Chatham University (PA) & La Roche University (PA): Financial Health & Viability Review

It is the day after the great Amazon Web Services meltdown. And yes, indeed, the College Financial Health Show showing up as scheduled on time on every 10:30, on 10:30 Central Time on Tuesday mornings. It's Matt Hendricks and Gary Stocker, and we are the only show that looks in detail, in depth, at the financial health of private colleges throughout the country. And Matt, I hope you survived the AWS crash yesterday, but what colleges are we looking at today?

I survived, uh, thankfully. All my stuff runs on my local hardware, so, um, I don't have to worry about it.

That's right. Yeah.

And here I thought I was less secure. I'm more secure.

That's funny.

Not secure isn't the right word. Robust, I guess. So we have Chatham University in Pennsylvania and La Roche College. I think La Roche University now, right?

Yeah, it is.

Yeah. Pennsylvania. And we'll get right to it. There's a lot of really interesting stuff today. Counterintuitive things that I love to share. Also some issues with board governance I think are worth discussing. So let's get right into it. This is the Financial Compass. As we're going to focus mostly on the financials here, some best practices we'll bring in today. I'm gonna put Chatham on the first. They'll be blue. Chatham and La Roche. All right, and I'm going to start with, like I've done the last few shows, start with the really the most important number if you're like looking at trajectory of universities, the unrestricted net assets. All right, really, again, in just basic English, this is how much is the university— how big is the university's runway and how is it changing? All right, in terms of these are the assets the school can use to draw, usually can draw on to pay bills. And ideally, these would be going up with inflation and actually faster than inflation. This number should be always increasing. And you can see a big problem with both of these schools. Couple of things. One is both are decreasing in unrestricted net assets. You see Chatham went from $46 million in 2016. They're now at $15 million. So they're shedding net assets or drawing down net assets is usually what it's referred to. Huge, huge problem. And like I said, once these go negative or go zero, all bets are off as to what's going to happen with the school. But they're very close to zero right now, both of them. Yeah, but $11 million, one's at $15 million. So not much, much more time to fix this, and I'll show you why, why these, why this has been going on over the last decade. You'll see it really clearly. It's just because they have deficits. But they're just like, the sad thing is they can go on for a long time before the school really wakes up and starts addressing it. Looking at the percentage change, and you can see Chatham's net assets, unrestricted net assets are down 66%. And just for context, That's worse than the schools that have closed here. This set—

yeah, ouch—

closed. Um, the 25th percentile is still growing. All right, so the bot— the, the bottom, the worst 25% of schools, uh, right at that cut, you still have growth in unrestricted net assets. So Chatham's really, really an outlier here on unrestricted net assets. Uh, LaRochelle is a really interesting story. I dug into this, I had some time to prep for today, so This big jump right here is a one-off thing they did. It looks like a one-off thing to me, at least. They sold a broadband license for $11 million, which gave them this blip from 10— well, like $11 million in unrestricted net assets to 20. So they got this thing for about $11 million. They used some of it to pay their deficit, I think, and then the rest went into unrestricted net assets. And then they just have promptly resumed the decline right after that. So not good. Obviously, this is a one-off thing, I think. So this won't be— sure looks like it's something they can do again. So it really hasn't changed their trajectory. There's maybe delayed it a couple of years. So not, not, not good at all. And just if you're curious, you can see total net assets And I think when I check this out, the results are the same. Both schools really showing the same trajectory, declining net assets for Chatham. Again, you have this, you had declining, then this big blip where they sold the broadband license and then back right on this actually steeper loss trajectory that they were on. Again, both well below the 25th percentile in terms of growth of total net assets. So again, why does the school, why do these schools look weird in terms of their net asset? Trends. It's all because of their budgets not being balanced. So show you net income margin. These schools have run chronic deficits. So blue again is Chatham. These are big losses. 6% loss, 13% loss, 11, 9. Only one year that was positive, and that was surely because of COVID relief money. Yep, yep. Negative again here at -19%. And then a positive year in 2024. But that is totally not real. And I'm about to show you why. The main reason this happened is they were able to convince a donor to release $6 million of their restricted endowment gifts. All right. So that showed up in their revenue, which pumped— and I can just show you the raw— I can show you the raw values below. But had they not done that, they would have had a massive deficit still. That showed up in their net assets released on their operating revenue. All right. And then, yeah, look, the same thing for La Roche. The last time they really had a decent budget looks like 2016 and just no end in sight to deficits for them and getting worse. So very, very bad budget management for both schools. We'll take a look at Here's the issue I was talking about with the endowments. Take a look at, um, Chatham's endowment is not growing at all. And again, a normal endowment since 2016 is up about 60%. Chatham's endowment is up 1.6%.

Ouch.

Complete disaster. And again, the— it would have been a disaster for La Roche as well, except for, like I said, they sold that broadband, uh, license. and, uh, that pumped up their endowment growth just in one year. Um, but look at— you probably know, Gary, why the Chatham endowment is not growing.

Yeah, I know.

You have massive—

breaking the piggy bank, Matt.

Yes, LaRoche has done it a few times. Um, but they're— they've been better since. But, uh, with Chatham's case, they took a 20% draw in 2023, 11% draw in 2024. Or that's enough to— I mean, that's 30% of your endowment, really close to it, um, in just 2 years. So there, there goes all of the gains over the last decade, pretty much. Um, okay, so very unsustainable path for both of these schools. Uh, let's take a look at, um, all right, I want to— I wanted to show you guys a little bit more about what I was talking about with this draw, and I actually stumbled on This is Chatham. I actually stumbled on something that was really interesting. So here's a really massive draw. So they have a $93 million endowment starting in 2022 fiscal year '23. And they, they have a normal draw here of 4.3, but they took this one-time extra draw of almost $15 million. So really they took what, like $19 million off of a $93 million endowment. That's a huge, huge draw, unsustainable. So they start out the next year at $79 million and they take an $8 million draw on a $79 $9 million endowment, again, way too high. It's like 11%. Yeah. And a half percent. Okay. So they also were able to convince this donor to release $6 million to get over here. So, so the reason, the reason they had to do this, you can see really clearly they only had $2 million left in unrestricted endowment assets. So there's no way you can draw $8.5 million unless you have a miracle year in terms of returns. So they had to basically approach a donor to get some of this money released. So they could do this draw. You can't just draw the restricted money. At least there's laws restricting how much you can pull out of here. It also looks like the board moved some money from restricted to unrestricted. And that's interesting.

There's no way to know if they move those funds from designated to unrestricted. There's no way to know, right?

There's no way to know. Uh, I guess in the board minutes you would know. Is that what you're talking about? Um, uh, so there must have been, honestly, because so this is donor-restricted money, not board-restricted. So all of the like quasi-endowment stuff will be unrestricted. So there might have been some other negotiation here to get this unrestricted. I'm not sure what that would have been all about. To be honest. But, but they— this is well documented, this transfer of $6 million. I'll show you that. And I kind of stumbled on something else that may actually be even more important when I was investigating what happened here. So this is the— okay.

Okay.

So there's like board members that are doing this. Okay. So this is interesting. So I found this. So they had a board member who was the donor approved the release from the endowment of $6 million. Okay, so that's that money we just talked about. But then I was curious, I was looking at these others, and I, I, I noticed this line. There's also a board member, um, that owns an entity that has a $3.5 million line of credit with the university. So at first I was thinking this must be a bank that's giving a line of credit to the university that's owned by a board member, which is a huge red flag. For me personally, in my opinion, this should never happen. Um, turns out it's not a bank. This is the owner of Parkhurst, uh, Food Service, all right, which is the university's biggest vendor. Um, they have the $3.2 million, uh, draw or dollar contracts, and, um, um, also giving a line of credit. So So it's this loan right here. So Parkhurst is the food service vendor, and then they also issued a line of credit to university. And Parkhurst is owned by one of the board members at Chatham. Very much against this if I worked at this school. There's no reason to do this. Okay. Zero reason to do this. They have 27 other board members. There's no reason to have a board member that is also doing self-dealing. Contracting to the university. It's completely a conflict of interest. And most schools just would not even deal with this. And I think that they shouldn't deal with this either. So you can think of all the problems that can— this can cause, even if they're not breaking any laws or anything like that. I'm not accusing them of breaking any laws. You can just see all the problems with this, right? Are they going to get another bid for a different food service vendor next year? And if so, if you're another food service vendor, would you even bother submitting a bid? Right? You know that the board member owns Parkhurst, and that's their current vendor. Why would you submit a bid that that board member might read, right?

Are we gonna— are we gonna look at the vendor pricing for that, Matt?

Yeah, we'll look at it. And, and I don't see anything wrong with it. They're certainly not getting like a sweetheart deal out of it. It doesn't look like— it looks like just a normal contract. But this is a huge problem, right? This really, really bad optics. There's no reason the university should do this. This particular board member should either be a board member and and not the vendor for the food service, or just drop off the board and continue on with your food service contract with the university. There's no reason to do both. There's absolutely no reason. They have 26 other board members, which is plenty, right? You don't need— like, Harvard has 13. All right, so you have more board members than you need. It's not like you need this extra member and have to deal with these conflicts. Uh, just really looks bad, especially when the school's struggling financially. There's going to be a lot of questions asked, right? Last thing they need to be answering is why one of the board members is also the biggest seller of services to the university and has an additional line of credit. Just makes no sense. Okay, um, yeah, I would end that immediately. Okay, but we'll get into that contract when we go there, and I don't see any issues with the contract. I mean Maybe there's nothing illegal, but it certainly looks bad. It's a completely unforced error on their part. It's just going to look really bad to all the stakeholders, the alumni, the students, faculty. If it hasn't already caused problems, it will. All right. Okay, so big deficits. Let's take a look at revenues overall for both of these schools. And this is where things get very interesting. So if you're Chatham, you can't argue with revenues, right? These revenues actually look quite good. And I double-checked this. This is a 30% growth in their overall revenue since 2016, operating revenue. But remember, they had some of that fake revenue in there, which is asking some of the donors to restrict some assets. But so if you take that $6 million out, they're still at right at 18% growth since 2016. So I double-checked that. That's great. Uh, they can't blame really revenues, it seems, um, for their budget problems. Um, so that means it's mostly going to be the cost side. You got to be happy with being better than the median here. Maybe it's not ideal, but, um, certainly not catastrophic revenue changes for Chatham. Uh, for La Roche, it's different. Their revenue is a big problem. They're down 10.5%. On operating revenue since 2016. Again, normal is up 18%, and that's right at where Chatham is. So, um, that looks good, um, for Chatham, not good for La Roche. And let's go into expenses, and you'll see the issue here with, um, expenses for these schools. Um, so we have both of them are— so we have La Roche just sort of inexplicably increasing expenses at up 10% while— what did I say they were down 10% on?

Down 10%.

Yeah, just can't do that, right? Uh, again, the board has to make sure that revenue is bigger than expenses. That's their main job. And, uh, you can't approve budgets that that's not the case. You certainly can't do it 9 years in a row. All right, so either they're approving budgets that are like that 9 years in a row Or the budget's wrong, which is probably more likely the case. Make sure you figure out why your budget's wrong. All right, um, Chatham's expenses are up 21%, um, and that's coming off— I think they had deficits back in 2016 to start off with, so they really needed to grow their revenues far more than their expenses just to get out of that, that hole. And so it's just not enough. All right, let's take a look at net tuition revenue. Really interesting stuff here. Net tuition revenue. And I think Gary and I have already pointed this out many times, that there's more to it than just enrollment here. But take a look at net tuition revenue at Chatham. That's excellent. They're up 25% on net tuition revenue. It's amazing. La Roche, that's near the 75th percentile, by the way. So again, their budget issues are mostly self-inflicted expense side stuff. Certainly I would be happy if RISD was up 25% on net tuition revenue. La Roche is not doing so well. Not catastrophic though, but down 7% on net tuition revenue. And I'm going to dig into this a little bit for you just to figure out why La Roche's net tuition revenue is declining. And before I show you exactly why, I'm going to show you going to enrollment for the students. So remember, Um, we'll take a look at enrollment. Very interesting enrollment trends here. So both schools have more enrollment than before, and they both have massive budget deficits. All right, so both of them are growing and running deficits. So really odd, counterintuitive, right? And La Roche especially, their enrollment's up 19%, and there's a sharp increase right here. What do you suppose might have caused this, Gary? They got a huge jump in enrollment Yet their net tuition revenue is low.

I know, I know.

Yeah, sure.

Not getting very much in tuition revenue per student.

Yeah, it's all about the price for them. Something happened with their pricing strategy that was a complete disaster. Even with this big jump in enrollments, again, they went from being down 26% to being up 19%. Somehow still experiencing a decrease in net tuition revenue.

And, but I show high, high merit discounts too, and I, yeah, I show my stuff.

Yeah, so they went from over that period, they went from $20 million in net tuition revenue down to $19 million, despite the fact that their enrollment surged, right? So how does that happen? It's all about the price. And something they did here in 2022 was a bad idea. They reduced the price from I shouldn't say exactly that strong. The average amount of tuition that a student is paying, right? I guess we should double-check that this is accounting, but given that it matches with what we see on the enrollment and overall revenues, I think this is the true story. But it looks like the price went from about $20,000, or really it was like $15,000. I don't know what this big jump here is, but maybe this is Somehow the way they worked in the COVID grants. But yeah, now we're at $10,000. That's at the 25th percentile in terms of what the average net tuition a student is paying. And it's probably unsustainable for them, especially since they're used to running deficits at kids paying far more than that. And now it's going to be even harder. So they have more kids and way less money. It's a huge problem, right? Now you got to actually provide them more stuff. And you have less money to do that. It's really, really a bad combination. My guess is that this was a mistake, but we would need to do more research on this and figure out why this happened. My guess is they discounted their tuition, saw an increase in enrollment, patted themselves on the back, and maybe didn't pay much attention to what that actually meant for revenue. But you get less revenue with the way that the math worked out here. So just to show you the math, so that really they cut their price in half here, if that's the true story. Price is down about 50% and their enrollment's up 19%. So the math there shows you clearly are going to be lower on net for the net tuition revenue there. All right. So clearly La Roche needs to look at the pricing strategy and figure out how to get that price. I just might just try bringing that price back up and see what happens.

And you can help them out with the Strategic Compass, right? Yep.

Yep. And I would recommend they do some small experiments on their own, but they, they don't have a long runway, so they got to do this stuff like now, right? And hope it works. Um, all right, on the expense side, let's start looking at what might be going on with both of these schools. Um, so I'm gonna start with employees, and everything I'm gonna do is going to be normalized by how much revenue is this school has. And very interesting here, so we're going to see a theme here where Chatham's just got very high expenses. Again, remember their revenues were going up, enrollment's going up, but they're just growing their expenses far more. And they just have abnormal expense profile for how much revenue they have. And so you can see it here, they're in the 75th percentile in terms of how many employees they have relative to their operating revenue. And oh, this is '23, but even this is not right, right? It really should be up here if you were to adjust their operating revenues to have a normal endowment draw. Remember, they drew like 20% of their endowment this year and that shows up in their revenue. So really, really abnormal in terms of how many— how much staff they had in '23 relative to their revenue. I think they adjusted that down in '24. I don't have their '24. This comes from the 990. For whatever reason, it's not posted yet. It's super late. I don't know if that's their fault or the IRS's fault, but I didn't see it. I checked. With La Roche, it's very interesting. Big drop in employees. So it looks like they're trying to deal with their budget, but I think they've more than canceled it out with a surge in vendor spend. And I'll just show you that right now. So the two, the two biggest pain points for schools are usually vendors and employees, right? Or both, right? And I'll show you, uh, fees for services here. This is, uh, the 990, and it shows up, um, shows up in the 990 as total fees for services that, you know, netting out some like advertising and stuff like that. And so I think what we have here is a clear story of La Roche, uh, just going wild with vendors. Um, actually both of these schools been quite wild with vendors for a while. Way, way higher vendor spend than normal for both of these schools. And again, remember, this, this should be up here with an adjusted operating revenue for Chatham. So again, I think that you see right away both of these schools need to take a very deep dive on their vendor spend, and Chatham needs to do a deep dive on, on, on their employee setup. And really, La Roche probably needs to cut back on the vendors and bring back some staff, right? And, and that's more efficient than what they're doing right now. I would guess. But those are just guesses. Of course, we do a much more in-depth analysis and use institutional data to really get to the bottom of everything. But this is the outside-in view, and it certainly points to no-brainers in terms of next steps on what to look like, what, what to look at. All these vendor contracts need to be looked at. Staffing needs to be looked at. I'll go through a bunch more from what I found earlier. I think the advertising expenses at Chatham are just completely out of this world. The raw spend is nearly $3 million. Both of them are very high for what their operating revenues are. And again, this is an inflated operating revenue in 2023. Retirement contributions. I can't remember what I found there. Let me see what this looks like. Uh, contributions. Yeah, it looks like La Roche may have an issue where they're just not paying retirement contributions now, uh, possibly. But Chatham's retirement contributions are high. I think that's partly— it may be all explained by just having too many people, but you might also look at what the contribution is. If it's 10%, I'll just tell you right now, that's very high. Um, I had 5% at the University of Tulsa when, when I resigned. Uh, 7 is fairly normal. Um, so double-check where you're at there. Um, let's see, contractors, number of contractors. I already showed you that fees for service was high, but let's see what the number of contractors looks like. Again, both of them just have a ton of contractors. All right, just to put this in context, so both of these are on the 75th percentile for what their revenue is. Chatham has 34 contractors that they pay at least $100K to. La Roche has 14. All right. And relative to their revenues, that's completely abnormal. All right. So double-check that. I think the travel budget looks weird at Chatham. It's maybe lower down the priority list, but you're spending almost $2 million on travel. Again, that's 75th percentile for how much revenue they have. IT is another pain point. IT spends, what do I have? Information technology. There we go. Okay, so whoever filled out the Chatham one is probably, that's got to be wrong. Possibly, unless they don't have a vendor for IT, that's possible, but they might look at one, right? Like, that's one way to save money actually and have lower staff. But the IT spend at La Roche looks high. Um, let's see, there's a lot of stuff to go into here, but I'm going to go into the specific contracts and wrap this up. Both these schools just need to take a deep dive on like vendor spend, um, renegotiate all their contracts, drop any contract they don't need. And then Chatham on top of that needs to look at staffing, uh, with a fine-tooth comb there. Uh, I'll start at Chatham. All right, here's the Parkhurst contracts. And again, this looks really good. Like $1,500 per student is about what I recommend. I think if you've seen previous shows, I'm usually saying $1,500 per student.

Yeah. Yeah. Okay.

So Box, but that all these vendor contracts look decent. Although I would question whether $800K to EAB is ever worth it. I just, yeah, I don't know if they're, providing that kind of value. Um, the rest looked okay. I do wonder about a $3 million construction when the school is struggling financially. Uh, I just wonder how those decisions are made with that context that you're going to have to pay utilities and maintenance on those, on those buildings. Um, if that is new construction, like how that's going to work out. I hope they've done that. Uh, La Roche. Okay, La Roche had an incredibly bad recruiting contract back— or $3.6 million. Again, this school is only 1,700 kids, so that's just completely out of the realm of a normal contract. And I've actually never heard of this vendor either. Uh, I just wonder what that was all about.

But they're the ones that got them the spike in enrollment but at the lowest tuition amount.

That's the thing I worry about. Perhaps they changed the pricing strategy or recommended the, you know, Hey, we can get you more enrollment if we just drop your price in half. Of course, any— anybody that's taken basic economics or just has common sense would say that that's what you could do to increase your enrollment, but it's probably a bad idea. Um, yeah, again, we don't know for sure, Gary, if that's what happened, but, uh, certainly something's wrong with the pricing at La Roche and needs— need a deep dive to figure out what's going on. The food service contract, again, $1,500 per student. That's pretty good. Construction, again, more construction here. These are really small. I just wonder if these are maintenance. I didn't check CapEx with either of these schools, but I have a feeling that it's going to be a disaster since they've been running deficits for quite some time. But yeah, I don't see, I don't see contracts that look abnormal, but the number is the problem. They just have too many contracts. Both schools had a lot of contracts for what their revenue was. So my guess is it'd be less about negotiating prices down and more about reducing the number. Yeah. I'll kick it back to you, Gary.

So, so, Matt, before I jump into my stuff, we've talked before, I think recently, that the colleges that we choose for the show almost exclusively come from viewer requests. And we have had a lot of colleges in Pennsylvania requested. What does that tell you?

Pennsylvania is a tough market. Uh, there's a— there are a lot of schools. I didn't realize how many schools are there. I think demographics is a tough market. Um, so yeah, you've got a lot of schools that are sort of in this vulnerable range too. A lot of schools that have very small endowments, Both of these schools have very, very low unrestricted net assets. So they just don't have runways. I think we'll see other schools in other states having issues, but some of these schools just have very short runways. So we're seeing them have pain right away. And keep in mind, both of these schools have been running deficits for at least 8, 9 years. Right. Even with a long runway, you eventually have to deal with that. Right.

And my take on that was very few people are going to want us to do a college that's doing well, right? Because they know that. But my guess is even the perception for those asking us to review the financial health and viability of Pennsylvania colleges, they all have concerns and justified concerns, really, in the case of both La Roche and Chatham and others that we have done as well. And you hit it, hit the nail on the head. Pennsylvania is a tough market. New York's a tough market. Increasingly North Carolina, Ohio, Indiana. Illinois, Missouri, those Midwest and Northeast states, just a tough, tough market. And yet, Matt, when you and I talk about lowering costs and that chronic inability for many of these private colleges to be unable to balance the budget, yet when they're in trouble, what do we hear from most of them say? We're going to grow our way out of this.

Yeah.

And it's just, just not going to happen. So let me go and share my screen with you, take a quick look at a couple other things. And we're going to start off with the College Viability App, and we always start with graduation rates. Let's take a quick look at the 4-year graduation rates for Chatham and La Roche. And we can see that Chatham is above our My College Viability minimum threshold of 50%. La Roche University, in spite of or in addition to all their financial troubles, isn't even graduating half of their students. They're not even a coin toss college, Matt. I really wanted to look at the unfunded institutional grants. So let's take a look at these. These unfunded institutional grants, Matt, as you well know, are most— almost all merit aid, most scholarships. Unfunded means there's no actual dollars, it's just a discount. And look at what the folks at Chatham have done, all right? Not quite $2 million a year each year in more and more unfunded tuition discounts. But interestingly, La Roche, we don't show—

wonder if they did a reset and just didn't do it right. I mean, they really really did.

I expected to see the La Roche number much, much bigger, much larger number than what it is right now. So I don't know if that's a data entry error or if it happened in 2024, maybe just wasn't reported yet until the IPEDS data comes out later this year. Huh, then that— I did not expect to see that. I expected to see that La Roche number have grown considerably, especially in the last couple of years. And let's take a look at tuition and fees because this kind of reaffirms, and again, Chatham, we saw, was able to grow revenue from tuition and fees, and La Roche, essentially flat, but flat over 8 years 'cause these are all nominal values. They don't take into account inflation. And so a decrease of $27,000 is really, in reality, when you're taking in the high inflation curve, you've had a much, much worse number than that. And then the unique attributes, we want to take a look at the college majors completion app. And what we now have here is the internal market share. And let's take a look at La Roche first. And they have some decent high-end volume classes— high-end volume majors, excuse me. Interesting, chemistry has plummeted, finance and management has plummeted, marketing has plummeted since 2020. The others have— well, even accounting has plummeted. That's interesting. They have 3 or 4 of those top volume majors have plummeted. And like too many colleges that we see, they have a lot of low, low enrollment, low completion majors. And again, what are you doing in the general studies business? That's not a good example. What are you doing in the mathematics business when you have about 2 or 3 graduates per year? And we'll see the external market share here in a second. Let's take a look at the same internal market share for Chatham University— drag my Zoom out of the way. And again, some decent volume programs. Don't see the same plummeting of majors that we saw at La Roche, but again, a lot of low-volume majors. And it's going to come to roost at some point. Colleges, either of their own volition or others' volition, will recognize that You just can't continue to be everything to everybody. And if you're having one person, not even one person graduating per year in film and video, what are you doing? Music and chemistry, math, economics— oh no, economics— arts and media entertainment. Okay, so Matt, again, we see two private colleges in Pennsylvania. Pennsylvania is a competitive state. It is a high-risk state for both public and private colleges. They've had some mergers, I believe, on the public college side, and it's, it's It's a statewide symptom of a national disease, or mostly national disease, the Midwest and the Northeast. And we see the same patterns. You and I have done this show for headed toward 15 or 16 months now. We've done over 150 colleges and the patterns are there. And we see them almost without exception. Certainly there are some colleges doing well and we've had a few of those on the show and it's cool to see those. But so many colleges are not doing well. And Matt, you nail it much better than I, The inability to match, to match revenue with expenses. When's that going to change? And if it doesn't change, what's going to happen?

Yeah, I've always thought that the only way it will change is if the boards just become more active, ask more questions. I mean, just really, it's up to the boards to do this. The— I mean, good administrations will do it too, but they just have too many other conflicting incentives. To create new programs, to create new initiatives, to get their name on a new building or whatever, that the incentives are messy for the administrators. The board should have an incentive to balance the budget and no real— nothing really sort of conflicting with that. Just need to go ahead and do it.

Yeah. Yeah. So let's call that a wrap, Dr. Hendricks. So for Matt Hendricks, I am Gary Stocker. Thanks for making time to watch the College Financial Health Show. We'll be back next Tuesday, AWS or not, with another College Financial Health Show.

We'll see you then.