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Accounts Receivable and Credit Losses | 6 Months Ended
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Dec. 31, 2021
Receivables [Abstract] |
Accounts Receivable and Credit Losses | 9. Accounts Receivable and Credit Losses We categorize our accounts receivable balances as trade receivables or financing receivables. Our trade receivables relate to student balances occurring in the normal course of business. Trade receivables have a term of less than one year and are included in accounts receivable, net on our Consolidated Balance Sheets. Our financing receivables relate to credit extension programs where the student is provided payment terms in excess of one year with their respective school and are included in accounts receivable, net and other assets, net on our Consolidated Balance Sheets. The classification of our accounts receivable balances was as follows (in thousands): ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | December 31, 2021
​ | ​ | ​ | Gross | ​ | ​ | Allowance | ​ | ​ | Net
Trade receivables, current | ​ | $ | 111,538 | ​ | $ | (21,335) | ​ | $ | 90,203
Financing receivables, current | ​ | ​ | 7,252 | ​ | ​ | (4,711) | ​ | ​ | 2,541
Accounts receivable, current | ​ | $ | 118,790 | ​ | $ | (26,046) | ​ | $ | 92,744
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Financing receivables, current | ​ | $ | 7,252 | ​ | $ | (4,711) | ​ | $ | 2,541
Financing receivables, noncurrent | ​ | ​ | 39,534 | ​ | ​ | (12,999) | ​ | ​ | 26,535
Total financing receivables | ​ | $ | 46,786 | ​ | $ | (17,710) | ​ | $ | 29,076
​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | June 30, 2021
​ | ​ | ​ | Gross | ​ | ​ | Allowance | ​ | ​ | Net
Trade receivables, current | ​ | $ | 52,512 | ​ | $ | (11,559) | ​ | $ | 40,953
Financing receivables, current | ​ | ​ | 6,348 | ​ | ​ | (4,260) | ​ | ​ | 2,088
Accounts receivable, current | ​ | $ | 58,860 | ​ | $ | (15,819) | ​ | $ | 43,041
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Financing receivables, current | ​ | $ | 6,348 | ​ | $ | (4,260) | ​ | $ | 2,088
Financing receivables, noncurrent | ​ | ​ | 39,665 | ​ | ​ | (12,572) | ​ | ​ | 27,093
Total financing receivables | ​ | $ | 46,013 | ​ | $ | (16,832) | ​ | $ | 29,181
​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | December 31, 2020
​ | ​ | ​ | Gross | ​ | ​ | Allowance | ​ | ​ | Net
Trade receivables, current | ​ | $ | 78,917 | ​ | $ | (9,845) | ​ | $ | 69,072
Financing receivables, current | ​ | ​ | 6,227 | ​ | ​ | (3,685) | ​ | ​ | 2,542
Accounts receivable, current | ​ | $ | 85,144 | ​ | $ | (13,530) | ​ | $ | 71,614
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Financing receivables, current | ​ | $ | 6,227 | ​ | $ | (3,685) | ​ | $ | 2,542
Financing receivables, noncurrent | ​ | ​ | 41,165 | ​ | ​ | (13,063) | ​ | ​ | 28,102
Total financing receivables | ​ | $ | 47,392 | ​ | $ | (16,748) | ​ | $ | 30,644
​ Our financing receivables relate to credit extension programs available to students at Chamberlain, AUC, RUSM, and RUSVM. These credit extension 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 allow students to finance their living expenses. Repayment plans for financing agreements 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 once a student withdraws or graduates from a program. Most 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, which reduces the possibility of over borrowing. Payments may increase upon completing or departing school. After a student leaves school, the student typically will have a monthly installment repayment plan. Credit Quality The primary credit quality indicator for our financing receivables is delinquency. Balances are considered delinquent when contractual payments on the loan become past due. We charge-off financing receivable balances after they have been sent to a third party collector, the timing of which varies by the institution granting the loan, but in most cases is when the financing agreement is at least 181 days past due. Payments are applied first to outstanding interest and then to the unpaid principal balance. The credit quality analysis of financing receivables as of December 31, 2021 was as follows (in thousands): ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Amortized Cost Basis by Origination Year | ​ | ​ | ​
​ | ​ | Prior | ​ | 2018 | ​ | 2019 | ​ | 2020 | ​ | 2021 | ​ | 2022 | ​ | Total
1-30 days past due |  | $ | 306 | ​ | $ | 118 |  | $ | 240 |  | $ | 30 |  | $ | 1,222 |  | $ | 370 |  | $ | 2,286
31-60 days past due | ​ | ​ | 46 | ​ | ​ | 219 | ​ | ​ | 5 | ​ | ​ | 117 | ​ | ​ | 434 | ​ | ​ | 310 | ​ | ​ | 1,131
61-90 days past due | ​ | ​ | 64 | ​ | ​ | 290 | ​ | ​ | 39 | ​ | ​ | 11 | ​ | ​ | 560 | ​ | ​ | 27 | ​ | ​ | 991
91-120 days past due | ​ | ​ | — | ​ | ​ | 28 | ​ | ​ | 18 | ​ | ​ | 152 | ​ | ​ | 372 | ​ | ​ | — | ​ | ​ | 570
121-150 days past due | ​ | ​ | 587 | ​ | ​ | 13 | ​ | ​ | 155 | ​ | ​ | — | ​ | ​ | 328 | ​ | ​ | 102 | ​ | ​ | 1,185
Greater than 150 days past due | ​ | ​ | 8,885 | ​ | ​ | 1,755 | ​ | ​ | 1,242 | ​ | ​ | 879 | ​ | ​ | 1,594 | ​ | ​ | — | ​ | ​ | 14,355
Total past due | ​ | ​ | 9,888 | ​ | ​ | 2,423 | ​ | ​ | 1,699 | ​ | ​ | 1,189 | ​ | ​ | 4,510 | ​ | ​ | 809 | ​ | ​ | 20,518
Current | ​ | ​ | 6,053 | ​ | ​ | 2,454 | ​ | ​ | 1,933 | ​ | ​ | 1,384 | ​ | ​ | 11,160 | ​ | ​ | 3,284 | ​ | ​ | 26,268
Financing receivables, gross | ​ | $ | 15,941 | ​ | $ | 4,877 | ​ | $ | 3,632 | ​ | $ | 2,573 | ​ | $ | 15,670 | ​ | $ | 4,093 | ​ | $ | 46,786
​ The credit quality analysis of financing receivables as of June 30, 2021 was as follows (in thousands): ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Amortized Cost Basis by Origination Year | ​ | ​ | ​
​ | ​ | Prior | ​ | 2017 | ​ | 2018 | ​ | 2019 | ​ | 2020 | ​ | 2021 | ​ | Total
1-30 days past due |  | $ | 297 | ​ | $ | 7 |  | $ | 320 |  | $ | 559 |  | $ | 135 |  | $ | 1,616 |  | $ | 2,934
31-60 days past due | ​ | ​ | 145 | ​ | ​ | 2 | ​ | ​ | 165 | ​ | ​ | 49 | ​ | ​ | 61 | ​ | ​ | 660 | ​ | ​ | 1,082
61-90 days past due | ​ | ​ | 24 | ​ | ​ | 310 | ​ | ​ | 92 | ​ | ​ | 102 | ​ | ​ | 69 | ​ | ​ | 95 | ​ | ​ | 692
91-120 days past due | ​ | ​ | 287 | ​ | ​ | — | ​ | ​ | 131 | ​ | ​ | 16 | ​ | ​ | 47 | ​ | ​ | 13 | ​ | ​ | 494
121-150 days past due | ​ | ​ | 43 | ​ | ​ | 31 | ​ | ​ | 133 | ​ | ​ | 42 | ​ | ​ | 256 | ​ | ​ | 108 | ​ | ​ | 613
Greater than 150 days past due | ​ | ​ | 7,468 | ​ | ​ | 2,973 | ​ | ​ | 1,919 | ​ | ​ | 1,431 | ​ | ​ | 475 | ​ | ​ | 872 | ​ | ​ | 15,138
Total past due | ​ | ​ | 8,264 | ​ | ​ | 3,323 | ​ | ​ | 2,760 | ​ | ​ | 2,199 | ​ | ​ | 1,043 | ​ | ​ | 3,364 | ​ | ​ | 20,953
Current | ​ | ​ | 4,565 | ​ | ​ | 1,955 | ​ | ​ | 2,601 | ​ | ​ | 1,586 | ​ | ​ | 1,548 | ​ | ​ | 12,805 | ​ | ​ | 25,060
Financing receivables, gross | ​ | $ | 12,829 | ​ | $ | 5,278 | ​ | $ | 5,361 | ​ | $ | 3,785 | ​ | $ | 2,591 | ​ | $ | 16,169 | ​ | $ | 46,013
​ The credit quality analysis of financing receivables as of December 31, 2020 was as follows (in thousands): ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Amortized Cost Basis by Origination Year | ​ | ​ | ​
​ | ​ | Prior | ​ | 2017 | ​ | 2018 | ​ | 2019 | ​ | 2020 | ​ | 2021 | ​ | Total
1-30 days past due |  | $ | 767 | ​ | $ | 444 |  | $ | 589 |  | $ | 909 |  | $ | 335 |  | $ | 23 |  | $ | 3,067
31-60 days past due | ​ | ​ | 631 | ​ | ​ | 500 | ​ | ​ | 97 | ​ | ​ | 123 | ​ | ​ | 181 | ​ | ​ | 29 | ​ | ​ | 1,561
61-90 days past due | ​ | ​ | 261 | ​ | ​ | 417 | ​ | ​ | 69 | ​ | ​ | 195 | ​ | ​ | 240 | ​ | ​ | — | ​ | ​ | 1,182
91-120 days past due | ​ | ​ | 364 | ​ | ​ | 23 | ​ | ​ | 197 | ​ | ​ | 11 | ​ | ​ | 156 | ​ | ​ | — | ​ | ​ | 751
121-150 days past due | ​ | ​ | 431 | ​ | ​ | 637 | ​ | ​ | 570 | ​ | ​ | 83 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 1,721
Greater than 150 days past due | ​ | ​ | 6,840 | ​ | ​ | 1,707 | ​ | ​ | 1,204 | ​ | ​ | 638 | ​ | ​ | 297 | ​ | ​ | — | ​ | ​ | 10,686
Total past due | ​ | ​ | 9,294 | ​ | ​ | 3,728 | ​ | ​ | 2,726 | ​ | ​ | 1,959 | ​ | ​ | 1,209 | ​ | ​ | 52 | ​ | ​ | 18,968
Current | ​ | ​ | 11,824 | ​ | ​ | 5,389 | ​ | ​ | 3,891 | ​ | ​ | 4,205 | ​ | ​ | 2,259 | ​ | ​ | 856 | ​ | ​ | 28,424
Financing receivables, gross | ​ | $ | 21,118 | ​ | $ | 9,117 | ​ | $ | 6,617 | ​ | $ | 6,164 | ​ | $ | 3,468 | ​ | $ | 908 | ​ | $ | 47,392
​ Allowance for Credit Losses The allowance for credit losses represents an estimate of the lifetime expected credit losses inherent in our accounts receivable balances as of each balance sheet date. In evaluating the collectability of all our accounts receivable balances, we utilize historical events, current conditions, and reasonable and supportable forecasts about the future. For our trade receivables, we primarily use historical loss rates based on an aging schedule and a student’s status to determine the allowance for credit losses. As these trade receivables are short-term in nature, management believes a student’s status provides the best credit loss estimate, while also factoring in delinquency. Students still attending classes, recently graduated, or current on payments are more likely to pay than those who are inactive due to being on a leave of absence, withdrawing from school, or not current on payments. For our financing receivables, we primarily use historical loss rates based on an aging schedule. As these financing receivables are based on long-term financing agreements offered by Adtalem, management believes that delinquency provides the best credit loss estimate. As the financing receivable balances become further past due, it is less likely we will receive payment, causing our estimate of credit losses to increase. The following tables provide a rollforward of the allowance for credit losses (in thousands): ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three Months Ended December 31, 2021 |  | Six Months Ended December 31, 2021
​ | ​ | Trade | ​ | Financing | ​ | Total |  | Trade | ​ | Financing | ​ | Total
Beginning balance |  | $ | 16,497 | ​ | $ | 17,064 |  | $ | 33,561 | ​ | $ | 11,559 | ​ | $ | 16,832 |  | $ | 28,391
Write-offs | ​ | ​ | (2,816) | ​ | ​ | (209) | ​ | ​ | (3,025) | ​ | ​ | (4,548) | ​ | ​ | (746) | ​ | ​ | (5,294)
Recoveries | ​ | ​ | 2,104 | ​ | ​ | 17 | ​ | ​ | 2,121 | ​ | ​ | 3,354 | ​ | ​ | 17 | ​ | ​ | 3,371
Provision for credit losses | ​ | ​ | 5,550 | ​ | ​ | 838 | ​ | ​ | 6,388 | ​ | ​ | 10,970 | ​ | ​ | 1,607 | ​ | ​ | 12,577
Ending balance | ​ | $ | 21,335 | ​ | $ | 17,710 | ​ | $ | 39,045 | ​ | $ | 21,335 | ​ | $ | 17,710 | ​ | $ | 39,045
​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three Months Ended December 31, 2020 | ​ | Six Months Ended December 31, 2020
​ | ​ | Trade | ​ | Financing | ​ | Total | ​ | Trade | ​ | Financing | ​ | Total
Beginning balance |  | $ | 9,111 | ​ | $ | 16,251 |  | $ | 25,362 | ​ | $ | 9,367 | ​ | $ | 15,063 |  | $ | 24,430
Write-offs | ​ | ​ | (989) | ​ | ​ | (1,554) | ​ | ​ | (2,543) | ​ | ​ | (1,672) | ​ | ​ | (1,748) | ​ | ​ | (3,420)
Recoveries | ​ | ​ | 200 | ​ | ​ | — | ​ | ​ | 200 | ​ | ​ | 386 | ​ | ​ | 40 | ​ | ​ | 426
Provision for credit losses | ​ | ​ | 1,523 | ​ | ​ | 2,051 | ​ | ​ | 3,574 | ​ | ​ | 1,764 | ​ | ​ | 3,393 | ​ | ​ | 5,157
Ending balance | ​ | $ | 9,845 | ​ | $ | 16,748 | ​ | $ | 26,593 | ​ | $ | 9,845 | ​ | $ | 16,748 | ​ | $ | 26,593
​ Allowance for bad debts on short-term and long-term receivables as of December 31, 2021, June 30, 2021, and December 31, 2020 was $39.0 million, $28.4 million, and $26.6 million, respectively. The increase in the reserve from the year-ago period and the beginning of fiscal year 2022 is driven by the provision for credit losses at Walden. Other Financing Receivables In connection with the sale of DeVry University, Adtalem loaned $10.0 million to DeVry University under the terms of the DeVry Note. The DeVry Note bears interest at a rate of 4% per annum, payable annually in arrears, and had a maturity date of January 1, 2022. The DeVry University loan receivable is included on the Consolidated Balance Sheet in prepaid expenses and other current assets as of each of December 31, 2021 and June 30, 2021, and other assets, net as of December 31, 2020, and is estimated by discounting the future cash flows using an average of current rates for similar arrangements, which is estimated at 4% per annum. Management has evaluated the collectability of this note and has determined no reserve is necessary. On July 31, 2019, Adtalem sold its Chicago, Illinois, campus facility to DePaul College Prep Foundation (“DePaul College Prep”). In connection with the sale, Adtalem holds a mortgage from DePaul College Prep for $46.8 million. The mortgage is due on July 31, 2024 as a balloon payment and bears interest at a rate of 4% per annum, payable monthly. The carrying value of the DePaul College Prep loan receivable is included in other assets, net on the Consolidated Balance Sheet as of December 31, 2021, June 30, 2021, and December 31, 2020 is $43.3 million, $42.7 million, and $42.0 million, respectively, and was originally determined by discounting the future cash flows using an average of current rates for similar arrangements, which is estimated at 7% per annum. Management has evaluated the collectability of this note and has determined no reserve is necessary.

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