Enrollment and Student Demographics - For the fiscal year ended August 31, 2025, the University's Average Total Degreed Enrollment was 81,900, including 66,300 undergraduate and 15,600 graduate students[20]. - Enrollment through employer relationships represented approximately 32% of the Average Total Degreed Enrollment in fiscal year 2025[20]. - The average age of new students is 38, with 95% being over the age of 22, and 53% are first-generation college students[26]. - As of August 31, 2025, students had earned more than 900,000 skills badges, demonstrating mastery of competencies directly applicable to job requirements[25]. Financial Performance - The University's net revenue increased from $835 million in fiscal year 2023 to $1,007 million in fiscal year 2025, and net income rose from $66 million to $135 million during the same period[32]. - 88.6% of the University's cash basis revenue for eligible tuition and fees was derived from federal program funds during fiscal year 2025[57]. - Student loans represented approximately 65% of the gross Title IV program funds received by the University in fiscal year 2025[61]. - Federal grants accounted for approximately 35% of the gross Title IV program funds received by the University in fiscal year 2025[61]. - The University's 90/10 Rule percentages were 88.6% and 88.3% for fiscal years 2025 and 2024, respectively, indicating compliance with Title IV funding requirements[110]. Regulatory Compliance and Accreditation - The University is institutionally accredited by the HLC, with the next reaffirmation scheduled for 2032-2033[48]. - The University has a long-standing record of regulatory compliance with a robust accreditation portfolio[49]. - The University is subject to extensive regulatory requirements imposed by federal and state agencies[59]. - The University has been institutionally accredited by the HLC since 1978, with reaccreditation obtained for the period through 2032-33[75]. - The University must maintain state authorization to operate and participate in Title IV programs, with potential loss of authorization impacting financial condition and operations[197]. Regulatory Risks and Challenges - The Department of Education's current state authorization rules require institutions to meet state requirements for Title IV eligibility when offering distance education[67]. - The University must comply with ongoing changes in state authorization from both the Department of Education and SARA to maintain its operational status[71]. - Changes in state authorization requirements could materially affect the University’s ability to provide distance education and participate in federal programs[71]. - New federal regulations effective July 1, 2024, may increase the risk of regulatory noncompliance for the University, potentially affecting its Title IV program participation[82]. - The Department of Education may impose letter of credit requirements or other adverse actions against the University if it fails to comply with regulations[83]. Borrower Defense and Financial Liabilities - Approximately 48,000 borrower defense applications were received by the University from June 2020 to April 2024, with one-third dated on or before June 22, 2022, potentially subject to automatic discharge under the Sweet settlement[94]. - The Sweet settlement mandates automatic loan discharge for certain borrower defense applications pending as of June 22, 2022, affecting about 150 institutions, including the University[93]. - The University faces potential financial liability related to borrower defense claims, which could impact its financial stability and operational costs[86]. - The Department of Education approved over 1,200 Borrower Defense to Repayment (BDR) claims, discharging nearly $37 million in federal student loans related to the University's "Let's Get to Work" ad campaign[95]. - The University believes there are a substantial number of additional pending BDR claims that have not yet been formally notified by the Department of Education[96]. Changes in Federal Regulations - The amendments to the Higher Education Act will eliminate the federal Grad PLUS loan program effective July 1, 2026[55]. - The Department of Education's recent rulemaking initiatives may lead to new regulations impacting federal student aid funding and institutional accountability, which could affect enrollment and revenue[85]. - The Department of Education's financial value transparency rule will require colleges to disclose student debt burdens and program costs, impacting student enrollment decisions starting in 2026[113]. - New accountability standards may condition federal direct loan eligibility on graduates' median earnings compared to less-credentialed working adults[176]. - Legislative changes to Title IV programs could materially affect the University's enrollment and financial condition[178]. Operational Changes and Initiatives - The University has made substantial investments in technology resources, leveraging AI to improve retention and student-facing capabilities[28]. - The University completed the closure of remaining out-of-state locations in fiscal year 2024, focusing on enhancing online offerings[127]. - The Campus Footprint Initiative, aimed at transforming the University's physical presence, began in October 2012 and concluded its initial phase in 2016[126]. - The University updated its curriculum to require Mississippi students to complete applicable courses before applying for Arizona licensure, effective September 1, 2025[202]. Fraud Prevention and Compliance - There has been a measurable increase in fraudulent applications and enrollments, particularly from individuals receiving Title IV funds[215]. - Additional checks and balances have been implemented to ensure only qualified individuals apply for programs and seek Title IV funds[215]. - New guidance from the Department of Education emphasizes the need for institutions to prevent fraud and protect Title IV program integrity[215]. - Failure to comply with Department of Education standards could result in financial penalties or loss of eligibility for Title IV programs[215]. - Accrediting agencies require processes to verify that the student registering is the same as the one participating in the program[215].
AP VIII Queso Holdings(PXED) - 2025 Q4 - Annual Report