6. Lease Commitments

Capital Leases

The Company incurs capital lease obligations for student computers and peripherals under agreements with PNC Equipment Finance, LLC (“PNC”) and Banc of America Leasing & Capital, LLC (“BALC”). As of June 30, 2019 and 2018, the outstanding balance of capital leases (as discussed in more detail below) was $24.6 million and $26.0 million, respectively, with lease interest rates ranging from 1.97% to 4.05%. The gross carrying value of leased student computers as of June 30, 2019 and 2018 was $51.3 million and $42.2 million, respectively. The accumulated depreciation of leased student computers as of June 30, 2019 and 2018 was $31.5 million and $26.0 million, respectively.

Individual leases under the agreement with PNC include 36-month payment terms, at varying rates, with a $1 purchase option at the end of each lease term. The Company has pledged the assets financed to secure the outstanding leases.

The Company’s $16.0 million agreement with BALC that was executed in December 2018, was increased to $25.0 million in February 2019 and extended through December 2019 at a fluctuating rate of LIBOR plus 1.25%. Individual leases with BALC include 12-month payment terms, a fixed rate of 4.05%, and a $1 purchase option at the end of each lease term. The Company has pledged the assets financed to secure the outstanding leases.

The following is a summary as of June 30, 2019 of the present value of the net minimum lease payments on capital leases under the Company’s commitments:


As of June 30,	Capital Leases
	(in thousands)

2020	$	20,070
2021		4,819
2022		340
Total minimum payments		25,229
Less amount representing interest (imputed weighted average capital lease interest rate of 3.66%)		(581)
Net minimum payments		24,648
Less current portion		(19,588)
Present value of minimum payments, less current portion	$	5,060

Operating Leases

The Company has fixed non‑cancelable operating leases with terms expiring through fiscal year 2024 for facility leases. Facility leases generally contain renewal options and certain leases provide for scheduled rate increases over the lease terms.

Rent expense was $7.2 million, $6.8 million and $6.3 million for the years ended June 30, 2019, 2018 and 2017, respectively.

Future minimum lease payments and sublease income, under non-cancelable operating leases with initial or remaining non-cancelable lease terms of one year or more are as follows:


	Year Ended June 30,
($ in thousands)		Minimum Lease Payments		Sublease Income		Net
2020	$	8,441	$	(930)	$	7,511
2021		8,229		(961)		7,268
2022		6,735		(528)		6,207
2023		550		—		550
2024		137		—		137
Totals	$	24,092	$	(2,419)	$	21,673