Lincoln Educational Services (LINC) risk factors, FY2025 10-K

Lincoln Educational Services's FY2025 10-K, filed Mar 02, 2026, lists 33 risk factors in 3 groups. Against the prior year's 39: 1 new, 7 dropped, 14 substantially reworded.

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Risk factors listed
333 groups
New this year
1vs 39 last year
Dropped
7since the prior 10-K
Substantially reworded
14of those kept
Section length
11k wordsItem 1A

What the changes say

  • Lincoln Educational Services faces new regulatory burdens regarding Department of Education gainful employment and accountability metrics.
  • Technology infrastructure risks are mitigated by backup data center switching capabilities.
  • Student loan default risks are expected to rise post-pandemic.

What changed since the prior 10-K

New

  • NewRISKS RELATED TO OUR INDUSTRY

    Our failure to comply with the DOE’s gainful employment and accountability regulations could result in additional disclosure requirements and possible loss of Title IV Program eligibility

    Failure to comply with the DOE's new gainful employment and accountability metrics based on debt-to-earnings rates could cause loss of Title IV program eligibility.

Dropped

  • DroppedRISKS RELATED TO OUR INDUSTRY

    If we fail to demonstrate “administrative capability” to the DOE, our business could suffer

    Risk of failing administrative capability standards set by the DOE.

  • DroppedRISKS RELATED TO OUR INDUSTRY

    Congress, the President and the DOE may make changes to the DOE or the laws and regulations applicable to, or reduce funding for, Title IV Programs, which could reduce our student population, revenues or profit margin

    Changes by Congress and the President to Title IV funding and HEA.

  • DroppedRISKS RELATED TO OUR INDUSTRY

    The DOE’s Gainful Employment regulations could have a significant impact on our business and results of operations

  • DroppedRISKS RELATED TO OUR INDUSTRY

    If we or our eligible institutions do not meet the financial responsibility standards prescribed by the DOE, we may be required to post letters of credit or our eligibility to participate in Title IV Programs could be terminated or limited, which could significantly reduce our student population and revenues

    Impact of DOE Gainful Employment regulations published in October 2023.

  • DroppedRISKS RELATED TO OUR INDUSTRY

    Changes in the executive branch of our federal government as a result of the outcome of elections or other events could result in further legislation, appropriations, executive orders, regulations and enforcement actions that could materially or adversely affect our business

  • DroppedRISKS RELATED TO OUR BUSINESS

    An increase in interest rates could adversely affect our ability to attract and retain students

    Failure to meet DOE financial responsibility standards requiring letters of credit.

  • DroppedRISKS RELATED TO OUR BUSINESS

    Additionally, while we maintain insurance against certain losses relating to cybersecurity threats and incidents that we believe to be at adequate levels of coverage, such coverage may not be sufficient to address an incident and we may not always be able to obtain adequate insurance to cover our losses

Reworded

  • 70% rewrittenRISKS RELATED TO OUR INDUSTRY

    We could be subject to liabilities, letter of credit requirements, and other sanctions under the DOE’s Borrower Defense to Repayment regulations

    Clarified that Borrower Defense to Repayment discharges apply to acts or omissions by the institution for which a loan was obtained.

  • 68% rewrittenRISKS RELATED TO OUR BUSINESS

    System disruptions to our technology infrastructure could impact our ability to generate revenue and could damage the reputation of our institutions

    Added mitigation note that on-premises and hosted vendor systems can shift between data centers to maintain operations during disruptions.

  • 66% rewrittenRISKS RELATED TO OUR BUSINESS

    Our financial performance depends in part on our effectiveness at developing awareness and acceptance of our programs among high school graduates and working adults looking to return to school

    Added the threat that rising interest rates could adversely affect the ability to attract and retain students.

    Was: Our financial performance depends in part on our ability to continue to develop awareness and acceptance of our programs among high school graduates and working adults looking to return to school

  • 59% rewrittenRISKS RELATED TO OUR INDUSTRY

    Our institutions would lose their eligibility to participate in Title IV Programs if former students default on repayment of federal student loans in excess of specified levels, which could reduce our student population and revenues

    Added expectation that borrower defaults will increase substantially following the expiration of pandemic-era federal student loan repayment suspensions.

    Was: Our institutions would lose eligibility to participate in Title IV Programs if their former students defaulted on repayment of their federal student loans in excess of specified levels, which could reduce our student population and revenues

  • 58% rewrittenRISKS RELATED TO OUR INDUSTRY

    Under the DOE’s 90/10 Rule, our institutions would lose their eligibility to participate in Title IV Programs if the percentage of their revenues derived from those programs exceeds 90%, which could reduce our student population and revenues

    Integrated 90/10 Rule revenue calculations with other federal funds disbursed to students under the American Rescue Plan Act.

    Was: Our institutions would lose eligibility to participate in Title IV Programs if the percentage of their revenues derived from those programs exceeds 90%, which could reduce our student population and revenues

  • 52% rewrittenRISKS RELATED TO OUR BUSINESS

    Our business could be negatively impacted by cybersecurity and other security threats or disruptions

    Reordered emphasis on technology reliability and growing government cybersecurity disclosure requirements.

  • 44% rewrittenRISKS RELATED TO OUR INDUSTRY

    If we cannot comply with the provisions of these or other regulations, as they currently exist or may be revised, or if the cost of such compliance is excessive, or if funding is materially reduced, our revenues or profit margin could be materially adversely affected

    Removed speculative language on DOE rule interpretations, focusing instead on direct failure to comply with regulations.

  • 41% rewrittenRISKS RELATED TO OUR INDUSTRY

    While none of our institutions are currently provisionally certified, the DOE could provisionally certify one or more of our institutions in the future, which would make them more vulnerable to unfavorable DOE action and place additional regulatory burdens on their operations

    Added that provisionally certified institutions must apply for and receive DOE approval for substantive changes like new locations or programs.

    Was: All of our institutions are provisionally certified by the DOE, which may make them more vulnerable to unfavorable DOE action and place additional regulatory burdens on its operations

  • 40% rewrittenRISKS RELATED TO OUR INDUSTRY

    We are subject to sanctions if we fail to correctly calculate and timely return Title IV Program funds for students who withdraw before completing their educational programs, which could increase our cost of regulatory compliance and decrease our profit margin

  • 29% rewrittenRISKS RELATED TO OUR BUSINESS

    We cannot predict our future capital needs, and if we are unable to secure additional financing when needed, our operations and revenues would be adversely affected

  • 25% rewrittenRISKS RELATED TO OUR INDUSTRY

    If regulators deny, delay, or condition their approval of new locations and educational programs at our schools, it could have a significant impact on our business and results of operations

  • 25% rewrittenRISKS RELATED TO OUR INDUSTRY

    Adverse publicity arising from scrutiny of us or other for-profit post-secondary schools may negatively affect us or our schools

    Was: Adverse publicity arising from scrutiny of us or other for-profit postsecondary schools may negatively affect us or our schools

  • 23% rewrittenRISKS RELATED TO OUR INDUSTRY

    We are subject to sanctions if we fail to comply with the DOE’s regulations regarding prohibitions against substantial misrepresentations, which could increase our cost of regulatory compliance and decrease our profit margin

  • 21% rewrittenRISKS RELATED TO OUR BUSINESS

    Our total assets include goodwill. In the event that our schools do not achieve satisfactory operating results, we may be required to write-off a significant portion of the goodwill which would negatively affect our results of operations

All 33 risk factors

Headings as the filing states them, in filing order.

RISKS RELATED TO OUR INDUSTRY

  1. 01We could be subject to liabilities, letter of credit requirements, and other sanctions under the DOE’s Borrower Defense to Repayment regulations70% rewritten
  2. 02Our failure to comply with the DOE’s gainful employment and accountability regulations could result in additional disclosure requirements and possible loss of Title IV Program eligibilityNew
  3. 03If we cannot comply with the provisions of these or other regulations, as they currently exist or may be revised, or if the cost of such compliance is excessive, or if funding is materially reduced, our revenues or profit margin could be materially adversely affected44% rewritten
  4. 04We are subject to fines and other sanctions if we make incentive payments to individuals involved in certain recruiting, admissions or financial aid activities, which could increase our cost of regulatory compliance and adversely affect our results of operations
  5. 05If our schools do not maintain their state licensure and accreditation, they may not participate in Title IV Programs, which could adversely affect our student population and revenues
  6. 06Under the DOE’s 90/10 Rule, our institutions would lose their eligibility to participate in Title IV Programs if the percentage of their revenues derived from those programs exceeds 90%, which could reduce our student population and revenues58% rewritten
  7. 07Our institutions would lose their eligibility to participate in Title IV Programs if former students default on repayment of federal student loans in excess of specified levels, which could reduce our student population and revenues59% rewritten
  8. 08Our business could be adversely impacted by additional legislation, regulations, or investigations regarding private student lending because students attending our schools rely on private student loans to pay tuition and other institutional charges
  9. 09A substantial decrease in student financing options, or a significant increase in financing costs for our students, could have a significant impact on our student population, revenues and financial results
  10. 10We are subject to sanctions if we fail to correctly calculate and timely return Title IV Program funds for students who withdraw before completing their educational programs, which could increase our cost of regulatory compliance and decrease our profit margin40% rewritten
  11. 11We are subject to sanctions if we fail to comply with the DOE’s regulations regarding prohibitions against substantial misrepresentations, which could increase our cost of regulatory compliance and decrease our profit margin23% rewritten
  12. 12While none of our institutions are currently provisionally certified, the DOE could provisionally certify one or more of our institutions in the future, which would make them more vulnerable to unfavorable DOE action and place additional regulatory burdens on their operations41% rewritten
  13. 13Regulatory agencies or third parties may conduct compliance reviews, bring claims or initiate litigation against us. If the results of these reviews or claims are unfavorable to us, our results of operations and financial condition could be adversely affected
  14. 14Adverse publicity arising from scrutiny of us or other for-profit post-secondary schools may negatively affect us or our schools25% rewritten
  15. 15If regulators deny, delay, or condition their approval of transactions involving a change of ownership or control of us or of institutions that we own or acquire, it could have a significant impact on our business and results of operations
  16. 16If regulators deny, delay, or condition their approval of new locations and educational programs at our schools, it could have a significant impact on our business and results of operations25% rewritten
  17. 17Public health pandemics, epidemics or outbreaks, such as the COVID-19 pandemic, could have a material adverse effect on our business and operations

RISKS RELATED TO OUR BUSINESS

  1. 18Our success depends in part on our ability to update and expand the content of existing programs and develop new programs in a cost-effective manner and on a timely basis
  2. 19Competition could decrease our market share and cause us to lower our tuition rates
  3. 20Our financial performance depends in part on our effectiveness at developing awareness and acceptance of our programs among high school graduates and working adults looking to return to school66% rewritten
  4. 21We cannot predict our future capital needs, and if we are unable to secure additional financing when needed, our operations and revenues would be adversely affected29% rewritten
  5. 22We may not be able to retain our key personnel or hire and retain the personnel we need to sustain and grow our business
  6. 23Our total assets include goodwill. In the event that our schools do not achieve satisfactory operating results, we may be required to write-off a significant portion of the goodwill which would negatively affect our results of operations21% rewritten
  7. 24Our business could be negatively impacted by cybersecurity and other security threats or disruptions52% rewritten
  8. 25System disruptions to our technology infrastructure could impact our ability to generate revenue and could damage the reputation of our institutions68% rewritten
  9. 26We are subject to privacy and information security laws and regulations due to our collection and use of personal information, and any violations of those laws or regulations, or any breach, theft or loss of that information, could adversely affect our reputation and operations
  10. 27Changes in U.S. tax laws or adverse outcomes from examination of our tax returns could have an adverse effect upon our financial results
  11. 28The occurrence of natural or man-made catastrophes, including those caused by climate change and other climate-related causes, could materially and adversely affect our business, financial condition, results of operations and prospects
  12. 29Our success depends, in part, on the effectiveness of our marketing and advertising programs in recruiting new students

RISKS RELATED TO OUR CAPITAL STRUCTURE

  1. 30Anti-takeover provisions in our Amended and Restated Certificate of Incorporation, our Bylaws and New Jersey law could discourage a change of control that our shareholders may favor, which could negatively affect our stock price
  2. 31We can issue shares of Preferred Stock without general shareholder approval, which could adversely affect the rights of shareholders of Common Stock
  3. 32The trading price of our Common Stock may continue to fluctuate substantially in the future
  4. 33our ability to meet or exceed, or changes in, expectations of investors and analysts, or the extent of analyst coverage of us; and decisions by any significant investors to reduce their investment in our Common Stock

Other Lincoln Educational Services 10-Ks

  • FY2024 10-K risk factors
    39 risks

    Heavy reliance on Title IV federal student financial aid programs and strict Department of Education compliance rules dominates the risk profile.

    Filed Mar 04, 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.