American Public Education (APEI) FY2025 10-K Risk Factors: 8 New, 10 Dropped

What the changes say

Regulatory scrutiny on 90/10 Rule compliance and new federal laws like OBBBA heavily shape the business risk profile.

What changed since the prior 10-K

New

NewRisks Related to Attracting and Retaining Students
expenses in an unsuccessful attempt to do so, we may fail to attract new enrollments to the extent necessary to realize a sufficient return on our efforts. Accordingly, our business, results of operations, and financial condition could be impacted
RU faces enrollment and expansion limits in new markets due to changes of control and U.S. Department of Education composite score concerns.
NewRisks Related to the Regulation of Our Industry
Combination (as defined above) is expected to benefit 90/10 Rule compliance and other regulatory considerations; however, there can be no assurance that the Combination will be completed on its anticipated timeline or at all, will have the expected benefits, or when those benefits will be realized
APUS experienced timing shifts and delays in collecting approximately $18.4 million and $22.1 million in tuition assistance from the Army.
NewRisks Related to the Regulation of Our Industry
strategic transactions could have, see the Risk Factors with the captions beginning with “The planned combination of APUS, RU, and HCN” and “Business combinations and acquisitions may be difficult to integrate …” below
Failure to satisfy the 90/10 Rule causes loss of Title IV and TA program eligibility, leading to severe regulatory and financial consequences.
NewRisks Related to the Regulation of Our Industry
The OBBBA may adversely impact us or our students’ ability to participate in federal student financial aid programs, which could have a significant adverse impact on enrollments and our business, operations, and financial results
The OBBBA signed on July 4, 2025, imposes new federal loan caps and earnings tests that could limit student borrowing and program availability.
NewRisks Related to the Regulation of Our Industry
review, when it will be completed, whether there will be any adverse findings in the resulting program review report, what findings there may be related to 90/10 Rule compliance, if any, or whether ED will place any liability or other limitations on APUS as a result of the review
Enforcement cooperation among the FTC, CFPB, ED, and VA increases the risk of civil penalties and lawsuits for deceptive or predatory practices.
NewRisks Related to the Regulation of Our Industry
adversely affect RU’s growth opportunities, including restricting its ability to serve additional students, particularly additional nursing students
Provisional certification by ED could restrict our institutions from adding educational programs, opening locations, or acquiring other institutions.
NewRisks Related to Our Business
addition, inflation has resulted and, in the future, could result in increased costs of labor and materials, which could adversely impact our operations and financial condition
Inflation has increased labor and material costs, while economic downturns could raise student loan default rates and credit balance refund liabilities.
NewRisks Related to Our Business
for management transition and the transfer of knowledge, the loss of key personnel, coupled with an inability to adequately train other personnel, hire new personnel, or transfer knowledge, could significantly impact our business and results of operations
Inability to attract and retain high-caliber faculty, management, and personnel could severely harm operations, expansions, and technology updates.

Dropped

DroppedRisks Related to Attracting and Retaining Students
to realize a sufficient return on our efforts. Accordingly, our business, results of operations, and financial condition could be impacted
DroppedRisks Related to the Regulation of Our Industry
If we or our institutions fail to comply with the extensive regulatory requirements for the operation of postsecondary education institutions, we and our institutions could face penalties and significant restrictions on operations, including loss of federal student loans and grants and access to DoD TA programs
DroppedRisks Related to the Regulation of Our Industry
credentialing or licensure. Alternatively, ABHES may in its discretion provide an opportunity for a program to come into compliance within a period of time specified by ABHES, and ABHES may extend the period for achieving compliance if a program demonstrates improvement over time or for other good cause
Planned Combination announcement on January 28, 2025.
DroppedRisks Related to the Regulation of Our Industry
An obligation to post a letter of credit, or to accept other conditions, such as a change in our system of Title IV payment from ED for purposes of disbursement, as a result of not meeting financial responsibility standards, could increase our costs of regulatory compliance, or affect our cash flow
DroppedRisks Related to Our Business
We have implemented a shared services model for services to our institutions, and challenges encountered due to the ongoing operation and expansion of this model could cause strategic or operational challenges and adversely impact us
DroppedRisks Related to Our Business
Our Series A Senior Preferred Stock provides rights, preferences, and privileges that are not held by our common stockholders, and is senior to our common stock, which could adversely affect our cash flows, liquidity, and financial condition
DroppedRisks Related to Our Business
intellectual property rights can be difficult, particularly as it relates to the development by our institutions’ competitors of competing courses and programs
DroppedRisks Related to Our Technology Infrastructure
Transitioning outsourced RU marketing and information technology functions to internal functions and for certain information technology functions, a managed service provider may not be efficient or cost-effective, or may pose other operational challenges
DroppedRisks Related to Our Technology Infrastructure
Some or all of the foregoing risks could result in additional costs or materially and adversely affect our business, financial condition, reputation, and results of operations
DroppedRisks Related to Owning our Common Stock
Environmental, social, and governance, or ESG, matters and the perception of our activities in these areas by stakeholders may impact our business and reputation

Reworded

88% rewrittenRisks Related to Our Technology Infrastructure
We have expended, and need to continue to expend, time, money, and resources into our and our institutions’ information technology, which may place a strain on our operational capacity and budgets that could adversely affect our systems, controls, and operating efficiency, and those of our institutions
Added specific mention of investments to integrate RU's technology system alongside general IT updates.
Was: We have expended and need to continue to expend time, money, and resources into our and our institutions’ information technology, which may place a strain on our capacity that could adversely affect our systems, controls, and operating efficiency, and those of our institutions
84% rewrittenRisks Related to the Regulation of Our Industry
If one or more of our institutions does not comply with the 90/10 Rule for two consecutive years, it or they will lose eligibility to participate in federal student financial aid programs
Explicitly added TA and VA programs into the 90/10 Rule revenue calculation definition.
83% rewrittenRisks Related to the Regulation of Our Industry
ED’s gainful employment requirements could materially and adversely affect our business
Incorporated the OBBBA accountability framework and earnings test effective July 1, 2026.
Was: ED’s new gainful employment requirements could materially and adversely affect our business
82% rewrittenRisks Related to the Regulation of Our Industry
A failure of HCN to satisfy ABHES accreditation standards, including specific student achievement indicators, could have a material adverse impact on HCN’s student enrollment, revenue, results of operations, and cash flows
Added a hedge allowing ABHES to provide an opportunity for programs to come into compliance.
77% rewrittenRisks Related to the Regulation of Our Industry
Government and regulatory agencies and third parties may conduct compliance reviews, bring claims, or initiate investigations, enforcement actions, or litigation against us, any of which could disrupt our institutions’ operations and adversely affect their performance
Added ED OIG inspections and audits of third-party service providers to the compliance review scope.
Was: Government and regulatory agencies and third parties may conduct compliance reviews, bring claims, or initiate enforcement actions or litigation against us, any of which could disrupt our institutions’ operations and adversely affect their performance
72% rewrittenRisks Related to Our Technology Infrastructure
Failure to comply with privacy laws or regulations could have an adverse effect on our business
Expanded privacy regulation scope from student and consumer data to include faculty and alumni data.
68% rewrittenRisks Related to the Regulation of Our Industry
Failure to improve certain of our programs’ NCLEX pass rates and to more generally satisfy NCLEX requirements could reduce our enrollments, revenue, and cash flow, lead to adverse actions taken by state boards of nursing, and limit our ability to offer educational programs
Formatted the factors influencing student licensure outcomes into a numbered list.
67% rewrittenRisks Related to Attracting and Retaining Students
Enrollments and course registrations have been, and may in the future be, adversely affected by a variety of factors not directly related to education programs, including changes in military activity, budgets and government shutdowns
Added specific impact details regarding the 2025 federal government shutdown and temporary TA suspension.
Was: Enrollments and course registrations by active-duty service members may be adversely affected by a variety of factors not directly related to education programs, including changes in military activity, budgets and government shutdowns
65% rewrittenRisks Related to the Regulation of Our Industry
Our subsidiary institutions’ failure to meet financial responsibility standards may result in additional regulatory requirements that may negatively impact cash flow or the loss of eligibility by one of our institutions to participate in Title IV programs
64% rewrittenRisks Related to the Regulation of Our Industry
HLC could identify deficiencies during its mid-cycle comprehensive evaluation of APUS and take adverse action against APUS based on such deficiencies
61% rewrittenRisks Related to Our Technology Infrastructure
Our increased use of AI may present operational, reputational, legal, regulatory, and competitive risks and could result in additional costs, each of which could materially and adversely affect our business, financial condition, and results of operations
Was: Increased use of AI may present operational, reputational, legal, regulatory, and competitive risks and could result in additional costs, each of which could materially and adversely affect our business, financial condition, and results of operations
61% rewrittenRisks Related to Our Business
Economic and market conditions in the United States and abroad and changes in interest rates could affect our enrollments, success with placement and persistence and cohort default rates
Was: Economic and market conditions in the U.S. and abroad and changes in interest rates could affect our enrollments, success with placement and persistence and cohort default rates
60% rewrittenRisks Related to Our Business
If we are unable to attract, retain, and develop skilled personnel and management, our business and growth prospects could be severely harmed, and changes in management could cause disruption and uncertainty
58% rewrittenRisks Related to Our Business
The planned combination of APUS, RU, and HCN may not be completed, or may not be completed on the terms or timeline currently contemplated, and if it is, the expected benefits may not be realized, any of which could have a material adverse impact on our business, financial condition, and results of operations
Was: The planned combination of APUS, RU, and HCN may not be completed, or may not be completed on the terms currently contemplated, and if it is, the expected benefits may not be realized, any of which could have a material adverse impact on our business, financial condition, and results of operations
57% rewrittenRisks Related to the Regulation of Our Industry
RU’s Illinois ADN program was previously adversely impacted by regulatory action, including as a result of the failure to meet applicable NCLEX pass rates, and further action by regulators and accreditors could result in additional adverse impacts
55% rewrittenRisks Related to the Regulation of Our Industry
ED rules related to BDTR claims may create significant liability that could have an adverse effect on our business and results of operations
53% rewrittenRisks Related to the Regulation of Our Industry
The postsecondary education regulatory environment has changed and may change in the future as a result of United States federal elections
Was: The postsecondary education regulatory environment has changed and may change in the future as a result of U.S. federal elections
50% rewrittenRisks Related to Our Business
Our student registrations, revenue, and cash flow have been adversely impacted, and we could experience additional adverse impacts as a result of the Armed Forces’ TA processing system upgrades or a transition to new systems for service members to request TA or accessing VA education benefit programs
Was: Our student registrations, revenue, and cash flow have been adversely impacted, and we could experience additional adverse impacts as a result of the Armed Forces’ transition to new systems for soldiers to request TA
49% rewrittenRisks Related to Our Business
Our limited ability to obtain exclusive proprietary rights and protect our intellectual property, as well as disputes we may encounter from time to time with third parties regarding our use of their intellectual property, could harm our operations and prospects
43% rewrittenRisks Related to Our Business
We may not achieve the anticipated benefits of our cost savings initiatives, including reductions in force, any benefits may be offset by increased costs in other areas
Was: We may not achieve the anticipated benefits of our cost savings efforts, including reductions in force, and any savings may be offset by increased costs in other areas
43% rewrittenRisks Related to Our Business
We rely on dividends, distributions and other payments, advances, and transfers of funds from our operating subsidiaries to meet our obligations and to fund acquisitions and certain investments
41% rewrittenRisks Related to Our Technology Infrastructure
Cybersecurity incidents could compromise sensitive information, including personal information, and cause system disruptions and significant damage to our business and reputation
34% rewrittenRisks Related to Attracting and Retaining Students
If we are unable to effectively market our programs or expand into new markets, our results of operations would be negatively affected
30% rewrittenRisks Related to Attracting and Retaining Students
RU’s actual and planned closure of campuses or termination of programs on certain campuses may adversely impact RU and us
30% rewrittenRisks Related to the Regulation of Our Industry
Investigations by state Attorneys General, Congress, and governmental agencies into the company and other for-profit institutions may result in increased regulatory burdens and costs and may impact our reputation
27% rewrittenRisks Related to the Regulation of Our Industry
Our institutions’ failure to comply with the requirements of SARA or regulations of ED or various states related to state authorization could result in actions that would have a material adverse effect on our enrollments, revenue, and results of operations
24% rewrittenRisks Related to Attracting and Retaining Students
Declines in enrollments at RU could have a material adverse effect on RU’s and our profitability, financial condition, results of operations, and cash flows
Was: Declines in enrollments at RU could materially adversely affect RU’s and our profitability, financial condition, results of operations, and cash flows
23% rewrittenRisks Related to Our Business
We have incurred indebtedness under our credit agreement, the cost of servicing that debt could adversely affect our business and financial results, and we may not be able in the future to service that debt
Was: We have incurred substantial indebtedness under our credit agreement, the cost of servicing that debt could adversely affect our business and financial results, and we may not be able in the future to service that debt
21% rewrittenRisks Related to Attracting and Retaining Students
If APUS does not have strong relationships with, and access to, various military installations and installation education centers, our ability to maintain enrollments from military students and our future growth may be impaired

All 68 risk factors

Headings as the filing states them, in filing order.

Risks Related to Attracting and Retaining Students

01Our success and financial performance depend on the effectiveness of our ability to attract students who persist in our institutions’ programs
02If we are unable to effectively market our programs or expand into new markets, our results of operations would be negatively affected34% rewritten
03expenses in an unsuccessful attempt to do so, we may fail to attract new enrollments to the extent necessary to realize a sufficient return on our efforts. Accordingly, our business, results of operations, and financial condition could be impactedNew
04If APUS does not have strong relationships with, and access to, various military installations and installation education centers, our ability to maintain enrollments from military students and our future growth may be impaired21% rewritten
05Enrollments and course registrations have been, and may in the future be, adversely affected by a variety of factors not directly related to education programs, including changes in military activity, budgets and government shutdowns67% rewritten
06Declines in enrollments at RU could have a material adverse effect on RU’s and our profitability, financial condition, results of operations, and cash flows24% rewritten
07Changes our institutions may make to their operations to improve the student experience and enhance our institutions’ ability to identify and enroll students who are likely to succeed may adversely affect our institutions’ enrollment, profitability, financial condition, results of operations, and cash flows
08If our institutions are unable to successfully adjust to future market demands by updating and expanding the content of existing programs and developing new programs, specializations, and modes of teaching on a timely basis and in a cost-effective manner, our performance may be impaired
09Continued strong competition in the postsecondary education market could decrease our institutions’ market share and increase our cost of acquiring students
10We expect to continue to face greater competition from non-traditional offerings, provided by both educational institutions and non-traditional providers
11Tuition and fee increases at RU, APUS, and HCN could have an adverse impact on enrollment, our financial condition and our results of operations
12RU’s actual and planned closure of campuses or termination of programs on certain campuses may adversely impact RU and us30% rewritten

Risks Related to the Regulation of Our Industry

13If our institutions fail to maintain their institutional accreditation, they will lose the ability to participate in Title IV, DoD TA programs, and VA programs and our student enrollments would decline
14If one or more of our institutions does not comply with the 90/10 Rule for two consecutive years, it or they will lose eligibility to participate in federal student financial aid programs84% rewritten
15Combination (as defined above) is expected to benefit 90/10 Rule compliance and other regulatory considerations; however, there can be no assurance that the Combination will be completed on its anticipated timeline or at all, will have the expected benefits, or when those benefits will be realizedNew
16strategic transactions could have, see the Risk Factors with the captions beginning with “The planned combination of APUS, RU, and HCN” and “Business combinations and acquisitions may be difficult to integrate …” belowNew
17The OBBBA may adversely impact us or our students’ ability to participate in federal student financial aid programs, which could have a significant adverse impact on enrollments and our business, operations, and financial resultsNew
18The DoD’s MOU imposes extensive regulatory requirements on our institutions with respect to participation in DoD TA programs, and our revenue and number of students would decrease if our institutions were no longer able to receive funds under DoD TA programs or if TA is reduced, eliminated, or suspended
19HLC could identify deficiencies during its mid-cycle comprehensive evaluation of APUS and take adverse action against APUS based on such deficiencies64% rewritten
20ED’s gainful employment requirements could materially and adversely affect our business83% rewritten
21Failure to improve certain of our programs’ NCLEX pass rates and to more generally satisfy NCLEX requirements could reduce our enrollments, revenue, and cash flow, lead to adverse actions taken by state boards of nursing, and limit our ability to offer educational programs68% rewritten
22RU’s Illinois ADN program was previously adversely impacted by regulatory action, including as a result of the failure to meet applicable NCLEX pass rates, and further action by regulators and accreditors could result in additional adverse impacts57% rewritten
23The inability of our institutions’ graduates to obtain professional licensure, employment, or other outcomes in their chosen fields of study, particularly in nursing, could reduce our enrollments and revenue, limit our ability to offer educational programs, and potentially lead to litigation that could be costly to us
24A failure of HCN to satisfy ABHES accreditation standards, including specific student achievement indicators, could have a material adverse impact on HCN’s student enrollment, revenue, results of operations, and cash flows82% rewritten
25If our institutions fail to maintain state authorization in the states where they are physically located, the institutions would lose their ability to grant degrees and other credentials and to participate in Title IV programs and DoD TA programs
26Our institutions’ failure to comply with the requirements of SARA or regulations of ED or various states related to state authorization could result in actions that would have a material adverse effect on our enrollments, revenue, and results of operations27% rewritten
27Our subsidiary institutions’ failure to meet financial responsibility standards may result in additional regulatory requirements that may negatively impact cash flow or the loss of eligibility by one of our institutions to participate in Title IV programs65% rewritten
28A failure to demonstrate “administrative capability” may result in the loss of eligibility to participate in Title IV programs
29ED rules related to BDTR claims may create significant liability that could have an adverse effect on our business and results of operations55% rewritten
30The postsecondary education regulatory environment has changed and may change in the future as a result of United States federal elections53% rewritten
31A failure by our institutions to comply with ED’s incentive payment rule could result in sanctions and liability under the False Claims Act
32Our institutions may lose eligibility to participate in Title IV programs if their student loan default rates are too high, and our future growth could be impaired as a result
33We rely on third parties to administer elements of APUS’s, RU’s, and HCN’s participation in Title IV programs and their failure to perform services as agreed or to comply with applicable regulations could cause us to lose our eligibility to participate in Title IV programs
34Our institutions will be subject to sanctions that could be material to our results and damage our reputation if ED determines that our institutions failed to correctly calculate and timely return Title IV program funds for students who withdraw before completing their educational program
35Our institutions’ failure to comply with ED’s substantial misrepresentation rules could result in material sanctions
36Enforcement of laws related to the accessibility of technology continues to evolve, which could result in increased information technology development costs and compliance risks
37Government and regulatory agencies and third parties may conduct compliance reviews, bring claims, or initiate investigations, enforcement actions, or litigation against us, any of which could disrupt our institutions’ operations and adversely affect their performance77% rewritten
38review, when it will be completed, whether there will be any adverse findings in the resulting program review report, what findings there may be related to 90/10 Rule compliance, if any, or whether ED will place any liability or other limitations on APUS as a result of the reviewNew
39Investigations by state Attorneys General, Congress, and governmental agencies into the company and other for-profit institutions may result in increased regulatory burdens and costs and may impact our reputation30% rewritten
40adversely affect RU’s growth opportunities, including restricting its ability to serve additional students, particularly additional nursing studentsNew
41If regulators do not approve or delay their approval of transactions involving a change of control of APEI or its institutions that we own or acquire, our and our institutions’ ability to operate could be impaired
42Failure to comply with the various federal and state laws and regulations governing HCN’s extended payment plan options could subject us to fines, penalties, obligations to discharge loans and other injunctive requirements

Risks Related to Our Business

43Our student registrations, revenue, and cash flow have been adversely impacted, and we could experience additional adverse impacts as a result of the Armed Forces’ TA processing system upgrades or a transition to new systems for service members to request TA or accessing VA education benefit programs50% rewritten
44Economic and market conditions in the United States and abroad and changes in interest rates could affect our enrollments, success with placement and persistence and cohort default rates61% rewritten
45addition, inflation has resulted and, in the future, could result in increased costs of labor and materials, which could adversely impact our operations and financial conditionNew
46Our business could be harmed if our institutions experience a disruption in their ability to process Title IV financial aid
47The planned combination of APUS, RU, and HCN may not be completed, or may not be completed on the terms or timeline currently contemplated, and if it is, the expected benefits may not be realized, any of which could have a material adverse impact on our business, financial condition, and results of operations58% rewritten
48Business combinations and acquisitions may be difficult to integrate, disrupt our business, dilute stockholder value, or divert management attention, and we may not realize the expected benefits of any consummated business combinations or acquisitions
49We rely on third-party vendors whose service may be of lower quality than ours, whose responsiveness may be less timely than ours, and whose compliance practices may increase our operational and compliance risk
50There can be no guarantee that our business will generate sufficient cash flow from operations or that future capital or borrowings will be available to us in an amount sufficient to enable us to fund our other liquidity needs
51We have incurred indebtedness under our credit agreement, the cost of servicing that debt could adversely affect our business and financial results, and we may not be able in the future to service that debt23% rewritten
52We may need additional capital in the future, but there is no assurance that funds will be available on acceptable terms
53If our institutions fail to maintain adequate systems and processes to detect and prevent fraudulent activity in student enrollment and financial aid, our institutions may lose the ability to participate in Title IV programs or DoD TA programs or have participation in these programs conditioned or limited
54If we are unable to attract, retain, and develop skilled personnel and management, our business and growth prospects could be severely harmed, and changes in management could cause disruption and uncertainty60% rewritten
55for management transition and the transfer of knowledge, the loss of key personnel, coupled with an inability to adequately train other personnel, hire new personnel, or transfer knowledge, could significantly impact our business and results of operationsNew
56We may not achieve the anticipated benefits of our cost savings initiatives, including reductions in force, any benefits may be offset by increased costs in other areas43% rewritten
57Our limited ability to obtain exclusive proprietary rights and protect our intellectual property, as well as disputes we may encounter from time to time with third parties regarding our use of their intellectual property, could harm our operations and prospects49% rewritten
58We may incur liability for the unauthorized duplication or distribution of course materials posted online for course discussions
59We rely on dividends, distributions and other payments, advances, and transfers of funds from our operating subsidiaries to meet our obligations and to fund acquisitions and certain investments43% rewritten
60Legal proceedings, particularly class action lawsuits, may require human and financial resources, distract our management, and negatively affect our reputation and results of operations

Risks Related to Our Technology Infrastructure

61We have expended, and need to continue to expend, time, money, and resources into our and our institutions’ information technology, which may place a strain on our operational capacity and budgets that could adversely affect our systems, controls, and operating efficiency, and those of our institutions88% rewritten
62or other interruption or disruption of these services, whether due to cyber-attacks, other cybersecurity incidents, or other causes, could adversely impact our operations and our business
63Cybersecurity incidents could compromise sensitive information, including personal information, and cause system disruptions and significant damage to our business and reputation41% rewritten
64Failure to comply with privacy laws or regulations could have an adverse effect on our business72% rewritten
65Our increased use of AI may present operational, reputational, legal, regulatory, and competitive risks and could result in additional costs, each of which could materially and adversely affect our business, financial condition, and results of operations61% rewritten

Risks Related to Owning our Common Stock

66The price of our common stock may be volatile, and as a result returns on an investment in our common stock may be volatile
67We may face risks associated with stockholder activism
68Our future results of operations and financial condition may not meet our guidance or expectations

Other American Public Education 10-Ks

FY2024 10-K risk factors
70 risks
Company is heavily exposed to strict federal, state, and accrediting regulations governing for-profit postsecondary education. Operations depend on military student enrollments and nursing program pass rates. Compliance failures threaten Title IV and DoD funding eligibility.
Filed Mar 06, 2025

About this page

The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.