31, 2023 CTU. Revenue for the current year decreased by 2.6% or $12.0 million as compared to the prior year.
LIQUIDITY, FINANCIAL POSITION AND CAPITAL RESOURCES As of December 31, 2023, cash, cash equivalents, restricted cash and available-for-sale short-term investments (“cash balances”) totaled $604.2 million. Restricted cash as of December 31, 2023 was $1.0 million and relates to amounts held in an escrow account to secure post-closing indemnification obligations of the seller pursuant to the Hippo acquisition.
LIQUIDITY, FINANCIAL POSITION AND CAPITAL RESOURCES As of December 31, 2024, cash, cash equivalents, restricted cash and available-for-sale short-term investments (“cash balances”) totaled $591.5 million. Restricted cash as of December 31, 2024 was $22.6 million and primarily relates to a letter of credit USAHS is required to maintain with the Department of Education.
As of December 31, 2023 2022 2021 2023 vs 2022 % Change 2022 vs 2021 % Change TOTAL STUDENT ENROLLMENTS: CTU 26,000 25,200 24,700 3.2 % 2.0 % AIUS 8,500 14,000 15,700 -39.3 % -10.8 % Total 34,500 39,200 40,400 -12.0 % -3.0 % Total student enrollments represent all students who are active as of the last day of the reporting period.
(3) USAHS includes results of operations beginning on the acquisition date of December 2, 2024. 51 As of December 31, 2024 2023 2022 2024 vs 2023 % Change 2023 vs 2022 % Change TOTAL STUDENT ENROLLMENTS: CTU 28,100 26,000 25,200 8.1 % 3.2 % AIUS 9,500 8,500 14,000 11.8 % -39.3 % USAHS (1) 3,800 - - NM NA Total 41,400 34,500 39,200 20.0 % -12.0 % ______________________ (1) Perdoceo completed the acquisition of USAHS on December 2, 2024.
Each segment represents a postsecondary education provider that offers a variety of academic programs. We organize our business across two reporting segments: CTU and AIUS. See Note 18 “ Segment Reporting ” for a description of each of our current reporting segments along with revenues, operating income and total assets by reporting segment.
See Note 18 “ Segment Reporting ” for a description of each of our current reporting segments along with revenues, operating income and total assets by reporting segment. Regulatory Environment and Political Uncertainty As indicated in “ Scrutiny of the For-Profit Postsecondary Education Sector ” section, the for-profit industry is scrutinized by various policymakers, agencies and interest groups.
The advertising and marketing expense for the current year decreased by 19.1% or $24.3 million as compared to the prior year, primarily driven by short-term operational changes made within AIUS during the current year as well as adjustments made to our process around generating prospective student inquiries in order to comply with updated expectations from various federal agencies around prospective student outreach.
The advertising and marketing expense for the current year decreased by 1.6% or $1.6 million as compared to the prior year, which was driven by adjustments made to our marketing processes to identify prospective student interest.
Current year operating income for CTU increased by 1.7% or $2.4 million as compared to the prior year, driven by the increase in revenue discussed above, partially offset with increased operating expenses, including increased asset impairment charges of $12.2 million as compared to the prior year. AIUS.
This increase was primarily driven by the return to normalized operating levels starting in late 2023, which contributed to increasing student enrollments throughout 2024. Current year operating income for AIUS decreased by 20.1% or $9.1 million as compared to the prior year, driven by the revenue decline mentioned above which was only partially offset with decreased operating expenses. USAHS.
Partially offsetting the current year increase in academic and student related costs was a decrease in occupancy expense of 40.5% or $7.0 million as compared to the prior year driven by the optimization of leased space related to our corporate headquarters.
Academics and student related costs decreased by 6.5% or $7.8 million as compared to the prior year, primarily due to operational changes made related to simplification of professional development offerings. Occupancy expenses for the current year improved by 16.1% or $1.7 million as compared to the prior year, driven by ongoing optimization of leased space.
Total student enrollments increased by 3.2% at December 31, 2023 as compared to December 31, 2022, driven by improved student retention and growth in student enrollments from corporate engagements, which more than offset a negative timing impact of the academic calendar redesign.
Strong underlying student retention and engagement and an increase in student enrollment from corporate engagements fully offset the negative impact of fewer revenue-earning days during the full year and resulted in this organic revenue growth. CTU's total student enrollments increased by 8.1% as of December 31, 2024 as compared to December 31, 2023.
Full year revenue is expected to be lower for 2024 primarily as a result of the academic calendar redesign at CTU which will result in lower revenue-earning days in 2024 as well as the lag impact on revenue of lower beginning total student enrollments at AIUS.
Full year revenue is expected to be higher for 2025 primarily due to the USAHS acquisition as well as growth in revenue and student enrollments within CTU and AIUS.
The decline in student enrollments was impacted by short-term operating changes made during the current year discussed above within " 2023 Review ". 54 Current year operating income for AIUS increased by 35.9% or $12.0 million as compared to the prior year, driven by lower admissions, advertising and marketing, occupancy and bad debt expenses as compared to the prior year, which more than offset the decrease in revenue.
We continue to expect quarterly fluctuations in bad debt expense. Operating Income Operating income for the current year increased by 15.8% or $23.8 million as compared to the prior year. The current year improvement was supported by lower operating expenses across most categories which more than offset the decrease in revenue as compared to the prior year.
The current year increase was primarily driven by the increased revenue along with lower admissions, advertising and marketing, occupancy and bad debt expenses as compared to the prior year, partially offset with an increase of $11.3 million related to asset impairment charges for the current year as compared to the prior year.
The decrease was primarily driven by lower administrative, admissions and advertising and marketing expenses. Administrative expense for the current year decreased by 11.9% or $20.3 million as compared to the prior year, primarily driven by operational efficiencies within our academic institutions and decreased legal fees within Corporate and Other for the current year.
Year Ended December 31, 2023 as Compared to the Year Ended December 31, 2022 CTU. Current year revenue increased by 11.8% or $49.3 million as compared to the prior year.
Year Ended December 31, 2024 as Compared to the Year Ended December 31, 2023 Revenue Revenue for the year ended December 31, 2024 (" current year ") decreased 4.0%, or $28.7 million, primarily due to decreases in revenue from both CTU and AIUS.
During the year ended December 31, 2023, the Company's Board of Directors approved a dividend policy, under which the Company made payments of $14.4 million during the year.
Payments of cash dividends and dividend equivalents . During the years ended December 31, 2024 and 2023, the Company made dividend payments of $31.7 million and $14.4 million, respectively. Principal payments for finance leases and failed sale leaseback.
Year Ended December 31, 2023 as Compared to the Year Ended December 31, 2022 Revenue Revenue for the year ended December 31, 2023 (" current year ") increased 2.1%, or $14.8 million, driven by growth in revenue within CTU which was partially offset with a decrease in revenue for AIUS as compared to the prior year.
The improvement in operating income was driven by lower operating expenses across most categories, partially due to right-sizing of the cost structure to align with more simplified professional development offerings, which more than offset the declines in revenue. AIUS. Revenue for the current year decreased by 11.1% or $26.8 million as compared to the prior year.
The increase in operating income for the current year was primarily due to lower marketing and admissions expenses in the current year driven by the operational changes made within AIUS, as well as the revenue growth for 2023 as compared to 2022.
The increase in operating income for the current year was a result of decreased operating expenses, primarily in the areas of administrative, asset impairment, admissions and academics expenses, which more than offset the decrease in revenue during the current year as compared to the prior year.
CTU's increase in total student enrollments was primarily driven by organic enrollment growth due to improvements in student retention and engagement.
This increase was driven by student enrollment growth within our corporate engagement programs as well as continued improvement in prospective student interest levels, student retention and student engagement.
Removed
Regulatory Environment and Political Uncertainty We operate in a highly regulated industry, which has significant impacts on our business and creates risks and uncertainties. In recent years, Congress, the Department, states, accrediting agencies, the Consumer Financial Protection Bureau, the Federal Trade Commission, state attorneys general, consumer advocacy groups and the media have all scrutinized the for-profit postsecondary education sector.
Added
USAHS is among the nation's reputable universities offering graduate health sciences degrees, primarily in physical therapy, occupational therapy, speech language therapy and nursing, as well as continuing education programs. Perdoceo's academic institutions are committed to providing quality education that closes the gap between learners who seek to advance their careers and employers needing a qualified workforce.
Removed
A group of influential U.S. senators, consumer advocacy groups and some media outlets have strongly and repeatedly encouraged the 48 Department, the Department of Defense and the Department of Veterans Affairs and its state approving agencies to take action to limit or terminate the participation of institutions such as ours in existing tuition assistance programs.
Added
Many of the most highly criticized institutions have been closed now for several years. See “ Scrutiny of the For-Profit Postsecondary Education Sector ” for additional information on this matter. The November 2024 federal elections resulted in a new President and Congress.
Removed
In several cases, these groups have received significant financial support from third parties critical of our sector and have aligned on messaging that negatively impacts our sector during policy and rulemaking discussions.
Added
We cannot predict the actions that the new Administration or Congress may take or their effect on the higher education sector. The new Congress or Administration may delay, block, modify, or eliminate certain Title IV and other regulations applicable to higher education institutions.
Removed
In addition, the current administration has made student loan forgiveness one of its top domestic policy objectives, and it has been aggressively pursued by the Department in cooperation with special interest groups, other federal agencies, state attorneys general and others.
Added
The positive student enrollment results we experienced as of the end of the current year demonstrated the execution on our strategy of prioritizing student experiences and academic outcomes, that we believe, will support sustainable and responsible growth. On December 2, 2024, the Company completed the acquisition of the University of St. Augustine for Health Sciences (" USAHS ").
Removed
These groups collectively have focused efforts relating to student debt forgiveness on for-profit colleges and universities, encouraging loan discharge applications and complaints by former students.
Added
USAHS is among the nation's reputable universities offering graduate health sciences degrees, primarily in physical therapy, occupational therapy, speech language therapy and nursing, as well as continuing education programs. Founded in 1979, USAHS educates students through its network of campuses in San Marcos, California; St. Augustine and Miami, Florida; and Austin and Dallas, Texas and through its online programs.
Removed
We continue to see one of the most challenging operating environments in recent memory as the Department has undertaken a complete overhaul of almost all of the major regulatory requirements associated with our participation in Title IV Programs and which disproportionally negatively impact the for-profit postsecondary education sector.
Added
This strategic acquisition allows us to diversify and significantly expand our academic offerings into the health sciences field, broadening our reach and community impact. Total student enrollments increased 20.0% at December 31, 2024 as compared to December 31, 2023, with both CTU and AIUS contributing to this increase, along with the USAHS acquisition.
Removed
Additionally, a number of the Department’s regulatory initiatives are explicitly targeted at negatively impacting the proprietary sector of education. In many cases the new regulatory requirements are unclear, require further clarification as to their interpretation or applicability or are subject or will be subject to legal challenges.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeAt December 31, 2023, a 10% increase or decrease in interest rates applicable to our investments or borrowings would not have a material impact on our future earnings, fair values or cash flows.
Biggest changeAt December 31, 2024, a 100 basis point increase or decrease in average interest rates applicable to our investments or borrowings would not have a material impact on our future earnings, fair values or cash flows. Our financial instruments are recorded at their fair values as of December 31, 2024 and December 31, 2023.
Despite the investment risk mitigation strategies we employ, we may incur investment losses as a result of unusual and unpredictable market developments and may experience reduced investment earnings if the yields on investments deemed to be low risk remain low or decline.
Despite the investment risk mitigation strategies 57 we employ, we may incur investment losses as a result of unusual and unpredictable market developments and may experience reduced investment earnings if the yields on investments deemed to be low risk remain low or decline.
Removed
Under the Second Amended Credit Agreement, outstanding principal amounts bear annual interest at a fluctuating rate equal to 1.0% less than the administrative agent’s prime commercial rate, subject to a 3.0% minimum rate. A higher rate may apply to late payments or if any event of default exists.
Removed
As of December 31, 2023, we had no outstanding borrowings under this facility. Our financial instruments are recorded at their fair values as of December 31, 2023 and December 31, 2022.

Other PRDO 10-K year-over-year comparisons