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FINANCING RECEIVABLES
 12 Months Ended
Jun. 30, 2017
Receivables [Abstract]  
FINANCING RECEIVABLES
NOTE 8: FINANCING RECEIVABLES
 
Adtalem’s institutional loan programs are available to students at its Chamberlain, AUC, RUSM, RUSVM, DeVry University 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, DeVry University 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 and reduce the possibility of over borrowing and to 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 as of June 30, 2017 and 2016 (in thousands).
 
 
 
June 30,
 
 
 
2017
 
2016
 
Gross Institutional Loans
 
 
 
 
$
59,489
 
 
 
 
$
69,825
 
Allowance for Credit Losses:
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance at July 1
 
$
(20,800)
 
 
 
 
$
(20,630)
 
 
 
 
Charge-offs and Adjustments
 
 
17,949
 
 
 
 
 
7,388
 
 
 
 
Recoveries
 
 
(573)
 
 
 
 
 
(461)
 
 
 
 
Additional Provision
 
 
(8,647)
 
 
 
 
 
(7,097)
 
 
 
 
Balance at End of Period
 
 
 
 
 
(12,071)
 
 
 
 
 
(20,800)
 
Net Institutional Loans
 
 
 
 
$
47,418
 
 
 
 
$
49,025
 
 
During the second quarter of fiscal year 2017, certain institutional loan balances were forgiven as part of the FTC settlement as discussed in “Note 4: Regulatory Settlements” and “Note 16: Commitments and Contingencies.” The amounts related to this settlement were $17.5 million in active outstanding balances, which carried related allowance for credit loss reserves of $13.4 million. Also forgiven were $12.9 million of inactive loan balances and accrued interest, which had previously been removed from the Net Institutional Loans balance.
 
Of the net balances above, $20.8 million and $21.7 million was classified as Accounts Receivable, Net on the Consolidated Balance Sheets at June 30, 2017 and 2016, respectively, and $26.6 million and $27.3 million, representing amounts due beyond one year, was classified as Other Assets, Net on the Consolidated Balance Sheets at June 30, 2017 and 2016, respectively.
 
The following tables detail the credit risk profiles of the institutional loan balances based on payment activity and analysis of past due institutional loans as of June 30, 2017 and 2016 (in thousands).
 
 
 
June 30,
 
 
 
2017
 
2016
 
Institutional Loans:
 
 
 
 
 
 
 
Performing
 
$
48,731
 
$
50,045
 
Nonperforming
 
 
10,758
 
 
19,780
 
Total Institutional Loans
 
$
59,489
 
$
69,825
 
 
 
 
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
Loans
 
Institutional Loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
June 30, 2017
 
$
7,538
 
$
2,234
 
$
651
 
$
10,758
 
$
21,181
 
$
38,308
 
$
59,489
 
June 30, 2016
 
$
8,038
 
$
1,512
 
$
924
 
$
19,780
 
$
30,254
 
$
39,571
 
$
69,825
 
 
Loans are considered nonperforming if they are more than 120 days past due. At June 30, 2017, nonperforming loans totaled $10.8 million, of which $10.7 million had a specific allowance for credit losses. At June 30, 2016, nonperforming loans totaled $19.8 million, of which $19.7 million had a specific allowance for credit losses.