Accounts and Financing Receivables

9 Months Ended

Mar. 31, 2025

Receivables [Abstract]

Accounts and Financing Receivables

9. Accounts and Financing Receivables

Our accounts receivables relate to student balances occurring in the normal course of business. Accounts receivables have a term of less than one year and are included in accounts and financing receivables, net on our Consolidated Balance Sheets. Our financing receivables relate to credit extension programs, which provide students with payment terms in excess of one year and are included in accounts and financing receivables, net and other assets, net on our Consolidated Balance Sheets.

The classification of our accounts and financing receivable balances was as follows (in thousands):

	March 31, 2025
		Gross		Allowance		Net
Accounts receivables, current	$	204,541	$	(44,183)	$	160,358
Financing receivables, current		5,361		(2,747)		2,614
Accounts and financing receivables, current	$	209,902	$	(46,930)	$	162,972
Financing receivables, current	$	5,361	$	(2,747)	$	2,614
Financing receivables, noncurrent		33,421		(9,669)		23,752
Total financing receivables	$	38,782	$	(12,416)	$	26,366

	June 30, 2024
		Gross		Allowance		Net
Accounts receivables, current	$	159,406	$	(35,336)	$	124,070
Financing receivables, current		5,239		(2,476)		2,763
Accounts and financing receivables, current	$	164,645	$	(37,812)	$	126,833
Financing receivables, current	$	5,239	$	(2,476)	$	2,763
Financing receivables, noncurrent		36,214		(10,082)		26,132
Total financing receivables	$	41,453	$	(12,558)	$	28,895

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, fees, and books, 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. Payments may increase upon completing or departing school.

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 generally write-off financing receivable balances when they are 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 March 31, 2025 was as follows (in thousands):

	Amortized Cost Basis by Origination Year
	Prior		2021		2022		2023		2024		2025		Total
1-30 days past due	$	185	$	121	$	190	$	47	$	734	$	152	$	1,429
31-60 days past due		115		169		80		348		88		383		1,183
61-90 days past due		62		—		9		20		20		—		111
91-120 days past due		87		24		—		74		30		53		268
121-150 days past due		14		5		38		—		88		30		175
Greater than 150 days past due		2,669		1,336		1,127		1,894		2,782		216		10,024
Total past due		3,132		1,655		1,444		2,383		3,742		834		13,190
Current		6,149		2,890		1,632		3,261		6,036		5,624		25,592
Financing receivables, gross	$	9,281	$	4,545	$	3,076	$	5,644	$	9,778	$	6,458	$	38,782
Gross write-offs	$	888	$	620	$	441	$	815	$	571	$	—	$	3,335

The credit quality analysis of financing receivables as of June 30, 2024 was as follows (in thousands):

	Amortized Cost Basis by Origination Year
	Prior		2020		2021		2022		2023		2024		Total
1-30 days past due	$	552	$	—	$	214	$	111	$	1,188	$	1,146	$	3,211
31-60 days past due		213		90		65		37		567		1,488		2,460
61-90 days past due		174		—		5		110		370		257		916
91-120 days past due		—		11		434		20		206		791		1,462
121-150 days past due		51		88		63		314		268		91		875
Greater than 150 days past due		2,556		466		1,366		1,300		1,920		987		8,595
Total past due		3,546		655		2,147		1,892		4,519		4,760		17,519
Current		6,014		748		3,944		1,897		4,549		6,782		23,934
Financing receivables, gross	$	9,560	$	1,403	$	6,091	$	3,789	$	9,068	$	11,542	$	41,453
Gross write-offs	$	1,145	$	279	$	509	$	597	$	729	$	2	$	3,261

Allowance for Credit Losses

The allowance for credit losses represents an estimate of the lifetime expected credit losses inherent in our accounts and financing receivable balances as of each balance sheet date. In evaluating the collectability of our accounts and financing receivable balances, we utilize historical events, current conditions, and reasonable and supportable forecasts about the future.

For our accounts receivables, we use historical loss rates based on an aging schedule and a student’s status to determine the allowance for credit losses. As these accounts 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 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 roll-forward of the allowance for credit losses (in thousands):

	Three Months Ended March 31, 2025						Nine Months Ended March 31, 2025
	Accounts		Financing		Total		Accounts		Financing		Total
Beginning balance	$	36,752	$	13,059	$	49,811	$	35,336	$	12,558	$	47,894
Write-offs		(13,441)		(962)		(14,403)		(43,311)		(3,335)		(46,646)
Recoveries		2,941		115		3,056		7,725		772		8,497
Provision for credit losses		17,931		204		18,135		44,433		2,421		46,854
Ending balance	$	44,183	$	12,416	$	56,599	$	44,183	$	12,416	$	56,599

	Three Months Ended March 31, 2024						Nine Months Ended March 31, 2024
	Accounts		Financing		Total		Accounts		Financing		Total
Beginning balance	$	35,020	$	13,326	$	48,346	$	29,190	$	11,468	$	40,658
Write-offs		(13,374)		(1,880)		(15,254)		(32,925)		(3,037)		(35,962)
Recoveries		2,973		649		3,622		7,901		1,093		8,994
Provision for credit losses		13,254		(537)		12,717		33,707		2,034		35,741
Ending balance	$	37,873	$	11,558	$	49,431	$	37,873	$	11,558	$	49,431