NOTE 7: FINANCING RECEIVABLES

Adtalem’s institutional loan programs are available to students at Chamberlain, AUC, RUSM and RUSVM. 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 at rates from 3.0% to 12.0% per annum accrue each month on the unpaid balance. Students are required to begin repaying their 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 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. Loans are considered nonperforming if they are more than 90 days past due. 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).


	June 30,
	2019				2018
Gross Institutional Loans			$	47,937			$	54,323
Allowance for Credit Losses:
Balance at July 1	$	(10,003)			$	(9,736)
Charge-offs and Adjustments		10,777				330
Recoveries		(83)				(61)
Additional Provision		(6,980)				(536)
Balance at End of Period				(6,289)				(10,003)
Net Institutional Loans			$	41,648			$	44,320

Of the net balances above, $16.6 million and $21.2 million was classified as Accounts Receivable, Net on the Consolidated Balance Sheets at June 30, 2019 and 2018, respectively, and $25.1 million and $23.1 million, representing amounts due beyond one year, was classified as Other Assets, Net on the Consolidated Balance Sheets at June 30, 2019 and 2018, 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).


	June 30,
	2019		2018
Institutional Loans:
Performing	$	38,049	$	44,492
Nonperforming		9,888		9,831
Total Institutional Loans	$	47,937	$	54,323


							Greater
			30-59		60-89		Than 90						Total
	1-29 Days		Days Past		Days Past		Days Past		Total				Institutional
	Past Due		Due		Due		Due		Past Due		Current		Loans
Institutional Loans:
June 30, 2019	$	3,578	$	2,458	$	687	$	9,888	$	16,611	$	31,326	$	47,937
June 30, 2018	$	8,473	$	900	$	3,099	$	9,831	$	22,303	$	32,020	$	54,323

Allowances for credit losses on nonperforming loans as of June 30, 2019 and 2018 were $6.1 million and $9.8 million, respectively.