Washington Post 2012 Annual Report Download - page 44

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Item 1A. Risk Factors.
The Company faces a number of significant risks and uncertainties in connection with its operations. The most significant
of these are described below. These risks and uncertainties may not be the only ones facing the Company. Additional
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 Higher Education Act and other laws 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 of the eligibility of one or more of the KHE schools to participate in
Title IV programs, a requirement to pay fines or to repay Title IV program funds, a denial or refusal by the DOE to
consider a school’s application for renewal of its certification to participate in the Title IV programs or for approval to add
a new campus or education program, requiring the submission of a letter of credit, civil or criminal penalties or other
sanctions. No assurance can be given that the Kaplan schools and programs currently participating in Title IV programs
will maintain their Title IV eligibility, accreditation and state authorization in the future or that the DOE might not
successfully assert that one or more of such schools or programs have previously failed to comply with Title IV
requirements. The loss of Title IV eligibility by either (1) the single OPEID unit that includes Kaplan University or (2) a
combination of other OPEID units would have a material adverse effect on Kaplan’s operating results.
• Program Reviews, Audits, Investigations and Other Reviews of KHE Schools Could Result in Findings of Failure to
Comply With Statutory and Regulatory Requirements
KHE schools are subject to program reviews, audits, investigations and other compliance reviews conducted by various
regulatory agencies and auditors, including, among others, the DOE, the DOE’s Office of the 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 KHE 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.
KHE schools also may be subject to complaints and lawsuits by present or former students or employees or other persons
related to compliance with statutory, common law and regulatory requirements that, if successful, could result in monetary
liabilities or fines or other sanctions.
• Reductions in the Amount of Funds Available to Students, Including Under Title IV Programs, in KHE Schools,
Changes in the Terms on Which Such Funds Are Made Available or Loss or Limitation of Eligibility to Receive Such
Funds, Could Have a Material Adverse Effect on Kaplan’s Business and Operations
During the Company’s 2012 fiscal year, funds provided under the student financial aid programs created under Title IV
accounted for approximately $882 million of the revenues of the schools in KHE. 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 material adverse effect on Kaplan’s business and operations. 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 a material adverse effect on Kaplan’s business and
operations.
32 THE WASHINGTON POST COMPANY