Washington Post 2009 Annual Report Download - page 38

risks and uncertainties not presently known, or currently deemed immaterial, may adversely affect the Company in the
future. In addition to the other information included in this Annual Report on Form 10-K, investors should carefully consider
the following risk factors. If any of the events or developments described below occurs, it could have a material adverse
effect on the Company’s business, financial condition or results of operations.
• Failure to Comply with Statutory and Regulatory Requirements Could Result in Loss of Access to U.S. Federal Student
Loans and Grants Under Title IV, a Requirement to Pay Fines or Monetary Liabilities or Other Sanctions
To maintain Title IV eligibility, each group of schools combined into an OPEID unit must comply with the extensive statutory
and regulatory requirements of the Federal Higher Education Act relating to its financial aid management, educational
programs, financial strength, facilities, recruiting practices and various other matters. Failure to comply with these
requirements could result in the loss or limitation on the eligibility of one or more of the schools in Kaplan Higher
Education to participate in Title IV programs, a requirement to pay fines or to repay Title IV program funds, a denial or
refusal by the Department of Education to consider a school’s application for renewal of its certification to participate in
the Title IV programs, civil or criminal penalties or other sanctions. No assurance can be given that the Kaplan schools
currently participating in Title IV programs will maintain their Title IV eligibility, accreditation and state authorization in the
future or that the Department of Education might not successfully assert that one or more of such schools have previously
failed to comply with Title IV requirements. The loss of Title IV eligibility by either (a) the single OPEID unit that includes
Kaplan University or (b) a combination of two or more other OPEID units would have a materially adverse effect on
Kaplan’s operating results.
• Program Reviews, Audits, Investigations and Other Reviews of Kaplan Higher Education Schools Could Result in
Findings of Failure to Comply with Statutory and Regulatory Requirements
The Kaplan Higher Education division schools are subject to program reviews, audits, investigations and other
compliance reviews conducted by various regulatory agencies and auditors, including, among others, the Department of
Education, the Department of Education’s Office of Inspector General, accrediting bodies and state and various other
agencies, as well as annual audits by an independent certified public accountant of each OPEID unit’s compliance with
Title IV statutory and regulatory requirements. These compliance reviews can result in findings of noncompliance with
statutory and regulatory requirements that can, in turn, result in proceedings to impose fines, liabilities, civil or criminal
penalties or other sanctions against the school, including loss or limitation of its eligibility to participate in Title IV
programs. Certain Kaplan Higher Education division schools are the subject of ongoing compliance reviews and lawsuits
related to their compliance with statutory and regulatory requirements and may be subject to future compliance reviews.
The Kaplan Higher Education division schools also may be subject to complaints and lawsuits by present or former
students or employees or other persons related to school compliance with statutory and regulatory requirements, that, if
successful, could result in requirements to pay monetary liabilities or fines or result in other sanctions.
• Reductions in the Amount of Funds Available to Students, Including Under the Federal Title IV Programs, in Kaplan’s
Higher Education Schools, Changes in the Terms on Which Such Funds Are Made Available or Loss or Limitation of
Eligibility to Receive Such Funds
During the Company’s 2009 fiscal year, funds provided under the student financial aid programs created under Title IV
accounted for approximately $1,283 million of the net revenues of the schools in Kaplan Higher Education. Any
legislative, regulatory or other development that has the effect of materially reducing the amount of Title IV financial
assistance or other funds available to the students of those schools would have a significant adverse effect on Kaplan’s
operating results. In addition, any development that has the effect of making the terms on which Title IV financial
assistance or other funds are available to students of those schools materially less attractive could have an adverse effect
on Kaplan’s operating results.
• Changes in U.S. Department of Education Regulations Could Lead to New Operational Risks and Requirements
On September 9, 2009, the Department of Education established negotiated rulemaking committees to help prepare
proposed regulations that would amend or add to existing Title IV regulations. In late January 2010, the negotiated
rulemaking committee failed to reach consensus on proposed regulations. As a result of this lack of consensus, the
Department of Education is not bound by the proposed regulations presented to the committee and may therefore publish
proposed regulations for public comment that may differ from those presented to the committee. The proposed regulations
are expected to address areas including, but not limited to, revised standards governing the payment of incentive
compensation to admissions and financial aid advisors; a new definition of “gainful employment” that may take into
account student tuition and debt levels or other factors to determine whether educational programs prepare students for
“gainful employment” in a recognized occupation and thereby qualify as Title IV eligible educational programs, and other
changes to Title IV eligibility requirements for institutions, programs and students. The changes ultimately proposed to the
Title IV regulations could adversely affect, among other things, Kaplan’s ability to retain admissions and financial aid
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