FINANCING RECEIVABLES

6 Months Ended

Dec. 31, 2017

Receivables [Abstract]

FINANCING RECEIVABLES

NOTE 7: FINANCING RECEIVABLES

Adtalem’s institutional loan programs are available to students at its Chamberlain, AUC, RUSM, RUSVM and Carrington institutions. These loan programs are designed to assist students who are unable to completely cover educational costs consisting of 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. Chamberlain and Carrington require that students begin repaying loans while they are still in school with a minimum payment level designed to demonstrate their capability to repay, reduce the possibility of over borrowing and minimize interest being accrued on the loan balance. Payments may increase upon completing or departing the program. After a student leaves school, the student typically will have a monthly installment repayment plan. In addition, the Becker CPA Exam Review Course can be financed through Becker with an 18-month term loan program.

Reserves for uncollectible loans are determined by analyzing the current aging of institutional loans and historical loss rates of loans at each institution. Management performs this analysis periodically throughout the year. Since all of Adtalem’s financing receivables are generated through the extension of credit 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 (in thousands).

	December 31, 2017				June 30, 2017				December 31, 2016
Gross Institutional Loans			$	57,397			$	57,391			$	54,070
Allowance for Credit Losses:
Balance at July 1	$	(11,632)			$	(7,915)			$	(7,915)
Charge-offs and Adjustments		1,024				4,722				3,054
Recoveries		(148)				(573)				(438)
Additional Provision		(2,361)				(7,866)				(4,240)
Balance at End of Period				(13,117)				(11,632)				(9,539)
Net Institutional Loans			$	44,280			$	45,759			$	44,531

Of the net balances above, $20.8 million, $20.1 million and $18.1 million was classified as Accounts Receivable, Net on the Consolidated Balance Sheets at December 31, 2017, June 30, 2017 and December 31, 2016, respectively, and $23.5 million, $25.7 million and $26.4 million, representing amounts due beyond one year, was classified as Other Assets, Net on the Consolidated Balance Sheets at December 31, 2017, June 30, 2017 and December 31, 2016, respectively.

 

The following tables detail the credit risk profiles of the institutional loan balances based on payment activity and an aging of past due institutional loans (in thousands).

	December 31,		June 30,		December 31,
	2017		2017		2016
Institutional Loans:
Performing	$	45,495	$	47,072	$	46,559
Nonperforming		11,902		10,319		7,511
Total Institutional Loans	$	57,397	$	57,391	$	54,070

	1-29 Days Past Due		30-59 Days Past Due		60-89 Days Past Due		Greater Than 90 Days Past Due		Total Past  Due		Current		Total Institutional Loans
Institutional Loans:
December 31, 2017	$	8,569	$	1,021	$	1,166	$	11,902	$	22,658	$	34,739	$	57,397
June 30, 2017	$	7,162	$	2,192	$	583	$	10,319	$	20,256	$	37,135	$	57,391
December 31, 2016	$	5,657	$	2,904	$	1,762	$	7,511	$	17,834	$	36,236	$	54,070

Loans are considered nonperforming if they are more than 90 days past due. At December 31, 2017, nonperforming loans totaled $11.9 million, of which $11.8 million had a specific allowance for credit losses. At June 30, 2017, nonperforming loans totaled $10.3 million, of which $10.2 million had a specific allowance for credit losses. At December 31, 2016, nonperforming loans totaled $7.5 million, of which $7.4 million had a specific allowance for credit losses.