Aspen University Removed from HCM2 Payment Method

Rhea-AI Summary

Aspen Group, Inc. (OTCQB: ASPU) announced that its subsidiary, Aspen University (AU), has been removed from Heightened Cash Monitoring 2 (HCM2) status by the U.S. Department of Education (DOE). Effective August 16, 2024, AU has transitioned to Heightened Cash Monitoring 1 (HCM1) status. This change significantly improves AU's financial aid disbursement process. Under HCM1, while AU still needs to use its own funds for initial disbursements, it can now immediately draw down funds from the DOE after submitting disbursement records. This shift is expected to reduce variability in the Company's unrestricted cash balances, marking a positive development for Aspen Group's financial operations.

Positive

• Transition from HCM2 to HCM1 status for Aspen University
• Immediate access to DOE funds after submitting disbursement records
• Expected reduction in variability of unrestricted cash balances

Negative

• AU still required to disburse student financial aid from its own institutional funds initially

PHOENIX, Aug. 19, 2024 (GLOBE NEWSWIRE) -- Aspen Group, Inc. ("AGI" or the “Company”) (OTCQB: ASPU), an education technology holding company, announced today that Aspen University ("AU") has been removed from the Heightened Cash Monitoring 2 ("HCM2") status by the U.S. Department of Education (“DOE”). Effective August 16, 2024, AU transitioned to Heightened Cash Monitoring 1 ("HCM1") status.

Under the previous HCM2 payment method, AU had to disburse student financial aid from its own institutional funds. AU was then required to submit a Reimbursement Payment Request (the Request) to the DOE, and reimbursement was received only after the DOE completed its review of the Request. With the transition to HCM1, AU will still need to disburse student financial aid from its own institutional funds, but AU can now submit disbursement records to the DOE system and immediately draw down the funds to cover those disbursements. This shift from HCM2 to HCM1 is expected to reduce the variability of the Company’s unrestricted cash balances.

About Aspen Group, Inc.

Aspen Group, Inc. is an education technology holding company that leverages its infrastructure and expertise to allow its two universities, Aspen University and United States University, to deliver on the vision of making college affordable again. For more information, visit www.aspu.com.

Contact Information:

Hayden IR
Kimberly Rogers
(385) 831-7337
Kim@HaydenIR.com

FAQ

What change in status did Aspen University (ASPU) experience with the U.S. Department of Education on August 16, 2024?

On August 16, 2024, Aspen University transitioned from Heightened Cash Monitoring 2 (HCM2) status to Heightened Cash Monitoring 1 (HCM1) status with the U.S. Department of Education.

How does the transition to HCM1 status affect Aspen University's (ASPU) financial aid disbursement process?

Under HCM1 status, Aspen University can now submit disbursement records to the DOE system and immediately draw down funds to cover those disbursements, instead of waiting for reimbursement after a DOE review.

What financial impact is expected for Aspen Group (ASPU) due to the change in cash monitoring status?

The transition from HCM2 to HCM1 status is expected to reduce the variability of Aspen Group's unrestricted cash balances, potentially improving the company's financial stability.

When did the U.S. Department of Education remove Aspen University (ASPU) from HCM2 status?

The U.S. Department of Education removed Aspen University from HCM2 status effective August 16, 2024.