1066134--8/23/2010--CORINTHIAN_COLLEGES

related topics

{regulation, government, change}

{financial, litigation, operation}

{operation, natural, condition}

{acquisition, growth, future}

{system, service, information}

{product, market, service}

{investment, property, distribution}

{personnel, key, retain}

{tax, income, asset}

{provision, law, control}

{competitive, industry, competition}

Risks Related To Extensive Regulation Of Our Business If we fail to follow extensive regulatory requirements for our business, we could suffer severe fines and penalties, including loss of access to federal student loans and grants for our students. The recently-enacted Health Care and Education Reconciliation Act of 2010 eliminated the Federal Family Education Loan ( FFEL ) program so that our students may only receive federal student loans through the Federal Direct Loan program; the transition from the FFEL program to the FDL program involves risks and uncertainty for our institutions and students. Congress may change eligibility standards or reduce funding for federal student financial aid programs, or other governmental or regulatory bodies may change similar laws or regulations relating to other student financial aid programs, which could adversely affect our business. Congress recently has commenced hearings and other examinations of the for-profit education sector that could result in further investigations, legislation, ED rulemaking, restrictions on Title IV Program participation by proprietary schools, or other actions that may materially and adversely affect our business. If any of our U.S. schools fails to maintain its accreditation or its state authorization, that institution may lose its ability to participate in federal student financial aid programs. Pending rulemaking by ED could result in regulatory changes that could materially adversely affect our business. Our U.S. schools may lose eligibility to participate in federal student financial aid programs if the percentage of their revenues derived from those programs is too high. As Congress increases available Title IV aid, we are often effectively required to increase tuition prices in order to maintain compliance with the 90/10 Rule; conversely, ED s proposed gainful employment regulations could require us to reduce tuition prices in order to limit the debt burden of our students If ED s gainful employment regulation is adopted as proposed, our institutions may not be able to comply with both rules. Our U.S. schools may lose eligibility to participate in federal student financial aid programs if their current and former students loan default rates on federally guaranteed student loans are too high. We intend to discontinue enrolling ATB Students beginning on September 1, 2010. The elimination of this population of potential new student enrollments could financial condition and results of operations could be materially adversely affected if we are required to write down the carrying value of goodwill If we do not meet specific financial responsibility ratios and tests established by the ED, our U.S. schools may lose eligibility to participate in federal student financial aid programs. One or more of our institutions may have to post a letter of credit or be subject to other sanctions if they do not correctly calculate and timely return Title IV Program funds for students who withdraw before completing their program of study. If regulators do not approve our acquisitions, the acquired school(s) would not be permitted to participate in federal student financial aid programs. If regulators do not approve transactions involving a change of control or change in our corporate structure, we may lose our ability to participate in federal student financial aid programs. If we fail to demonstrate administrative capability to the ED, our business could suffer. Regulatory agencies or third parties may conduct compliance reviews, commence investigations, bring claims or institute litigation against us. Investigations, claims and actions against companies in our industry could adversely affect our business and stock price. We are subject to sanctions if we pay impermissible commissions, bonuses or other incentive payments to individuals involved in certain recruiting, admissions or financial aid activities. Failure to comply with extensive Canadian regulations could affect the ability of our Canadian schools to participate in Canadian financial aid programs. Operational Risks That Could Have a Material Adverse Effect on Our Business If our students are unable to obtain private loans from third party lenders, our business could be adversely affected. Our Genesis discount student loan program could have a material adverse effect on our financial condition, results of operations and cash flows. We rely on a single company to provide financial aid processing for our students. If that company fails or refuses to timely provide such service, or materially increases its fees, our business could be harmed. If students fail to pay their outstanding balances, our business will be harmed. Our marketing and advertising efforts may not be effective in attracting prospective students. If we cannot effectively identify, acquire and integrate additional schools, it could harm our business. Failure to effectively manage opening new schools and adding new services could harm our business. Our success depends upon our ability to recruit and retain key personnel. Anti-takeover provisions in our charter documents and Delaware law could make an acquisition of our company difficult. We face litigation that could have a material adverse effect on our business, financial condition and results of operations. Failure to keep pace with changing market needs and technology could harm our business. Competitors with greater resources could harm our business. Failure to obtain additional capital in the future could reduce our ability to grow. If natural disasters, terrorist attacks, public transit strikes or economic downturns occur in specific geographic areas where we have a high concentration of schools, our business could be harmed.

Full 10-K form ▸

1066134--8/23/2010--CORINTHIAN_COLLEGES_INC