AMERICAN PUBLIC EDUCATION INC (APEI) Business

ITEM 1. BUSINESS

COMPANY OVERVIEW

American Public Education, Inc., or APEI, provides online and campus-based postsecondary education to approximately 108,600 students through our subsidiary institutions. Our institutions offer purpose-built education programs designed to prepare individuals for productive contributions to their professions and society and to offer opportunities designed to advance students in their current professions or to help them prepare for their next career.

Our Vision and Mission

Our vision is for education to transform lives, advance careers, and improve communities. Our mission is to Power Purpose, Potential and Prosperity for Those in Service to Others. Our institutions of advanced learning are purpose-built to prepare service-minded students for employment, careers, and leadership in a diverse and changing world. Many of our students are from underserved populations for whom our institutions can transform their and their families’ lives. We are the number one educator of active-duty military and of veterans through American Public University System. We are a national leader in pre-licensure nursing education, focused on a Diploma in Practical Nursing, or PN diploma, and an Associate Degree in Nursing, or ADN, through Rasmussen University and Hondros College of Nursing, as well as a Bachelor of Science in Nursing, or BSN degree, through Rasmussen University.

Our Institutions

We have three subsidiary institutions: American Public University System; Rasmussen University; and Hondros College of Nursing.

American Public University System

American Public University System, or APUS, provides online postsecondary education to approximately 88,700 adult learners. APUS traces its roots to American Military University, or AMU, which was founded in 1991, as a distance-learning, graduate-level institution for military officers seeking an advanced degree in military studies. Since then, APUS has broadened its focus to include veterans, extended military families, and other public service and service-minded communities, with a focus on educating those who serve. APUS has two brands: AMU, which is focused on educating students from the military and national security communities, and military families and veterans, and American Public University, or APU, which is focused on educating career-focused working adults with an emphasis on educating professionals working in service-minded communities, including nursing, public health, public administration, and business administration. Today, while the majority of APUS students are undergraduate-level, students are also enrolled in its certificate, graduate, and doctoral programs.

APUS is exclusively an online institution of higher learning, purpose-built to meet the needs of the communities it serves. Many of its students serve in positions requiring extended and irregular work schedules, are on-call for rapid response missions, participate in extended deployments and exercises, travel or relocate frequently, and often must balance family and work demands. Although APUS’s focus has broadened since its founding, it continues to have an emphasis on its relationship with the military community. As of December 31, 2025, approximately 62% of APUS’s students self-reported that they served in the military on active duty at the time of initial enrollment, and approximately 15% of APUS’s students self-reported that they are a military veteran. The remainder of APUS’s students are other military or military-affiliated professionals (such as reservists or National Guard members), family members of veterans and active-duty military and public service professionals (such as law enforcement personnel or other first responders) and other non-military students (such as working adult students).

APUS is institutionally accredited by The Higher Learning Commission, or HLC, an institutional accrediting agency recognized by the U.S. Department of Education, or ED. Most other higher education institutions accept APUS’s courses for transfer credit as a result of this accreditation. For more details on APUS’s HLC accreditation, see “Our Institutions and Operations – Our Institutions – Accreditation” and “Regulatory Environment – Accreditation – Institutional Accreditation” below.

Rasmussen University

RU provides nursing- and health sciences-focused postsecondary education to approximately 15,900 students at its 18 campuses across five states and online. Not included in these counts are the Green Bay, Wisconsin campus that was closed effective December 31, 2025, and the Wausau, Wisconsin campus, which RU intends to close on December 31, 2026. At the

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beginning of its 125-year history, RU focused on educating business students to prepare them for practical careers in bookkeeping, secretarial services, and accounting. RU’s foundation of education that transforms lives created an institution built to serve those not typically served by traditional higher education. While RU continues to offer programs across a broad range of study including business, technology, and education, it expanded its breadth and embarked on providing healthcare education in 2006. Today, RU offers a comprehensive “ladder” of nursing degrees, including a pre-licensure Diploma in PN, ADN, and BSN degree, as well as the post-licensure RN to BSN degree, Master of Science in Nursing degree and Doctorate of Nursing Practice. In addition, RU also offers a post-graduate nursing certificate.

RU is committed to innovation in program delivery. For example, virtually every nursing program at RU incorporates online content alongside lab and clinical or classroom components. As of December 31, 2025, on-ground enrollment was approximately 7,100 students, of which approximately 6,200 were pursuing nursing degrees at RU, approximately 90% of whom were enrolled in RU’s pre-licensure nursing degree programs. At December 31, 2025, online enrollment was approximately 8,800 students.

RU is institutionally accredited by HLC with an Open Pathway designation, and all of RU’s Nursing programs are programmatically accredited by specialty nursing accrediting bodies. As with APUS, most other higher education institutions accept RU’s courses for transfer credit as a result of RU’s HLC accreditation.

Hondros College of Nursing

HCN provides nursing education to approximately 4,000 students at eight campuses across three states. HCN offers pre-licensure nursing programs that are designed to prepare individuals for productive careers through both a PN diploma and an ADN, and a Direct Entry ADN option that offer an accelerated graduation pathway for students who meet certain transfer credit, academic, and entrance exam requirements.

HCN’s students principally receive on-campus instruction at one of HCN’s campuses and online for certain courses for those that prefer remote course learning. As of December 31, 2025, approximately 68% of HCN students were enrolled in a PN program and 32% were enrolled in an ADN program.

HCN is institutionally accredited by the Accrediting Bureau of Health Education Schools, or ABHES, a national accrediting agency recognized by ED. HCN’s PN program is accredited by the National League for Nursing Commission for Nursing Education Accreditation, or NLN CNEA.

Our Segments

For the periods covered by this Annual Report, we had three reportable segments: the APUS Segment; the RU Segment; and the HCN Segment. Unallocated corporate activity, eliminations, and GSUSA’s results prior to the GSUSA Sale Date are included in “Corporate and Other” in the Consolidated Financial Statements. Financial information regarding each of our reportable segments is reported and discussed in this Annual Report in the sections entitled “Financial Statements and Supplementary Data” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations”. Beginning in fiscal year 2026, we will have two reportable segments: APU Global, formerly the APUS Segment, and RU Health+, the businesses that formerly comprised the RU Segment and HCN Segment.

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The following information for our segments is as of and for the year ended December 31, 2025.

2025 Developments and Future Financial Objectives

The Planned Combination of APUS, RU, and HCN

In 2025, we announced the planned combination of APUS, RU, and HCN, or the Combination, which will result in a combined institution named American Public University System comprised of two divisions named (i) APU Global, comprised of AMU and APU, and (ii) RU Health+, comprised of RU’s campus-based and online nursing programs, RU’s healthcare programs, HCN’s campus-based nursing and healthcare programs, and RU’s non-healthcare programs. The Combination constitutes a Change of Control, Structure or Organization pursuant to HLC policy and, accordingly, we were required to obtain HLC approval prior to effectuating the Combination. In December 2024, APUS and RU jointly submitted an application for Change of Control, Structure or Organization to HLC. Subsequently, ED informed us that we would need to follow a different process to implement the Combination that entails two steps instead of one: (i) merger of the legal entities that own and operate APUS, RU, and HCN, with the APUS entity surviving following the merger, and (ii) combination of the institutions into one HLC-accredited institution. As a result of this process change, HLC required APUS and RU to submit a new joint application for Change of Control, Structure or Organization to HLC in September 2025 containing substantially the same information that had been submitted previously and reflecting the two-step process. In February 2026, HLC approved the continuation of accreditation of APUS and RU after the legal entity merger with an acknowledgment that the intent is to eventually consolidate the three institutions into one HLC accreditation. ABHES has also informed HCN that it will continue HCN’s ABHES accreditation after the legal entity merger. On March 2, 2026, we completed the merger of the legal entities that own and operate APUS, RU, and HCN, with the APUS entity surviving the merger, and subsequently notified ED that the merger occurred and resulted in RU and HCN being directly owned by the same legal entity that directly owns APUS. We currently expect to complete implementation of step two of the Combination in the third quarter of 2026, subject to obtaining required approvals. For additional details regarding regulatory treatment of the Combination, see “Regulatory Environment – Accreditation – Institutional Accreditation” and “Regulatory Environment – Accreditation – The Planned Combination of APUS, RU, and HCN”, and for additional information regarding risks related to the Combination, see the Risk Factor with the caption beginning “The planned combination of APUS, RU, and HCN . . . .”

U.S. Federal Government Shutdown

On October 1, 2025, the U.S. federal government shut down due to a failure by Congress to pass appropriations legislation, resulting in, among other things, suspension of the DoD TA programs and ultimately an inability of APUS students seeking to use TA as a payment source to register, or in some cases stay registered, for courses. In connection with this shutdown, which ended November 12, 2025, APUS TA course registrations decreased in the fourth quarter 2025 compared to the prior year period. This was the first time since 2013 that APUS had dropped course registrations as a result of a government

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shutdown because the Defense Appropriations Bill, which annually funds TA, was not passed prior to October 1, 2025. This shutdown had an adverse impact on APUS’s course registrations, which impacted APUS’s and our cash flows, results of operations, and financial condition. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Overview – U.S. Federal Government Shutdown”, for more information.

90/10 Compliance

We continued to have a sustained focus in 2025 on the “90/10 Rule”, which is described under “Student Financing Sources and Related Regulations/Requirements – Department of Education – Regulation of Title IV Financial Aid Programs – The 90/10 Rule” below. While each of our institutions was in compliance with the 90/10 Rule for 2025, APUS’s relevant percentage for 2025 was 89%. Compliance with the 90/10 Rule will continue to be an area of focus, and despite our efforts, there can be no assurance that we will continue to be able to comply in future years, particularly at APUS. See the Risk Factors captioned “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”, “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”, and “There 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”, for more information.

Tuition Increases

Providing affordable degree and certificate programs is an important element of our competitive strategy. In August 2025, RU implemented a modest tuition increase for new and reentering students, and in October 2025 implemented modest increases for current students in non-prelicensure nursing programs. In January 2026, RU implemented a modest tuition increase for prelicensure nursing program students. HCN implemented a 5% increase in tuition and fees effective in October 2025 for its ADN and PN programs. The tuition and fee increases at RU and HCN are intended to reflect adjustments to be consistent with the local campus markets. Even with these increases, RU and HCN’s tuition and fees are designed to be affordable and competitive when compared to the tuition and fees at similar institutions offering the same level of flexibility, accessibility, and student experience.

In February 2026, APUS implemented a modest tuition increase for non-military undergraduate and graduate students. We believe that APUS’s tuition and fees remain lower than the average in-state cost at public universities.

Campus Consolidations and Closures

In May 2024, RU notified the Wisconsin Educational Approval Program, or EAP, that it intended to voluntarily close its two Wisconsin campuses, effective December 31, 2025, and 2026, respectively. RU closed the Green Bay campus effective December 31, 2025 as planned, and intends to close the Wausau campus on December 31, 2026. All students enrolled at the two Wisconsin campuses have expected graduation dates on or before the applicable campus closing date. For additional information, see the Risk Factor captioned “RU’s actual and planned closure of campuses or termination of programs on certain campuses may adversely impact RU and us.”

Preferred Stock Redemption

On June 23, 2025, APEI redeemed all 400 outstanding shares of Series A Senior Preferred Stock for $43.1 million, excluding unpaid and accrued dividends of $1.4 million. Accordingly, there are no shares of preferred stock issued or outstanding at December 31, 2025. For additional details regarding the redemption of the Series A Senior Preferred Stock, please refer to “Note 12. Preferred Stock” included in our Consolidated Financial Statements.

Assets Held for Sale

In the first and second quarters of 2025, APUS completed the sale of an undeveloped parcel of land and two buildings located in Charles Town, West Virginia, for net sales proceeds of approximately $23.0 million. Please refer to “Note 5. Assets Held For Sale” included in our Consolidated Financial Statements for more information.

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Sale of Graduate School USA

On July 25, 2025, or the GSUSA Sale Date, APEI completed the sale of its membership interest in Graduate School USA, or GSUSA, for $0.5 million, subject to customary adjustments, and as a result, the lease liability was removed from our balance sheet. We have no continuing involvement in GSUSA. The sale of APEI’s membership interest in GSUSA is not considered significant shift in our strategic focus, nor is it considered material to our operations, cash flows, or financial position. Please refer to “Note 2. Significant Accounting Policies” included in our Consolidated Financial Statements for more information on APEI’s sale of its membership interest in GSUSA.

Executive Leadership Changes

On August 4, 2025, the Board of Directors of APEI, or the Board, appointed James Kenigsberg as Interim Chief Innovation and Technology Officer of APEI, and Mr. Kenigsberg resigned from service on the Board in connection with and effective as of his appointment.

Effective October 20, 2025, we appointed Edward H. Codispoti as Chief Financial Officer. Our former Chief Financial Officer, Richard W. Sunderland, Jr., continued to serve the Company until his departure in the first quarter of 2026.

Please refer to “Our Institutions and Our Operations – Information About our Executive Officers” below for additional information about our executive officers serving as of the date of this Annual Report.

Reductions in Force

On November 3, 2025, as a result of the government shutdown, we completed a reduction in force that resulted in the termination of approximately 40 non-faculty employees at APUS, representing approximately 6.5% of the APUS non-faculty workforce. Separately, in the fourth quarter of 2025, 19 information technology employees at APEI were terminated in connection with our ongoing efforts to optimize certain information technology functions. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Overview – Reductions in Force”, for more information.

Our Market and Competition

Market Characteristics

The overall U.S. postsecondary education market is large, with more than 4,500 institutions of higher learning, diverse in its business models, and fragmented such that no one institution has a significant market share. Most postsecondary institutions, including for-profit postsecondary institutions, regardless of where they are located, how they are organized, or who they serve, face challenges, including:

•demand for relevance and return on investment, as they must prepare students with relevant skills to work in new and rapidly changing industries, respond to technological change, and support employers in efforts to optimize and advance their workforce;

•focus on quality and affordability, including via questions from potential students, lawmakers, the media, and others about the quality and cost of postsecondary education and the impact of poor quality and high costs;

•changes in consumer demands as prospective students look to pursue credentials outside of degrees;

•a continually changing regulatory environment;

•fluctuations in enrollment; and

•rapid technological transformation, including through increasing demand for online offerings and the utilization of technology to enhance student learning, and increasing use of artificial intelligence, or AI, technologies.

Competition

In addition to the characteristics outlined above, the U.S. postsecondary education market is characterized by intense competition. Competitive factors include, among other things:

•the quality of the academic program and alignment to high growth jobs;

•affordability;

•breadth of degree offerings;

•flexibility in delivery models;

•frequency of course or program starts;

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•faculty experience;

•level of support for student success;

•career counseling and placement services;

•reputation;

•effectiveness in attracting college-ready students; and

•compliance track record.

Institutions Serving Military Students

APUS has focused on serving the military community since its founding, and the community continues to be a primary source of APUS students. Approximately 2,400 institutions serve military students through participation in Department of Defense, or DoD, tuition assistance, or TA, programs, including APUS. APUS’s primary competitors for military students are other institutions offering online instruction and colleges and universities offering on-campus instruction near military installations.

We believe that APUS will continue to see competition in the military community from both not-for-profit and for-profit schools, as well as from the Armed Forces themselves, including through distance learning programs. For example, the U.S. Naval Community College, or the USNCC, is a community college supporting naval education for enlisted service members. While a number of schools with which APUS competes are participating partners with the USNCC, APUS is not an eligible partner because of its status as a for-profit institution. As traditional not-for-profit public and private schools continue to advance online capabilities, we believe that they may present competition for APUS.

Nursing Programs

RU and HCN’s nursing programs are offered as campus-based programs in the geographic areas surrounding their campuses. In RU and HCN’s combined 26 on-ground nursing campuses, we compete with a mix of community colleges, public and private postsecondary institutions, and other career-focused nursing colleges offering similar pre-licensure nursing programs. Because of the relatively local focus of these pre-licensure programs, our competitive environment is moderately fragmented and affected by various factors specific to the states and particular areas where campuses are located, including local supply and demand for nurses and nursing schools. We are also continuing to focus on growing our post-licensure nursing programs, for which the competitive environment is less fragmented and has larger competitors, including because RN to BSN and other post-licensure degrees are available online as well as in traditional campus-based environments.

Other Public and Postsecondary Institutions

Within the broader postsecondary education market, our institutions compete primarily with not-for-profit, public, and private two-year and four-year colleges, as well as other for-profit schools, particularly those that offer online learning programs. Due to an increase in online postsecondary offerings, we face increased competition as students pursue degree and credential-based postsecondary education from a wider selection of online offerings. For example, we anticipate increased competition from campus-based postsecondary institutions as they continue to increase online degree programs and develop more non-traditional programs.

Most public institutions are aided by substantial government subsidies. Public and private not-for-profit institutions benefit from grants, tax-exemptions, contributions, and other financial resources not widely available to for-profit institutions. Many public competitors also benefit from longstanding name recognition and are able to directly recruit students in a more cost-effective manner, especially in their local markets. Many private institutions are able to make larger investments in marketing, as their cost of tuition is higher than tuition at our institutions.

Non-Traditional Competition

We also face competition, particularly at APUS and for RU’s online programs, from competing schools and others providing non-traditional education programs, often without charge or at low costs, including:

•institutions offering competency-based education, or CBE, programs and single course or course packages aimed at credentialing outcomes rather than degree outcomes;

•corporate training and other companies partnering with universities or the federal government to offer alternative educational paths for students and the federal government workforce, respectively;

•entities providing coding bootcamps or micro-credentials; and

•non-degree granting institutions such as massive online course providers.

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We believe that our institutions will continue to face new competition from non-traditional programs.

For more information on competition within the postsecondary education market in which we compete, refer to “Risk Factors – Risks Related to Attracting and Retaining Students”.

Our Opportunities and Strengths

Our Opportunities

Active-Duty Military, Veterans, and their Families

The U.S. military community will continue to be an important market segment for online education. We believe service members will continue to seek respected universities that provide military-focused support services coupled with an online curriculum and flexible scheduling. We believe service members are particularly interested in postsecondary credentials that offer both career advancement within the military and preparation for employment outside of the military.

We believe that military veterans represent another important addressable market for online education. The U.S. Bureau of Labor estimates that in 2025 there were approximately 6.1 million veterans aged 18 to 54. We believe that our military heritage, affordability, and online offerings are attractive to veterans. In addition, policies and campaigns to facilitate the hiring of veterans may reduce barriers to non-military jobs and facilitate veteran-owned businesses. As these policies and campaigns reduce barriers to non-military jobs and facilitate veteran-owned businesses, we believe online universities offer valuable educational opportunities for veterans regardless of where they live, work, or learn.

We also believe that family members of both active-duty military and veterans represent an opportunity given our prominence and reputation in the military and veterans communities.

Nursing

The expanding need for healthcare coupled with a nursing shortage continues to drive significant demand for nursing education. Projected employment for licensed practical nurses and registered nurses is expected to grow by approximately 3% and 5% annually, respectively, from 2024 to 2034, according to the U.S. Bureau of Labor Statistics’ Occupational Outlook Handbook. When factoring in the need to replace workers who transfer to different occupations or exit the labor force, such as to retire, the U.S. Bureau of Labor Statistics projects openings each year for nurses of more than 200,000 through 2034, though the amount of demand varies by geography.

There is significant unmet demand from qualified students for nursing educational programs. Despite anticipated job opportunity growth, qualified applicants are not always accepted by nursing programs, primarily due to program selectivity, a shortage of clinical sites, faculty, and resource constraints. However, given the state and regulatory approvals necessary, investment in campuses, specialized programmatic knowledge and related accreditations, clinical placement requirements, time to receive approval to grow enrollments, and various standards that nursing schools must meet, we believe there are challenges for new entrants to nursing education. We also believe we may distinguish ourselves from our competitors by developing direct partnerships with healthcare providers as they become more involved in educating and training their future workforces, of which nurses are the largest segment.

Career Learning

U.S. employers are increasingly reporting significant gaps between required skills and the capabilities of their workforce. Working adults also recognize the need to be lifelong learners. We believe employers and professional associations will continue to seek partnerships with academic institutions to advance the skills and productivity of their workforce through higher education and career learning programs, which we see as an opportunity, particularly for RU and HCN. We also believe that there is an opportunity to expand the APUS brand more broadly to attract students beyond its historical constituency.

Our Competitive Strengths

Return on Educational Investment and Affordability

Our institutions are committed to continually assessing and enhancing our academic programs and student services to offer a high-quality education and facilitate successful outcomes for our students and graduates that align with employer needs.

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In addition, as described in “Our Institutions and Operations – Human Capital” below, our institutions focus on excellence by hiring experienced faculty and continuing to develop their capabilities.

Providing affordable, quality degree and certificate programs is an important element of our competitive strategy. We believe the combined tuition and fees at APUS are generally less than the average in-state cost at a public university. APUS’s low tuition and fees, in combination with APUS-funded tuition grants and book grants provided to all undergraduate students, result in significant savings and mean that APUS students are not required to take on as much debt as they might at another institution. APUS’s generous transfer credit policy, and use of open educational resources, further reduce a student’s out-of-pocket costs.

Tuition and fees at RU and HCN are also designed to be affordable and competitive when compared with those of similar institutions offering the same level of flexibility, accessibility, and student experience. RU students may also lower their total cost of attendance through self-directed assessments, which provide savings by permitting students who demonstrate proficiency in a subject to test out of courses. Similarly, HCN students may apply performance-based grants toward the balance of their tuition. Please refer to “Our Institutions and Operations – Our Institutions – Affordability and Cost of Attendance” below.

We believe that, given broad concerns about rising tuition and student loan debt in higher education, there are opportunities to create awareness and attract college-ready students with the primary message of affordability and value.

Relevant Offerings Aligned with Demand

Our institutions offer programs aligned to jobs that U.S. Bureau of Labor Statistics data and non-governmental organizations have indicated as high growth areas. Our institutions are also committed to continually assessing and enhancing our academic programs and student services to offer a high-quality education and facilitate successful outcomes for our students and graduates that align with employer needs. The depth and breadth of APUS’s and RU’s non-nursing program offerings are designed to effectively address the needs of students who enter into education programs with vastly different educational and career backgrounds and goals. For example, APUS utilizes Industry Advisory Councils to evaluate its current curriculum and determine the career relevance of programs and degrees, which facilitate efforts to connect APUS’s curriculum to the industries and the students it serves and to deliver a high-quality academic product. RU and HCN, meanwhile, create new nurses to meet the significant imbalance of supply and demand that exists for nurses by preparing and training nursing students to enter the nursing profession as licensed nurses.

Flexible Program Offerings

Our institutions offer flexible learning modalities to meet the needs of busy working adults. APUS offers online delivery with monthly starts and academic support offerings that are individualized to students’ needs, while RU offers a blend of in person and online courses for their nursing and other healthcare-related programs, and flexible start dates and online courses for other programs. HCN offers PN and ADN programs that accommodate working adults by offering on-campus instruction, online instruction for certain courses, as well as daytime and evening/weekend options at its Ohio campuses.

Market Leadership

Our status as a market leader in key areas we serve means that we operate from a position of strength in those areas. APUS is the number one educator of active-duty military and of veterans. Since its founding, APUS has broadened its focus to include veterans, extended military families, and other public service and service-minded communities, with a focus on a broad purpose of “educating those who serve.” As of December 31, 2025, approximately 62% of APUS’s students self-reported that they served in the military on active duty at the time of initial enrollment, and approximately 15% of APUS’s students self-reported that they are a military veteran. We are also a national leader in pre-licensure nursing education. RU and HCN have more than 10,200 nursing students at their 26 campuses across eight states and online with over 90% of those students pursuing a pre-licensure PN diploma, ADN, or post-licensure BSN degree.

Expansive Nursing Footprint

Our institutions train nurses at 26 campuses across eight states and online. Given the state and regulatory approvals necessary, the investment in physical campus facilities, the specialized programmatic knowledge and related accreditations, clinical placement requirements, the time to receive approval to grow nursing enrollments and various standards that nursing schools must meet, we believe nursing education – and in particular first or pre-licensure nursing education – provides us with

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opportunities to distinguish ourselves from our competitors. In addition, we believe we are one of the only educators with a full “ladder” of nursing curriculum from PN diplomas to Doctoral degrees.

Purpose-Built Student Information System

At APUS, our purpose-built technology platform allows for scale without significant additional cost, and our student information system is purpose-built to serve active-duty military by allowing students that intend to access their TA benefit to seamlessly enroll, register, and gain approval for this benefit.

Our Business Strategy and Goals

Win with Service-Minded Students and their Families

At our core is a recognition of the importance of individuals who serve the country and society at large. We aim to deliver on our vision of education that transforms lives, advances careers, and improves communities by “educating those who serve.” Our institutions are purpose-built to educate the service-minded student by offering programs designed to prepare individuals for contributions to their profession and society and to provide opportunities to advance students in their current professions or help them prepare for their next career.

We seek to offer curriculum in bundles that resonate with service-minded students and their families. We expect to continue to focus on education that provides real skills and pathways to employment and career advancement in fields that align with demand. We aim to deliver differentiated, memorable learner experiences across the entire student journey.

Deliver a Return on Higher Education Investment

We seek to maximize a student’s return on their educational investment. We believe learners are looking for a practical solution that provides value in return for their educational investment and that fits their lifestyle and values. We believe there are opportunities to create awareness and attract college-ready students with the primary message of affordability and value.

Grow a National Nursing Platform

We are focused on expanding nursing opportunities through geographic campus expansion and the expansion of our programs and course offerings. This focus includes expansion of our post-licensure enrollments, particularly at RU where key post-licensure programs have already been established and are primarily delivered online, which represents an opportunity for our alumni and other already-licensed nurses to advance their nursing careers. We also seek to enhance provider partnerships to act as a catalyst for enrollment growth and defray student costs. We intend to continue to seek opportunities for both organic and inorganic growth, including by exploring acquisitions of other nursing schools.

Build a Career Learning Platform

We believe that our institutions provide us with a foundation from which we can build a career learning platform. APUS partners with community colleges, which prepare students for transfer opportunities to APUS for bachelor’s degree programs. At RU and HCN we seek to enter into new nursing provider partnerships and expand existing nursing provider partnerships. Together RU and HCN have over 400 corporate alliance partners whose employees can pursue an education at RU or HCN. Additionally, among our institutions’ offerings are certificate and credentialing programs.

Achieve Sustainable Growth

We aim to increase our public market scale by growing the revenue of our enterprise organically and inorganically and delivering improved enterprise-wide operating margins. We will continue to develop capabilities to drive organic growth and plan to continue to assess and pursue strategic acquisitions and integrate and grow them for inorganic growth. For example, we will continue to focus on being the top educator for active-duty military and veterans and one of the top educators for pre-licensure nurses.

Focus on Regulatory Metrics

We strive to deliver a quality, competitive education, which goes hand-in-hand with demonstrating compliance with various regulatory standards and metrics. We expect to continue to focus on the core elements of our business that are necessary

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to meet these standards and metrics. For example, in our nursing programs, we continue to focus on improving various achievement metrics, particularly around NCLEX pass rates and retention statistics, and at APUS, we continue to focus on ensuring that we comply with the 90/10 Rule.

Optimize Our Cost Structure Through the Shared Services Model

We aim to deliver better, faster, more cost effective, responsible, scalable results for our institutions by providing shared services to them, as noted in “Our Institutions and Operations” below. We believe that the shared services model promotes the efficient use of resources. With the expected completion of the Combination and the creation of APU Global and RU Health+, we expect there to be revenue synergies and cost synergy opportunities through the elimination of redundancies and optimizing operations.

OUR INSTITUTIONS AND OPERATIONS

We provide postsecondary education through three educational institutions of higher learning: APUS, RU, and HCN. Each institution is primarily responsible for its own academic mission, while APEI performs certain business functions on a shared basis for the benefit of APUS, RU, and HCN, with the capability to further expand these shared services to these entities. We believe that the shared services model promotes the efficient use of resources.

Our Institutions

Programs and Areas of Study

We offer a total of 181 degree programs, 110 certificate programs, and four diploma programs, through our institutions. We offer programs across a broad range of fields of study, including public service-focused fields such as nursing, national security, military studies, intelligence, and homeland security, as well as traditional academic fields such as business, health science, information technology, justice studies, education, and liberal arts.

General Academics

APUS offers 133 degree programs and 98 certificate programs across five schools of study. More than 1,700 distinct courses are available in either eight- or sixteen-week formats. Most APUS academic terms begin on the first Monday of each month. APUS’ certificate programs generally require a minimum of 18 credit hours and focus on a particular component of a broader degree program. Among those programs are 13 undergraduate and 11 graduate NanoCertsTM programs, which are focused programs comprised of three academic courses in a related area of interest that provide skills necessary for career or professional development and result in a micro credential. RU offers over 60 programs across seven schools of study in addition to nursing. RU offers approximately 700 distinct courses in 5.5 or 11-week formats with terms beginning in January, April, July, and October, as well as 5.5 week terms beginning mid- February, mid- May, mid-August, and mid-November of each year.

Nursing

RU offers a comprehensive “ladder” of nursing degrees, including a pre-licensure Diploma in PN, ADN, and a BSN degree, as well as the post-licensure RN to BSN degree, Master of Science in Nursing degree and Doctorate of Nursing Practice. In addition, RU also offers a post-graduate nursing certificate. HCN offers on-campus instruction leading to a PN diploma or ADN, as well as a Direct Entry ADN option that offers an accelerated graduation pathway for students who meet certain transfer credit, academic, and entrance exam requirements. Portions of these programs are taught online. Academic

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terms for HCN’s PN and ADN programs begin four times each year, with courses starting in January, April, July, and October. Graduates of RU and HCN’s PN and ADN programs are eligible to seek licensure after passing the applicable NCLEX exams.

Student Body

Overall, our institutions have approximately 108,600 students enrolled online and at 26 campuses across eight states, with enrollment calculated differently depending on the institution.

The student body of APUS consists of approximately 88,700 enrolled students, most of whom are employed full-time. Student enrollment is defined as the number of unique active students, including those who take an approved leave of absence, who are currently attending a course or have completed at least one course within the last 12 months. APUS is designed to serve adult learners with tailored offerings to support them in successfully reaching their individual goals. As of December 31, 2025, approximately 62% of APUS’s students self-reported that they served in the military on active duty at the time of initial enrollment, and approximately 15% of APUS’s students self-reported that they are a military veteran. The remainder of APUS’s students are other military or military-affiliated professionals (such as reservists or National Guard members), public service professionals (such as law enforcement personnel or other first responders), and other non-military students (such as working adult students and military spouses). Many APUS students have significant prior education and career experiences; approximately 88% enroll at APUS with prior educational credits, approximately 90% are working adults, and APUS students have an average age of 34.

RU provides education to approximately 15,900 enrolled students at 18 campuses across five states. Student enrollment is defined as the number of unique active students, including those who take an approved leave of absence. RU offers programs across a broad range of fields of study, with a focus on healthcare, specifically nursing education. At RU, 80% of students are over the age of 25 and 83% are female. As of December 31, 2025, approximately 6,200 students are pursuing nursing degrees at RU, over 90% of whom are enrolled in RU’s pre-licensure degree programs.

HCN provides nursing education to approximately 4,000 students at eight campuses across three states. The average HCN student is approximately 35 years old and 93% of HCN students are female. As of December 31, 2025, approximately 67% of HCN students were enrolled in a PN program and 32% were enrolled in an ADN program.

Accreditation

Our institutions have institutional accreditation, and their programs often have programmatic or specialized accreditation. Institutional accreditation is an important attribute of our institutions. Colleges and universities depend, in part, on accreditation in evaluating transfers of credit and applications to graduate schools. Students and sponsors of tuition reimbursement programs look to accreditation for quality assurance, and employers rely on institutions’ accredited status when evaluating a candidate’s credentials. APUS is institutionally accredited by HLC with a Standard Pathway designation, with the next reaffirmation of accreditation site visit date to take place in May 2027, which will entail a review of APUS in its post-Combination form. RU has institutional accreditation from HLC with an Open Pathway designation, with the next comprehensive evaluation for reaffirmation of accreditation scheduled for March 2027. HCN is institutionally accredited by ABHES and has been granted continued accreditation through February 2027 for all programs at all campuses. Upon completion of the Combination, HCN will no longer maintain its separate accreditation through ABHES.

In addition to institutional accreditation, certain of our programs offered have received specialized accreditation. For example, the Accreditation Council for Business Schools and Programs accredits approximately 15 different business-focused academic programs offered by APUS and accredits APUS’s accounting program under a specialized accounting accreditation. The Commission on Collegiate Nursing Education accredits the Bachelor and Master of Science in Nursing programs at APUS and RU. Certain programs offered by RU have received specialized accreditation as well. For example, RU’s PN and ADN programs are accredited by the Accrediting Commission for Education in Nursing. HCN’s PN program is accredited by NLN CNEA.

RU and HCN’s locations and programs are approved by state agencies as well. For example, the nursing education programs offered by RU and HCN are approved by the relevant state boards of nursing.

For more information on accreditation and licensure, please refer to “Regulatory Environment – Accreditation” and “Regulatory Environment – State Authorization/Licensure” in this Annual Report.

Admissions and Admissions Standards

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We seek to attract students who are more likely to persist and succeed in our programs and continue to work to identify and implement changes and initiatives in an effort to attract and enroll more college-ready students more effectively. We welcome students to apply for admission at any time through online application processes at APUS, RU, and HCN. The current qualification for most undergraduate programs is a high school diploma or General Education Development certificate. Applicants for graduate programs must hold a bachelor’s degree from an accredited U.S. institution or an equivalent foreign institution. Certain programs may have additional admissions standards and restrictions. For example, RU and HCN require prospective nursing students to achieve qualifying entrance exam scores for certain programs.

Affordability and Cost of Attendance

We have long been focused on offering our students affordable programs. Affordable tuition has been a priority of APUS since its founding. APUS tuition remains among the lowest in the four-year for-profit sector. APUS costs are approximately 22% less than the average in-state full-time undergraduate tuition, fees, and books at four-year public universities, based on the final 2024-2025 institutional data reported to ED through the Integrated Postsecondary Education Data System. The low tuition and fees, in combination with APUS-funded tuition grants and book grants provided to all undergraduate students, results in significant savings to APUS students. Additionally, APUS’s generous transfer credit policy, and use of open educational resources, further reduce a student’s out-of-pocket costs. Tuition and fees at RU and HCN are also designed to be affordable and competitive with those of similar institutions offering the same level of flexibility, accessibility, and student experience.

Tuition and Fees

APUS implemented tuition and fee increases for its non-military and veteran students in the second and third quarters of 2023. In April 2024, APUS implemented an additional modest tuition increase to master’s level students across all categories, including military, non-military, and veteran students, and in September 2024, APUS returned the military rate for master’s level students to the $250 per credit hour rate in effect prior to the April 2024 tuition increase. Following these increases, tuition for undergraduate courses is $350 per credit hour, while tuition for master’s level classes is $455 per credit hour. In general, a bachelor’s degree may be earned for $42,000 in tuition costs at current tuition rates, and APUS master’s degrees may be earned for $16,380 in tuition at current tuition rates. In February 2026, APUS increased undergraduate tuition to $360 per credit hour for undergraduate level courses, and increased tuition to $470 per credit hour for master’s level courses for non-military students. APUS does not charge an admission fee or fees for services such as registration, course drops, or similar events that trigger fees at many other institutions. Because APUS is an exclusively online institution, there are no required resident fees, such as for parking, food service, student union, and recreation. Most students taking graduate courses at APUS are charged a technology fee of $85 per course. When applicable, APUS students are charged certain additional fees, such as graduation, late registration, transcript request, and comprehensive examination fees.

RU’s costs vary among its programs and between part-time and full-time attendance. RU implemented modest tuition increases in the first quarters of 2023 and 2024 for all students for select programs, for new students for select programs in August 2024, and for returning students for select programs in October 2024, to help offset the increased cost of delivering a quality education. RU implemented modest tuition increases for new and reentering students in August 2025 and implemented modest increases for current students in non-prelicensure nursing programs in October 2025. RU implemented a modest tuition increase for prelicensure nursing program students in January 2026. RU’s ADN program typically costs $453 per credit hour in addition to course fees. Credit hour costs range from $260 per credit hour to $453 per credit hour for other undergraduate programs. At the graduate level, RU offers six different master’s programs for $290 per credit hour or less. RU charges a $200 course technology and resource fee for each course. Students may purchase required textbooks or e-books through RU for a flat fee of $15 for each textbook (traditional or e-book) for each course.

HCN’s costs vary among its programs. In the second quarter of 2023, HCN implemented a 5% increase in tuition and fees across all programs to offset the increased cost of delivering a quality, competitive education. In the fourth quarter of 2025, HCN implemented a 5% increase in tuition and fees for its ADN and PN programs, intended to reflect adjustments to be consistent with the local campus markets. HCN’s PN program may be completed for approximately $20,500 in tuition and fees, the ADN program may be completed for approximately $29,200 in tuition and fees, each of which is dependent on the campus location. Fees include the cost of examination review materials, lab fees, and test review fees, among others. Some of these costs are payable to HCN and others are payable to third parties. HCN’s students also incur costs for textbooks, supplies, uniforms, and its technology package. These costs vary by program and are paid for by HCN’s students as the textbooks or supplies are needed. HCN estimates that over the life of its programs, a student’s costs related to textbooks and supplies will be approximately $5,000 for the PN program and $6,000 for the ADN program.

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At RU and HCN, tuition increases are adjusted to be consistent with the local campus markets. Even with these increases, RU and HCN’s tuition and fees are designed to be affordable and competitive when compared to the tuition and fees at similar institutions.

Grants and Other Fee Reduction Opportunities

APUS provides a Preferred Military Rate of $250 per credit hour for undergraduate and master’s level courses, for all U.S. active-duty military, National Guard members, Reservists, and military families. Active-duty military students using TA at the undergraduate level are expected to generally have no out-of-pocket expenses. In addition, APUS also provides a 10% grant for veterans and veteran’s family members, or Veteran Grant, on standard undergraduate tuition rates, a 15% Veteran Grant on master’s level courses, and a 10% Opportunity Grant for undergraduate and master’s level courses for remaining students. In addition, veterans who qualify for 100% of their Post-9/11 Veterans Educational Assistance Act of 2008, or Post-9/11 GI Bill, benefits are expected to generally have no out-of-pocket expenses either.

Active-duty military undergraduate students and their spouses and dependents enrolled in courses for academic credit at APUS receive textbooks and certain course materials at no additional cost to them through an APUS-funded institutional book-grant program. APUS also utilizes open access and online library materials where appropriate and works with various publishers to reduce the cost of textbooks and course materials for both graduate students who pay for textbooks and course materials and for APUS, which funds the book grant.

At RU, students can lower their total cost of attendance through self-directed assessments, which provide savings by permitting students who demonstrate proficiency in a subject to test out of courses. Self-directed assessments, when available, may be attempted for a prepaid fee, which is generally $149 per attempt.

HCN students may apply performance-based grants toward the balance of their tuition after the application of all other funding sources. HCN also offers an institutional affordability grant to students demonstrating financial need to cover the difference between the total cost of tuition and fees and the amount of all eligible financial aid resources. The grant is designed to limit a student’s monthly payment to $200 through an award of up to $200 per month, or $600 per term after consideration of financial aid, employer tuition reimbursement, and other financial resources.

HCN offers its students extended payment plan options. The extended payment plans are designed to assist students with educational costs including tuition and fees. HCN’s payment plans require ongoing payments while the student is enrolled in a program and extend after the last day of attendance or graduation. To the extent interest is applied, it is generally fixed and does not accrue until the student departs the program or graduates. The extended payment plan options do not impose any origination fees.

Sources of Student Financing and Financial Aid

Our students finance their education through a combination of individual resources, ED’s Title IV programs, private loans, state and federal grants, institutional grants, TA, Department of Veterans Affairs, or VA, educational benefits, and corporate reimbursement programs. Most students rely on some form of financial aid in addition to their individual resources. At APUS, students utilizing DoD’s TA programs as their primary source of payment accounted for 41% of revenue in 2025, those utilizing VA education benefits 26%, those utilizing ED’s Title IV programs 19%, and those utilizing cash and other sources 14%. At RU, students utilizing ED’s Title IV programs as their primary source of payment accounted for 78% of revenue in 2025, those utilizing cash and other sources 20%, and those utilizing VA education benefits 2%. In addition, most HCN students rely on some form of financial aid in addition to their individual resources. We believe that the ability of our students to participate in these programs is essential to the success of APUS, RU, and HCN.

Participation in TA, VA education benefits, and Title IV programs adds to our institutions’ regulatory burden and results in increased regulatory scrutiny, as described more fully below in “Regulatory Environment – Student Financing Sources and Related Regulations/Requirements”. Federal legislative activity and actions by ED, DoD, and VA may adversely impact the ability of our students to obtain tuition financing, which as with any other limitations on tuition financing could have a material adverse effect on enrollments and our financial condition, as described more fully below in “Risk Factors – Risks Related to Our Business”.

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Student Retention and Academic Outcomes

Our institutions are focused on executing initiatives that will more effectively support their students and help improve those students’ educational outcomes. Improved engagement is an important element in our goal of retaining qualified students. For example, APUS and RU improve engagement through, among other things, faculty engagement initiatives and co-curricular initiatives to increase the level of engagement and collaboration in the classroom and strengthen the bond between those institutions and their students. We also carry out initiatives intended to improve the educational outcomes of our students. For example, RU is dedicated to helping students pass the NCLEX exam the first time by identifying student-specific challenge areas, providing customized tutoring resources and faculty training, and creating student support specialist positions to conduct NCLEX review sessions. In January 2025, RU implemented a contract with a third-party to provide nursing program curriculum upgrades and course materials and testing services to nursing students. These services include integrated NCLEX testing simulation and preparation tools throughout the curriculum and curriculum assessments to identify areas where RU can better enable student mastery and success. HCN offers students NCLEX fee vouchers to encourage students to take the NCLEX within a certain period after graduation. HCN continues to provide significant faculty development resources to support improvements to the teaching and learning experience and program outcomes. Additionally, HCN offers quarterly student workshops to help students prepare for taking the NCLEX exam, provides NCLEX-style questions on assessments throughout the program, and analyzes data from the NCLEX results, and other assessment tools, to adjust course requirements and materials.

Career Development

We believe assisting students in advancing their careers in their current profession or securing employment after completion of their programs or courses is an essential part of our mission. Our institutions offer an array of career services, including complementary personalized career advice for students and alumni through direct interaction with career services staff, career events such as in-person and virtual job fairs and on-campus recruiting, and institution-sponsored online job boards. APUS also offers career planning tools, such as an interest assessment to identify career options that fit student interests and guides to careers associated with student majors, and career preparation services, such as mock interview services, resume review services, and social media review services to improve students’ employer-facing online profiles. RU provides a variety of self-service resources, including access to a networking, job posting, a career research website, online resume building and interview preparation tools, webinars, and video tutorials, as well as online programmatic advising by dedicated career services advisors. We strive to link students directly with employers where we can. At RU and HCN we seek to enter into new nursing provider partnerships and expand existing nursing provider partnerships, and together RU and HCN have over 400 corporate alliance partners.

Marketing and Branding

We strive to align our marketing efforts with our business and strategy and to tailor our marketing approach to our educational offerings and the students we serve. This approach encompasses all our learning modalities, from online to on-campus to hybrid, and all our educational outcomes, from certification to degree, and leading to the career outcomes students seek after they leave us. As part of these efforts, we continue to highlight certain key marketing and branding messages that align with our strategy, including educating those who serve, affordability and value.

We execute our marketing efforts through both direct-to-student and business-to-business channels. Our marketing relationship with students extends across the entire student journey from recruitment to post-graduation and includes efforts to drive student awareness, improve student onboarding, increase persistence, improve student performance, and focus on career outcomes. We aim to market to students wherever they may be, through their chosen media or marketing channel, and in the geographies where they are located. Our approach includes in-person and relationship-based marketing as well as digital (including search, company-owned and external content, social media, and streaming services), and more traditional media television, radio, and print marketing efforts.

We also work with partners we believe can provide us with better access to students who will persist in our institutions’ programs. Over 25% of our RU enrollments are associated with an alliance or partner relationship. We have agreements with over 300 employers whose employees pursue an education at RU. APUS partners with over 120 employers and organizations directly. Additionally, we collaborate with leading tuition assistance administrators and vertical channel partners, extending our indirect reach to over 1,000 organizations and expanding awareness of our academic programs across diverse industries. The APUS Military Outreach team provides ongoing, professional, in-person services to our university’s military students across the United States. This team conducts on-base office hours across the country and participates in nearly 100 education fairs each year, ensuring consistent visibility and hands-on guidance for military learners. At RU and HCN, we

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seek to establish new partnerships with healthcare providers to further career outcomes and defray costs of education, as discussed more fully in “Our Institutions – Career Development” above.

Marketing efforts tailored for our institutions consider prospective and current students, including their respective educational goals. To that end, APUS marketing has historically had a relationship-based focus on building long-term relationships with businesses, professional organizations, and individuals in the military, military-affiliated, and public service communities. We also have programs at APUS that aim to assist members of the military as they transition into private sector jobs. RU and HCN nursing program marketing includes leveraging relationships with and marketing to the healthcare community, and we continue to focus our marketing efforts on non-nursing in markets with increases in demand for those programs.

In November 2025, APUS announced its plan to optimize dedicated marketing resources to promote benefits to extended families, and increase its messaging about Veteran Grants. APUS plans to leverage its existing military outreach team and student and alumni network, as well as entering new marketing channels, in order to accelerate growth among veteran and extended military family student populations.

APUS continues to plan to expand its reach to become a global digital university that integrates emerging technology and enhanced teaching and learning opportunities for faculty and students. APUS aims to provide students with collaborative learning experiences, classroom support powered by AI, and personalized digital services. Already, students can access personalized career coaches, and 24/7 mental health support, both in multiple languages; AI-based career services; and numerous online practical work experience opportunities.

All of our institutions’ marketing is performed in-house by our centralized marketing team through a shared services model. We continue to enhance our marketing team with subject matter expertise and optimize our initiatives utilizing marketing technology, data, and analytics. This in turn allows us to improve our marketing/media mix, audience targeting, creative messaging and user experience for all of our educational institutions.

Information Technology

Information technology systems are critical to our student experience and to the operations of our institutions. APEI provides information technology services to its institutions through a shared services model that supports centralized governance while enabling institution-specific requirements.

Prior to September 2024, RU had outsourced a broad set of technology services under an agreement with Collegis LLC, including hosting and operation of learning management, student information, and customer relationship management systems, student and end-user support, voice services, network operations, and related infrastructure services.

Our Ongoing Technology Transformation

We are executing a multi-year enterprise technology transformation intended to modernize our core platforms, improve student experience, reduce long-term technology risk, and improve operational effectiveness. This work is managed through defined, sequential stages to ensure a controlled rollout while maintaining uninterrupted operations.

Throughout 2024, we insourced core platform ownership, architecture, integration, and institutional support capabilities while continuing to use managed service providers for certain operational and commodity services. This operating structure is intended to increase internal control over mission-critical systems and reduce dependency risks while benefitting from retaining the scalability of external partners.

In 2025, we began implementing an organizational redesign that aligns technology teams and functions into “domains.” Each domain is responsible for a defined set of platforms, business capabilities, and services. This structural model is intended to create clearer accountability for system ownership, reduce fragmentation, streamline decision-making, and ensure that each critical area of student, academic, and enterprise operations has a dedicated technology leadership structure. Domains are supported by centralized centers of excellence in data, cybersecurity, enterprise architecture, and platform engineering to promote consistency and standard practices across portfolios.

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Student Information and Instructional Delivery

Our core enterprise systems include (i) student information systems, or SIS, which support admissions, registration, academic records, tuition and financial transactions, and student services; (ii) learning management systems, or LMS, which support instructional delivery; and (iii) customer relationship management, or CRM, systems, which support admissions and enrollment.

APUS operates a legacy customized SIS known as Partnership at a Distance™, or PAD. We continue to evaluate modernization and long-term platform strategies, including staged transition approaches intended to minimize operational disruption while providing more modern architecture and end-user experiences. RU uses Anthology Campus Nexus as its SIS and HCN uses a separate legacy SIS platform. In 2026, we will be moving non-core SIS data and workflow functions for RU and HCN into Salesforce, which already serves as a stable system of record for student lifecycle data and operational processes for APUS and RU. This approach is intended to preserve core regulatory and academic-record functions within the SIS while shifting surrounding processes into a more stable and standardized platform. In 2026, we plan to begin migrating HCN to a new SIS platform as part of our broader strategy to reduce fragmentation and complexity across student information systems.

APUS and HCN use Brightspace by D2L as their LMS platform. RU currently uses Blackboard Ultra, hosted by Anthology. In 2026, we plan to transition RU from Blackboard Ultra to D2L to consolidate our LMS environment across our institutions, which we expect will reduce operational complexity and support a more consistent academic experience. While we expect to complete certain of these upgrades in 2026 and 2027, there can be no guarantee that they will be completed on this timeline. We regularly evaluate opportunities to modernize and improve the operational effectiveness of our technology systems and platforms, and we anticipate additional changes as we work to execute on our multi-year enterprise technology transformation.

In addition to our SIS, LMS, and CRM platforms, we maintain systems that support financial aid processing, institutional finance, human resources, marketing, analytics, and enterprise decision support.

Our Information Technology Infrastructure

Our technology infrastructure consists of two co-location data centers and a mix of internally managed and third-party managed environments. Redundant network connectivity supports student and institutional access to all systems. We are continuing to transition toward a cloud-based operating model through the phased migration of applications, integration services, and infrastructure workloads to cloud platforms. We expect to operate a hybrid environment during this transition. Our objective is to improve scalability, reliability, security, and resilience while reducing reliance on fixed on-premises infrastructure and reducing exposure to individual vendor ecosystems.

For additional information regarding risks relating to our information technology systems, see “Risk Factors – Risks Related to Our Technology Infrastructure” generally.

Human Capital

Strategy and Values

Our ability to deliver on our mission, on quality student outcomes, and on sustainable growth is tightly aligned with our human capital strategy. Our performance depends on the talents, experience, and efforts of our faculty and non-faculty staff, and on our ability to foster a culture and practice of high performance, innovation, cooperation, integrity, and respect. We seek to be a destination for high-potential employees and desire to build a bench of future leaders by developing best-in-class human capital capabilities. We also strive to ensure we have optimized the position descriptions and performance expectations of the entire workforce. During 2025, our key human capital efforts focused on furthering the partnership between our centralized shared services human resources, or HR, teams and our embedded HR business partners teams in our institutions, as well as continuing to enhance our learning management and training platforms. Those teams collectively continue to support our talent acquisition and development efforts for our faculty and non-faculty staff roles.

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As of December 31, 2025, APEI’s employee population comprised the following:

The different backgrounds of our employees are influenced in part by the geography in which our headquarters, administrative offices, and campuses are located and by the communities we serve, in particular military, military-affiliated, veteran, and nursing communities.

Talent Development and Retention

We believe the quality of our faculty and non-faculty staff is critical to the student experience and student outcomes and is therefore vital to our institutions’ success. Hiring competition is intense, especially for faculty in specialized areas and for qualified executives. RU and HCN also compete with both nursing schools and traditional employers of healthcare professionals to fill open faculty positions. A nursing faculty shortage continues in certain markets, adversely affecting our ability to recruit and retain qualified nursing faculty at RU and HCN. We believe that current job market dynamics, including low unemployment, have further increased the challenge of hiring and employee retention. We strive to retain our talent and closely track retention of our faculty and non-faculty staff. In 2024 and 2025, we had full-time faculty and non-faculty staff turnover of approximately 14% and 16%, of which, in 2024 and 2025, 73% and 67% were voluntary and 27% and 33% were involuntary, respectively. Although we continue to take steps to retain our current faculty and non-faculty staff and source and recruit talent, there can be no assurance that our efforts will meet our goals.

Our strategic initiatives require our personnel to perform at a high level and to adapt and learn new skills and capabilities. New faculty members complete on-boarding, orientation, and training. All faculty have annual development opportunities and requirements. In addition, our institutions regularly review faculty performance. We have implemented a centralized talent and transformation team to focus on improving internal learning and development practices and succession planning to ensure that we cultivate skills needed to deliver high quality student outcomes and help grow our operations. We execute an annual enterprise-wide talent review to ensure a consistent review of talent and construct meaningful development plans for leaders within our organization, as well as enhanced succession planning. While previous talent reviews focused on vice presidents and more senior employees, in 2025 we extended the talent review process to include all employees at director and above. We also continued our centralized, consistent compliance training approach across the organization. We continued to use the learning management and training platform that we implemented in 2024 and remain committed to working to ensure that new hires and employees are fully trained on key compliance matters upon hiring and on an annual basis thereafter. We review all required compliance trainings annually for comprehensiveness. Finally, we offer a comprehensive education benefit program that provides opportunities for our employees to advance their education and careers by taking courses at APUS, RU, and HCN.

Staffing our Institutions

We believe that hiring and retaining well-educated and qualified faculty and non-faculty staff members is important to our success. In 2025, we leveraged our fully centralized talent acquisition function and team to improve talent search efficiency, increase the consistency of our sourcing practices, and strengthen hiring processes. We have seen a significant reduction in our metrics related to time to fill open positions and believe that we have improved our ability to assess talent needs company-wide.

At APUS, approximately 77% of our full-time faculty have a terminal degree in their field of study, and virtually all undergraduate full-time faculty members hold graduate degrees. Many APUS faculty members have relevant experience at other universities and within military, corporate, and government institutions. At RU and HCN, all full-time nursing faculty have earned a BSN or higher. In addition to having the necessary educational requirements, RU and HCN seek faculty members who have demonstrated experience in the field of nursing.

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Employee Engagement and Relations

We measure employee engagement, including full-time faculty, on an ongoing basis by soliciting feedback, including by using an annual, company-wide employee engagement survey to gather and assess our employees’ views on various matters. The results from these surveys are used to implement programs and processes designed to enhance employee engagement and improve the employee and faculty experience. In 2025, we launched a condensed version of our annual survey to gain feedback on key areas of importance to our human capital management strategy, and we are implementing action plans to address areas of opportunities identified in those results. None of our employees are party to a collective bargaining agreement, and management considers employee relations to be good.

Health and Safety

We are committed to the health and well-being of our employees and assess our well-being initiatives and marketplace trends on an ongoing basis. We have increased our focus on employee well-being and have enhanced our Total Rewards Team, which is focused on benefits and well-being. In addition, in 2025 we added a fitness benefit which provides access to online workouts and discounted gym memberships, and no cost mental health resources. We offer paid parental leave to support our full-time faculty and non-faculty staff and their families and additional paid time off, including time for volunteerism, as additional retention tools. In 2025, we continued to provide benefits through our employee discount program and continued focused efforts to educate our employees on the company-provided benefits and resources available to them.

Community Impact

We have a variety of engagement and community impact councils at APEI and in our education units. These teams lead our efforts to ensure that we positively impact the communities in which our employees work and live, including by organizing volunteer opportunities. We provide all full-time employees, including faculty and non-faculty staff, with eight hours of additional paid time off for volunteering and giving back to our communities.

Information About our Executive Officers

Set forth below is certain information concerning our executive officers serving as of the date of this Annual Report.

Angela K. Selden joined us in September 2019 as President and Chief Executive Officer and a member of our Board of Directors. Ms. Selden had previously served as Chief Executive Officer of DIGARC, LLC, an education technology provider to higher education institutions, since October 2016. From July 2015 until April 2016, Ms. Selden was Interim Chief Executive Officer of Skybridge Americas, a global contact center and provider of fulfillment solutions, and she served as a member of its board of directors from July 2015 through December 2018. Prior to Skybridge Americas, Ms. Selden served as Chief Executive Officer of Workforce Insight, LLC, a global provider of strategic workforce management, from 2014 to 2015, after Workforce Insight’s acquisition by Baird Capital Partners, where Ms. Selden served as Executive in Residence from 2013 to 2014 and participated in the acquisition of Workforce Insight. Prior to her role at Baird, Ms. Selden served as Chief Executive Officer and Executive Co-Chairman of Arise Virtual Solutions, Inc., a virtual workforce solutions outsourcer from January 2005 until August 2011. Earlier in her career, Ms. Selden spent 18 years at Accenture, including serving as the Managing Partner leading Accenture’s North American West Consumer and Industrial Products group to significant growth.

Edward H. Codispoti, CPA joined us in October 2025 as Executive Vice President and Chief Financial Officer. Mr. Codispoti had previously served as the Chief Financial Officer of NV5 Global, Inc. from June 2019 until October 2025. Prior to NV5 Global, Mr. Codispoti was the Chief Financial Officer of Ilumno Holdings, Ltd. from May 2017 until June 2019 and Chief Financial Officer of JetSmarter, Inc. from October 2016 to March 2017. He served in various capacities for TradeStation

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Group, Inc., including Chief Financial Officer from June 2011 to August 2016, Chief Accounting Officer from February 2010 to June 2011 and Corporate Controller and Vice President of Accounting from September 2007 to May 2011. Mr. Codispoti began his career at Arthur Andersen, LLP.

James Kenigsberg joined us in August 2025 as the Interim Chief Innovation and Technology Officer of APEI and had previously served as a director of APEI from June 2022 until his appointment as Interim Chief Innovation and Technology Officer. Prior to joining APEI, Mr. Kenigsberg was the founding Chief Technology Officer at 2U, Inc., from August 2008 until January 2022. He continued to support 2U’s strategic initiatives as a Senior Strategic Advisor through January 2024. Prior to 2U, Mr. Kenigsberg served as Vice President of Application Development at The Princeton Review from October 2000 to August 2008. He also held senior technology roles at Thomson Reuters and Ogilvy & Mather from January 1998 to October 2000.

Thomas A. Beckett joined us in April 2011 as Director, Legal Affairs for APUS, in January 2012 became Vice President, Legal Affairs, and since January 2016, has served as our Senior Vice President and General Counsel, and Secretary since June 2016. Prior to joining APUS, Mr. Beckett was the General Counsel and Chief Operating Officer of HealthSport, Inc. and its wholly owned subsidiary, InnoZen, Inc. (now CURE Pharmaceutical) from 2007 to 2010. In addition, from 2004 to 2010, Mr. Beckett held various leadership positions at HealthSport and InnoZen. Prior to this, Mr. Beckett was an associate at King & Spalding LLP and Holland & Knight LLP. Mr. Beckett began his career as a banking officer with First Union National Bank. Mr. Beckett is on the board of directors of Shenandoah Telecommunications Company, a wireless telephone and cable services company.

Tanya J. Axenson joined us in July 2022 as Senior Vice President and Chief Human Resources Officer. Prior to joining APEI, Ms. Axenson served as Senior Vice President of HR and Chief Diversity Officer of Erickson Senior Living, which develops, operates, and manages continuing care retirement communities, from January 2021 to July 2022. Previously, Ms. Axenson also served as Vice President and Chief Human Resources Officer of Aerotek, Inc., a leading talent solutions provider, from September 2012 to January 2021. Ms. Axenson also previously held various other human capital and legal roles at Exelon/Constellation Energy, an energy provider, and served as an associate attorney at Gibson, Dunn & Crutcher LLP.

Karmela Gaffney joined us in July 2023 as Acting Chief Marketing Officer before being hired for the role full-time in December 2023. Prior to joining APEI, Ms. Gaffney served as the Chief Marketing Officer of Academic Partnerships from 2020 to 2022 and Senior Vice President of Digital and Integrated Marketing at the same company from 2018 until 2020. Prior to this, Ms. Gaffney was Vice President, eCommerce and Phoenix.edu at University of Phoenix from 2015 to 2018 and was Vice President, Digital Commerce at Choice Hotels International from 2013 to 2015. Ms. Gaffney also previously held various leadership roles at Best Western Hotels & Resorts.

Nuno S. Fernandes joined us in August 2022 as President of APUS. Prior to joining APUS, Mr. Fernandes served at Ilumno, a company that partners with universities in Latin America to expand access to higher education throughout the region, as President and Chief Executive Officer from May 2019 to August 2022, Executive Vice President, Global Operations and Strategic Alliances from April 2018 to May 2019, Executive Vice President, Strategic Alliances from May 2017 to April 2018, Senior Vice President, Global Operations from September 2016 to May 2017, Chief Marketing and Operations Officer from September 2015 to September 2016, Senior Vice President Marketing, Enrollment and Student Services from January 2014 to September 2015, and Senior Vice President Marketing, Enrollment from January 2013 to January 2014. Mr. Fernandes has also held various leadership roles at Overseas Leisure Group and Bosch.

Mark L. Arnold joined us in January 2025 as President of RU. Prior to joining RU, Mr. Arnold served as the Chief Executive Officer of Nystrom & Associates, an outpatient mental health provider, from 2020 to 2023. Prior to this, Mr. Arnold was Chief Operating Officer at Rayus Radiology (formerly, Center for Diagnostic Imaging) from 2017 to 2020 and held other various roles, including Chief Development & Strategy Officer, Senior Vice President & General Manager, Regional Vice President, Minnesota, and Vice President, Strategy and Business Development from 2011 to 2017. Mr. Arnold previously served as a senior healthcare research analyst at Piper Sandler from 2005 to 2011, held leadership roles at 3M Company, and was a healthcare management consultant.

Intellectual Property

We and our institutions own, and exercise rights associated with patents, copyrights, trademarks (registered and common law), and domain names to protect our intellectual property.

Our institutions own or license all course syllabi and course and instructional materials developed by their faculty and non-faculty staff and, as such, these course materials may be used by our institutions in current and future courses as needed to

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facilitate instruction and may be modified by our institutions to meet evolving course or curriculum requirements. In general, our institutions do not assert ownership claims to scholarly works of their faculty, such as articles, professional presentations, and books, which were not developed as course materials. Such intellectual property of our institutions’ individual faculty members remains the property of each such faculty member and is reserved specifically for use only by the faculty member who owns it unless the faculty member grants permission for use by others. Generally, however, our institutions claim copyright ownership of all course syllabi and other course and instructional materials developed during faculty employment as an employee or contractor of our institutions, or if our institutions have compensated the faculty member for the particular product. In addition, our institutions claim ownership of research grant publications where our institutions have funded the research in full or in part, as well as other work products where our institutions have engaged in an agreement with the faculty or non-faculty staff member.

We or our institutions have secured or claim rights to trademarks for various names and terms used in our and their respective businesses, including rights in “American Public Education, Inc.,” “APEI,” “American Public University System,” “American Military University,” “AMU,” “American Public University,” “APU,” “Rasmussen University,” and others. In connection with our acquisition of HCN, we received a royalty-free, irrevocable, exclusive, transferable, sublicensable license to use the name “Hondros College of Nursing” and, instead of “Nursing,” any other qualifier directly related to nursing, medicine, or healthcare in connection with the business and operations of HCN. The trademarks and service marks we use are central to our institutions’ brand identities overall and associated marketing efforts, including how prospective students identify them.

Our institutions also own rights to internet domain names pertaining to their brand names and other unique descriptors. We and our institutions vigorously defend against infringement of intellectual property rights, including trademarks and copyrights.

Seasonality and Quarterly Fluctuations

We experience fluctuations in quarterly results and, therefore, the results in any quarter may not represent the results we may achieve in any subsequent quarter or full year. Operating results fluctuate as a result of seasonal or other variations in enrollments. For example, historically, across our institutions, our enrollments are higher in the fall when students traditionally start their education. Our student population also varies as a result of new enrollments, graduations, student attrition, the success of our marketing programs, and other reasons that we cannot always anticipate. We expect quarterly fluctuations to continue.

Available Information About Us

APEI was incorporated in Delaware in 2002 as the successor to a Virginia corporation incorporated in 1991. Our website is www.apei.com. We make available, free of charge through our website, our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, as soon as reasonably practicable after they are electronically filed with, or furnished to, the SEC. Information on or available through our website is not incorporated by reference in this Annual Report, and any reference to our website is intended to be an inactive textual reference only.

REGULATORY ENVIRONMENT

We and our institutions are regulated by (i) accrediting agencies, (ii) state regulatory bodies, and (iii) the federal government through ED. APUS, RU, and HCN are approved to participate in tuition assistance, or TA, programs administered by DoD, and veterans education benefits programs administered by the VA and are therefore also subject to oversight by those agencies. Regulations, standards, and policies of these agencies address the vast majority of our operations, including our educational programs, facilities, instructional and administrative staff, administrative procedures, marketing, recruiting, and financial operations and condition. We are also regulated in some cases by other federal agencies including the Consumer Financial Protection Bureau, or CFPB, and Federal Trade Commission, or FTC.

The postsecondary education regulatory environment is complex and continues to evolve. Changes in or new interpretations of law, regulations, standards, and policies could have material consequences for our institutions’ accreditation, authorization to operate in various states, permissible activities, receipt of funds under student financial assistance programs, and cost of doing business. The postsecondary education regulatory environment has also changed and may change in the future as a result of United States federal elections, changes in Presidential administrations and control of Congress, and legislative activity at the state level.

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Additional information regarding the regulatory and legislative environment and potential risks associated with it is available below and in the section entitled “Risk Factors” in this Annual Report.

Accreditation

Institutional Accreditation

Accreditation is a voluntary, non-governmental process through which an institution submits to review of its institution or programs based on the standards of the accrediting agency and the stated aims and purposes of the institution or program. Accrediting agencies establish criteria for accreditation, conduct peer-review evaluations, and publicly recognize those institutions or programs that meet the stated criteria and are considered accredited institutions or accredited programs. Accredited institutions and programs are subject to periodic review to assess institutional and program integrity, to encourage continued high performance and improvement, and to confirm that accreditation criteria continue to be satisfied. An institution or program that does not meet the criteria may have its accreditation limited, revoked, or not renewed.

Accreditation at the institutional level by an accrediting agency recognized by ED is necessary to participate in Title IV programs and TA. To be recognized by ED, accrediting agencies must adopt specific standards and procedures. If one of our institutions’ institutional accreditors was to lose its recognition as an accrediting agency and the institution was unable to obtain recognition from another recognized accrediting agency, the institution could lose its eligibility to participate in Title IV programs and TA. The loss of ability of one of our institutions to participate in either Title IV programs or TA could have a material adverse effect on our business and financial condition.

Additional information about each of our institutions’ accreditation is provided above in “Our Institutions and Operations – Our Institutions – Academics – Accreditation” and as follows:

•APUS is institutionally accredited by HLC with a Standard Pathway designation. All institutions on the Standard Pathway must undergo a mid-cycle comprehensive evaluation, which entails, among other things, HLC conducting a mid-cycle assurance review and site visit. APUS’s mid-cycle comprehensive evaluation had been scheduled for May 2026, but in October 2025, HLC rescheduled the visit to May 2027. The comprehensive evaluation site visit will entail a review of APUS in its post-Combination form. APUS’s next reaffirmation of accreditation is scheduled for 2030-2031.

•RU is institutionally accredited by HLC with an Open Pathway designation. RU’s reaffirmation of accreditation had been scheduled for 2025-2026, and HLC had scheduled the associated comprehensive evaluation site visit for May 2026, but in October 2025, HLC rescheduled the visit to March 2027. As a result of completion of step one of the Combination in March 2026, we expect that the March 2027 visit will be cancelled because RU will be on Accredited Change of Control status and typically will not be required to undergo routine evaluative processes.

•HCN is institutionally accredited by ABHES. In February 2021, ABHES granted HCN continued accreditation through February 2027 for all programs at its campuses in Ohio and Indiana. In July 2022, ABHES approved inclusion of HCN’s Detroit, Michigan campus into its grant of accreditation. Upon completion of the Combination, HCN will no longer maintain its separate accreditation through ABHES.

ABHES annually reviews student achievement indicators, including retention rate, placement rate, and licensing and credentialing examination pass rate. ABHES may withdraw accreditation at any time if it determines that an institution fails to demonstrate at least a 70% retention rate for each program, a 70% placement rate for each program, and a 70% pass rate on mandatory licensing and credentialing examinations or fails to meet the state-mandated results for credentialing or licensure. Alternatively, ABHES may in its discretion provide an opportunity for a program that is not meeting ABHES’ outcomes thresholds 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. In the reporting years ended June 30, 2023, June 30, 2024, and June 30, 2025, select HCN programs at certain HCN campuses failed to satisfy certain ABHES student achievement measures, and, as a result, ABHES has placed specific programs at certain campus locations on outcomes reporting status and required action plans. HCN has submitted all the required outcomes reports and action plans.

For the reporting year ended June 30, 2024, the Cleveland and Dayton, Ohio PN programs and the Akron, Ohio ADN program were below the 70% benchmark for retention. As a result, ABHES placed these programs on outcomes reporting status and required HCN to submit reports for each of these programs demonstrating their retention rate through the first three quarters of the 2024-2025 reporting year by May 2025. These three programs met the 70%

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benchmark for the reporting period, and, as a result, at its July 2025 meeting, the ABHES Commission voted to remove retention reporting requirements. HCN reported its final retention rates for the reporting year ended June 30, 2025 in November 2025. The Akron and Toledo, Ohio ADN programs and the Dayton, Ohio MA program were below the 70% benchmark for retention. As a result, ABHES placed Akron and Toledo, Ohio ADN programs and the Dayton, Ohio MA program on outcomes reporting status for those programs, and is requiring HCN to submit reports for each of these programs demonstrating their retention rate through the first three quarters of the 2025-2026 reporting year in May 2026.

For more information on the risks associated with these rates, refer to the risk factor in “Risk Factors – Risks Related to the Regulation of Our Industry” with the caption beginning “A failure of HCN to satisfy ABHES accreditation standards...”.

Institutional accreditation is an important attribute of our institutions. Colleges and universities depend, in part, on accreditation in evaluating transfers of credit and applications to graduate schools. Many institutions will only accept transfer credit from institutions with certain institutional accreditation. Students and sponsors of tuition reimbursement programs look to accreditation for quality assurance, and employers rely on institutions’ accredited status when evaluating a candidate’s credentials. Failure to maintain our institutional accreditations would result in the loss of eligibility to participate in Title IV programs and TA.

The Planned Combination of APUS, RU, and HCN

On January 28, 2025, we announced the planned combination of APUS, RU, and HCN, or the Combination, which will result in a combined institution named American Public University System comprised of two divisions named (i) APU Global, comprised of AMU and APU, and (ii) RU Health+, comprised of RU’s campus-based and online nursing programs, RU’s healthcare programs, HCN’s campus-based nursing and healthcare programs, and RU’s non-healthcare programs. The Combination constitutes a Change of Control, Structure or Organization pursuant to HLC policy and, accordingly, we were required to obtain HLC approval prior to effectuating the Combination. In December 2024, APUS and RU jointly submitted an application for Change of Control, Structure or Organization to HLC. For HLC purposes, APUS will be the surviving institution, and the application sought approval for the Combination and the expansion of APUS’s HLC accreditation to include the RU and HCN programs and locations. HLC conducted a site visit in March 2025 related to the joint application. At its June 2025 meeting, HLC approved the Combination and continuation of accreditation upon implementation of the related transactions. Subsequently, ED informed us that we would need to follow a different process to implement the Combination that entails two steps instead of one: (i) merger of the legal entities that own and operate APUS, RU, and HCN, with the APUS entity surviving following the merger, and (ii) combination of the institutions into one HLC-accredited institution. ED does not treat the combination of institutions with the same parent as a change in ownership and control for Title IV purposes. Therefore, the first step requires only that RU and HCN provide notice to ED that the merger occurred, and the second step requires APUS, as the surviving institution, to seek and obtain approval from ED to expand its Title IV certification to cover RU and HCN programs and locations. As a result of this process change, HLC required APUS and RU to submit a new joint application for Change of Control, Structure or Organization to HLC in September 2025 containing substantially the same information that had been submitted previously and reflecting the two-step process. In February 2026, HLC approved the continuation of accreditation of APUS and RU after the legal entity merger with an acknowledgment that the intent is to eventually consolidate the three institutions into one HLC accreditation. ABHES has also informed HCN that it will continue HCN’s ABHES accreditation after the legal entity merger. On March 2, 2026, we completed the merger of the legal entities that own and operate APUS, RU, and HCN with the APUS entity surviving following the merger, and subsequently notified ED that the merger occurred and resulted in RU and HCN being directly owned by the same legal entity that directly owns APUS. We currently expect implementation of step two of the Combination to be complete by the beginning of the third quarter of 2026, subject to obtaining required approvals. HLC will conduct at least one site visit after the Combination as required by HLC’s Change of Control, Structure or Organization Procedure.

In order for ED to expand APUS’s Title IV certification, we must submit evidence that APUS’s HLC accreditation has been expanded to include the RU and HCN programs and locations and that APUS is approved to operate in the states where RU and HCN have campuses. Accordingly, in addition to the HLC approval process described above, APUS will need to obtain required approvals from state agencies, including state boards of nursing, in order to operate in the states where RU and HCN currently operate. See the Risk Factor captioned “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” for more information.

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Programmatic Accreditation and Professional Recognition

In addition to institutional accreditation, our institutions have obtained programmatic accreditation or professional recognition for certain programs, as described more fully above in “Our Institutions and Operations – Our Institutions – Academics – Accreditation”. Among other standards and requirements, programmatic accreditors may utilize benchmarks for student outcomes in the programs they accredit and may require the institution to address outcomes that fail to satisfy those benchmarks or may take other action based on such matters. If our institutions fail to satisfy the standards of these programmatic accrediting agencies or professional organizations for the relevant programs, they could be subject to restrictions or could lose the programmatic accreditation or professional recognition for those programs, which could result in materially reduced student enrollments, prevent the institution from offering the programs in certain states where programmatic accreditation is required, or prevent our students from seeking and obtaining licensure or employment.

State Authorization/Licensure

Our institutions are subject to regulation by the states in which they operate. The level of oversight varies from state to state, and such regulations change frequently. State laws typically establish standards for instruction, faculty qualifications, administrative procedures, marketing, recruiting, financial operations, and other operational matters. Some states prescribe regulations related to an institution’s financial condition, and some states require the posting of surety bonds. State laws and regulations may affect our institutions’ ability to offer educational programs, open locations, and award degrees. If one of our institutions fails to comply with a state’s requirements, it may lose its state licensure or authorization, which would result in the institution’s inability to enroll students in that state and could result in the institution’s inability to receive Title IV program funds and TA funds, at least for students in that state.

Some states assert authority to regulate an institution if its educational programs are offered to residents of those states, regardless of whether the institution maintains a physical presence in the state. The growth of online education has led and may further lead to new laws and regulations and new interpretations of existing laws and regulations. New laws, regulations, or interpretations, including with respect to whether our institutions’ activities constitute a physical presence or otherwise may require authorization or licensure, could increase our cost of doing business and affect our ability to recruit students in particular states, which could negatively affect enrollments and revenue and have a material adverse effect on our business. Changes in our business activities could lead states that do not currently require our institutions to be authorized to require such authorization. The extent of this increase in regulatory obligations, and the associated costs and significance, are not known at this time. Furthermore, in some states it may take a significant amount of time to meet the applicable regulatory requirements with respect to a new program initiative, or we may not be able to do so at all.

The State Authorization Reciprocity Agreement, or SARA, is a voluntary agreement among member states (all states except California), districts, and territories that establishes national standards for interstate offering of postsecondary distance education and is intended to make it easier for students to take online courses offered by institutions based in another jurisdiction. SARA requires member jurisdictions to approve institutions in their jurisdiction to participate in SARA based upon institutional accreditation and financial stability, and to resolve student complaints. Applications must be renewed annually. SARA does not cover, or limits its coverage related to, certain activities. As a result, an institution may still be required to obtain state authorization from, for example, state education agencies or boards responsible for professional licensure. For information on our institutions’ status under SARA, please refer to “State Authorization/Licensure of Our Institutions” in this Annual Report.

In January 2025, SARA’s coordinating entity, the National Council for State Authorization Reciprocity Agreements, or NC-SARA, initiated its policy modification process, soliciting proposals for changes to SARA policy. Such proposals included, among other things, public disclosure of provisional status and modifications to the process for evaluating financial responsibility composite scores. In October 2025, the NC-SARA board of directors approved nine proposals, which included changes related to when an institution may be placed on provisional status, public disclosure requirements for institutions placed on provisional status, and a state’s ability to calculate, or require that an institution has calculated, a composite score based on the institution’s most recent audited financial statements if ED’s composite score is outdated. See the Risk Factor captioned “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” for more information. APUS, RU and HCN all participate in SARA.

Many states also have specific requirements that an individual must satisfy in order to be licensed as a professional in a specified field. Students’ success in obtaining licensure typically depends on numerous factors, including: (i) individual merits of the graduate; (ii) whether the institution and the program were approved by the state in which the graduate seeks licensure or

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by a professional association; (iii) whether the program meets all state requirements for professional licensure; and (iv) the accreditation of the institution and the specific program.

Federal Requirements for State Authorization/Licensure

“Home” State Authorization

ED regulations specify how an institution may demonstrate, as required by ED, that it is authorized to offer postsecondary education programs by the state(s) where it is located, including the state where its main campus is located, which we refer to as its “home” state, and that the home state otherwise satisfies ED requirements. If ED determines that an institution does not have the required home state approval, the institution will be ineligible to participate in Title IV programs. If one of our institutions were to lose its ability to participate in Title IV programs in connection with home state authorization requirements, it would also lose its ability to participate in TA and VA, be unable to operate in the state, grant credentials, and lose institutional accreditation.

State Authorization of Online Education

ED regulations require that an institution that offers postsecondary education through distance education to students located in a state in which the institution is not physically located or in which the institution is otherwise subject to the state’s jurisdiction must meet the state’s requirements to be legally offering postsecondary distance education in that state or must be covered by a state authorization reciprocity agreement, like SARA. ED regulations also now specify the required methodology for determining the state in which a student is located for purposes of satisfying state authorization requirements for distance education courses and require an institution to disclose certain information related to whether programs leading to professional licensure meet applicable state requirements, regardless of program modality.

State Authorization and Professional Licensure

ED regulations require institutions that offer postsecondary education programs leading to employment in an occupation that requires licensure or certification to meet certain additional requirements in order for those programs to maintain eligibility to participate in Title IV programs. In each state in which the institution is located, in which students enrolled in distance education are located, or where a student enrolled after July 1, 2024 attests that they intend to seek employment, the program must: (i) meet all applicable federal or state agency accreditation or pre-accreditation requirements, including as a condition of employment in the occupation for which the program prepares the students; (ii) satisfy the applicable state education requirements for professional licensure or certification so that a student seeking employment may qualify to take any licensure or certification exam needed to practice or find employment in the state; and (iii) comply with all applicable state laws related to closure.

State Authorization/Licensure of Our Institutions

APUS is authorized to enroll students from each of the 50 states and the District of Columbia. APUS is headquartered in Charles Town, West Virginia, and is authorized to offer its programs by the West Virginia Higher Education Policy Commission, or WVHEPC. Under current law, if APUS were to lose its accreditation by HLC, WVHEPC may suspend, withdraw, or revoke APUS’s authorization. Failure to comply with WVHEPC requirements could result in APUS losing its authorization from WVHEPC, its accreditation by HLC, its eligibility to participate in Title IV programs and TA, or its ability to offer certain programs, any of which could force APUS to cease operations. As explained further in “Student Financing Sources and Related Regulations/Requirements – Department of Education – Regulation of Title IV Financial Aid Programs – Financial Responsibility”, APUS is approved to participate in SARA. APUS previously participated on provisional status due to APEI’s consolidated composite score for fiscal 2022 and 2023 being in the zone. In December 2025, APUS was removed from provisional status because APEI’s consolidated composite score for fiscal 2024 was no longer in the zone, and WVHEPC accepted that composite score without it being the most recently reflected score by ED. APUS also has obtained authorization to operate in California, which is the only state that is a non-SARA jurisdiction.

RU is headquartered in suburban Minneapolis, Minnesota and is authorized to offer its programs by the Minnesota Office of Higher Education, or MOHE. RU has a total of 18 campuses across Florida, Illinois, Kansas, Minnesota, and North Dakota, and is also authorized to offer its programs by the relevant education agencies in these states. In December 2024, the North Dakota State Board of Higher Education approved RU to operate under a provisional license effective January 1, 2025, due to APEI’s composite score for fiscal year 2022 being in the zone. In May 2025 RU provided APEI’s new fiscal year 2024 consolidated composite score and was removed from provisional status and became fully authorized to operate in the state. In July 2024, RU closed its Lake Elmo, Minnesota campus and moved all enrolled students at the campus to RU’s Eagan,

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Minnesota campus, which is located less than 10 miles from the Lake Elmo campus. In addition, in May 2024, RU notified the Wisconsin Educational Approval Program, or WEAP, that RU intends to voluntarily close RU’s two Wisconsin campuses, Green Bay and Wausau, effective December 31, 2025, and 2026, respectively. All students enrolled at the two Wisconsin campuses had or have expected graduation dates on or before the applicable campus closing date. RU closed the Green Bay campus, effective December 31, 2025, as planned. As of December 31, 2025, closure of the Wausau, Wisconsin campus is expected to directly impact less than ten students.

HCN is headquartered in Westerville, Ohio and is authorized to offer its programs by the Ohio State Board of Career Colleges and Schools. HCN has six campuses in Ohio, one campus in Indiana and one campus in Michigan and is also authorized to offer its programs by the relevant education agencies in these states.

RU and HCN participate in SARA, and RU has also obtained authorization to operate in California. HCN does not offer online programs in California.

For details about “home” state authorization generally, see the “State Authorization/Licensure – Federal Requirements for State Authorization/Licensure – ‘Home’ State Authorization” above.

In addition, the nursing education programs offered by RU and HCN are approved by the relevant state boards of nursing.

To maintain regulatory approval from the state board of nursing or equivalent body in the states that we operate, an educational program must maintain a certain pass rate on the relevant licensure exam, as defined by the state. If a program does not attain this pass rate, the program may face various consequences, including development and implementation of a plan of corrective action, issuance of a corrective order, or revocation of approval pursuant to an adjudication proceeding.

A number of programs at certain RU campuses and in certain states, including its Moorhead, Minnesota, and Illinois ADN programs, as well as HCN’s Ohio ADN program, have not met state-established first-time NCLEX benchmarks for consecutive years. We believe that low pass rates may be the result of a number of factors, including, without limitation, the academic preparedness of our students, curriculum gaps, changes in the mode of course delivery including the use of virtual courses, testing failures and inconsistencies, imbalances in enrollment and resources, and changes in admission standards. For more information, please refer to the Risk Factor that begins with the caption “Failure to improve certain of our programs’ NCLEX pass rates...”.

The State of Illinois enacted legislation effective January 2024 that changed the Illinois NCLEX pass rate requirements from a one-year measurement based on first attempts only to include a three-year average that includes all test attempts, and temporarily removed all nursing programs, including for RU’s Illinois ADN program, from probationary status until September 2026. RU’s Illinois ADN program is currently approved. The Illinois Department of Financial and Professional Regulation, or IDFPR, has publicly reported that RU’s Illinois ADN program has not met the required NCLEX pass rate for the prior six years. There can be no assurance that IDFPR will not seek to impose different or additional requirements prior to September 2026 as a result of failures to satisfy the required NCLEX pass rate, and we are unable to predict what actions IDFPR may take regarding RU’s Illinois ADN program after September 2026. Actions could include reinstatement of probationary status or withdrawal of approval.

The Florida legislature passed legislation in May 2025 that would have subjected RU nursing programs to significant additional regulatory scrutiny by the Florida Board of Nursing, or FBN, and the Florida Department of Health. The legislation was vetoed by the governor in July 2025, but was expected to lead to increased challenges in hiring and retaining qualified nursing program directors and increased expenses related to compliance with new requirements. The legislation would have allowed FBN to impose disciplinary remedies on an approved program against which an adverse action has been taken by another regulatory jurisdiction in the United States. Similar legislation passed the Florida House of Representatives in January 2026, and is currently making its way through Florida Senate committees.

In February 2023, the FBN placed RU’s Fort Myers, Florida ADN program on probation due to two consecutive years of its NCLEX pass rates not meeting the state standard. In February 2024, FBN notified RU that the program would be allowed to continue on probation for one additional year. RU achieved the required NCLEX pass rate in 2024, and FBN removed probation status at its February 5, 2025 board meeting.

At its May 2024 meeting, the Florida Commission for Independent Education, or FCIE, reviewed RU for a substantive change due to financial stability concerns and, at the time, the Fort Myers, Tampa, and Ocala, Florida ADN programs being placed on probation by FBN. FCIE subsequently placed RU on a provisional license until November 30, 2024. To fulfill a

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condition of licensure, RU submitted an interim report on its financial condition and NCLEX pass rates for the Fort Myers, Ocala and Tampa, Florida ADN programs to FCIE in July 2024. RU’s annual renewal was reviewed by FCIE in November 2024, and RU was granted a provisional license for 2025. In May 2025, considering the ADN programs’ removal from probation and RU’s positive working capital, FCIE moved RU from a provisional license back to a full License by Means of Accreditation. In July 2025, FCIE, placed RU on a provisional license due to RU’s application for Substantive Change, Change in Ownership or Control required for the Combination. In November 2025, FCIE moved RU back to a full License by Means of Accreditation following a review of its annual renewal application in connection with the two-step process required by ED to implement the Combination.

HCN’s ADN program has been on provisional approval status in Ohio since March 2017 due to not meeting the first-time pass rate standard. The Ohio Board of Nursing, or OBN, will consider restoring a program to full approval status when the program meets the first-time pass rate standard for at least two consecutive years.

Failure to comply with state authorization or licensure requirements has impacted and could in the future restrict our institutions’ ability to recruit or enroll students or result in other sanctions, including fines and penalties. New laws, regulations, interpretations, or changed circumstances related to our institutions’ educational programs could increase our cost of doing business and affect our ability to recruit students and offer programs in particular states, which could, in turn, adversely affect our institutions’ enrollments and revenue and have a material effect on our business. Additional information regarding the current impacts and potential risks associated with our NCLEX pass rates is provided in the “Risk Factors” section of this Annual Report.

Student Financing Sources and Related Regulations/Requirements

Our students finance their education through a combination of Title IV programs, TA, education benefits administered by the VA, private loans, corporate reimbursement programs, individual resources, and institutional grants, and in the case of HCN, extended payment plan options. Participation in federal student aid programs, including those administered by the DoD and VA, and the extended payment plan options at HCN, adds to the regulation of our operations.

Department of Education

The Higher Education Act of 1965, as amended, or the HEA, and related ED regulations subject us to significant scrutiny in the form of numerous standards we must satisfy in order to participate in and administer Title IV programs. The federal government provides support for postsecondary education through the Title IV programs in the form of grants and loans to eligible students who can use those funds to enroll in an eligible educational program at any institution that has been certified by ED. An institution will be certified to participate in the Title IV programs only if, among other things, it enters into a written program participation agreement, or PPA, with ED, which conditions participation in Title IV programs upon compliance with ED regulations and any additional conditions specified in the PPA.

ED regulations modify and expand requirements related to financial responsibility, administrative capability, and certification procedures. Under the modified regulations, institutions are required to meet additional financial responsibility criteria and must report certain “financial responsibility” events to ED. Such events include certain mandatory and discretionary triggers that capture financial circumstances that may not be reflected in an institution’s financial statements, including instances where an institution faces a potential loss of Title IV funding. If ED determines that an institution has 90/10 Rule violations, high borrower default rates, or certain pending legal and administrative actions, it will require the institution to post “financial protection”, such as a letter of credit. ED may also require the institution to post financial protection if it determines that certain discretionary triggers may have an adverse effect on the financial condition of the institution, such as pending accrediting agency or government agency actions, high annual dropout rates, or pending borrower defense claims. If ED requires financial protection as a result of more than one mandatory or discretionary trigger, ED will require separate financial protection for each individual trigger. In addition to financial protection, ED may require institutions that fail to meet these financial responsibility criteria to participate in Title IV programs under a provisional certification. ED may also impose additional requirements on the institution’s participation in Title IV programs, such as restrictions on enrollment, addition of new programs, or acquisitions.

Higher Education Act

The HEA must be periodically reauthorized by Congress, and each Title IV program must be funded through appropriations acts on an annual basis. The most recent comprehensive reauthorization occurred in 2008 when Congress reauthorized most HEA programs through the 2014 federal fiscal year. The reauthorization has been temporarily extended in

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the years that have followed. Congress previously considered comprehensive legislation to reauthorize the HEA, including proposals from Republicans and Democrats, referred to as the Student Aid Improvement Act and the College Affordability Act, respectively, and Congress could consider such legislation again in the future.

We cannot predict whether, in what form, or when, HEA reauthorization legislation will be enacted. Modifications to the HEA could occur as part of reauthorization, which could require us to modify our business practices and increase administrative costs, thereby negatively impacting our results of operations.

Types of Title IV Financial Aid Programs

Title IV program aid is primarily awarded to students on the basis of financial need, generally defined as the difference between the cost of attending an institution and the amount a student can reasonably contribute. Our students receive grants and loans to fund their education under several Title IV programs, of which the two largest are federal Direct Loans, or Direct Loans, and Pell Grants. Some of our students may also be eligible for other Title IV grant programs, such as the Federal Supplemental Education Opportunity Grant. The Title IV programs are subject to Congressional action in terms of appropriations and other legislation that may affect funding levels, student eligibility, and other requirements. For example, the Pell Grant program could be subject to cuts or changes in the future, and cuts in ED’s administrative budget could lead to delays in student eligibility determinations and delays in origination and processing of federal student loans. On July 4, 2025, the One Big Beautiful Bill Act, or the OBBBA, was signed into law. Among other things, the OBBBA amends portions of the HEA and makes changes to the Title IV programs. Additional information regarding such changes is available below under “Compliance with Regulatory Standards and the Effect of Regulatory Violations – Other Recent Legislative and Regulatory Activity – The One Big Beautiful Bill Act”.

Regulation of Title IV Financial Aid Programs

To be eligible and certified to participate in Title IV programs, an institution must be accredited by an accrediting body recognized by ED, must be authorized to operate by the appropriate regulatory authority in each state where the institution maintains a physical presence, and must comply with specific standards and procedures set forth in the HEA and the regulations issued thereunder by ED.

ED periodically revises its regulations and changes its interpretations of existing laws and regulations. Accrediting agencies and state education agencies also have responsibilities for overseeing institutional compliance with certain Title IV program requirements. For these reasons, we cannot predict with certainty how Title IV program requirements will be applied in all circumstances. Key provisions relating to institutional participation in Title IV and the processing of Title IV aid that could adversely affect us include the following:

Eligibility and Certification Procedures. An institution must apply periodically to ED for continued certification to participate in Title IV programs. Recertification generally is required every six years, but may be required earlier, including when an institution undergoes a change in ownership resulting in a change of control. An institution may come under review when it expands its activities in certain ways, such as opening an additional location, adding a new program, or, in certain cases, when it modifies academic credentials that it offers.

ED regulations effective July 1, 2024, implement supplementary performance measures that ED will consider when determining whether to certify or condition an institution’s participation in Title IV programs. Among other requirements, ED may consider amounts spent on instruction and instructional activities, academic support, and support services, compared to the amounts spent on recruiting activities, advertising, and other pre-enrollment expenditures. In addition, if a program is designed to meet educational requirements for a specific professional license or certification that is required for employment in an occupation, and the institution is required by an accrediting agency or state to report passage rates for the licensure exam for the program, ED may consider such passage rates.

ED may place an institution on provisional certification status if ED finds that the institution does not fully satisfy all Title IV requirements and in certain other circumstances, such as when an institution undergoes a change in ownership resulting in a change of control. During a period of provisional certification, the institution must comply with any additional conditions imposed by ED. In addition, ED may more closely review a provisionally certified institution if it applies for approval to open a new location, add an educational program, acquire another school, or make any other significant change. If ED determines that a provisionally certified institution is unable to meet its responsibilities, it may seek to revoke the institution’s certification to participate in Title IV programs with fewer due process protections than if it were fully certified.

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APUS applied for recertification to participate in Title IV programs in March 2023. In July 2024, ED notified APUS that it had approved APUS’s continued participation in the Title IV programs under a Provisional Program Participation Agreement, or PPPA, that is effective July 15, 2024, and expires June 30, 2026. ED granted approval on a provisional basis because APUS was subject to an open program review (described below) at the time of recertification. The PPPA imposes new reporting requirements on APUS related to accrediting agency actions, governmental actions, and class actions. Additionally, APEI co-signed the PPPA pursuant to ED regulations that require an entity with a direct or indirect ownership interest and the power to exercise control over the institution to co-sign the PPPA and assume joint and several liability for the participating institution’s Title IV liabilities. APUS must apply for recertification to participate in Title IV programs no later than March 31, 2026, and APUS submitted this application on February 2, 2026.

In July 2021, in connection with RU’s March 2019 change in ownership that preceded our acquisition of RU, ED imposed certain temporary growth restrictions on RU, including limitations on new programs and locations and a cap on enrollments of students who participate in Title IV programs. Additionally, ED required RU to submit periodic financial and enrollment reports and a financial responsibility letter of credit. RU was initially required to fund this letter of credit using a restricted deposit account that required a deposit of 105%, or $24.2 million, to secure the RU letter of credit. In connection with the acquisition of RU, or the Rasmussen Acquisition, RU timely submitted a change in ownership and control application to ED seeking approval to participate in the Title IV programs under our ownership and, effective October 2021, ED and RU entered into a Temporary Provisional Program Participation Agreement, or TPPPA, that allowed RU to continue disbursing Title IV funds while ED reviewed the change in ownership application. The TPPPA continued the restrictions that ED imposed as a result of the March 2019 change in ownership. In August 2023, ED notified RU that it had approved RU’s continued participation in the Title IV programs under APEI ownership under a PPPA. ED continues the prior requirement that RU submit periodic financial and Title IV enrollment reports. The PPPA also imposes new reporting requirements related to accrediting agency actions, government actions, class actions, and student complaints. The PPPA specifies that after ED reviews and accepts financial statements and compliance audits for one complete fiscal year of RU’s Title IV participation under APEI’s ownership, RU may seek approval for new programs that replace current programs. The PPPA also specifies that after ED reviews and accepts financial statements and compliance audits that cover the second complete fiscal year of RU’s Title IV participation under our ownership, RU may seek approval for new locations, new programs that are not replacing current programs, and other changes. Because two complete fiscal years of RU’s Title IV participation under APEI’s ownership have passed and ED has accepted the financial statements and compliance audits for those years, RU may now seek approval for new locations, new programs whether or not they are replacing current programs, and other changes. RU remains subject to enrollment growth limitations under the PPPA. RU can request that ED release RU from further enrollment restrictions after three full fiscal years of RU’s Title IV participation under APEI’s ownership. The August 2023 PPPA no longer requires RU to post the financial responsibility letter of credit that ED had imposed based on the 2019 change in ownership and control of RU. In May 2025, ED released the letter of credit and released RU from temporary growth restrictions imposed in connection with RU’s 2019 change in ownership. RU must apply for recertification of its Title IV participation by March 31, 2026.

In June 2023, HCN timely applied for recertification to participate in Title IV programs. ED subsequently notified HCN that it had recertified HCN’s participation in all Title IV programs effective August 15, 2023, and which expires on September 30, 2026. If ED approves the Combination, the scope of APUS’s certification to participate in Title IV programs will be expanded to include RU and HCN and RU and HCN will no longer have separate Title IV certifications. See “Business – Regulatory Environment – Accreditation – Institutional Accreditation” above for more information.

Administrative Capability. ED regulations specify extensive criteria that an institution must satisfy to establish that it has the requisite administrative capability to participate in Title IV programs. These criteria relate to, among other things, institutional staffing, operational standards such as procedures for disbursing and safeguarding Title IV program funds, timely submission of accurate reports to ED, referring to ED’s Office of Inspector General, or ED OIG, credible information that a student or employees with Title IV responsibilities may have engaged in fraud or illegal conduct in connection with Title IV program administration, and various other procedural matters. ED may find that an institution has failed the administrative capability requirements if the institution does not provide adequate financial aid counseling or career services, has been subject to a negative action by a state or federal agency, court, or accreditor, fails to verify high school diplomas, or does not timely place students in geographically accessible clinical or externship opportunities. If an institution fails to satisfy any of the administrative capability requirements, ED may require the repayment of Title IV program funds, transfer the institution from the “advance” method of payment of Title IV program funds to heightened cash monitoring status, or to the “reimbursement” method of payment, place the institution on provisional certification status, or commence a proceeding to impose a fine or to limit, suspend, or terminate the participation of the institution in Title IV programs.

Financial Responsibility. The HEA and ED regulations establish extensive standards of financial responsibility that institutions must satisfy in order to participate in Title IV programs. These standards generally require that an institution

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provide the services described in its official publications and statements, properly administer Title IV programs in which it participates, and meet all of its financial obligations, including making required refunds and any repayments to ED.

ED evaluates institutions on an annual basis for compliance with specified financial responsibility standards, including a complex formula based on line items from the institution’s audited financial statements. The formula focuses on three financial ratios: (i) equity ratio (which measures the institution’s capital resources, financial viability, and ability to borrow); (ii) primary reserve ratio (which measures the institution’s viability and liquidity); and (iii) net income ratio (which measures the institution’s profitability or ability to operate within its means). Generally, an institution’s financial ratios must yield a composite score of at least 1.5 for the institution to be deemed financially responsible. A composite score between 1.0 and 1.4 is considered by ED to be in the “zone.” An institution in the “zone” may still participate in the Title IV programs as a financially responsible institution through the “zone alternative” or the “financial protection alternative” as set forth in ED regulations. Under the zone alternative, an institution: (i) must request and receive funds under the heightened cash monitoring or reimbursement payment methods (resulting in a delayed method of cash funding for Title IV aid); (ii) may be required to provide additional information to ED upon request (e.g., early submission of financial statement and compliance audit, information about current operations and future plans); (iii) must require its auditor to express an opinion regarding compliance with zone alternative requirements; and (iv) must provide timely information to ED regarding certain oversight and financial events. Under the financial protection alternative, the institution must provide financial protection of at least 50% of the Title IV funding that it received during its most recently completed fiscal year.

ED may also apply the financial responsibility standards to other entities under common ownership with an eligible institution. At the request of ED, for purposes of evaluating the financial responsibility of our institutions, including the composite score calculation, we supply consolidated financial statements to ED. Because ED does not review each of our institution’s financial statements separately, a determination by ED that our consolidated financial statements do not satisfy the “financial responsibility” requirements could cause all of our institutions to lose access to Title IV program funding or result in other penalties or conditions on continued participation. See risk factor captioned “Our subsidiary institutions’ failure to meet financial responsibility…” for more information.

In April 2025, ED notified us that according to its calculations, we had a fiscal year end 2023 consolidated composite score of 1.3 and our institutions were therefore in the “zone,” and we selected the “zone alternative” as the alternative basis on which we establish financial responsibility. Thereafter, APUS, RU and HCN operated under the zone alternative to establish financial responsibility, which imposed on us certain restrictions and obligations, including the heightened cash monitoring payment method, or HCM1. On March 10, 2026, ED notified us that, as of such date, APUS, RU, and HCN were no longer required to comply with the zone alternative requirements due to a composite score for fiscal 2024 of 2.6.

Institutions with composite scores below 1.5 do not qualify for approval from SARA unless, in the case of scores above 1.0, the home state exercises its discretion to consider additional financial information. Eligibility for SARA is determined separately for each of our institutions by the SARA portal agency in the institution’s home state. If the respective SARA portal agency for APUS, RU, or HCN were not to renew the institution’s approval due to a low composite score, we would need to obtain approval or exemptions in states in which the affected institution offers distance education programs or discontinue the affected institution’s offerings to students in such states. In addition, some states have adopted financial standards that are similar to ED’s composite score, which means an affected institution may be unable to obtain licensure in that state if it were to lose SARA participation. And, because composite scores are viewed as a measure of financial responsibility, other regulators or accreditors could consider a composite score that is in “zone” negatively, which could have an impact on their interactions with us and what they permit us to do. APUS participated in SARA in 2025 on provisional status due to its composite score for fiscal 2022 and 2023 being in the zone. In December 2025, APUS was removed from provisional status because its composite score for fiscal 2024 was no longer in the zone, and WVHEPC accepted that composite score in advance of it being approved by ED.

In September 2019, ED published modifications to its financial responsibility standards in regulations that took effect July 1, 2020, or the 2019 Borrower Defense Regulations. The 2019 Borrower Defense Regulations, among other matters, identify certain conditions or other triggering events that have or may have an adverse material effect on the institution’s financial condition, in response to which ED would or could require that the institution submit some form of financial protection, such as a letter of credit, to ED. Triggering events are characterized as either mandatory or discretionary. ED will consider an institution unable to meet its financial or administrative obligations if an institution experiences a mandatory triggering event. ED may consider an institution not to be financially responsible if an institution experiences a discretionary triggering event. For each triggering event, to demonstrate that the institution remains financially responsible, the institution may submit evidence that the triggering event has been resolved, that the institution has insurance that will cover part or all of the debt or liabilities, or that the triggering event has not or will not have a material adverse effect on the institution. If ED determines that one of our institutions is not financially responsible because of one or more triggering events, the institution

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would be required to provide an irrevocable letter of credit equal to at least 10% of the amount of federal student financial aid funds received by the institution for the past year for each triggering event.

The “90/10 Rule.” Under the so-called “90/10 Rule”, a for-profit institution is prohibited from deriving more than 90% of its revenue (as computed by ED) on a cash accounting basis (except for certain institutional loans) from Title IV programs for any fiscal year. If an institution fails to satisfy the 90/10 Rule for any fiscal year, the institution is placed on provisional status for two fiscal years. An institution that fails to satisfy the rule for two consecutive fiscal years becomes ineligible to participate in Title IV programs for at least two fiscal years and is required to demonstrate compliance with Title IV eligibility and certification requirements for at least two additional fiscal years prior to resuming Title IV program participation. Such institution would also lose the ability to participate in TA because DoD requires institutions to participate in the Title IV programs in order to participate in TA. Ineligibility of any one or more of our institutions to participate in Title IV programs and TA would have a material adverse effect on our enrollments, revenue, results of operations, and cash flows.

The American Rescue Plan Act, or ARPA, modified the HEA’s 90/10 Rule to require that a for-profit institution derive not less than 10% of its revenue from sources other than “federal education assistance funds”. ED regulations that address ARPA’s modifications to the 90/10 Rule provide that federal educational assistance funds used to calculate the “90%” side of the ratio include Title IV funds and any other for fiscal years beginning on or after January 1, 2023, educational assistance funds provided by a federal agency directly to an institution or a student, including the federal portion of any grant funds provided by or administered by a non-federal agency, except for non-Title IV federal funds provided directly to a student to cover expenses other than tuition, fees, and other institutional charges. The 90/10 Rule no longer permits institutions to count federal aid for active-duty service members and veterans as part of the “10%” side of the ratio. As a result, TA and VA benefits are included in the “90%” side of the ratio. See the Risk Factor captioned “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” for more information.

The final regulations also include other requirements, including: institutions must request and disburse Title IV funds before the end of the fiscal year (or, for institutions operating under the reimbursement method or the heightened cash monitoring method, make disbursements by the end of the fiscal year and report the funds in the “90%” side of the ratio for that fiscal year); institutions are restricted in when and how they can count institutional loans and alternative financing arrangements as non-federal revenue; institutions may, under certain circumstances, include non-federal revenue from non-Title IV programs in their 90/10 calculation; and institutions must notify ED and students in a timely manner if they fail the 90/10 Rule.

On July 7, 2025, ED issued an interpretative rule that clarified ED’s classification of revenue received by for-profit schools under the 90/10 Rule. The interpretive rule specifies that for-profit schools will be allowed to count non-federal funds generated from programs offered entirely through distance education, if such programs satisfy certain criteria, as non-federal revenue in their 90/10 calculations, and may revise 90/10 Rule calculations for prior fiscal years to include revenue from distance education programs in the “10%” side of the ratio.

Using the applicable 90/10 formula, the following table contains the percentage of cash-basis revenue earned from Title IV program funds:

Incentive Payment Rule. An institution participating in Title IV programs may not provide any commission, bonus or other incentive payment to any person or entity engaged in any student recruitment, admissions, or financial aid awarding activity based directly or indirectly on success in securing enrollments or federal student financial aid. ED has previously announced that it will calculate institutional liability for noncompliance with the incentive payment rule by calculating the cost to ED of all Title IV funds improperly received by the institution, including the cost to ED of all of the Title IV funds received by the institution over a particular period of time if those funds were obtained through implementation of a policy or practice in which students were recruited in violation of the incentive payment rule. ED may also fine an institution, or take administrative action to limit, suspend, revoke, deny, or terminate an institution’s eligibility to participate in the Title IV programs, if the institution violates the prohibition.

We have designed our employee compensation and third-party contractual arrangements to comply with the incentive payment rule currently in effect. However, because there are ambiguities as to how the rule is interpreted and enforced by ED

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and because we could make errors in implementation, we can make no assurances that ED would not find deficiencies in our past, current, or future employee compensation plans and relevant third-party contractual arrangements. In addition, in recent years, other postsecondary education institutions have been named as defendants in whistleblower lawsuits, known as “qui tam” cases, brought pursuant to the Federal False Claims Act, alleging that an institution’s compensation practices did not comply with the incentive payment rule. Any such litigation could be costly and could divert management’s time and attention away from the business, regardless of whether a claim has merit. The incentive payment rule also influences how our institutions are able to compensate and motivate their employees.

Cohort Default Rate. To remain eligible to participate in Title IV programs, an educational institution’s student loan cohort default rates must remain below certain levels. Pursuant to HEA requirements, if the cohort default rate for any year exceeds 40% in any single year, or exceeds 30% for three consecutive years, an institution loses eligibility to participate in Title IV programs. If an institution’s cohort default rate is equal to or greater than 30% in any year, it must establish a default prevention task force and develop a default prevention plan with measurable objectives for improving the cohort default rate.

In September 2025, ED released final official cohort default rates for institutions for federal fiscal year 2022, with ED reporting a zero percent cohort default rate for APUS, RU, and HCN. As explained further in “Student Loan Defaults” below, these rates were favorably impacted by regulatory relief provided in connection with the COVID-19 pandemic pursuant to which borrowers with Title IV program student loans were not required to make payments on their federal loans, and no interest accrued on these loans during this period. Interest accrual on forborne federal student loans resumed on September 1, 2023, and payments became due beginning October 1, 2023. In connection with these developments, ED implemented a 12-month “on-ramp” to repayment, running from October 1, 2023, to September 30, 2024, during which borrowers were not placed into default for missed payments. The end of COVID-19 pandemic-related student loan forbearance and the 12-month “on-ramp” period may lead to higher default rates in the future.

The final official ED cohort default rates for APUS, RU, and HCN for the federal fiscal years 2020, 2021 and 2022 are as follows:

Student Loan Defaults. Government policies to minimize the adverse economic impact of the COVID-19 pandemic have artificially lowered our institutions’ cohort default rates, which nevertheless may be higher than otherwise expected as a result of the pandemic. Congress and ED implemented a temporary freeze on student loan payments and interest accruals, which means borrowers were less likely to default on their loans and our institutions’ cohort default rates are lower not because borrowers are making timely repayments but because the government was allowing them not to make payments. In June 2023, the Fiscal Responsibility Act was enacted, ending the freeze on payments and interest accruals. Accordingly, interest accrual on federal student loans resumed on September 1, 2023, and payments became due beginning October 1, 2023. As a result, ED implemented a 12-month “on-ramp” to repayment, running from October 1, 2023, to September 30, 2024, during which borrowers were not considered delinquent, reported to credit bureaus, placed in default, or referred to debt collection agencies for missed payments, which may lead to an increase in defaults and therefore an increase in our institutions’ cohort default rates in the future. See the Risk Factor captioned “Our 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” for more information.

Gainful Employment Regulations. Effective July 1, 2024, gainful employment, or GE, regulations, established an accountability framework to determine the Title IV eligibility of GE programs based in part on satisfaction of specified performance levels of two measures defined by GE regulations: the debt-to-earnings rates (which include two rates, the discretionary debt-to-earnings rate and the annual debt-to-earnings rate) and the earnings premium measure. Institutions were required to report by July 1, 2024, initial information relating to these GE measures that covered program and student data from the 2022-2023 and 2023-2024 award years. ED extended this initial reporting deadline to September 30, 2025, and RU, APUS, and HCN reported their initial program and student data by such deadline. RU, APUS, and HCN timely reported their program and student data for award year 2024-2025.

On July 4, 2025, the OBBBA was signed into law. The OBBBA establishes an accountability framework, effective July 1, 2026, that institutions must satisfy at the program level in order for students in the program to continue to receive Direct Loans requiring that an undergraduate or graduate or professional program be ineligible for Direct Loans if, in two out of three consecutive years, the median earnings of a cohort of program completers are less than the median earnings of working adults

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aged 25-34 with only a high school diploma for undergraduate program completers, or a bachelor’s degree for graduate or professional program completers, respectively, either in the state where the institution is located or, if fewer than 50% of students at the institution reside in the institution’s state, the national average. If a program fails the earnings test for one year, institutions must provide students with a warning that the program is at risk of losing Direct Loan eligibility.

On December 8, 2025, ED convened the Accountability in Higher Education and Access through Demand-driven Workforce Pell Committee, or AHEAD, and initiated the negotiated rulemaking process for the OBBBA accountability framework. On January 9, 2026, AHEAD reached consensus on proposed modifications to GE regulations that would eliminate debt-to-earnings rates, change student warning requirements, limit the consequences for failing the earnings premium measure, and add an appeal process for programs that lose Title IV eligibility under this framework. The consensus language also maintains the current regulatory requirement that ED host a website that provides program-level data, including, but not limited to, median loan debt and median earnings. Further, under the consensus language, an institution would lose Pell grant eligibility for a program if at least half of the institution’s Title IV recipients or half of an institution’s Title IV funds come from failing programs. On January 30, 2026, ED published proposed regulations to implement the AHEAD consensus language. The proposed regulations were subject to the notice and comment rulemaking process which ended on March 2, 2026. As such, the final regulations may differ from those initially proposed.

In connection with the negotiated rulemaking, in December 2025, ED issued updated institutional program performance data, or PPD, that includes calculations of the earnings premium measure under the OBBBA accountability framework for certain programs. These data are for informational purposes only and do not reflect the final data that will be used to determine whether a program will pass the earnings premium measure, as ED used a different cohort of students than will be used to calculate the actual earning premium measures and many programs’ earnings data were suppressed due to data privacy limitations. However, out of the 67 APUS programs, 43 RU programs, and two HCN programs that ED assessed in the updated PPD, one APUS program failed the OBBBA earnings premium measure, representing less than 1% of total net course registrations for the three months ended December 31, 2025, compared to five APUS programs and six RU programs failing the GE debt-to-earnings test, representing 2.60% of total APUS net course registrations and 4.91% of total RU student enrollment, respectively, for the three months ended December 31, 2025.

The current GE regulations will remain in effect until ED publishes a final rule implementing the proposed OBBBA regulatory changes and that final rule goes into effect. Under current GE regulations, beginning July 1, 2026, institutions must issue student warnings to current and prospective students if ED notifies the institution that the GE program could become ineligible based on its final debt to earnings rates or earnings premium measure for the next award year for which the measures are calculated. Prospective students would need to review and acknowledge receipt of these warnings on ED’s program information website before we can disburse any Title IV student aid funds to the student. This requirement would be changed by the anticipated proposed rules relating to the OBBBA.

Third-Party Servicers. ED regulations permit an institution to enter into a written contract with a third-party servicer for the administration of any aspect of the institution’s participation in Title IV programs. Our institutions utilize third-party servicers for some services and in the future may consider using third-party servicers for other functions that are currently managed directly by our institutions. Third-party servicers must, among other obligations, comply with Title IV requirements and be jointly and severally liable with the institution to ED for any violation by the servicer of any Title IV provision. An institution must report to ED new contracts with or any significant modifications to contracts with third-party servicers and other matters related to third-party servicers. If any third-party servicer engaged by one of our institutions does not comply with applicable statutes and regulations, our institution may be liable for its actions, and our institution could lose its eligibility to participate in Title IV programs.

Title IV Return of Funds. When a student withdraws, an institution must return unearned Title IV program funds to ED in a timely manner. An institution must first determine the amount of funds that a student “earned” before withdrawal. If the student withdraws during the first 60% of any period of enrollment or payment period, the amount of Title IV program funds that the student earned is equal to a pro rata portion of the funds for which the student would otherwise be eligible. If the student withdraws after the 60% threshold, then the student has earned 100% of the Title IV program funds. The institution must return to the appropriate Title IV programs, in a specified order, the lesser of (i) the unearned Title IV program funds or (ii) the institutional charges incurred by the student for the period multiplied by the percentage of unearned Title IV program funds. An institution must return the funds no later than 45 days after the date of the institution’s determination that a student withdrew.

If 5% or more of such returns were not timely made, the institution may be required to submit a letter of credit in favor of ED equal to 25% of the amount of unearned Title IV funds the institution was required to return for its most recently completed fiscal year. If ED determines that one of our institutions has repeatedly failed to comply with ED regulations, it may

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take adverse action against the institution on the basis of the repeated finding or may find that the institution has failed to demonstrate administrative capability, as described above.

Substantial Misrepresentation. Under the HEA and its implementing regulations, ED may take action against an institution in the event of substantial misrepresentation by the institution concerning the nature of its educational programs, its financial charges, or the employability of its graduates. As part of the 2022 Borrower Defense Regulations, as defined below, ED modified the substantial misrepresentation rule to explicitly include certain “omissions of fact” as a basis for a misrepresentation claim or borrower defense to repayment, or BDTR, claim. If ED determines that an institution has engaged in substantial misrepresentation regarding the nature of its education program, its financial charges, or the employability of its graduates, ED may: (i) if the institution is provisionally certified, as some of our institutions currently are, revoke an institution’s program participation agreement or impose limitations on its participation in Title IV programs; (ii) deny participation applications made on behalf of the institution; or (iii) initiate a proceeding against the institution to fine the institution or to limit, suspend, or terminate the institution’s participation in Title IV programs.

The Clery Act. Our institutions must comply with certain campus safety and security reporting requirements as well as other requirements in the Jeanne Clery Disclosure of Campus Security Policy and Campus Crime Statistics Act, or the Clery Act. The Clery Act requires an institution, among other things, to report to ED and disclose in an annual security report, for the three most recent calendar years, statistics concerning the number of certain crimes that occurred on or within the institution’s “Clery geography,” which comprises an institution’s campus and non-campus buildings and property, public property on or adjacent to and accessible from the campus, and in some cases areas within the patrol jurisdiction of the campus police or security department, and to publish certain policies and procedures related to campus safety. A failure to comply with the Clery Act could result in our institutions being fined or having their eligibility to participate in Title IV programs limited, suspended, or terminated, could lead to litigation, or could harm our institutions’ reputation, each of which could, in turn, adversely affect our institutions’ enrollments and revenue and have a material effect on our business.

Borrower Defenses. Under the HEA, ED is authorized to specify in regulations which acts or omissions of an institution of higher education a borrower may assert as a BDTR of a loan under the Direct Loan Program, or a Direct Loan. ED may initiate a proceeding to collect from an institution the amount of relief resulting from a borrower defense claim. Prior to 2016, ED’s regulations permitted a borrower to assert a BDTR of a Direct Loan if the institution’s acts or omissions give rise to a cause of action against the institution under state law. In November 2016, ED published modifications to regulations that set forth, among other matters, the acts or omissions of an institution of higher education a student borrower or group of borrowers may assert as a defense to repayment of a Direct Loan, or the 2016 Borrower Defense Regulations. The 2016 Borrower Defense Regulations were in effect from July 1, 2017, until July 1, 2020. For Direct Loans first disbursed on or after July 1, 2017, the 2016 Borrower Defense Regulations created a new federal standard for BDTR of Direct Loans, new limitation periods for such claims, and new processes for resolution of such claims. In September 2019, ED published the 2019 Borrower Defense Regulations, which, among other things, modify the standard for BDTR of Direct Loans made on or after July 1, 2020, the limitation periods for such claims, and the processes for resolution of such claims. The 2016 Borrower Defense Regulations continue to apply to all Direct Loans made on or after July 1, 2017, and before July 1, 2020, with certain exceptions pursuant to the 2019 Borrower Defense Regulations. The 2019 Borrower Defense Regulations apply to all Direct Loans made on or after July 1, 2020, and before July 1, 2023.

In March 2021, ED announced a revised approach for determining relief for borrowers who successfully assert borrower relief claims. Under this approach, a borrower will receive full loan relief when evidence shows that the institution engaged in certain misconduct. This policy rescinded the prior administration’s formula that generally granted only partial loan relief for borrower defense claims. Under the 2016 Borrower Defense Regulations and the 2019 Borrower Defense Regulations, ED may initiate a separate proceeding to collect from an institution the amount of relief granted based on a BDTR claim.

On November 1, 2022, ED published final regulations with an effective date of July 1, 2023, to address BDTR, loan discharge, pre-dispute arbitration and class-action waivers, among other matters, or the 2022 Borrower Defense Regulations. The 2022 Borrower Defense Regulations created a single standard and streamlined process for relief that will: (i) apply to all future and pending BDTR claims as of July 1, 2023 instead of standards varying based on the date of the borrower’s first loan disbursement; (ii) allow students to assert borrower defenses related to Direct Consolidation Loans; (iii) define what kinds of misconduct could lead to borrower defense discharges (e.g., substantial misrepresentation, substantial omission of fact, breach of contract, aggressive and deceptive recruitment, and certain judgments or final ED actions); (iv) establish a reconsideration process for borrowers whose claims are not approved for a full discharge; (v) create a process for forming groups of borrowers and adjudicating claims based on the common facts of those group claims; and (vi) provide a clear timeline for adjudication of group and individual claims. The 2022 Borrower Defense Regulations indicate that ED will hold institutions accountable for the cost of discharges, including by establishing a recoupment process separate from the approval of BDTR claims and making a recoupment determination based on the standards in place at the time the loan was first disbursed. The OBBBA delays

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implementation of the 2022 Borrower Defense Regulations until July 1, 2035. Accordingly, BDTR regulations that were in effect on July 1, 2020, have been reinstated.

In December 2023, RU received from ED 338 BDTR claims, all of which had submission dates between June 23, 2022, and November 15, 2022, for students attending RU between 2000 and 2022, seeking in the aggregate a discharge of approximately $6.1 million in loans. In December 2023, HCN received from ED 77 BDTR claims, all of which had submission dates between June 23, 2022, and November 15, 2022, for students attending HCN between 2007 and 2022, seeking in the aggregate a discharge of approximately $1.4 million in loans. In September 2024, APUS received from ED 408 BDTR claims, all of which had submission dates between June 23, 2022, and November 15, 2022, for students attending APUS between 2006 and 2021, seeking in the aggregate a discharge of approximately $6.6 million in loans. In 2025, RU received from ED 54 additional BDTR claims, all of which had submission dates between August 5, 2025 and November 14, 2025, for students attending RU between 1989 and 2019, seeking in the aggregate a discharge of approximately $1.1 million in loans. As of March 11, 2026, APUS received from ED 98 BDTR claims, all of which had submission dates between November 17, 2022, and October 10, 2023, for students attending APUS between 2009 and 2020, seeking in the aggregate a discharge of approximately $1.8 million in loans. As of March 11, 2026, RU received from ED 83 additional BDTR claims, all of which had submission dates between November 2022 and October 2023, for students attending RU between 2007 and 2026, seeking in the aggregate a discharge of approximately $1.6 million in loans. As of March 11, 2026, HCN received from ED 11 BDTR claims, all of which had submission dates between January 7, 2023, and September 8, 2023, for students attending HCN between 2008 and 2020, seeking in the aggregate a discharge of approximately $0.2 million in loans. Each of APUS, RU, HCN disputes the validity of these claims and has filed responses to them with ED. We are unable to predict whether ED will grant BDTR relief for the claims, or if so, whether it will seek recoupment from APUS, RU, and/or HCN. Refer to the Risk Factor captioned “ED rules related to BDTR claims may create significant liability that could have an adverse effect on our business and results of operations” for additional information.

Closed School Loan Discharge. The 2019 Borrower Defense Regulations modified ED’s requirements with respect to the circumstances under which a borrower is eligible for a loan discharge if an institution or location closes. For example, the 2016 Borrower Defense Regulations previously provided for an automatic loan discharge under certain circumstances, but the 2019 Borrower Defense Regulations eliminated the automatic loan discharge for schools closing on or after July 1, 2020. Based on automatic loan discharge rules, RU was negatively affected in 2020 by two previous campus mergers, one in North Dakota in 2015, and one in Wisconsin in 2016. The result were liabilities of $168,630, which was reduced to $77,569 after reconsideration appeals were submitted by RU to ED. RU may also face closed school discharge liabilities as a result of the 2021 consolidation of two Florida campuses, the 2022 consolidation of two Minnesota campuses, the closure of one Wisconsin campus in 2025, and the planned closure of another Wisconsin campus in 2026. The 2022 Borrower Defense Regulations include closed school loan discharge provisions that will provide for automatic discharges to any borrower who was enrolled within 180 days prior to a school’s closure and who did not complete their education at the school or through an approved teach-out agreement at another school within one year after the closure of their original school. The regulations will shorten the previous period for automatic discharge, so borrowers do not default on their loans after a closure of their school. The OBBBA delays implementation of the closed school loan discharge provisions of the 2022 Borrower Defense Regulations until July 1, 2035. Accordingly, the closed school loan discharge provisions that were in effect on July 1, 2020, have been reinstated.

Dispute Resolution. The 2016 Borrower Defense Regulations, which apply to all Direct Loans made on or after July 1, 2017, and before July 1, 2020, prohibit requiring students to initially engage in an institutions’ internal complaint processes, prohibit pre-dispute arbitration agreements, and class action lawsuit waivers, and require notification to ED of arbitration filings and awards, for claims that may form the basis for a BDTR. The 2019 Borrower Defense Regulations, which apply to all Direct Loans made on or after July 1, 2020, and before July 1, 2023, generally remove these prohibitions but require institutions whose students must enter into pre-dispute arbitration agreements or class action waivers to disclose publicly those requirements, and prohibit requiring a student to participate in arbitration or any internal dispute resolution process prior to filing a BDTR application with ED. The 2022 Borrower Defense Regulations, prohibit institutions from requiring borrowers to sign mandatory pre-dispute arbitration agreements or class action waivers for claims related to the making of a Direct Loan or the provision of educational services for which the loan was obtained. The OBBBA delays implementation of the 2022 Borrower Defense Regulations until July 1, 2035. Accordingly, dispute resolution provisions under the BDTR regulations that were in effect on July 1, 2020, have been reinstated.

Other Department of Education and Privacy Regulation

Privacy of Student Personal Information and Records. The Family Educational Rights and Privacy Act of 1974, or FERPA, and ED’s regulations implementing FERPA require education institutions to protect the privacy of students’ education records by, among other things, limiting disclosure of a student’s personally identifiable information without prior written consent. If an institution fails to comply with FERPA, ED may require corrective actions or terminate eligibility to participate in

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Title IV programs. In addition, education institutions engaged in financial activities such as the granting of student loans are obligated to safeguard student information pursuant to the Gramm-Leach-Bliley Act, or GLBA, and implementing regulations, which among other things, requires reasonable security practices to protect personally identifiable financial information of students, parents, or other individuals in a customer relationship with the institution. Failure to comply with the applicable GLBA requirements may result in FTC enforcement, which could include the imposition of conditions, penalties, monitoring, and oversight. Institutions are also subject to the FTC’s general deceptive and unfair practices jurisdiction of Section 5 of the FTC Act for processing student information. FTC privacy and security enforcement focuses primarily on: (i) collecting, using, sharing, or retaining personal information inconsistent with representations, commitments, and promises in privacy policies and other public statements; (ii) privacy policies that do not adequately inform consumers about actual practices; and (iii) failing to reasonably protect the security, privacy, and confidentiality of personal information. Institutions must also comply with the FTC Red Flags Rule, a requirement designed to identify and mitigate identity theft, including for certain student accounts. States can also bring similar enforcement actions under so called “mini-FTC Acts” as well as other applicable privacy and security laws. For example, the California Consumer Privacy Act, or the CCPA, and implementing regulations impose disclosure and notice obligations on institutions and provide a broad array of consumer rights relating to California residents and their personal information, including among others, the right to access personal information, the right to opt out of sales of personal information, the right to correct or delete personal information, and the right to limit certain disclosures of personal information. The CCPA has the potential for significant civil penalties for failing to comply as well as a private right of action and statutory damages for data breaches that are the result of unreasonable security. Other comprehensive state privacy laws that our institutions may be subject to with varying requirements have come into effect in recent years and these requirements continue to evolve. Our collection of personal information relating to individuals in the European Union, or EU, or the United Kingdom, or UK, may implicate the EU’s or the UK’s General Data Protection Regulation, or GDPR. Non-compliance with the EU GDPR or UK GDPR could result in a fine for certain activities of up to €20 million or £17.5 million, respectively, or 4% of an organization’s global annual revenue, whichever is higher, per violation.

Accessibility for Students with Disabilities. Section 504 of the Rehabilitation Act of 1973, or Section 504, prohibits discrimination against a person with a disability by any organization that receives federal financial assistance, which includes us. ED’s Office for Civil Rights, or OCR, which enforces Section 504, together with the Department of Justice, have asserted that requiring the use of technology in a classroom environment when such technology is inaccessible to individuals with disabilities violates Section 504, unless those individuals are provided accommodations or modifications that permit them to receive all the educational benefits provided by the technology in an equally effective and integrated manner. In recent years, OCR has taken enforcement action against several institutions of higher education, including primarily online institutions, after determining that their websites and online learning management platforms were not accessible to persons with a disability. In 2022, OCR initiated a compliance review of APUS’s learning management system and courses. In August 2024, OCR identified APUS was out of compliance with certain accessibility requirements for people with disabilities for ten courses. Currently, APUS is cooperating with OCR on a resolution to bring APUS into compliance. At this time, we cannot predict when the compliance review will be completed, additional costs associated with compliance, whether there will be any further findings, or whether OCR will place any liability or other limitations on APUS as a result of the compliance review. An institution that does not come into compliance with Section 504 could lose access to federal funding, including the ability to participate in the Title IV programs and TA. See the Risk Factor captioned “Enforcement of laws related to the accessibility of technology continues to evolve, which could result in increased information technology development costs and compliance risks” for more information.

Title IX. Title IX of the Education Amendments of 1972, or Title IX, prohibits discrimination on the basis of sex in education programs that receive funding from the federal government. ED regulations effective August 2020, or the 2020 Rule, define what constitutes sexual harassment for purposes of Title IX in the administrative enforcement context, describe what actions trigger an institution’s obligation to respond to incidents of alleged sexual harassment, and specify how an institution must respond to allegations of sexual harassment. In April 2024, ED released new regulations that significantly revise how schools, including higher education institutions, must address cases involving sex-based discrimination, including cases of sexual harassment, sex-based harassment, and assault occurring on or after the August 1, 2024, effective date. The new regulations also explicitly include protections against discrimination based on sexual orientation, gender identity, and sex characteristics. In addition, the new regulations update protections against discrimination because of pregnancy, related conditions, or terminations of pregnancy. Multiple states challenged the new regulations, and federal district courts granted preliminary injunctions in 26 states: Alabama, Alaska, Arkansas, Florida, Georgia, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Mississippi, Missouri, Montana, Nebraska, North Dakota, Ohio, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, West Virginia, and Wyoming. In some instances, courts expanded the injunction to named schools, regardless of where the schools are located; APUS was named among nearly 700 such schools in a July 2024 list. Kansas v. United States Dep’t of Educ., No. 5:24-cv-4041 (D. Kan. 2024). Except where enjoined, the new regulations otherwise became effective on August 1, 2024. In January 2025, a federal district court granted summary judgment against ED, concluding that the new regulations were unlawful and permanently vacating the rule nationwide. Tennessee v. Cardona, No.

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2:24-cv-072 (E.D. Ky. 2025). In February 2025, OCR issued a Dear Colleague Letter confirming both that it will enforce Title IX under the 2020 Rule and that institutions with open investigations initiated under the new regulations should reevaluate such investigations for consistency with the 2020 Rule.

Distance Education. ED regulations provide institutions additional flexibility in offering distance education and competency-based education programs. Definitions in these regulations specify the instructional requirements that distance education programs must abide in order to remain eligible for Title IV disbursements. Failure to comply with these standards could lead to adverse actions by ED. In addition, in January 2025, ED published new regulations that define a “distance education course” and require institutions to report student enrollment in distance education in accordance with procedures that will be established by ED. The new regulations become effective July 1, 2026.

Department of Defense

Regulation of Tuition

Service members of the U.S. Armed Forces are eligible to receive TA from their branch of service through the DoD’s TA program. Service members may use TA to pursue postsecondary degrees at institutions that are accredited by accrediting agencies recognized by ED. APUS, RU, and HCN participate in TA programs. Active-duty military students in most undergraduate programs and master’s level graduate programs at APUS and RU receive per credit hour tuition pricing at a tuition rate that is commensurate with available TA funding to allow tuition charges to be 100% covered by TA.

Since March 2013, DoD has restricted the ability of service members who have not previously taken a postsecondary education course and who are in certain duty locations outside the continental United States, or overseas locations, to receive TA for courses offered by institutions of higher education that are not parties to contracts with the DoD to provide DoD voluntary education programs at those locations. Because we do not have contracts with the DoD to provide instruction at overseas locations, service members who begin their first postsecondary education program after arrival at an applicable overseas location may not use TA to pay for their education in our programs until after they have already successfully completed a course with an institution that has entered into a contract to provide voluntary education programs at that overseas location. Service members who were already enrolled in one of our programs before arriving at an overseas location may continue to receive TA for the in-progress program, but they will be encouraged to enroll in courses provided by institutions that provide programs at the applicable overseas location.

DoD requires educational institutions to meet certain criteria, including generally having at least 20 students on base, and to request access in writing that outlines among other things the specific purpose of the visit, in order to access installations solely to provide counseling, and generally prohibits education institutions from holding regular or recurring office hours on installations solely to provide counseling. This limits APUS’s ability to support existing students and serve new students. If APUS is not able to improve its access to military installations and its existing students on those installations, or find alternative methods to serve those students, its military enrollments may decline.

Each institution participating in TA is required to sign a Memorandum of Understanding, or MOU, outlining certain commitments and agreements between the institution and DoD prior to being permitted to participate in TA. Pursuant to the DoD MOUs, among other requirements, institutions must: (i) explain certain tools to service members, such as ED’s “College Navigator” website and the “Paying for College” website of the CFPB; (ii) comply with requirements related to readmission policies for service members; (iii) abide by limitations on the use of funds derived from TA; (iv) provide certain academic and student support services; (v) disclose information about transfer of credit; (vi) in certain circumstances, return TA funds to DoD (such as when a student ceases to attend or an institution cancels a course); (vii) offer to service members loan counseling before private student loans are offered or recommended; and (ix comply with ED’s Title IV “program integrity” rules, including rules related to incentive payments and misrepresentation. The DoD MOU also provides that an institution may only participate in TA if it is accredited by an accrediting agency recognized by ED, approved for VA funding, and a participant in Title IV programs. In February 2025, the DoD Voluntary Education Institutional Compliance Program, or ICP, notified APUS that it will conduct a review of APUS’s compliance with the DoD MOU. ICP completed its review in May 2025 and issued a report with no findings of noncompliance. Additional information regarding the potential risks associated with the DoD MOUs is provided in the “Risk Factors” section of this Annual Report.

Several federal government agencies have established an online student complaint system for service members, veterans, and their families to report negative experiences at education institutions and training programs administering the Post-9/11 GI Bill, TA, and other military-related education benefit programs. An institution having recurring substantive complaints, or demonstrating an unwillingness to resolve complaints, may face a range of penalties, including revocation of its MOU and removal from participation in TA.

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Department of Defense Funding

A series of automatic federal budget cuts, known as sequestration, have impacted certain federal student aid programs since fiscal year 2013 and have been extended through fiscal year 2030. As a result of uncertainty about the availability of funding, several military branches initially suspended and later announced changes to their TA programs. For example, the Army now requires service members to complete one year of service after graduation from Advanced Individual Training in order to be eligible for TA, and the Army and the Coast Guard have both reduced the total per service member annual benefits The OBBBA appropriated $100 million for TA in federal fiscal year 2025, beginning on October 1, 2025, that is available until September 30, 2029 if not earlier exhausted. The $100 million was a one-time allocation across the military branches based on their active-duty population numbers. We understand that a significant portion of this allocation may have been obligated or spent.

Congressional inaction on budgetary matters has led to lapses in federal funding, resulting in government shutdowns, including the government shutdown that began on October 1, 2025, and ended on November 12, 2025, or the 2025 Shutdown, and subsequent policy changes that have affected TA programs at DoD. A future government shutdown, particularly one that includes DoD, or suspension or resulting modification of TA programs, including in connection with the failure to increase or a delay in increasing the federal debt ceiling, could have a material adverse effect on APUS’s enrollments and on our cash flows, results of operations, and financial condition. For additional details, see the Risk Factor captioned “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” and the “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Overview – U.S. Federal Government Shutdown” section.

Funding shortfalls have also affected DoD TA programs. For example, as a result of the expected exhaustion of annual TA benefits available to sailors, in May 2019, the Navy ceased approving TA funds for eligible sailors until the start of the government’s fiscal year 2020 on October 1, 2019. Currently, Navy service members must have a minimum of three years of service before becoming eligible to use TA and cannot use TA in their last year of service. Additionally, for TA and the Navy College Program for Afloat College Education, funding is capped at 18 semester hours per fiscal year combined, and career funding is capped at 120 semester hours combined. In addition, eligible sailors can only use TA to fund two courses each quarter of the fiscal year, and reservists on one-year orders are ineligible for TA.

On December 11, 2024, the U.S. Department of the Army announced increases to the annual cap on the dollar amount of tuition assistance benefits and to the hours cap for each semester. Other service branches have since followed suit and increased the annual cap on the amount of tuition assistance benefits.

We expect each military branch and the DoD to continually evaluate their approach to education funding, and the resulting changes could have an impact on the funds available to service members to pursue their education at our institutions.

Department of Veterans Affairs

The VA administers education benefits provided by federal law, including the Montgomery GI Bill, or GI Bill, and the Post-9/11 GI Bill. APUS, RU, and HCN are approved to provide education to veterans and members of the selective reserve and their dependents by the state approving agencies where RU and HCN campuses are located for RU and HCN, and in West Virginia for APUS. In order for an institution to participate in VA education benefits, it must be a participant in the Title IV programs.

For the 2025-2026 academic year, an eligible veteran who attends a non-public U.S. institution may receive veterans education benefits to pay for tuition and fees based on the net cost to the veteran up to $29,920. Veterans pursuing a program of education on a more than half-time basis at an on-campus location are eligible for a monthly housing allowance equal to the basic allowance for housing available to service members in that location who are at a military pay grade E-5 and have dependents. Veterans pursuing a program of education solely through distance education on a more than half-time basis are eligible to receive a monthly housing allowance equal to 50% of the national average, or $1,169.00 per month.

To the extent that TA does not cover the full cost of tuition for service members, eligible service members may also use their benefits under the GI Bill or the Post-9/11 GI Bill through the “Top-Up” program. The “Top-Up” program allows U.S. Military active-duty service members to use their GI Bill or Post-9/11 GI Bill benefits to pay the difference between the total cost of a college course and the amount of TA that is paid by the military for the course but is limited to 36 months of payments.

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The Johnny Isakson and David P. Roe, M.D. Veterans Health Care and Benefits Improvement Act of 2020, or the Isakson Roe Act, modified policies related to GI Bill and other VA-administered education funds, in part to align VA requirements with DoD and ED requirements related to student financial aid. Section 1018 of the Isakson Roe Act mandates that schools that receive veterans education benefits: (i) provide VA students with information on total cost of an education program, an estimate of debt the student will have upon graduation, graduation rates, requirements to obtain any license, certification, or approval for which the course of education is designed to provide preparation, and certain other information; (ii) inform VA students of the availability and potential eligibility of federal financial aid before packaging or arranging private student loans or alternative financing programs; (iii) avoid fraudulent and unduly aggressive recruiting or automatic renewal techniques; (iv) avoid misrepresentations or payment of incentive compensation on the basis of securing enrollments; (v) provide VA students with information regarding graduation requirements; (vii) obtain required approvals from the institutions’ accrediting agency for new courses or programs; (viii) maintain a policy to accommodate service members and reservists to be readmitted if they are temporarily unable to attend due to service requirements; and (ix) appoint a point of contact to provide academic and financial aid advising.

The Responsible Education Mitigating Options and Technical Extensions Act, among other things, clarified that the Isakson Roe Act Section 1018 prohibition on incentive compensation does not apply to foreign students residing outside the United States who are ineligible for federal student financial aid.

The Training in High-Demand Roles to Improve Veteran Employment Act, or the THRIVE Act, amended provisions related to veterans’ education programs found in ARPA and the Isakson Roe Act. The THRIVE Act requires the VA to work with the Department of Labor to determine the list of high-demand occupations for rapid retraining assistance, excludes programs pursued solely through distance learning on a half-time basis or less from the housing stipend available to those in the retraining program, and requires the Government Accountability Office to report on the outcomes and effectiveness of retraining programs. The legislation also requires the VA to take disciplinary action if a person with whom an institution has an agreement to provide educational or recruiting services violates the VA’s incentive compensation prohibitions.

The Ensuring the Best Schools for Veterans Act of 2022 modified how the VA implements the rule generally forbidding use of VA benefits for students enrolling in a program in which more than 85% of students enrolled in the program have any portion of their tuition, fees, or other charges paid to or for them by the institution or by the VA, or the 85/15 Requirement. Among other things, the law clarifies that reporting associated with the 85/15 Requirement generally does not apply to institutions at which 35% or fewer students receive GI bill benefits, computed separately for the main campus and any branch or extension of the institution. The law also exempts programs for which fewer than 10 students have any portion of their tuition, fees, or other charges paid to or for them by the institution or by the VA. An institution that meets the requirements for an exemption must submit verifying information to the VA on a biennial basis.

Additional Sources of Student Payments

In addition to the Title IV, DoD, and VA programs described above, eligible students may participate in other financial aid programs or receive support from other governmental and private sources. Some of our students finance their own education or receive full or partial employer tuition reimbursement. Our institutions enter into agreements with various employers through which our institutions agree to a variety of terms, including terms related to the provision of tuition grants to eligible employees. Our institutions may offer interest free payment plans of less than 12 months to students to assist them with the financing of educational expenses. In certain circumstances, our students may access alternative loan programs from a number of private lenders, which are intended to cover the difference between what the student receives from all financial aid sources and the student’s total cost of attendance. As a condition to an institution’s participation in the Title IV programs, the institution must adopt a code of conduct pertaining to student loans, including alternative loans.

HCN offers its students extended payment plan options. The extended payment plan is designed to assist students with educational costs including tuition and fees. The extended payment plan is subject to various federal and state laws and regulations, such as the Truth in Lending Act as implemented in Regulation Z, the Equal Credit Opportunity Act as implemented in Regulation B and the Unfair, Deceptive or Abusive Acts or Practices provisions of Title X of the Dodd-Frank Act.

Consumer Protection

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Consumer Financial Protection Bureau

The CFPB has pursued enforcement actions against certain for-profit institutions of higher education and has released several reports that directly address issues related to institutions of higher education. In January 2026, the CFPB Education Loan Ombudsman released its annual report, which analyzed 4,500 private student loan complaints and 18,400 federal student loan complaints received during the 2024-2025 award year. The CFPB indicated that the majority of complaints involved problems consumers had dealing with their loan servicer. We do not know what enforcement actions the CFPB may pursue, or what steps Congress or federal agencies may take, in response to these reports and whether such actions, if any, will have an adverse effect on our business or results of operations.

Other Issues Related to Consumer Protection and Complaints

Many states have become more active in regulating for-profit education from a consumer protection perspective, specifically related to enforcement of consumer protection laws and implementation of new regulations by state attorneys general. Actions by state attorneys general and other governmental agencies, whether or not involving us or our institutions, could damage our reputation and the reputation of our institutions and limit the ability to recruit and enroll students, which could reduce student demand for our institutions’ programs and adversely impact our revenue and cash flow from operations.

Our institutions are recipients of complaints filed with state regulatory authorities, the Better Business Bureau, and posted in online forums. Our institutions attempt to resolve such complaints in a cooperative manner. However, even if such complaints are resolved or are otherwise unfounded, they may still harm the reputation of our institutions.

In October 2021, ED announced that it had restored an Office of Enforcement within ED’s Office of Federal Student Aid to strengthen oversight of and enforcement actions against postsecondary institutions that participate in federal student loan, grant, and work-study programs. In September 2024, the Office of Enforcement issued a Federal Student Aid Enforcement Bulletin describing conduct that creates a risk of engaging in substantial misrepresentations, which may prompt administrative action by ED against an institution.

Compliance with Regulatory Standards and the Effect of Regulatory Violations

Compliance Reviews

Our institutions and certain of our third-party service providers may be subject to compliance reviews, inspections, audits, and investigations, by various external agencies, including ED, ED OIG, state licensing agencies, DoD, VA, and accrediting agencies. For example, in February 2026, ED OIG notified RU that it would conduct an inspection related to RU’s process related to addressing students with unusual enrollment history flags for the 2024-2025 award year. The HEA and ED regulations also require institutions to submit annually a compliance audit conducted by an independent certified public accountant in accordance with Government Auditing Standards and applicable ED OIG audit standards. In addition, to enable ED to make a determination of financial responsibility, institutions must annually submit audited financial statements prepared in accordance with ED regulations.

In July 2023, ED began a program review of APUS’s administration of Title IV programs during the 2021-2022 and 2022-2023 award years, which includes, among other things, a review of compliance with the 90/10 Rule. APUS has not yet received a program review report from ED. Accordingly, at this time, we cannot predict the outcome of the APUS program 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.

In order to participate in TA, institutions must agree to participate in DoD’s Voluntary Education Institutional Compliance Program, or ICP. An institution that, through the ICP, is found noncompliant with DoD requirements and demonstrates an unwillingness to resolve a finding may be subject to a range of penalties from a written warning to termination of the institution’s participation in TA. APUS and RU have previously been subject to ICP reviews. For example, in February 2025, ICP notified APUS that it will conduct a review of APUS’s compliance with the DoD MOU. ICP completed its review in May 2025 and issued a report with no findings of noncompliance.

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Potential Effect of Regulatory Violations

If our institutions fail to comply with the regulatory standards governing Title IV programs, ED could impose one or more sanctions, including transferring our institutions to the reimbursement or cash monitoring system of payment, seeking to require repayment of certain Title IV program funds, requiring the posting of an irrevocable letter of credit in favor of ED as a condition for continued Title IV certification, taking emergency action against our institutions, referring the matter for criminal prosecution, or initiating proceedings to impose a fine or to limit, condition, suspend, or terminate participation in Title IV programs. If our institution’s approval to participate in Title IV programs is terminated, it will also lose its ability to participate in TA pursuant to its DoD MOU, as well as in education benefits administered by the VA.

If such sanctions or proceedings were imposed against our institutions and resulted in a substantial curtailment, or termination, of participation in Title IV programs, this would materially and adversely affect our enrollments, revenue, results of operations, and financial condition.

If one of our institutions were to lose its eligibility to participate in Title IV programs, or if the amount of available Title IV program funds were reduced, we could seek to arrange or provide alternative sources of revenue or financial aid for students. Although we believe that one or more private organizations would be willing to provide financial assistance to students attending our institutions, there is no assurance that this would be the case, and the interest rate and other terms of such financial aid might not be as favorable as those for Title IV program funds. We may be required to guarantee all or part of such alternative assistance or might incur other additional costs in connection with securing alternative sources of financial aid. Accordingly, the loss of our eligibility to participate in Title IV programs, or a reduction in the amount of available federal student financial aid, would be expected to have a material adverse effect on our financial condition and results of operations even if we could arrange or provide alternative sources of revenue or student financial aid.

In addition to the actions that may be brought against us as a result of our institutions’ participation in Title IV programs, we also may be subject, from time to time, to complaints and lawsuits relating to regulatory compliance brought not only by our regulatory agencies, but also by other government agencies and third parties, such as present or former students or employees and other members of the public.

Regulatory Actions and Restrictions on Operations

Many actions that we may wish to take in connection with our operations are subject to regulation from a variety of agencies. For example, ED’s regulations, state regulatory requirements, and accrediting agency standards may, in certain instances, limit our ability to acquire or sell institutions, and to establish additional locations and programs. Similarly, many states require approval before institutions can add new programs, campuses, or teaching locations. Generally, these agencies require institutions to notify them and sometimes require institutions to obtain their approval, in advance of opening a new location or implementing new programs. As described in “Student Financing Sources and Related Regulations/Requirements – Department of Education – Regulation of Title IV Financial Aid Programs – Eligibility and Certification Procedures”, RU was subject to certain limitations on new programs and locations and is currently subject to a cap on the number of students that participate in Title IV programs that can be enrolled.

Change in Ownership Resulting in a Change of Control

ED’s regulations, state regulatory requirements, and accreditation standards may limit our ability to acquire, merge, or sell institutions, and may impose restrictions on activities following a transaction. For example, ED must approve any change in ownership resulting in a change of control of APEI, our institutions or any institution we may acquire. These restrictions may impede our ability to grow by acquisition, or to dispose of assets. Moreover, as a publicly traded company, the potential adverse regulatory effects of a change of control could influence future decisions by us and our stockholders regarding the sale, purchase, transfer, issuance, or redemption of our common stock. In addition, the regulatory burdens and risks associated with a change of control could discourage bids for our shares of common stock and could have an adverse effect on the market price of our shares.

For example, the Rasmussen Acquisition was required to be reported to, and in some cases approved by, various education regulatory bodies. RU also pursued post-closing notices and consents related to the change in ownership. State agencies, accreditors, boards of nursing, and other relevant regulators also required further action with respect to the Rasmussen Acquisition. Additionally, some regulators required approval after the change in ownership in order to continue proper licensure, accreditation, approval, or authorization.

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Department of Education

An institution that undergoes a change in ownership resulting in a change of control loses its eligibility to participate in Title IV programs and must apply to ED in order to reestablish such eligibility. ED regulations define what constitutes a change in ownership and control of various types of legal entities. For example, ED regulations provide that a change of control of a publicly traded company occurs in one of two ways: (i) there is an event that would obligate the corporation to file a Current Report on Form 8-K with the Securities and Exchange Commission disclosing a change of control; or (ii) the corporation has a stockholder that owns at least 25% of the total outstanding voting stock of the corporation and is the largest stockholder of the corporation, and that stockholder ceases to own at least 25% of such stock, or ceases to be the largest stockholder. As a result, a significant purchase or disposition of our voting stock, including an acquisition resulting in a stockholder owning at least 25% of our outstanding stock, could be determined by ED to be a change in ownership and control. For entities that are not closely held or publicly traded corporations, including limited liability companies, limited liability partnerships, limited partnerships, and similar types of legal entities, the ownership interest threshold is 50% for a change in ownership that results in a change in control automatically triggering ED’s approval process. ED’s approval process may apply when a change in control occurs despite not meeting the 50% threshold. Institutions must notify ED and students of a planned change in ownership that results in a change in control at least 90 days in advance. In addition, institutions are subject to certain reporting obligations for changes in ownership that do not result in a change in control, including 5% ownership interests for all entity types. ED’s regulations also require additional financial protection (i.e., letters of credit) when a new owner is lacking financial statements or as ED determines necessary.

The HEA provides that after an institution undergoes a change in ownership and control ED may temporarily provisionally certify the institution based on a materially complete application received within 10 business days after the change occurred. ED may continue such temporary provisional certification on a month-to-month basis until it has rendered a final decision on the institution’s application, provided the institution has timely supplied all required information and documentation. If ED approves the application, it issues a provisional certification, which extends for a period expiring not later than the end of the third complete award year following the date of provisional certification.

When a change in ownership and control occurs, ED applies certain financial tests to determine the financial responsibility of the institution under the new ownership. The institution generally is required to submit a same-day audited balance sheet reflecting the financial condition of the institution immediately following the change in ownership and control, and the same-day balance sheet must satisfy certain requirements. In addition, when a change in ownership and control occurs and there is a new owner, the institution must submit to ED the new owner’s audited financial statements for its two most recently completed fiscal years. If those audits do not satisfy ED requirements, ED may impose conditions on continued Title IV participation, such as a letter of credit, certain growth restrictions, including with respect to adding locations and programs, and additional monitoring requirements. ED’s financial responsibility standards are described more fully above in “Student Financing Sources and Related Regulations/Requirements – Department of Education – Regulation of Title IV Financial Aid Programs – Financial Responsibility”.

State Regulatory Agencies

Many states require institutions of higher education to report or obtain approval of certain changes in ownership or other aspects of institutional status. The types of and triggers for such reporting or approval vary, but many states include the sale of a controlling interest of common stock in the definition of a change of control requiring approval. A change of control may require us to obtain approval of the change in ownership and control in order to maintain our state approval. In certain circumstances, state approving agencies responsible for oversight of veterans education benefits also may require an institution to obtain approval for a change in ownership and control.

Accreditors

Many accrediting agencies, including HLC, require institutions of higher education to report or obtain approval for certain changes in legal status, ownership, form of control, or other aspects of institutional status, but the types of and triggers for such reporting or approval vary. Many accrediting agencies also require on-site evaluations to confirm the appropriateness of any approval. Some accrediting agencies’ oversight may also extend to defined changes that occur in an institution’s parent or controlling entity, and not necessarily the institution itself. Such oversight could trigger additional reviews of the institution and possible change in accreditation status.

Should we attempt to enter into transactions with institutions accredited by other accreditors, we would be required to follow the requirements of such accreditors. Our management may not have experience with the accreditors of the target

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institution, which would increase the risks related to such a transaction and management of the institution subsequent to the transaction.

Restrictions on Adding Locations and Educational Programs

ED may, as a condition of participation in Title IV programs, require prior approval of new locations, programs, or otherwise restrict the number of programs an institution may add. ED’s regulations require institutions to report and, in certain cases (such as when an institution is provisionally certified such as APUS and RU), to seek approval for a new additional campus location at which at least 50% of a program will be offered if the institution wants to disburse Title IV program funds to students enrolled at that location. Institutions are responsible for knowing whether they need approval, and institutions that add locations and programs and disburse Title IV program funds in connection with those locations and programs without having obtained any necessary approval may be subject to administrative repayments and other sanctions.

The HEA requires for-profit institutions to be in full operation for two years before qualifying to participate in Title IV programs. However, ED regulations in many circumstances permit an institution that is already qualified to participate in Title IV programs to establish additional campus locations that are exempt from the two-year rule. The new campus location must satisfy all other applicable requirements for institutional eligibility, including approval by the relevant state authorizing agency and the institution’s accrediting agency.

Provisionally certified institutions of higher education, such as APUS and RU, must seek prior approval from ED to offer new academic programs eligible for Title IV program funds and to open new locations at which Title IV program funds will be disbursed. A fully certified degree-granting institution generally is not obligated to obtain ED’s prior approval for a new location, an additional program leading to a degree at the same level previously approved by ED, or a new program that both prepares students for gainful employment in the same or related recognized occupation as an education program that has previously been designated as an eligible program at that institution and meets certain minimum-length requirements. However, ED could nevertheless require a fully certified institution to obtain prior approval for new programs and locations for purposes of Title IV program participation.

Other Recent Legislative and Regulatory Activity

Many of our students rely on federally funded programs, including Title IV programs, TA and education benefits administered by the VA that may be affected by changes in the federal budget. Due to the substantial amount of federal funds disbursed to schools through Title IV programs, TA, and education benefits administered by the VA, the large number of students and institutions participating in these programs, and significant political interest in the cost of education, Congress continues to show interest in regulation and oversight of institutions of higher education, especially those that are for-profit.

In addition, ED withdrew or terminated pending rulemakings pertinent to postsecondary education shortly before the change in the Presidential administration. President Trump and members of his administration have also stated that the administration intends to dismantle ED, limiting its functions to only those that are statutorily required or transferring oversight of certain functions to other agencies. For more information, see the Risk Factor captioned “The postsecondary education regulatory environment has changed and may change in the future as a result of United States federal elections”.

The One Big Beautiful Bill Act

On July 4, 2025, the OBBBA was signed into law. Among other things, the OBBBA amends portions of the Higher Education Act of 1965, as amended, makes changes to the Title IV programs, and restores certain ED regulations related to borrower defense to repayment and closed school discharge.

The OBBBA will overhaul the structure of certain student loan programs. Effective July 1, 2026, it will eliminate Federal Direct PLUS loans for graduate and professional students, with limited grandfathering. The law also: (i) fixes annual and aggregate loan limits for graduate students, with different caps depending on whether they are or have been professional students; (ii) creates a lifetime maximum aggregate amount for Title IV loans (other than a loan made to the student as a parent on behalf of a dependent); (iii) authorizes institutions to limit the amount of loans a student may borrow in an academic year provided such limit is applied consistently to all students enrolled in a program; and (iv) requires the amount of loan funds available under a student’s annual loan eligibility to be reduced proportionately to the degree to which that student is not enrolled on a full-time basis. On September 29, 2025, ED established the Reimagining and Improving Student Education Committee, or RISE Committee, and initiated the negotiated rulemaking process for the OBBBA student loan provisions. On November 6, 2025, the RISE Committee reached consensus with ED on proposed changes regarding a new income-driven

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repayment plan, the Repayment Assistance Plan, including the treatment of income for borrowers filing taxes jointly and the minimum monthly loan payment amount, and the definition of “professional student”, among other things.

The OBBBA also establishes an accountability framework, effective July 1, 2026, that institutions must satisfy at the program level in order for students in the program to continue to receive Direct Loans. On December 8, 2025, ED convened AHEAD and initiated the negotiated rulemaking process for the OBBBA accountability framework. On January 9, 2026, AHEAD reached consensus on proposed modifications to GE regulations. Additional information regarding the proposed modifications is available above under “Student Financing Sources and Related Regulations/Requirements – Department of Education – Regulation of Title IV Financial Aid Programs – Gainful Employment Regulations”. On January 30, 2026, ED published a notice of proposed rulemaking that incorporated the consensus language, and accepted public comments to the notice of proposed rulemaking until March 2, 2026.

The OBBBA creates Workforce Pell Grants, effective July 1, 2026, for students enrolled in eligible workforce programs that satisfy certain requirements and limits eligibility for Pell Grants in certain ways.

The OBBBA also changes existing U.S. tax laws, including extending or making permanent certain provisions of the Tax Cuts and Jobs Act, repealing certain clean energy initiatives, in addition to other changes. The OBBBA did not have a material impact on our annual effective tax rate in 2025.

The OBBBA also appropriated the OBBBA TA Funds, consisting of $100 million in funding for TA that is separate and apart from ordinary course appropriations and are available for use through September 30, 2029. We understand that a significant portion of this allocation may have been obligated or spent.

Finally, the OBBBA delays implementation of the Biden Administration’s BDTR regulations and closed school loan discharge regulations until July 1, 2035. Accordingly, BDTR and closed school loan discharge provisions of the 2019 Borrower Defense Regulations, as defined above, have been reinstated. For details the 2019 Borrower Defense Regulations generally, see “Student Financing Sources and Related Regulations/Requirements – Regulation of Title IV Financial Aid Programs – Borrower Defenses” and “– Closed School Loan Discharge” above.