STRA Strategic Education Dashboard

Risks

• If Strayer University and Capella University fail to comply with the extensive legal and regulatory requirements for higher education institutions, they could face significant monetary or other liabilities and penalties, including loss of access to federal student loans and grants for their students.
• Congressional examination of for-profit post-secondary education could lead to legislation or other governmental action that may negatively affect the industry.
• We are dependent on the renewal and maintenance of Title IV programs.
• Strayer University and Capella University are subject to compliance reviews, which, if they resulted in a material finding of noncompliance, could affect their ability to participate in Title IV programs.
• If either Strayer University or Capella University fails to maintain its institutional accreditation or if its institutional accrediting body loses recognition by the Department of Education, the University would lose its ability to participate in Title IV programs.
• If either Strayer University or Capella University fails to maintain any of its state authorizations, the University would lose its ability to operate in that state and to participate in Title IV programs there.
• If either Strayer University or Capella University fails to obtain recertification by the Department of Education when required, that University would lose its ability to participate in Title IV programs.
• A failure to demonstrate financial responsibility or administrative capability may result in the loss of eligibility to participate in Title IV programs.
• Student loan defaults in the U.S. could result in the loss of eligibility to participate in Title IV programs.
• Strayer University or Capella University could lose its eligibility to participate in federal student financial aid programs or be provisionally certified with respect to such participation if the percentage of its revenues derived from those programs were too high, or could be restricted from enrolling students in certain states if the percentage of the University’s revenues from federal or state programs were too high.
• The failure by Strayer University or Capella University to comply with the Department of Education’s incentive compensation rules could result in sanctions and other liability.
• The failure by Strayer University or Capella University to comply with the Department of Education’s misrepresentation rules could result in sanctions and other liability.
• The failure by Strayer University or Capella University to comply with the Department of Education’s credit hour or direct assessment rules could result in sanctions and other liability.
• The failure by Strayer University or Capella University to comply with the Clery Act or Title IX could result in sanctions and other liability.
• Strayer University and Capella University are subject to sanctions if they fail to calculate accurately and make timely payment of refunds of Title IV program funds for students who withdraw before completing their educational program.
• Investigations, legislative and regulatory developments, and general credit market conditions related to the student loan industry may result in fewer lenders and loan products and increased regulatory burdens and costs in the U.S.
• We rely on one or more third parties for software and services necessary to administer Strayer University's and Capella University's participation in Title IV programs and failure of such a third party to provide compliant software and services, or by us in our use of the software, could cause Strayer University or Capella University to lose eligibility to participate in Title IV programs.
• Our business could be harmed if Strayer University or Capella University experience a disruption in their ability to process student loans under the Federal Direct Loan Program.
• Our business could be harmed if Congress makes changes to the availability of Title IV funds.
• As enforcement of laws related to the accessibility of technology continues to evolve in the U.S., information technology development costs and compliance risks could increase.
• Our enrollment rate is uncertain, and we may not be able to assess our future enrollments effectively.
• Adding new locations, programs, and services is dependent on our forecast of the demand for those locations, programs, and services and on regulatory approvals.
• Our future success depends in part upon our ability to recruit and retain key personnel.
• Our success depends in part on our ability to update and expand the content of existing academic programs and develop new programs in a cost-effective manner and on a timely basis.
• Congressional and other governmental activities in the U.S. could damage the reputation of Strayer University or Capella University and limit our ability to attract and retain students.
• We face strong competition in the post-secondary education market.
• The Company relies on exclusive proprietary rights and intellectual property, and competitors may attempt to duplicate our programs and methods.
• Seasonal and other fluctuations in our operating results could adversely affect the trading price of our common stock.
• Regulatory requirements in the U.S. may make it more difficult to acquire us.
• Capacity constraints or system disruptions to a University’s computer networks could damage the reputation of the institutions and limit our ability to attract and retain students.
• The Company’s computer networks may be vulnerable to security risks that could disrupt operations and require them to expend significant resources.
• The Company has operations in the U.S., Australia, and New Zealand, and is subject to complex business, economic, legal, political, and foreign currency risks, which risks may be difficult to address adequately.
• The personal information that the Company collects may be vulnerable to breach, theft, or loss that could adversely affect our reputation and operations and is subject to privacy and data security laws which may impact operational efficiency
• Failure to maintain adequate processes to prevent and detect fraudulent activity related to student online enrollment or financial aid could adversely affect the Universities’ operations.
• Strayer University and Capella University, with their online programs, operate in a highly competitive market with rapid technological changes, and they may not compete successfully.
• Integrating SEI and Capella Education Company (“CEC”), and the recently acquired Torrens University and related assets in Australia and New Zealand (“ANZ”) may be more difficult, costly or time consuming than expected, and the combined company may not realize all of the anticipated benefits of the merger and acquisition.
• The goodwill and indefinite-lived intangible assets recorded in connection with the Merger and the acquisition of ANZ could become impaired in the future.
• The current COVID-19 pandemic and other possible future public health emergencies may adversely affect our business, our future results of operations, and our overall financial performance.
• COVID-19 related regulatory and legislative changes may contain ambiguous provisions that could result in penalties in case of institutional noncompliance.