Student Receivables

12 Months Ended

Jun. 30, 2014

Receivables [Abstract]

Student Receivables

6. STUDENT RECEIVABLES

The Company offers three types of financial arrangements to its students to assist with the obligation associated with tuition and fees, which helps students fund the difference between total tuition and fees and the amount covered by various sources of financial aid, including amounts awarded under Title IV programs, private loans and cash payments: due and payable amounts; a tuition payment plan; and lines of credit. Due and payable amounts are short-term extensions of credit for typically small balances which are repayable upon demand by the Company. Tuition payment plans are short-term credit extensions for 12 months or less. Lines of credit are extensions of credit which include a monthly minimum payment amount and permit students to repay amounts borrowed over a period of up to 42 months after graduation. During fiscal 2013, the Company extended the repayment period for financing made available to students from a maximum of 36 months beyond graduation to a maximum of 42 months beyond graduation. The majority of applicable line of credit accounts incur interest charges that accrue each month on unpaid balances except for those accounts that have been placed into collections. Student receivables include $29.3 million (net of $32.2 million allowance) and $24.3 million (net of $27.9 million allowance) recorded in other long-term assets on the accompanying balance sheets related to lines of credit to students for amounts due beyond one year.

The Company monitors its student receivables based on enrollment status. Receivables from former students who are in collections are reserved for at a very high rate. Receivables from former students that are out-of-school are reserved for at a higher rate than the receivables from students that are in-school. The gross current and non-current student receivables, which excludes loans awarded under the student lending program further described below, by student status were as follows at June 30 (in thousands):        

	2014		2013
In-school	$	236,144	$	194,062
Out-of-school (1)	63,624		128,375
Collections	115,293		110,955
Gross student receivables	$	415,061	$	433,392

A roll forward of the Company's total allowance for doubtful accounts and loan loss reserves from June 30, 2011 to June 30, 2014 is as follows (in thousands):

Balance June 30, 2011	$	199,357
Bad debt expense	163,926
Amounts written off	(113,001		)
Balance June 30, 2012	250,282
Bad debt expense	171,850
Amounts written off  (2)	(213,884		)
Balance June 30, 2013	208,248
Bad debt expense (1)	141,946
Amounts written off	(156,354		)
Balance June 30, 2014	$	193,840

(1) Refer to Note 2, "Summary of Significant Accounting Policies," for details with respect to a correction in the Company's policy regarding the recognition of incremental revenue recorded when students withdraw.

(2) As explained in Note 2, "Summary of Significant Accounting Policies," the Company reduced the number of days after which accounts in collections are written off during fiscal 2013.

The amounts set forth above are recorded within student receivables, net and other long-term assets on the consolidated balance sheets. Recoveries of amounts previously written off were not significant in any period presented.

The Company commenced a new student lending program in fiscal 2013 under which it purchases loans awarded and disbursed to its students from a private lender. The loans purchased under this program are included in other long-term assets, net of an allowance, at an amount of $8.7 million and $0.4 million at June 30, 2014 and 2013, respectively, on the accompanying consolidated balance sheets.