Washington Post 2004 Annual Report Download - page 28

offered in a traditional classroom format at the school's Davenport, Iowa campus. At year-end 2004, Kaplan University
had approximately 19,000 students enrolled in online programs. Concord University School of Law, the nation's first online
law school, offers Juris Doctor and Executive Juris Doctor degrees wholly online (the Executive Juris Doctor degree
program is designed for individuals who do not intend to practice law). At year-end 2004, approximately 1,600 students
were enrolled at Concord. Concord is accredited by the Accrediting Commission of the Distance Education and Training
Council and has received operating approval from the California Bureau of Private Post-Secondary and Vocational
Education. Concord also has complied with the registration requirements of the State Bar of California; graduates are,
therefore, able to apply for admission to the California Bar. The College for Professional Studies, which had approximately
1,000 students enrolled at year-end 2004, offers bachelor and associate degree and diploma correspondence
programs in the fields of legal nurse consulting, paralegal studies and criminal justice; however, that school is no longer
enrolling students and will discontinue operations after its current students complete their programs.
Dublin Business School (""DBS'') is an undergraduate and graduate institution located in Dublin, Ireland, with satellite
locations in London; Dubai, United Arab Emirates; and Kuala Lumpur, Malaysia. DBS offers various undergraduate and
graduate degree programs in business and the liberal arts. At year-end 2004, DBS was providing courses to
approximately 4,000 students.
One of the ways a foreign national wishing to enter the United States to study may do so is to obtain an F-1 student visa.
For many years, most of Kaplan's Test Preparation and Admissions Division centers in the United States have been
authorized by what is now the U.S. Citizenship and Immigration Services (the ""USCIS'') to issue certificates of eligibility to
prospective students to assist them in applying for F-1 visas through a U.S. Embassy or Consulate. Under a program that
became effective early in 2003, educational institutions are required to report electronically to the USCIS specified
enrollment, departure and other information about the F-1 students to whom they have issued certificates of eligibility. By
year-end 2004, 137 of Kaplan's U.S. Test Preparation and Admissions Division centers had been certified to participate in
this program. Once certified, a center must apply for recertification every two years. During 2004 students holding F-1
visas accounted for approximately 2.1% of the enrollment at Kaplan's Test Preparation and Admissions Division and an
insignificant number of students at Kaplan's Higher Education Division.
Title IV Federal Student Financial Aid Programs
Funds provided under the student financial aid programs that have been created under Title IV of the Higher Education Act
of 1965, as amended, historically have been responsible for a majority of the net revenues of the schools in Kaplan's
Higher Education Division accounting, for example, for approximately $430 million of the revenues of such schools for the
Company's 2004 fiscal year. The significant role of Title IV funding in the operations of these schools is expected to
continue.
To maintain Title IV eligibility a school must comply with extensive statutory and regulatory requirements relating to its
financial aid management, educational programs, financial strength, recruiting practices and various other matters. Among
other things, the school must be authorized to offer its educational programs by the appropriate governmental body in the
state or states in which it is located, be accredited by an accrediting agency recognized by the U.S. Department of
Education (the ""Department of Education''), and enter into a program participation agreement with the Department of
Education.
A school may lose its eligibility to participate in Title IV programs if student defaults on the repayment of Title IV loans
exceed specified default rates (referred to as ""cohort default rates''). A school whose cohort default rate exceeds 40%
for any single year may have its eligibility to participate in Title IV programs limited, suspended or terminated at the
discretion of the Department of Education. A school whose cohort default rate equals or exceeds 25% for three
consecutive years will automatically lose its Title IV eligibility for at least two years unless the school can demonstrate
exceptional circumstances justifying its continued eligibility. Pursuant to another program requirement, any for-profit
postsecondary institution (a category that includes all of the schools in Kaplan's Higher Education Division) will lose its
Title IV eligibility for at least one year if more than 90% of that institution's receipts for any fiscal year are derived from
Title IV programs.
The Title IV program regulations also provide that not more than 50% of an eligible institution's courses can be provided
online and that, in some cases, not more than 50% of an eligible institution's students can be enrolled in online courses and
impose certain other requirements intended to insure that individual programs (including online programs) eligible for
Title IV funding include minimum amounts of instructional activity. However, Kaplan University currently is a participant in the
distance education demonstration program of the Department of Education and as a result is exempt from the foregoing
requirements until at least June 30, 2006. Several bills were introduced in the last Congress that would have exempted
12 THE WASHINGTON POST COMPANY