Perdoceo Education (PRDO) risk factors, FY2024 10-K

Risks Related to the Highly Regulated Field in Which We Operate

1. 01As 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
2. 02“Gainful Employment” regulations may subject us to significant disclosures and limitations, including program closures, which could materially reduce the enrollments and revenue at our institutions and negatively impact our future growth
3. 03See “GE and FVT Negotiated Rulemaking” above for information about the timeline of the GE and FVT rules. Given the recent challenges associated with implementation of the rules, we have concerns with the accuracy and effectiveness of the GE and FVT metrics
4. 04Our institutions could lose their eligibility to participate in federal student financial aid programs, face limitations on their ability to serve new or former students or have other limitations placed upon them if the percentage of their revenues derived from certain federal programs is too high
5. 05The ability of our institutions to comply with the 90-10 Rule will depend upon the composition of our future student population and their personal circumstances, as well as on regulatory changes and other factors outside of our control, including those cited above
6. 06See Item 1, “Business – Student Financial Aid and Related Federal Regulation – Compliance with Federal Regulatory Standards and Effect of Federal Regulatory Violations - ‘90-10 Rule,'” for more information about the 90-10 Rule and the measures we have implemented to improve our compliance
7. 07The 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
8. 08A failure to demonstrate "financial responsibility" or "administrative capability" or meet new "certification" requirements would have negative impacts on our operations
9. 09See the “Compliance with Federal Regulatory Standards and Effect of Federal Regulatory Violations” above for an overview of the current rules relating to Borrower Defense to Repayment
10. 10Our institutions would lose their ability to participate in Title IV Programs if they fail to maintain their institutional accreditation, and our student enrollments could decline if certain of our programs fail to obtain or maintain programmatic accreditation
11. 11If 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 have participation in these programs conditioned or limited
12. 12Our agreement with the FTC may lead to unexpected impacts on our student enrollments or higher than anticipated expenses, a failure to comply may lead to additional enforcement actions and continued scrutiny may result in additional costs or new enforcement actions
13. 13If we are unable to successfully resolve pending or future litigation and regulatory and governmental inquiries involving us, or face increased regulatory actions or litigation, our financial condition and results of operations could be adversely affected
14. 14Even if we maintain compliance with applicable governmental and accrediting body regulations, increased regulatory scrutiny or adverse publicity arising from allegations of non-compliance may increase our costs of regulatory compliance and adversely affect our financial results, growth rates and prospects
15. 15If the Department denies, or significantly conditions, recertification of any of our institutions to participate in Title IV Programs, that institution could not conduct its business as it is currently conducted
16. 16We are dependent on the recertification and maintenance of Title IV Programs
17. 17We need timely approval by applicable regulatory agencies to offer new programs or make substantive changes to existing programs
18. 18If our institutions become ineligible to participate in various educational assistance programs, it could have a material negative impact on student enrollments and could have other adverse consequences

Risks Related to Our Business

1. 19Our financial performance depends on the level of student enrollments in our institutions
2. 20We compete with a variety of educational institutions, especially in the online education market, and if we are unable to compete effectively, our student enrollments and revenue could be adversely impacted
3. 21Congress, the Department and other agencies have required increasing disclosure of information to prospective students (with some disclosures only required by for-profit institutions). Some of these disclosures may negatively impact a prospective student’s decision to enroll in one of our institutions
4. 22uncertain. Any future changes in federal and state laws and regulations, as well as the interpretation and implementation of such laws and regulations, could affect us in substantial and unpredictable ways
5. 23Our financial performance depends on our ability to develop awareness among, and enroll and retain, students in our institutions and programs in a cost-effective manner
6. 24We may not be able to retain our key personnel or hire, train and retain the personnel we need to sustain and grow our business
7. 25Our financial performance depends, in part, on our ability to keep pace with changing market needs and technology
8. 26Our future results of operations could be materially adversely affected if we are required to write down the carrying value of non-financial assets and non-financial liabilities, such as goodwill
9. 27We 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
10. 28Our corporate engagement programs have contributed to student enrollment growth through 2024. If we fail to enter new corporate engagements or if existing corporate partners pause or reduce participation in their tuition assistance programs, total student enrollments may suffer
11. 29The acquisition, integration and growth of acquired businesses may present challenges that could harm our business
12. 30Natural disasters or other extraordinary events may cause us to close some of our schools or suffer casualty losses

Risks Related to Our Business Technology Infrastructure

1. 31The 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
2. 32information or personal information about our students or employees, cause interruptions or malfunctions in our operations or commit fraud. We have experienced malware and virus attacks on our systems which went undetected by our virus detection and prevention software
3. 33Our primarily remote work environment may exacerbate the risks related to our business technology infrastructure

Risk Related to Our Common Stock

1. 34The trading price of our common stock may continue to fluctuate substantially in the future, and as a result returns on an investment in our common stock may be volatile
2. 35price and volume fluctuations in the overall stock market, which may cause the market price for our common stock to fluctuate significantly more than the market as a whole
3. 36Shareholders may not receive the level of dividends previously provided under the dividend policy our Board of Directors has adopted, or any dividends at all