1046568--2/25/2010--CAREER_EDUCATION

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{regulation, government, change}

{financial, litigation, operation}

{personnel, key, retain}

{system, service, information}

{operation, international, foreign}

{stock, price, operating}

{product, market, service}

{regulation, change, law}

{condition, economic, financial}

{property, intellectual, protect}

{acquisition, growth, future}

{debt, indebtedness, cash}

{cost, contract, operation}

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Risks Related to the Highly-Regulated Field in Which We Operate If our U.S. schools fail to comply with the extensive federal regulatory requirements for school operations in the educational services industry, we could incur financial penalties, restrictions on our operations, loss of federal and state financial aid funding for our students, or loss of our authorization to operate our U.S. schools. Financial Responsibility Standards and Return and Refunds of Title IV Funds. The current negotiated rulemaking by the ED could result in regulatory changes that materially and adversely affect our business. Any changes in ED s regulations could affect the ability of our students to obtain federal funding under Title IV Programs, impact our operations, and have other adverse consequences for us, as can changes in federal and state legislation or regulations of other federal, state and other regulatory bodies overseeing our education programs. Government agencies, regulatory agencies, and third parties may conduct compliance reviews, bring claims or initiate litigation against us based on alleged violations of the extensive regulatory requirements applicable to us, which could require us to pay monetary damages, be sanctioned or limited in our operations, and expend significant resources to defend against those claims. Any failure to comply with state authorization and regulatory requirements, or new state legislative or regulatory initiatives affecting our schools, could have an adverse effect on our student population, results of operations, financial condition and cash flows. If AIU fails to maintain its institutional accreditation status, our business, financial condition, results of operations, cash flows, common stock price and growth prospects could be adversely affected. If one or more of our schools fails to maintain institutional accreditation or if one or more of our accrediting agencies loses recognition by ED, our schools could lose ability to participate in Title IV programs, and our growth prospects, reputation and financial condition could be materially adversely affected. Risks Related to Our Business We, and our business model, are subject to risks relating to enrollment of students. If we are not able to continue to successfully recruit and retain our students, our financial results could be adversely materially affected. A substantial decrease in student financing options, or a significant increase in financing costs for our students, could have a material adverse effect on our student population, revenue and financial results. Budget constraints in states that provide state financial aid to our students could reduce available financial aid, which could adversely affect our student population. Alternatively, improved state financing may result in increased support for lower-priced public institutions, which may increase competition for students. If we are unable to successfully resolve pending or future litigation and regulatory and governmental inquiries involving us, our financial condition, results of operations and growth prospects could be adversely affected. If we fail to effectively identify, pursue and integrate acquired schools, both in the U.S. and outside of the U.S., our growth could be slowed and our profitability may be adversely affected. We are subject to the risks inherent in operating in foreign countries. If we fail to effectively identify, establish, and operate new schools and new branch campuses of our existing schools, or to offer new educational programs, our growth may be slowed and our profitability may be adversely affected. We need timely approval by applicable regulatory agencies to offer new programs, expand our operations into certain states, or acquire additional schools. If those approvals are not timely, we may incur operating expenses (such as lease obligations) for significant time periods before we can enroll students. Our financial performance depends, in part, on our ability to keep pace with changing market needs and technology. The loss of our key personnel could harm us. If our graduates are unable to obtain professional licenses or certification in their chosen field of study, we may face declining enrollments and revenues or student claims against us. Our future operating results and the market price of our common stock could be materially adversely affected if we are required to write down the carrying value of nonfinancial assets and nonfinancial liabilities, including long-lived assets, goodwill and intangible assets, such as our trademarks. We could experience decreasing enrollments or decreasing growth in our enrollments in our schools due to changing demographic trends in family size, overall declines in enrollment in postsecondary schools, job growth in fields unrelated to our core disciplines, immigration and visa laws, or other societal factors. Capacity constraints or system disruptions to our online computer networks could have a material adverse effect on our ability to attract and retain students. Our financial performance depends, in part, on our ability to continue to develop awareness and acceptance of our schools and programs among high school graduates and working adults. We compete with a variety of educational institutions, and if we are unable to compete effectively, our student population and revenue could be adversely impacted. Our credit agreement limits our ability to take various actions. We are subject to privacy laws and regulations both domestically and in the countries in which our foreign schools operate, due to our collection and use of personal information. Any violations of those laws, or any breach, theft or loss of that information, could adversely affect our reputation and operations. We rely on exclusive proprietary rights and intellectual property that may not be adequately protected under current laws, and we may encounter disputes from time to time relating to our use of intellectual property of third parties. We may incur liability for the unauthorized duplication or distribution of class materials posted online for class discussions. A protracted economic slowdown and rising unemployment could harm our business. We may incur costs in complying with the Americans with Disabilities Act and with similar laws. Risk Related to Our Common Stock The trading price of our common stock may fluctuate substantially in the future.

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1046568--2/25/2010--CAREER_EDUCATION_CORP