FINANCING RECEIVABLES

3 Months Ended

Sep. 30, 2014

FINANCING RECEIVABLES

NOTE 6: FINANCING RECEIVABLES

DeVry Group’s institutional loan programs are available to students at its DeVry University, Chamberlain and Carrington institutions as well as selected students at AUC, RUSM  and RUSVM. These loan programs are designed to assist the small percentage of students who are unable to completely cover educational costs by other means. These loans may be used for tuition, books, and fees, and are available only after all other student financial assistance has been applied toward those purposes. In addition, AUC, RUSM and RUSVM loans may be used for students’ living expenses. Repayment plans for institutional loan program balances are developed to address the financial circumstances of the particular student. Interest charges accrue each month on the unpaid balance. DeVry University, Chamberlain, and Carrington require that students begin repaying a small portion of the loans while they are still in school, and then payments increase upon completing or departing the program. After a student leaves school, the student typically will have a monthly installment repayment plan with all balances due within 12 to 60 months. In addition, the Becker CPA Review Course and the United States Medical Licensing Exam Review Course can be financed through Becker with zero percent, 18-month and 6-month, respectively, term loans.

Reserves for uncollectible loans are determined by analyzing the current aging of accounts receivable and historical loss rates of loans at each educational institution. Management performs this analysis periodically throughout the year. Since all of DeVry Group’s financing receivables are generated through the extension of credit to students to fund educational costs, all such receivables are considered part of the same loan portfolio.

The following table details the institutional loan balances along with the related allowances for credit losses as of September 30, 2014 and 2013 (dollars in thousands).

	As of September 30,
	2014				2013
Gross Institutional Student Loans			$	67,174			$	64,023
Allowance for Credit Losses
Balance at Beginning of Period	$	(18,914)			$	(18,958)
Charge-offs		1,381				1,041
Recoveries		(269)				(198)
Additional Provision		(1,810)				(1,361)
Balance at End of Period				(19,612)				(19,476)
Net Institutional Student Loans			$	47,562			$	44,547

Of the net balances above, $20.5 million and $20.8 million were classified as Accounts Receivable, Net in the Consolidated Balance Sheets at September 30, 2014 and 2013, respectively, and $27.0 million and $23.7 million, representing amounts due beyond one year, were classified in the Consolidated Balance Sheets as Other Assets at September 30, 2014 and 2013, respectively.

The following tables detail the credit risk profiles of the institutional student loan balances based on payment activity and provide an aging analysis of past due institutional student loans as of September 30, 2014 and 2013 (dollars in thousands).

	As of September 30,
	2014		2013
Institutional Student Loans:
Performing	$	49,952	$	47,670
Nonperforming		17,222		16,353
Total Institutional Student Loans	$	67,174	$	64,023

	30-59  Days  Past Due		60-89 Days Past Due		90-119 Days Past Due		Greater Than  120 Days Past Due		Total  Past Due		Current		Total  Institutional Student Loans
Institutional Student Loans:
September 30, 2014	$	5,136	$	2,171	$	1,426	$	17,222	$	25,955	$	41,219	$	67,174
September 30, 2013	$	4,283	$	1,725	$	2,068	$	16,353	$	24,429	$	39,594	$	64,023

Loans are considered nonperforming if they are more than 120 days past due. At September 30, 2014, nonperforming loans totaled $17.2 million, of which $14.7 million had a specific allowance for credit losses. At September 30, 2013 nonperforming loans totaled $16.3 million, of which $13.0 million had a specific allowance for credit losses.