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Revenue Recognition | 12 Months Ended
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Dec. 31, 2021
Revenue From Contract With Customer [Abstract] |
Revenue Recognition | 6. REVENUE RECOGNITION Disaggregation of Revenue The following tables disaggregate our revenue by major source for the years ended December 31, 2021, 2020 and 2019 (dollars in thousands):
|  |  | For the Year Ended December 31, 2021 |
|  |  | CTU (4) |  |  | AIUS (5) |  |  | Corporate and Other (6) |  |  | Total |
Tuition, net (1) |  |  | $ | 384,307 |  |  | $ | 269,645 |  |  | $ | - |  |  | $ | 653,952 |
Technology fees |  |  |  | 21,249 |  |  |  | 11,322 |  |  |  | - |  |  |  | 32,571 |
Other miscellaneous fees(2) |  |  |  | 1,227 |  |  |  | 665 |  |  |  | - |  |  |  | 1,892 |
Total tuition and fees, net |  |  |  | 406,783 |  |  |  | 281,632 |  |  |  | - |  |  |  | 688,415 |
Other revenue(3) |  |  |  | 1,766 |  |  |  | 1,728 |  |  |  | 1,125 |  |  |  | 4,619 |
Total revenue |  |  | $ | 408,549 |  |  | $ | 283,360 |  |  | $ | 1,125 |  |  | $ | 693,034 |
|  |  | For the Year Ended December 31, 2020 |
|  |  | CTU |  |  | AIUS |  |  | Corporate and Other (6) |  |  | Total |
Tuition, net |  |  | $ | 381,371 |  |  | $ | 270,430 |  |  | $ | - |  |  | $ | 651,801 |
Technology fees |  |  |  | 20,687 |  |  |  | 10,122 |  |  |  | - |  |  |  | 30,809 |
Other miscellaneous fees(2) |  |  |  | 1,283 |  |  |  | 686 |  |  |  | - |  |  |  | 1,969 |
Total tuition and fees, net |  |  |  | 403,341 |  |  |  | 281,238 |  |  |  | - |  |  |  | 684,579 |
Other revenue(3) |  |  |  | 2,166 |  |  |  | 123 |  |  |  | 446 |  |  |  | 2,735 |
Total revenue |  |  | $ | 405,507 |  |  | $ | 281,361 |  |  | $ | 446 |  |  | $ | 687,314 |
|  |  | For the Year Ended December 31, 2019 |
|  |  | CTU |  |  | AIUS |  |  | Corporate and Other (6) |  |  | Total |
Tuition, net |  |  | $ | 370,318 |  |  | $ | 225,364 |  |  | $ | - |  |  | $ | 595,682 |
Technology fees |  |  |  | 17,844 |  |  |  | 9,412 |  |  |  | - |  |  |  | 27,256 |
Other miscellaneous fees(2) |  |  |  | 1,690 |  |  |  | 428 |  |  |  | - |  |  |  | 2,118 |
Total tuition and fees, net |  |  |  | 389,852 |  |  |  | 235,204 |  |  |  | - |  |  |  | 625,056 |
Other revenue(3) |  |  |  | 2,411 |  |  |  | 170 |  |  |  | 67 |  |  |  | 2,648 |
Total revenue |  |  | $ | 392,263 |  |  | $ | 235,374 |  |  | $ | 67 |  |  | $ | 627,704 |
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| (1) | Tuition includes revenue earned for degree-granting programs as well as revenue earned for non-degree professional development and continuing education offerings related to the DigitalCrafts and Hippo acquisitions from the date of acquisitions.
| (2) | Other miscellaneous fees include student activity fees and graduation fees.
(3) Other revenue primarily includes contract training revenue and miscellaneous non-student related revenue.
| (4) | CTU includes revenue related to the Hippo acquisition commencing on the September 10, 2021 date of acquisition.
| (5) | AIUS includes revenue related to the (i) DigitalCrafts acquisition commencing on the August 2, 2021 date of acquisition, and (ii) Trident acquisition commencing on the March 2, 2020 date of acquisition.
| (6) | Revenue recorded within Corporate and Other relates to miscellaneous non-student related revenue.
Performance Obligations Our revenue, which is derived primarily from academic programs taught to students who attend our universities, is generally segregated into two categories: (1) tuition and fees, and (2) other. Tuition and fees represent costs to our students for educational services provided by our universities and are reflected net of scholarships and tuition discounts. Our universities charge tuition and fees at varying amounts, depending on the university, the type of program and specific curriculum. Our universities bill students a single charge that covers tuition, fees and required program materials, such as textbooks and supplies, which we treat as a single performance obligation. Generally, we bill student tuition at the beginning of each academic term for our degree programs and recognize the tuition as revenue on a straight-line basis over the academic term. As part of a student’s course of instruction, certain fees, such as technology fees and graduation fees, are billed to students. These fees are earned over the applicable term and are not considered separate performance obligations. We bill student tuition upon enrollment for our non-degree professional development and continuing education offerings and recognize the tuition as revenue on a straight-line basis over the length of the course. Other revenue, which consists of contract training revenue, bookstore sales and miscellaneous non-student related revenue, is billed and recognized as goods are delivered or services are performed. Contract training revenue results from individual courses that are stand-alone courses and not part of a degree or certificate program. Bookstore sales are primarily initiated by the student and are not included in the enrollment agreement at the onset of a student’s entrance to the institution. Miscellaneous non-student related revenue consists of staffing services provided to third parties and software license fees. These types of sales constitute a separate performance obligation from classroom instruction. Our institutions’ academic year is generally at least 30 weeks in length but varies both by institution and program of study and is divided by academic terms. Academic terms are determined by regulatory requirements mandated by the federal government and/or applicable accrediting body, which also vary by university and program. Academic terms are determined by start dates, which vary by university and program and are generally 8-12 weeks in length. Our non-degree professional development and continuing education offerings are generally 16-52 weeks in length. Contract Assets For each term, the portion of tuition and fee payments received from students but not yet earned is recorded as deferred revenue and reported as a current liability on our consolidated balance sheets, as we expect to earn these revenues within the next year. A contract asset is recorded for each student for the current term for which they are enrolled for the amount charged for the current term that has not yet been received as payment and to which we do not have the unconditional right to receive payment because the student has not reached the point in the student’s current academic term at which the amount billed is no longer refundable to the student. On a student by student basis, the contract asset is offset against the deferred revenue balance for the current term and the net deferred revenue balance is reflected within current liabilities on our consolidated balance sheets. For AIUS’ Trident and DigitalCrafts programs and CTU’s Hippo programs, students are billed as they enroll in courses, including courses related to future periods. Any billings for future periods would meet the definition of a contract asset as we do not have the unconditional right to receive payment as the course has not yet started. Contract assets related to future periods are offset against the respective deferred revenue associated with the future period. Due to the short-term nature of our academic terms, the contract asset balance which exists at the beginning of each quarter will no longer be a contract asset at the end of that quarter, with the exception of the contract assets associated with future periods. The decrease in contract asset balances are a result of one of the following: it becomes a student receivable balance once a student reaches the point in a student’s academic term where the amount billed is no longer refundable to the student; a refund is made to withdrawn students for the portion entitled to be refunded under each institutions’ refund policy; we receive funds to apply against the contract asset balance; or a student makes a change to the number of classes they are enrolled in which may cause an adjustment to their previously billed amount. As of the end of each quarter, a new contract asset is determined on a student by student basis based on the most recently started term and a student’s progress within that term as compared to the date at which the student is no longer entitled to a refund under each institution’s refund policy. Contract assets associated with future periods remain as contract assets until the course begins and the student reaches the point in that course that they are no longer entitled to a refund. The amount of deferred revenue balances which are being offset with contract assets balances as of December 31, 2021 and 2020 were as follows (dollars in thousands):
|  | As of December 31, |
|  | 2021 |  |  | 2020 |
Gross deferred revenue |  | $ | 113,719 |  |  | $ | 85,402 |
Gross contract assets |  |  | (43,106 | ) |  |  | (50,868 | )
Deferred revenue, net |  | $ | 70,613 |  |  | $ | 34,534 |
Deferred Revenue Changes in our deferred revenue balances for the years ended December 31, 2021 and 2020 were as follows (dollars in thousands):
|  | For the Year Ended December 31, 2021 |
|  | CTU |  |  | AIUS |  |  | Total |
Gross deferred revenue, January 1, 2021 |  | $ | 28,522 |  |  | $ | 56,880 |  |  | $ | 85,402 |
Business acquisitions, beginning balance |  |  | 3,952 |  |  |  | 1,404 |  |  |  | 5,356 |
Revenue earned from prior balances |  |  | (27,857 | ) |  |  | (46,591 | ) |  |  | (74,448 | )
Billings during period (1) |  |  | 439,836 |  |  |  | 271,053 |  |  |  | 710,889 |
Revenue earned for new billings during the period |  |  | (378,926 | ) |  |  | (235,041 | ) |  |  | (613,967 | )
Other adjustments |  |  | (853 | ) |  |  | 1,340 |  |  |  | 487 |
Gross deferred revenue, December 31, 2021 |  | $ | 64,674 |  |  | $ | 49,045 |  |  | $ | 113,719 |
|  | For the Year Ended December 31, 2020 |
|  | CTU |  |  | AIUS |  |  | Total |
Gross deferred revenue, January 1, 2020 |  | $ | 27,845 |  |  | $ | 35,359 |  |  | $ | 63,204 |
Business acquisition, beginning balance |  |  | - |  |  |  | 13,395 |  |  |  | 13,395 |
Revenue earned from prior balances |  |  | (25,179 | ) |  |  | (40,402 | ) |  |  | (65,581 | )
Billings during period (1) |  |  | 404,930 |  |  |  | 289,751 |  |  |  | 694,681 |
Revenue earned for new billings during the period |  |  | (378,161 | ) |  |  | (240,836 | ) |  |  | (618,997 | )
Other adjustments |  |  | (913 | ) |  |  | (387 | ) |  |  | (1,300 | )
Gross deferred revenue, December 31, 2020 |  | $ | 28,522 |  |  | $ | 56,880 |  |  | $ | 85,402 |
_______________
| (1) | Billings during period includes adjustments for prior billings.
Cash Receipts Our students pay for their costs through a variety of funding sources, including federal loan and grant programs, institutional payment plans, employer reimbursement, Veterans’ Administration and other military funding and grants, private and institutional scholarships and cash payments, as well as private loans for our non-degree programs. Cash receipts from government related sources are typically received during the current academic term. We typically receive funds after the end of an academic term for students who receive employer reimbursements. Students who have not applied for any type of financial aid generally set up a payment plan with the university and make payments on a monthly basis per the terms of the payment plan. If a student withdraws from one of our universities prior to the completion of the academic term, we refund the portion of tuition and fees already paid that, pursuant to our refund policy and applicable federal and state law and accrediting agency standards, we are not entitled to retain. Generally, the amount to be refunded to a student is calculated based upon the percent of the term attended and the amount of tuition and fees paid by the student as of their withdrawal date. In certain circumstances, we have recognized revenue for students who have withdrawn that we are not entitled to retain. We have estimated a reserve for these limited circumstances based on historical evidence in the amount of $2.1 million and $2.3 million as of December 31, 2021 and 2020, respectively. Students are typically entitled to a partial refund until approximately halfway through their term. Pursuant to each university’s policy, once a student reaches the point in the term where no refund is given, the student would not have a refund due if withdrawing from the university subsequent to that date. Management reassesses collectability when a student withdraws from the university and has unpaid tuition charges for the current term which the university is entitled to retain per the applicable refund policy. Certain unpaid charges do not meet the threshold of reasonably collectible and are recognized as revenue in accordance with ASC Topic 606 when cash is received and the contract is terminated and neither party has further performance obligations. We have no remaining performance obligations for students who have withdrawn from our universities, and once the refund calculation is performed and funds are returned to the student, if applicable under our refund policy, no further consideration is due back to the student. We recognized $1.6 million, $1.1 million and $1.2 million for the years ended December 31, 2021, 2020 and 2019, respectively, for payments received from withdrawn students. Significant Judgments We analyze revenue recognition on a portfolio approach under ASC Topic 606. Significant judgment is used in determining the appropriate portfolios to assess for meeting the criteria to recognize revenue under ASC Topic 606. We have determined that all of our students can be grouped into one portfolio. Based on our past experience, students at different universities, in different programs or with different funding all behave similarly. Enrollment agreements all contain similar terms, refund policies are similar across all institutions and students work with the university to obtain some type of funding, for example, Title IV Program funds, Veterans Administration funds, military funding, employer reimbursement or self-pay. We have significant historical data for our students which allows us to analyze collectability. We do not expect that revenue earned for the portfolio is significantly different as compared to revenue that would be earned if we were to assess each student contract separately. Significant judgment is also required to assess collectability, particularly as it relates to students seeking funding under Title IV Programs. Because students are required to provide documentation, and in some cases extensive documentation, to the Department to be eligible and approved for funding, the timeframe for this process can sometimes span between 90 to 120 days. We monitor the progress of students through the eligibility and approval process and assess collectability for the portfolio each reporting period to monitor that the collectability threshold is met. For the years ended December 31, 2021, 2020 and 2019, we received a majority of our universities’ cash receipts for tuition payments from various government agencies as well as our corporate partnerships. These cash receipts represent a substantial portion of our consolidated revenues and all have low risk of collectability.

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- Definition The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -URI http://asc.fasb.org/topic&trid=49130388 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 10 -URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130551-203045 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 13 -Subparagraph (b)(2) -URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130556-203045 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 12 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130554-203045 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130550-203045 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 12 -Subparagraph (e) -URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130554-203045 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 12 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130554-203045 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 12 -Subparagraph (d) -URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130554-203045 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130558-203045 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 12 -Subparagraph (c) -URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130554-203045 + Details
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