Washington Post 2015 Annual Report Download - page 38

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,
representations made by the school 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 ED 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 educational program; a requirement to submit a letter of credit, the imposition
of civil or criminal penalties; or other sanctions. On December 17, 2015, Kaplan University received notice from
the ED that it had been placed on provisional certification status until September 30, 2018. During the period of
provisional certification, Kaplan University must obtain prior ED approval to open a new location, add an
educational program, acquire another school or make any other significant change. Provisional certification
status carries fewer due process protections than full certification. As a result, the ED may withdraw an
institution’s provisional certification more easily than if it is fully certified. Provisional certification does not
otherwise limit access to Title IV program funds by students attending the institution.
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 ED 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 Kaplan University 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 ED, the ED’s Office of the Inspector
General, accrediting bodies and state and various other federal 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 or in
other federal or state financial assistance 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. Although substantially all of the assets of KHE on-ground schools were sold on
September 3, 2015, Kaplan retained liability for pre-sale conduct of those schools.
KHE schools also have been, and may in the future be, subject to complaints and lawsuits by present or former
students or employees or other people related to compliance with statutory, common law and regulatory
requirements that, if successful, could result in monetary liabilities or fines or other sanctions.
23 GRAHAM HOLDINGS COMPANY