Can a Small College Close to Reinvent Itself? Saint Joseph’s Looks to Find Out

Bruce Wilcks

There was an unusual twist to last Friday’s announcement that Saint Joseph’s College, in Rensselaer, Ind., would “suspend operations” at the end of the current semester: The college’s leaders said that by shutting down now, they hoped to “preserve our remaining resources to prepare for a launch of a future, re-engineered Saint Joseph’s College.”

But discussions about what a revived Saint Joseph’s might look like are still months away, at the earliest. And observers cite the tumultuous experiences of other small colleges that have closed or come close to it — among them Antioch, Sweet Briar, and Wilson Colleges — as suggesting that any attempt to reopen would face numerous hurdles.

But it would also provide an interesting test case for other hard-pressed colleges that have made unsuccessful attempts to improve their fiscal health and might consider taking a more drastic step if they thought a positive outcome would, eventually, justify it.

Saint Joseph’s, a liberal-arts institution opened in 1891 by an order of Roman Catholic priests and brothers, has struggled for years to increase enrollment, said Robert A. Pastoor, the president, in an interview this week. The college has just over 900 students currently, down from more than 1,066 at the beginning of the 2015-16 academic year and 1,163 at the beginning of 2013-14.

“Many things have been tried” to get enrollment numbers up, said Mr. Pastoor, who has been in office only two years. Among the college’s gambles were new apartments and a new academic building, he said, but taking out loans to build them contributed to debt that now totals $27 million and includes mortgages on the campus.

The college’s regional accreditor, the Higher Learning Commission, put Saint Joseph’s on probation in November 2016, citing concerns about whether “the institution’s resource base supports its current educational programs and its plans for maintaining and strengthening their quality in the future.”

Benedict Sponseller, chairman of the Board of Trustees, told faculty and staff members at a meeting this week that the decision to suspend operations resulted from “the combination of cash-flow difficulty, the threat of losing our accreditation, and the real possibility of students’ not being able to get loans,” according to the Lafayette Journal & Courier. He added that the college had exhausted its ability to borrow money.

“The old business model that we’ve been operating under is broken,” Mr. Pastoor said, noting that the model was identical to that of many other small colleges: tuition-dependent but offering hefty discounts to attract undergraduates. The college’s nursing program, which has just under 200 students, is expected to be able remain open at a facility in Lafayette, Ind., provided the Higher Learning Commission approves, he said.

In a statement about the closing, the college said it had hoped “to grow out of the current financial challenges,” but they are just “too steep.” Just a few years ago St. Joseph’s reported having $25 million in its endowment accounts, but Mr. Pastoor said only about $6 million remains, some of which the college hopes to use as severance pay for faculty and staff members. Doing so will require permission from Indiana’s attorney general, he noted, and it may be several months before that decision is announced.

In addition to reimagining Saint Joseph’s, the statement mentioned the possibility of becoming “an attractive partner for another educational institution” — a conventional move for institutions that find themselves in trouble. But that, too, requires suspending operations at the end of the current semester, according to the statement.

Honoring the Founders’ Mission

Mr. Pastoor said the idea of re-engineering Saint Joseph’s arose because the Board of Trustees remains committed to the mission laid out for the college by its founding religious order, the Missionaries of the Precious Blood. “We are there to serve the disenfranchised and marginalized in the area,” he said, and that mission “drove the suggestion of not closing but suspending operations.”

The hope is, he said, that by not going out of business entirely the college could retain its current accreditation rather than having to start from scratch if it were able to reopen. Antioch College, which reopened in 2011 after a three-year closure, needed five years to win accreditation, even on an accelerated schedule. Without accreditation, Antioch could not participate in federal student-aid programs, and was able to attract students only because its trustees pledged enough money to promise free tuition to the first four classes.

Mr. Pastoor also said a re-engineered Saint Joseph’s would need new models for both its academic offerings and its financial operations — models that, he said, the board hoped would be worked out after the suspension by a few remaining academic and financial employees. Mr. Pastoor said he did not expect to stay on as president.

On the financial side, he said, one factor that could benefit a reopened Saint Joseph’s is a 7,600-acre tract of prime farmland given to the college in 2010. Revenue from that property can be used only for scholarships, he said. He also said the institution’s commitment to the underserved might make a reimagined college a “model for the future” that foundations would be interested in supporting.

Re-engineering colleges to improve their viability has brought mixed success in recent years, although in almost all cases it has been tried while the institutions remained open. Agnes Scott College, a women’s liberal-arts institution in Atlanta, has attracted attention and applicants by refocusing its curriculum and other offerings to highlight leadership and international awareness. Centenary College of Louisiana, in Shreveport, decided in 2010 to cut the number of majors it offers from 44 to 22 and make other significant changes, but last year it was put on probation by its accrediting agency, the Southern Association of Colleges and Schools, over financial worries.

“I think a lot of independent colleges are actually going through that reimagination process,” said Harold V. Hartley III, senior vice president at the Council of Independent Colleges. “We think of it as strategic innovation. Saint Joseph’s sounds like they want to give themselves that opportunity by hitting the pause button.”

Richard A. Hesel, a consultant with the Art & Science Group, in Baltimore, said that while he wasn’t familiar with the details of Saint Joseph’s situation, it sounded like the college “should have been thinking about re-engineering 10 years ago.” He added: “There are a lot of circumstances where institutions, and boards in particular, do not face the realities of a situation. They have a fiduciary responsibility to do that, and they don’t.”

His colleague David W. Strauss noted that “the lesson we’re seeing, from the couple of instances we’re looking at as analogues, is that it’s really difficult to pause and start up again.” That may have to do with bad press, he said, “but also with the years that led up to it — the marketplace senses weakness.”

The takeaway, he said, is that “I’m guessing that you’d have to reopen as something significantly different than you were before.”

Lawrence Biemiller writes about a variety of usual and unusual higher-education topics. Reach him at lawrence.biemiller@chronicle.com.