Conservatory of Music (MA) & Trinity Christian College (IL): Financial Health & Viability Review

It is Tuesday, October 7th, 2025. You know what that means? It's time for yet another episode of the College Financial Health Show with Matt Hendricks and Gary Stocker, where each and every week without fail, we look at the financial health and even viability of private colleges. Across the country, and Dr. Matt Hendricks, who developed the Private College Advanced Financial Compass and Strategic Compasses, some fabulous tools. Matt, what two colleges are we looking at today, sir?

Yeah, we have New England Conservatory of Music in Massachusetts and Trinity Christian College in Illinois.

Can you remind the audience how we pick these?

I get people asking me all the time, how do you pick these schools? I don't pick them.

Are you picking them?

That's right, you don't pick them. And interestingly, yes, I have a database of colleges that have some financial specification issues, but I haven't used that in a long time because you know why? All of our requests, all of our, all the colleges we do, Matt, are from viewers. And I had a lady drop me a note yesterday with 6 or 8 different colleges she wants reviewed. And so I don't have to do any work. I put them on the list. Sometimes you and I change the list a little bit, but for the most part, all of our stories are done based on viewer requests. And you and I know why, because folks are concerned about those colleges.

Yeah, that's what I tell them anyway.

I hate that.

Yeah, Gary gets requests and then he sends me 2 colleges on the weekend that we're going to discuss. So the 2 today I'll put up and we'll do the, the dual presentation again. And, um, not that I'm comparing these 2 schools because they're not really like peers, right? What I'm, what I'm doing here is comparing these schools to the national medians, 25th percentile, 75th percentile, which again is not like the best way if you're going to go about policy making policy changes at your school. You should be using, um, specific peer sets that are good for that specific research question. But in this case, in this case, I'm trying to give you a sense of whether there's something to look into or not. And usually if you're looking weird compared to the median, the 25th percentile, 75th percentile, something's up. It's pretty rare that you would be normal in your peer set and way out of bounds for the national median and so on.

While you bring Tony Christian up, I had folks say, or others tell me, that college leaders will watch the show, look at our data, and say the comparisons don't mean anything to them. What's your response to that?

That's, that is not true. Well, if it doesn't mean anything to you, you better start doing some work on it because these, these do mean a lot. And in fact, a lot of the stuff I'm going to show, you don't even have to compare, right? If you're running negative, if you're running deficits, I mean, you don't have to compare that.

Just, that's not Good.

All right, right, right.

Um, yeah, there's different extremes in both of these schools.

Well, this one right here is pretty extreme in terms of deficits. Uh, this blue school is New England Conservatory.

So I mean, there's a couple things. Um, if you don't appreciate the, uh, benchmarking that's being done right now, I say that you're going to fall behind really fast in terms of, um, how well your school is run and what newer cutting-edge leaders are doing, because I will tell you the best schools in the, the world are doing this right now and taking this very seriously.

So, um, don't try to dismiss it.

It's not, um— if you don't understand it, reach out to me.

I'll show you how it's useful for your specific school.

And, and no, you know, we've got a video product, a tutorial coming out any day now that shows how to use this tool, and it's dedicated for college leaders and board members to actually show them the logic and use of these tools.

Yeah, I'll just say I've done this for over 200 schools now. Uh, 99% of them think that this is very important, and these are top-tier schools in the country.

So, um, don't dismiss this. If you do, you'll regret it. Trust me.

If you don't understand it, like I said, reach out.

Gary and I'll show you how this is useful for policy, and more importantly, perhaps is getting people on board at your school with what you want to do to save the school, right?

Like, it's really, um, I mean, you see it all the time. The president wants to cut costs at a school, immediately nobody's going to believe that president, right? They're not going to take your word for it, all right? This is not like you're running a Fortune 500 company where everybody's just going to listen to you and do what you want to do. This is a completely different environment, uh, compared to the private sector.

You need to sell everything you do to not only your employees right?

The faculty and, and staff, but also the students, your customers, which you never have to do usually with a private company.

And you also have a board that you're going to have to sell it to. So it's very, uh, difficult, uh, process.

And the best way to do that is with these benchmarks, right? And so yeah, if you're going to dismiss the benchmarks, what's going to end up happening is that you're going to try to do something, somebody's going to show the benchmarks, and most of the people are going to believe the benchmarks over the president, and it's going going to potentially be a very bad— okay, so both of these schools have deficits, right?

And like I've said over and over again, you can have deficits several years in a row. Uh, let's start with the green school. It's Trinity Christian.

What do we have?

We have just one year of a positive, uh, of a surplus net income, and that was in 2017. The last 9— so, uh, this school is in serious financial distress.

And I'll show probably a lot more evidence to show this, but I'll show you ultimately why this matters in the next slide. Same thing for New England.

New England's deficits are actually bigger. And yeah, we have the same thing, just 1 year of positive or 2 years, really nothing to talk about those.

Yeah, really.

So both of these schools are really, really, really struggling with getting a budget that is going to work for them long term. Again, a, a normal budget would have the school have a positive net income, at least on average, and ideally about +1% is sort of the norm for what schools bake into their budget.

That means you got to budget for your depreciation expenses. Non-cash expenses need to be in the budget.

You need to save money for repairing buildings and stuff like that, replacing computers and all those things. So make sure that's in your budget as well. The reason these budgets don't work, I'm going to show you right now, is because your unrestricted net assets are going to collapse.

Okay, starting with the green, I'm going to do percent change. All right, so starting with the green school, the green school again is Trinity Christian. Their unrestricted net assets are down 12% since 2016. That's not sustainable, right? The school in real terms, the school's probably worth way, way less than it was in 2016. I wish I had the exact numbers, how much inflation we've had, but it's probably over 50%, right? Since then. So this school is worth less than half of what it was. Oh yeah.

Yeah. We see that all the time.

Yeah.

Yeah.

So in nominal terms, it's down 12%.

Uh, in real terms, a lot more in real terms when you count in inflation and all that, it's really worth way, way less than that.

So, um, this is a problem, right? You can't have your school just, um, drawing down its assets virtually every year.

Uh, and I'm focused on unrestricted net assets here because those are the assets that are like typical assets that the school can use without, you know, getting the courts involved and asking donors to change restrictions and stuff like that.

For the blue school here, again, that is New England Conservatory of Music.

I did have a bit of time before we jumped on to check what this was all about. It's like there was a huge—

so back in '16, '17, and '18, there were typically 3 columns in the balance sheet and statement of activities where you had actually statement of activities only, but there were 3 types of assets.

There's unrestricted, temporarily restricted, and permanently restricted, right? They switched it up in 2019 to unrestricted and restricted.

That's it.

But what they ended up doing was putting a bunch of the temporarily restricted stuff into unrestricted. I, I haven't seen this happen before, but that's what happens. If you look back at their audit, you'll see what they did.

Um, so just looking though compared to 2019, so they rescaled everything here and then just look relative to 2019, and you can see they're at $161 million in 2019 in unrestricted net assets.

They lost half of that, right? They're at $83 million in unrestricted net assets in 2024. It doesn't take a math genius to see that, you know, in another 5, 6 years this will be gone, right, at this rate, and the school will be done.

Okay, yeah, once your net assets go negative, all bets are off then.

Like, uh, how are you going to pay your bills? You can't sell assets anymore to pay your bills.

You got to take debt.

There's no bank that's going to give you a loan.

You can maybe take loans from your own endowments. You get the whole cycle starts, right, where you start seeing schools taking loans from their own endowments, sometimes doing things incorrectly in terms of taking restricted endowment funds, getting in trouble with their attorney general and so on.

It's just a complete disaster. You can't let this happen and certainly can't let it go to zero.

And you don't even need finance gurus and data gurus like you and me to look at that and say, hey, that's a problem. It's just— it's staring right at you. That's an issue.

Yeah.

So in terms of like a private company, this would just be like the valuation of the company. Really, like, the stock price would follow closely with this, right?

So there would be a lot of repercussions for a CEO running their business like this. And really, there's similar things that need to happen in the nonprofit sector.

The board's the ultimate sort of check on this. And if they're not going to check it, eventually what's going to check it is they're just going to run out of cash.

All right.

Okay, so both schools struggling, unrestricted net assets getting drawn down.

I'll show you net total net assets, which is the sum of restricted and unrestricted. And do percent change.

Yeah, so both of them still struggling. So total net assets here for Trinity Christian again is down 5%. So this school is in really deep trouble in terms of net asset changes.

Let's see how much they have left.

So they have $50 million in net assets left.

How much do they have for unrestricted?

$12, I think it was.

Unrestricted raw, $35.

Okay.

Okay. So they still have a bit of runway, but it's running short, right?

Once this goes negative, some schools have gone negative already. It's really, really tricky to keep going unless you have restricted net assets that you can start pulling on.

But again, it's just you're digging yourself a hole. In theory, you have to pay that back. Back, right?

Um, and for, and for new viewers, that red line at the bottom, that is the trend line for 9 recently closed private colleges, and you don't ever want to track along those lines, and Trinity is certainly close to that.

I was showing you guys total net assets.

I don't want to just cut that off, but here's what I'm focused at. So the, the conservatory music school, um, New England Conservatory of Music has a lot of net assets, $250 million.

So there's— that really makes it— it doesn't matter how bad the place is run, they're not going to shut down anytime soon.

And a lot of it was unrestricted, as I showed you earlier.

But what I worry about with these schools is, you know, the longer they're run this way, the less harder it is for the next administration at this school to keep it going, right? Eventually you run out of money and you become less competitive.

You can't give as competitive scholarships to your students. You just don't have enough money to draw on to do that kind of stuff. Ideally, you keep this going with, you know, the typical school, and over time you're able to draw more on your endowment funds and less on net tuition revenue, which makes the school just better, right? You can do a lot more with a school that's got a billion-dollar endowment versus one that has no endowment. You can offer a lot more to your students and just support your mission a lot better. So that's what I worry about. I'm not worried about closure with this school in particular. This one I am, though, eventually. Um, so they do have $50 million in net assets, but again, at $35 million in unrestricted, that can run out quite fast if things really go south. So, um, I'm urging them to balance their budgets now, um, to avoid—

you, you sound like a broken record, Matt. Week after week after week, that's what— that's the guidance you share.

Yeah, and that's one of the main benefits, I think, of this show is You know, if you see, if you've been watching the show for a while, you can see how this can go on for a long time if nobody says anything, right? These schools can go on for— this school in particular can run a $10 million deficit for 20-some years straight. And if nobody says anything, they can do it. They'll just draw the assets down to zero, right?

Eventually, whoever takes the helm will have to shut the school down, probably, unless they can right the ship.

But It's just really not fair to the future of the school. It's the board's knowledge.

The school will be run that way. You have to make sure your job as a board member, your fiduciary duty, I think, is to make sure that the school is run sustainably today. Right.

And part of that is into perpetuity. And 20 years, man, is not into perpetuity.

So we showed the net assets. They have deficits.

A couple other areas that are nice to look at to get a sense of what's happening at school. One is taking a look at the property and equipment. Financially healthy schools typically grow their property and equipment over time, the value of it, right? They're buying computers, they're upgrading stuff, they're fixing stuff, and so on. You can see neither of these schools are doing that. Typical schools' property and equipment has grown about 16% since 2016.

There's this big jump here, by the way. This is only 13 schools.

I just started adding 2025, so I'm not going to really give that a lot of credibility at the moment because that's probably far off from what the national median is.

But 13 schools that have reported are doing really well. I think there's a reason for that. Schools tend to report early.

That's why they're reporting.

Yeah. And get— they're just on top of everything. They get their audits done fast. They use the audit to build their budget, right?

That they're just doing the following best practice.

Take a look at the Trinity Christian. The physical plant is down 28%. And really since Well, since 2018, 2019, what are we down, like 25% or so on property and equipment at the, um, at the Conservatory of Music. So, um, so what's happening, that means basically, well, at the Conservatory of Music it could be, it could be a little, a little bit more innocent, and if they just have one really fancy building and they're not, um you know, it's new, they don't have to replace a lot of stuff, it's possible that this is normal.

But if they have a lot of instruments and stuff like that, computers, and they're not replacing them or fixing them, that could be a concern.

And that might be what's happening with the Trinity Christian College. Perhaps this is actually a bit more scary because these buildings may be quite a bit older, and they're, they're also not replacing much or anything there. So that's not great.

What else do I usually show here, Gary?

Yeah, I'm always looking forward to operating expenses.

Oh yeah, revenues versus expenses. So let's take a look at operating revenues over time.

And it's good to get a sense of how they're changing.

Honestly, both of these— so here's the thing, like, don't automatically assume that revenues are bad at a school that's having financial problems, right? A lot of times it's not the case.

Yeah.

Oh yeah.

There's two sides, right?

There's expenses and revenues.

Both of these schools have decent revenue growth since 2016.

Um, but we do need to double-check something I forgot already, which is that we need to make sure that this is real and that they're not pulling their endowment funds to prop this up. Uh, so the Conservatory of Music up 32%, that's excellent if that's legit. And same thing with the Trinity Christian, that's up 15%, that's nothing to be worried about really, it's right at the median. Uh, but let's double-check the endowments, and you can already see that we're probably going to find a problem here with Trinity the endowment is basically, uh, not growing at all. Show the raw values here, and it's not very big. Yeah, so here's the Conservatory of Music. They have a $164 million endowment, and it's growing normally. Excellent, it's great. All right, um, whereas I'm going to try to help the view here, I'm going to take out the 75th percentile You can just click on these to take these out and take out the median even. Okay, so where we were at the peak, we were at $18 million, uh, but now we're at $11 million.

Um, so you can probably guess what's happening here.

Endowment draw, it's going down.

Yeah, massive draws, uh, looks like in 2022 and '23. They really drew about 45% of the endowment value in those two years, assuming that is to cover And you can see this. Okay, anyway, um, you can find down at the bottom of the notes, you can find beginning of value, uh, you know, appreciation of the investments, the contributions, the draw, and so on. They, uh, appear to have allowed massive draws in '22 and '23. And they, I mean the board, allowed this, um, which is probably also showing up in your unrestricted operating revenue, in which case this is way worse than what we're showing here. Although '24 looks good.

So I'm kind of curious.

I would need to dig into this a bit to see exactly.

I want to see the expenses. I want to see the expenses.

Yeah, let's take a look at expenses.

So yeah, we've got massive expense growth at the Music Conservatory, 20% more growth than the 75th percentile. Yeah, this— so clearly, uh, the deficits at the Music Conservatory are really driven by expense growth, right? Uh, very abnormal expense growth. And certainly abnormal compared to their revenue growth.

If the revenue growth is strong, right?

So, right. Um, and we also have sort of normal, a bit below normal growth and expenses. But again, I think their revenues might be way lower.

Revenue is about 15, expenses are up 11, looks like.

Yeah, but I worry that that revenue is not legit and that it's taking in those big endowment draws and then maybe something else in 2024 that I would have to look at their, their audit and double-check. But Yeah, so I suspect with Trinity it's not the same story, that their revenue is actually down quite a bit when you factor out the anomalies with the operating revenue, the endowment draws and such.

Okay, so let's see if we can help these schools out a bit.

Let's take a look at what's happening with some of the key revenues like net tuition revenue.

Okay, so yeah, I suspect they're the real revenues here.

There could have been like one-time contributions too, like The school's like begging for money from donors. Like a lot of weird things can happen to prop up operating revenue, but you can't really hide your net tuition revenue drop. And it's down 38% at Trinity. That's, that's really bad. You can see that tracks right with schools that have closed. All right. Although we got a slight rebound here in 2024, not nearly what they need, though, to get back to where they need to be.

So what would the New England Conservatory of Music This looks great.

Again, up 21% on net tuition revenue.

I don't see any problems on the revenue side for them.

Um, they have expense issues.

Yeah, they just have a lot of expense growth, and, um, that just— that's something they can fix quickly, which is great news for them. They just need to, to do it.

And this is where the comparisons come in, right? You got to figure out how did the other schools— how have the other schools been operating, right? How are they keeping their expenses in check and we're not?

right?

That's a really simple question that can be answered with benchmarking. All right, so with the per-student values, I like to check this too because it gives you a sense of if the price is a problem.

Again, New England Conservatory of Music, great. Their price— students paying like $40K on average to go there. That's excellent, excellent for the school, I should say.

On the other hand, Trinity Christian, the price is way low. this is the 25th percentile, $17K, or sorry, $17K, $12K is the 20th percentile.

They're at $11,900. They used to be at $15,000 nominally. So in real terms, this price has just fallen off.

Um, and that is potentially a pro— I, I doubt that this is sustainable.

You can't charge $12,000 per student probably without a big endowment and just operate a 4-year institution. I just don't know if that's going to work. So they need to probably both— they need to bring this price back up, right? And I know it sounds counterintuitive, but my guess is that this price drop didn't help their enrollment, but it definitely hurt their books. Uh, let's take a look at their enrollment and what's happening here with students, student count. Percent change. Yeah, their enrollment's down 21%. Yeah, face of a lower tuition price is going down. Yeah, I suspect that the price drop is a response to the enrollment drop, but it, it probably isn't the reason they're losing enrollment, right? It probably has nothing to do with the price. They're probably one of the cheapest schools in the country. They could probably, like I said, bring that price back up and not impact their enrollment. Very much, if at all. There's something else affecting their enrollment that is not related to price, I suspect. And so there's a lot of stuff that could do that. Um, just simple things like the application requirements can cause this, fees, uh, bad marketing, just not really communicating the value prop facilities, all sorts of stuff, right, that have nothing to do with price really. Um, but they probably need to bring that price up immediately just to have a chance of riding this out. That's my advice on the revenue side.

Let's take a look at the expense side for both of these schools.

Employee counts. All right, so remember New England had this issue where their expenses were growing really fast.

You can probably get a sense of what's happening. They had a lot of 1,200 employees in 2016.

Now they have 1,300 employees, so that might be part of it.

Uh, so they've, they've grown their number of employees by 13%.

All right, which may be fine, but, uh, if you're running deficits, probably not fine, right?

To do the highest percentiles in the country.

Yeah, so that's really fast employee growth.

Um, and then per, per student, this is problematic.

Even if the students are paying $40 grand like they are, you probably can't have, you know, nearly 2 times the number of staff as you do students. They've got 1.8 times the number of students, right?

Think about that.

For every student, they have 1.8 staff members. That is abnormal, all right? The 25th— the 75th percentile is less than 1, right? So you have more students than staff. The median is to have about 2/3 of a staff member per student, right? Or for 3 students, you have 2 staff members.

And you can see even Trinity is high on this, right?

Their staffing is high, not nowhere near the conservatory.

But again, this is a school that doesn't have an endowment really.

Right. What was it left like, $11 million? You can't probably be high on staffing per student in that case. If you're Harvard, you can, right? Because they're—

you're going to pay.

I mean, they're in a situation where basically their students need to pay the staff salary.

Right?

Pretty much.

So, students aren't paying $11,000 per student on average. Unless you're going to pay your employees $11,000, it's probably not going to work to have a 1-to-1. They don't have one, but, you know, you can see how the math works out here. This probably needs to be a bit lower and relative to their revenue, it's super high, but they're 75th percentile for how many staff members they have relative to their revenue. And the same thing for the Conservatory of Music. Both appear to have serious staffing problems.

So that's just the count. Let's take a look at the total compensation of non-officers.

And while you're bringing that up again, we do so many, we've done almost 150 college reviews now. So many times staffing is the issue, man. It's well over half the time that's the issue.

Yeah. And don't assume that this is, uh, Faculty, right? The faculty are the smaller, are a smaller group, right?

The, there's a huge group of staff that has nothing to do with teaching classes, believe it or not. Um, and you know this if you worked at the HR, the HR places at these schools, but ask your HR department for all the titles on campus. So you'll be shocked at all the people all over the place doing different jobs. Um, I'm not, but, but, uh, you would be when you first looked at it. And I know I was when I first saw it. So salaries and wages just too high for the revenues at both of these schools. So again, Evidence here that, relative to the number of students, just crazy at the conservatory. Um, but yeah, evidence here that both schools have issues with staffing, and, uh, it's probably mostly to do with numbers of people. Um, let's take a look at contributions.

Wow, did they cut their retirement contributions already at Trinity?

Does it look like it?

Something to ask the staff there. Either that or somebody's filling up this thing wrong.

That would make sense.

They're in such dire straits.

Yeah, it looks pretty bad, doesn't it? Non-officer. Okay, let's check out the current officer salaries. Okay, that looks okay.

I'm looking at Trinity because I'm a bit more concerned about them.

But yeah, it's Conservatory of Music. No.

Number one pain point typically is staffing.

Second pain point usually is contractors. So let's take a look at contractors paid over $100K. And do it per FTE first. Conservatory of Music. All right, let's just go to raw values again.

They used to have 20 contractors. They paid over $100,000.

They now have 33. Okay, so if you're wondering why you're struggling financially despite strong revenue growth, growth at the Conservatory of Music, here's one of the pain points. Here's one of the issues, right?

You've grown your staff.

What'd I say?

It was like 27% growth in staff.

You've also, uh, you know, we're getting close to doubling the number of contractors over $100,000, uh, compensation there.

Who knows?

That's, that's more than $3 million in compensation just for over $100K, and we know there's a lot more under.

A lot of other vendors that are below this, right? So actually, that's one of the things I've been adding to my practice is getting a sense of all of the vendors, all of the credit card payments, that have been made.

Crazy stuff, right?

Like thousands of payments to pizza joints and stuff like that.

Like this stuff adds up really fast. So double check all of these contracts, all of your credit card, all of your point of sale stuff, all of the accounts payables.

Double check who you're paying, whether you needed that, what's going on. It looks fine here at at Trinity in terms of raw values, but again, they're small. So per student, that looks decent.

And okay, contractors don't appear to be an issue at Trinity.

It's mostly the staffing. All right, but there are other, other big expense items here we can take a look at. Marketing. Trinity is spending a bit on marketing, but that actually looks normal. Okay, that's fine. IT. This can be a pain point for some schools. Looks okay at both of these, actually.

Look at those.

But again, uh, double check. Uh, I suspect this is going to be an issue. Yeah. Um, okay, for whatever reason, these insurance policies get out of hand.

You see how this— they went from— what a raw—

I, I can't imagine that things changed that much at this school since 2019, right?

They're paying $120,000 right now in 2019 for insurance.

Now they're paying $600,000.

I, I don't understand that they could be self-insured and just insuring themselves for health insurance.

So these— yeah, actually, I don't know for sure how they report this. I think this is—

it's possible that health insurance is in there, but it's showing up here. Actually, no, it's not going to be in there because—

true. Yeah, you're right.

That is— where is it? Did you do it?

All right.

Here, other benefits. So health insurance, dental insurance, life insurance is right here. So this is like property insurance, you know, errors in omission, I think, other stuff like that.

But they need to look into this. This is why this is useful, right? Yeah.

Yeah.

Something like this where you're benchmarking against yourself. You've gone from less than $100,000 to all of a sudden $600,000. You need to start asking questions about why that happened.

Right, and understand it.

Maybe there's a reason for it.

Maybe there's not. Maybe you just need to get some different insurance quotes.

It's important for all of the people who watch this show that we're using the college's data. This is the data they submitted either through their audited financial statements or their IRS 990s, or in some cases, IPEDS data. We're just making it easy to compare.

Yeah, that's the 990.

And again, occupancy costs. Okay, this is utilities. Rents, stuff like that. It's really high at Conservatory and also really high at Trinity Christian compared to their revenue and per FTE.

Yeah, I mean, this school shrunk so much, you start wondering if maybe they're heating buildings that are just not used very much anymore, right?

If try to get these buildings utilization up, if you can't, you probably just You can shut them down, mothball them for a bit. I don't know.

Lots of policy questions that pop out of this though, right?

Yeah. So that's my job is to give you options, help you see clearly what's happening. Office expenses have been really high at both of these schools for a long time. That's paper, printing, postage, stuff like that. That shouldn't be like that. Double-check your budgeting there. What's going on? If you're just letting individual departments have credit cards and go to the store anytime they feel like it. That adds up very fast. All right. All these little things add up very fast. Fundraising expenses. Yeah. Completely really high at both schools. Double check you're getting your ROI there.

Okay.

So yeah, I think what, remember my theory before, how they might have had a good revenue in 2024.

It might have been like a one-time thing. They just, yeah.

$12 million. Yeah.

Their alumni that they could possibly get money from and they were able to get $13 million. Maybe they pitched it, we need this to survive, right?

Yeah.

This is awesome.

But I mean, really, again, how many years does that give you if you don't balance the budget?

One.

Yeah. Let's, let's take a look at their net income just to see. So that becomes— I want to do change in net assets from operations.

Wow, they're getting close.

They're actually doing a decent job of getting this, but they lost $170K here on—

oh wait, but again, that's going to include the gifts, right?

Okay, so, um, right, they need to cut probably that out of their expenses.

Yeah, okay, so they—

what, they get $12 million in gifts and they still run a deficit? Wow. Yeah, I don't think it's going to give them very long at all, right? That, in fact Yeah, they already ate it up, apparently, compared, you know, looking at this, they should have had a plus $12 million here, but they had a negative. Okay, so that's not good. All right.

I'll pass it back to you, Gary. Clearly, the point of all this is that there's a lot to look at.

If you're Trinity, look at your staffing immediately. You need to right-size your staff and then probably do other stuff. You need to bring that price back up immediately as well. don't worry if you lose students, doesn't matter. You need to get that up, right? You're probably not going to lose students faster than you can increase that price, which is important.

So, um, and so, man, like I shared a little bit earlier in the show, we've done not quite 150 reviews, financial and health reviews, of about 150 colleges. Um, and, and in most cases, but not all, they are essentially local symptoms of a national disease. And we see that in both cases today, and that national disease is an inability to manage expenses in conjunction with revenue. It's a trend, it's a pattern. You and I see that almost for every college, and it makes me wonder if this industry has the leadership and management wherewithal to be able to manage costs. Now, some do, don't get me wrong. There's certainly some of those 150 that we've done, we are really, really impressed with what they've done, but that's a relatively small number, and week in and week out, you and I do this show and the themes are similar. It's distribution revenue, it's unrestricted net assets, it is employee counts. In some cases, it's employees paid over $100,000. That wasn't the case today. And they're fixable. And again, I started off the show asking you today, you know, so folks don't believe in the comparisons. I'll be more blunt than Dr. Hendricks. You're wrong. You've got to use these comparisons. And for the folks at Trinity, less so for the folks at New England Conservatory. Use them. You should have used them a long time ago.

Yeah, I don't even think they're—

they're not even being honest when they say that because they obviously use comparisons all the time and they're just—

they don't want to look at these comparisons, right?

They're not good.

Yeah, things that are uncomfortable, right? Or think about it.

I told you, man, talking with the reporter later today about a college that closed, and I was looking at the numbers last night, and Matt, you and I could look at that college 5 years ago and said, yeah, it's not going to make it. And yet colleges continue to hang on. Colleges here today, and one in particular I would have concerns about, you would have concerns about. And it's not an overnight development. This develops over time.

I'll just say one thing too about like a little bit more blunt. You hear it.

If you hear one of your administrators say those comparisons are not relevant, we're unique, or that, oh, our expenses have gone up because of inflation. Those are two massive, massive red flags for you to take back. And talk, start asking more questions, because clearly neither of those responses are either true or, uh, yeah, they're just not true. And it signals that they're not going to take— they're not going to fix the problem. All right, that's basically what it signals.

Yeah. So let's take a look just at a couple things, and I've got both of our colleges up. Interestingly, I'm gonna start with graduation, and this is kind of sad news. Because both colleges are doing a decent job of graduating students. The conservatory, a little bit much better than Trinity Christian. Um, you know, of course my minimum threshold is 50%, but we see this with some regularity, Matt, in that these colleges that can at least graduate their students— and many, many, many can't in 4 years—

still having financial troubles.

I can understand colleges in financial trouble, but give Trinity Christian College credit for all the financial issues they have and for all the viability issues they have, they continue to graduate students in excess of half. Now, that's not a fabulous number, but it's a decent number.

And then I looked also at—

I also just do as a kind of a public service effort, we want to talk about unfunded institutional grants. Unfunded institutional grants is inside baseball speak for merit aid.

Most merit aid and most scholarships unfunded institutional grants, Matt, you and I know are discounts. And we see that the Conservatory has gone up $5 million over the last 8 years, so what, $700,000, $800,000 a year? Uh, Trinity Christian has tried and done a much better job of managing that, but they're still up a million, a couple hundred thousand per year, um, in additional discounts. They're welcome to do that, it is good for the students, but as we see week in and week out, Matt, it's not so good for the colleges because they're foregoing revenue. And again, these are not actual dollars, these are discounts, same kind of discounts you and I get for cars and computers and clothes and stuff like that.

Trinity Christian, um, a lot of low enrollment majors. The only— they only have 2, maybe 3 or 4 with decent enrollment numbers.

The rest are all less than 10 per year.

Um, at what point do those become economically infeasible?

And then I did—

I went to Illinois because that's where Saint Trinity Christian is from.

And I brought up just a couple of majors. This is external market share, right? This is for 2023 bachelor's degrees, all the public and private colleges in Illinois. Biology. I'm gonna do biology first. And we see some major players. We see the University of Illinois in Chicago. We see Loyola University and a couple others. We can put that— put the pointer on top. Have decent market share. But look at all these mom-and-pop programs, these small enrollment majors really across the Illinois spectrum. Wouldn't it be interesting, Dr. Hendricks, if— I'm just gonna make up a scenario here— the University of Illinois-Chicago and Loyola managed all of the biology programs for the state of Illinois? Now, this is just a wild hare, I understand. It's not going to happen, but, but logically There's value in that because would you, given a choice, all things equal, send your child to Loyola University, which has a massive market share in biology, or would you send your child to Knox College, which has next to none? And that's an easy question to answer. And then we'll look at one other one, shows the same theme. I'm going to look at accounting. I'm not using economics, Matt, I hope you're okay with that. And again, we see the same theme. There are strong players University of Illinois Champaign-Urbana, Illinois State, Illinois Chicago, again DePaul. Strong players. Why wouldn't these strong players offer their services to help all the colleges in Illinois? Again, just for sake of example, run and manage and improve and support their accounting and accounting-related services. You know, if you and I ran a coffee shop and we sold 100 cups of coffee a day and 2 donuts a day We'd probably get out of the donut business pretty soon because it's just not worth it making donuts for two to sell two donuts a day. And that's kind of what we're seeing here for these colleges. And then finally, as a reminder, for those students and their families looking at assessing the financial health of colleges they're considering, at My College Viability, mycollegeviability.com, you can get a free college viability report for, for colleges you're considering. and it looks at graduation rates. It looks like enrollment changed. Decreasing enrollment is not a good thing, Matt. And some other things that we look at as well. Of course, there's a paid version also.

And, and Matt, I wish we could come up with new themes, but we can't, and we won't, because the themes are similar. And we're going to continue to see college closes— they're not closures, excuse me— we're going to continue to see college closures. Probably starting this year as colleges get those, those Title IV fund checks and realize they're not going to go any farther. You and I have a feel for which ones are going to not make it. We're never going to share them on the show.

That's not our purpose.

Our purpose is to say, hey, here's what the data suggests. But increasingly, I think we want students and their families and even faculty and staff and other community stakeholders to take some position on this to recognize that these colleges in many cases are not financially very well run. And we use our show to point that out, Matt.

Yeah, I think it's tough love, really, that this is— for me anyway, this is tough love. A lot of these schools, like I said, there's nobody saying anything and they go on for a decade running deficits and nobody seems to be paying attention. So I think what I hope this show does is just make people pay attention and start asking questions, make the board start being more proactive, not just taking the administration's word for everything, that everything's great, and really start asking the right questions. Look at this data, right? Get a sort of an outside data source.

It's your own audit, actually. It's just your own audit. And I'm just making it easy for you to see.

How your audit and 990 compares to other schools.

So yeah, and I'll leave my contact information in the show notes. So, so for those of you watching this show or any of the shows that we do, if you want a private demo for just your college, drop me a note and either Matt and/or I will schedule that for you and we'll step you through it. Um, these are products, this is our business, this is what we do, and we're happy to share those with you. So we'll wrap this show up. For Dr. Matt Hendricks, I'm Gary Stocker. Thanks as always for making time for the College Financial Health Show. We'll be back next Tuesday with two more colleges on the show.