Strategic Education (STRA) risk factors, FY2025 10-K

Strategic Education's FY2025 10-K, filed Feb 27, 2026, lists 38 risk factors in 2 groups. Against the prior year's 38: 2 new, 2 dropped, 18 substantially reworded.

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Risk factors listed
382 groups
New this year
2vs 38 last year
Dropped
2since the prior 10-K
Substantially reworded
18of those kept
Section length
10k wordsItem 1A

What the changes say

  • Regulatory changes and Title IV dependency continue to dominate the risk profile for Capella and Strayer Universities.

What changed since the prior 10-K

New

  • NewRisks Related to Extensive Regulation of Our U.S. Business

    state where the program fails these requirements unless the student attests at initial enrollment to seeking employment in another state that satisfies them

    Capella and Strayer face authorization and SARA compliance risks for distance education students in non-SARA states like California.

  • NewRisks Related to Our Business

    Our use of generative artificial intelligence tools poses risks, including risks relating to the quality and results of such tools, reputational risks, competitive risks, cybersecurity risks, and regulatory risks

    Using generative AI tools risks inaccurate content, litigation, regulatory penalties, and competitive obsolescence.

Dropped

  • DroppedRisks Related to Our Business

    Our financial performance depends in part on our ability to continue to increase awareness of the academic programs we offer among working adult students

  • DroppedRisks Related to Our Business

    Capella University and Strayer University, with their online programs, operate in a highly competitive market with rapid technological changes, and they may not compete successfully

Reworded

  • 95% rewrittenRisks Related to Extensive Regulation of Our U.S. Business

    The failure by Capella University or Strayer University to comply with Federal civil rights laws could result in sanctions and other liability

    Expanded to cite specific Federal civil rights laws including Title VI, Title IX, Section 504, and the ADA.

    Was: The failure by Capella University or Strayer University to comply with the Clery Act or Title IX could result in sanctions and other liability

  • 89% rewrittenRisks Related to Extensive Regulation of Our U.S. Business

    If either Capella University or Strayer University fails to maintain any of its state or foreign authorizations, the University would lose its ability to operate in the relevant jurisdiction and to participate in Title IV programs there

    Minor phrasing updates regarding Minnesota state registration and authorization requirements for Strayer University campuses.

    Was: If either Capella University or Strayer University fails to maintain any of its state authorizations, the University would lose its ability to operate in that state and to participate in Title IV programs there

  • 89% rewrittenRisks Related to Extensive Regulation of Our U.S. Business

    Our business could be harmed if Congress makes changes to the availability of Title IV funds

    Added OBBBA legislation eliminating Federal Direct PLUS loans for graduate and professional students effective July 2026.

  • 85% rewrittenRisks Related to Extensive Regulation of Our U.S. Business

    The failure by Capella University or Strayer University to comply with the Department of Education’s misrepresentation rules could result in sanctions and other liability

    Updated to reference Department of Education misrepresentation regulations as they relate to Borrower Defense to Repayment claims.

  • 84% rewrittenRisks Related to Extensive Regulation of Our U.S. Business

    To be eligible for Title IV funding, academic programs at proprietary institutions generally must prepare students for gainful employment in a recognized occupation

    Added that the U.S. District Court for the Northern District of Texas upheld the 2023 Gainful Employment Rule.

    Was: To be eligible for Title IV funding, academic programs offered by proprietary institutions of higher education generally must prepare students for gainful employment in a recognized occupation

  • 72% rewrittenRisks Related to Extensive Regulation of Our U.S. Business

    Capella University and Strayer University are subject to compliance reviews, which, if they result in a material finding of noncompliance, could affect their ability to participate in Title IV programs

    Minor edits streamlining references to Department of Education program reviews and Office of Inspector General audits.

  • 68% rewrittenRisks Related to Extensive Regulation of Our U.S. Business

    If either Capella University or Strayer University fails to maintain its institutional accreditation or if its institutional accrediting body loses recognition by the Department of Education, the University would lose its ability to participate in Title IV programs

    Updated institutional accrediting body references for Capella and Strayer Universities.

  • 57% rewrittenRisks Related to Extensive Regulation of Our U.S. Business

    Student loan defaults in the U.S. could result in the loss of eligibility to participate in Title IV programs

    Retained cohort default rate and Title IV eligibility thresholds under the Higher Education Act with minor phrasing updates.

  • 50% rewrittenRisks Related to Extensive Regulation of Our U.S. Business

    If either Capella University or Strayer University fails to obtain recertification by the Department of Education when required, that University would lose its ability to participate in Title IV programs

  • 47% rewrittenRisks Related to Our Business

    Our success depends in part on our ability to update and expand the content of existing academic programs and develop new programs in a cost-effective and timely manner

    Was: Our success depends in part on our ability to update and expand the content of existing academic programs and develop new programs in a cost-effective manner and on a timely basis

  • 41% rewrittenRisks Related to Our Business

    Our enrollment rate is uncertain, and we may not be able to estimate our future enrollments effectively

  • 38% rewrittenRisks Related to Our Business

    We face strong competition in the post-secondary education market, including in the online education market, which is subject to rapid technological changes

    Was: We face strong competition in the post-secondary education market

  • 34% rewrittenRisks Related to Our Business

    The Company relies on exclusive proprietary rights and intellectual property, and competitors may attempt to duplicate our programs and methods

  • 27% rewrittenRisks Related to Extensive Regulation of Our U.S. Business

    If Capella University and Strayer University fail to comply with the extensive legal and regulatory requirements for higher education institutions, they could face significant monetary or other liabilities and penalties, including loss of access to federal student loans and grants for their students

  • 24% rewrittenRisks Related to Extensive Regulation of Our U.S. Business

    Investigations, legislative and regulatory developments, and general credit market conditions related to the student loan industry may result in fewer lenders and loan products and increased regulatory burdens and costs in the U.S

  • 22% rewrittenRisks Related to Our Business

    Regulatory requirements in the U.S. may make it more difficult to acquire us

  • 22% rewrittenRisks Related to Extensive Regulation of Our U.S. Business

    Capella University and Strayer University are subject to sanctions if they fail to calculate accurately and make timely payment of refunds of Title IV program funds for students who withdraw before completing their educational program

  • 22% rewrittenRisks Related to Our Business

    Seasonal and other fluctuations in our operating results could adversely affect the trading price of our common stock

All 38 risk factors

Headings as the filing states them, in filing order.

Risks Related to Extensive Regulation of Our U.S. Business

  1. 01If Capella University and Strayer University fail to comply with the extensive legal and regulatory requirements for higher education institutions, they could face significant monetary or other liabilities and penalties, including loss of access to federal student loans and grants for their students27% rewritten
  2. 02Congressional examination of for-profit post-secondary education could lead to legislation or other governmental action that may negatively affect the industry
  3. 03Capella University and Strayer University are dependent on the renewal and maintenance of Title IV programs
  4. 04Capella University and Strayer University are subject to compliance reviews, which, if they result in a material finding of noncompliance, could affect their ability to participate in Title IV programs72% rewritten
  5. 05If either Capella University or Strayer University fails to maintain its institutional accreditation or if its institutional accrediting body loses recognition by the Department of Education, the University would lose its ability to participate in Title IV programs68% rewritten
  6. 06If either Capella University or Strayer University fails to maintain any of its state or foreign authorizations, the University would lose its ability to operate in the relevant jurisdiction and to participate in Title IV programs there89% rewritten
  7. 07state where the program fails these requirements unless the student attests at initial enrollment to seeking employment in another state that satisfies themNew
  8. 08If either Capella University or Strayer University fails to obtain recertification by the Department of Education when required, that University would lose its ability to participate in Title IV programs50% rewritten
  9. 09A failure to demonstrate financial responsibility or administrative capability may result in the loss of eligibility to participate in Title IV programs
  10. 10Student loan defaults in the U.S. could result in the loss of eligibility to participate in Title IV programs57% rewritten
  11. 11The failure by Capella University or Strayer University to comply with the Department of Education’s incentive compensation rules could result in sanctions and other liability
  12. 12The failure by Capella University or Strayer University to comply with the Department of Education’s misrepresentation rules could result in sanctions and other liability85% rewritten
  13. 13To be eligible for Title IV funding, academic programs at proprietary institutions generally must prepare students for gainful employment in a recognized occupation84% rewritten
  14. 14The failure by Capella University or Strayer University to comply with the Department of Education’s credit hour or direct assessment rules could result in sanctions and other liability
  15. 15The failure by Capella University or Strayer University to comply with Federal civil rights laws could result in sanctions and other liability95% rewritten
  16. 16Capella University and Strayer University are subject to sanctions if they fail to calculate accurately and make timely payment of refunds of Title IV program funds for students who withdraw before completing their educational program22% rewritten
  17. 17Investigations, legislative and regulatory developments, and general credit market conditions related to the student loan industry may result in fewer lenders and loan products and increased regulatory burdens and costs in the U.S24% rewritten
  18. 18Our business could be harmed if Capella University or Strayer University experience a disruption in their ability to process student loans under the Federal Direct Loan Program
  19. 19Our business could be harmed if Congress makes changes to the availability of Title IV funds89% rewritten
  20. 20As enforcement of laws related to the accessibility of technology continues to evolve in the U.S., information technology development costs and compliance risks could increase

Risks Related to Our Business

  1. 21Our enrollment rate is uncertain, and we may not be able to estimate our future enrollments effectively41% rewritten
  2. 22Adding new locations, programs, and services is dependent on our forecast of the demand for those locations, programs, and services and on regulatory approvals
  3. 23Our future success depends in part upon our ability to recruit and retain key personnel
  4. 24Our success depends in part on our ability to update and expand the content of existing academic programs and develop new programs in a cost-effective and timely manner47% rewritten
  5. 25Congressional and other governmental activities in the U.S. could damage the reputation of Capella University or Strayer University and limit our ability to attract and retain students
  6. 26We face strong competition in the post-secondary education market, including in the online education market, which is subject to rapid technological changes38% rewritten
  7. 27The Company relies on exclusive proprietary rights and intellectual property, and competitors may attempt to duplicate our programs and methods34% rewritten
  8. 28Seasonal and other fluctuations in our operating results could adversely affect the trading price of our common stock22% rewritten
  9. 29Regulatory requirements in the U.S. may make it more difficult to acquire us22% rewritten
  10. 30Capacity constraints or system disruptions to our university’s computer networks could damage the reputation of the institutions and limit our ability to attract and retain students
  11. 31The Company’s computer networks, and those of third parties we use in our operations, may be vulnerable to cybersecurity risks that could disrupt operations and require the expenditure of significant resources
  12. 32The personal information that the Company collects may be vulnerable to breach, theft, or loss that could adversely affect our reputation and operations and is subject to privacy and data security laws which may impact operational efficiency
  13. 33Failure to maintain adequate processes to prevent and detect fraudulent activity related to student online enrollment or financial aid could adversely affect our universities’ operations
  14. 34Our use of generative artificial intelligence tools poses risks, including risks relating to the quality and results of such tools, reputational risks, competitive risks, cybersecurity risks, and regulatory risksNew
  15. 35The Company operates institutions in the U.S., Australia, and New Zealand, and is subject to complex business, economic, legal, political, geopolitical, and foreign currency risks, which risks may be difficult to address adequately
  16. 36Integrating SEI and Torrens University and associated assets in ANZ may be more difficult, costly or time consuming than expected, and the combined company may not realize all of the anticipated benefits of the acquisition
  17. 37The goodwill and indefinite-lived intangible assets recorded in connection with the acquisitions of Capella Education Company and ANZ could become impaired in the future
  18. 38The impact of pandemics and other possible future public health emergencies may adversely affect our business, our future results of operations, and our overall financial performance

Other Strategic Education 10-Ks

  • FY2024 10-K risk factors
    38 risks

    Capella University and Strayer University depend heavily on Title IV federal student financial aid programs and face extensive regulation. International expansion into Australia and New Zealand introduces complex integration and operational risks.

    Filed Feb 27, 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.