Three and a half years ago, a wealthy donor to two struggling colleges in Nebraska gave them an ultimatum: unless they seriously explored ways to merge classes and operations, he’d pull the plug on future capital donations. It was the only way, he insisted, that the two small Lutheran colleges just 25 miles apart could survive.
Today, enrollment is swelling at Midland Lutheran College, where students arriving by the carload from neighboring Dana College are signing up for an expanding selection of classes and athletic teams.
But this isn’t the kind of merger that the donor intended or that anyone at the two colleges, neighbors and friendly rivals for more than a century, wanted. Midland Lutheran is back on its feet mainly because Dana is about to close.
“I’m sure everyone at Midland Lutheran is feeling good about increasing the size of their student body, but I don’t think anyone is happy about the way it happened,” says Howard L. Hawks, chairman and chief executive officer of Tenaska Inc., an international energy company based in Omaha.
Mr. Hawks, a longtime donor to both colleges, says he is saddened by an outcome he predicted when the two colleges decided to go it alone.
Dana’s governing body reluctantly decided last month to begin the process of closing the college just hours after a rescue plan by a for-profit company fell through.
Dana’s accreditor, the Higher Learning Commission of the North Central Association of Colleges and Schools, was skeptical that its prospective owner, an entity called Dana Education Corporation, could maintain the college’s mission, attract enough students, and keep it financially solvent. The accreditor refused to transfer Dana’s accreditation to the for-profit group, the sale was called off, and the college’s closing was announced.
A Neighbor’s Help
Dana’s 550 students in Blair, Neb., needed somewhere to go, and Midland Lutheran, a half-hour away in Fremont, was eager to take them in. Its own enrollment had dropped precariously in recent years, from 934 in 2004 to about 600 this spring. Midland Lutheran began an aggressive outreach, dubbed Dana@Midland to recruit Dana’s students. Within a few days, more than half of Dana’s students had begun filling out paperwork to enroll at Midland Lutheran. By late last week, more than 300 had signed up, and if they all show up in the fall, Midland Lutheran’s enrollment will swell back up to more than 900.
Benjamin E. Sasse was only three months into his presidency at Midland Lutheran when the news of Dana’s closing broke.
He insists, and most people at Dana seem willing to believe, that Midland Lutheran has been genuinely concerned with helping a sister affiliate of the Evangelical Lutheran Church in America.
“The decision [to close Dana] was made on Wednesday, and we had carloads of teary-eyed kids showing up on Thursday,” Mr. Sasse says.
Students weren’t the only ones who were worried. Two days after Dana’s announcement, Midland Lutheran appointed an emergency faculty-hiring committee that is expected to start extending offers to some Dana faculty members over the next few weeks. Mr. Sasse declined to predict how many would be hired, but says that his college had already planned to add 19 new faculty members over the next three years and that it will now accelerate the hiring. Among the potential growth areas are Spanish and social work.
Midland Lutheran has also hired several of Dana’s staff members in admissions and support services to help with the transfers.
Losses and Gains
Marshall A. Hill, director of Nebraska’s Coordinating Commission for Postsecondary Education, says it has been hard to watch the college, which was founded by Danish pioneers in 1884, disappear, in bits and pieces, from Blair.
“It sort of feels, in this part of the country, like a farm option, when the family farm fails and the tractors and implements go up for sale,” he says. “There’s a sadness about it.”
While it is clear that Midland Lutheran will benefit from Dana’s closure, “our motive from the beginning has been making sure Dana students are taken care of,” says Mr. Sasse.
Every student who was admitted to Dana will automatically be accepted at Midland Lutheran, and all academic and athletic scholarships will transfer. Midland Lutheran has offered Dana students free on-campus housing for a year and will allow them to keep the same roommates.
Midland Lutheran, which had been planning to expand its athletics program before Dana’s demise, will add four new sports teams and has offered temporary or permanent contracts to all of Dana’s head coaches. Those coaches have started recruiting their athletes en masse to Midland Lutheran.
It remains to be seen how Midland Lutheran, which has also operated a slim margin in recent years, will pay for the expansion. Some of the money will come from the added tuition revenue of hundreds of transfer students (although many received generous scholarships, which will be honored).
Mr. Sasse says Midland Lutheran was also able to set aside millions of dollars over the past few years by encouraging early retirement and through fund raising.
Mr. Hawks continued to donate money for partial scholarships for 20 students at each of the two colleges. But he held firm on refusing to contribute toward any physical projects.
“Building more buildings when it was foreseeable that they wouldn’t have a long-term life didn’t make sense,” he says.
Mr. Hawks says the outcome for Dana might have been different if the two had extended their collaboration beyond a few shared professorships and isolated programs.
Limited Collaboration
The Rev. Kip A. Tyler, a member of the Dana Board of Regents and senior pastor at Omaha’s Lutheran Church of the Master, says consultants met with representatives of the two colleges and determined that merging operations would be too expensive and that the money would be better spent on the colleges’ separate recovery plans.
Mr. Tyler, whose son finished his first year at Dana and is now in limbo, sums up the experience of voting to close the college. “It was horrendous.”
Mr. Hill, of Nebraska’s higher-education commission, is unsure whether joining forces earlier might have saved Dana.
“I honestly don’t know whether that could have precluded Dana from getting to the point where they felt their only way out was to sell to a group of investors,” he says. “It’s hard to see that there could not have been some economies of scale that could have been gained by a greater level of cooperation.”
As for the future, “you have to wonder how well it can all work when they couldn’t seem to agree to collaborate more prior to Dana’s close,” Mr. Hill says. “Bringing those Dana people in and making them truly a part of Midland Lutheran is going to be a challenge.”
Milton Heinrich, chairman of Dana’s art department, has been there for 35 years and called the college’s closing “devastating.” On Friday afternoon, several dozen faculty and staff members met with Dana board members and administrators to look ahead and reflect on their past. Some expressed anger and frustration, both at the accreditor’s decision and at the regents’ failure to have a backup plan. Salaries that were supposed to continue through the end of the summer aren’t guaranteed, and a notice on Dana’s Web site appealed for donations to pay faculty and staff members, some of whom are now working for free.
At the end of Friday’s meeting, the group congregated on the patio of Dana’s main administration building for a brief memorial service in which people were asked to recall meaningful names and events from their years at Dana. “After each statement,” Mr. Heinrich says. “the collective body of faculty or staff said, ‘We remember,’ and then everybody hugged and cried.”
