How to Save a Dying College

Reflections on the Collapse of St. Rose

Many of you have already seen the headlines, but last week the College of St. Rose in Albany, New York, announced that after over 100 years in operation the college would be closing on account of continued declining enrollment. 

While college closure headlines are regrettably the norm these days, for me personally this one hit close to home as I’m a 2006 graduate of the institution’s Communications program. Like many folks reflecting on their undergraduate experience, my time at St. Rose was transformative, and nearly 20 years later I remain connected to many of the program’s faculty. 

So it’s safe to say this one stings. 

Not just because an institution I loved is closing, but because their closure was so clearly predictable. Going back nearly 10 years the organization has been vocal about enrollment challenges, and starting in 2015 I began reaching out to leadership offering free consultation in an attempt to develop some alternative go-forward solutions. 

What happened next was what made this situation so painful for many of us impacted: largely nothing. 

Outside of a swath of program reductions, and a limited real estate sale, the leadership appears, at least externally, over recent years to do almost nothing other than trim budget and stand at command while going down with the ship. 

So today, as I think back on not just what is, but what could have been, I’m left wondering…

Why Do So Many Institutions Facing Existential Threats Appear to Stand Idly By While They Die?  

And so I decided to cautiously wade in and write this post. Not in an effort to kick any organization while they’re down, nor to imply I could have actually had any substantive impact had they allowed me to engage, but rather to pen out some sobering realities that I think any institution facing financial uncertainty must consider. 

So What’s Driving Inaction? 

There are three primary factors driving inaction among institutions facing existential threats:

#1 - Denial of Reality 

Everyone wants to believe it’s going to get better, but for the majority of institutions facing declining enrollment, the truth is that it realistically will not. Yet each year, institutions develop lofty, aspirational budgets that paint a picture that somehow suddenly everything is about to change.

In some cases, this is driven by a President looking to buy time with the Board or a Cabinet either unwilling or unable to push back with the truth. 

In others, it may be the Board itself that is pushing a narrative that the only plan must be one that keeps the mothership whole.

Regardless of the cause, more-often-than-not what happens is another year goes by with another missed plan. Another year where true, hard action could have taken place, but instead we’re left with half-baked Hail Marys and a budget that will no doubt be blown by the end of first quarter. 

This certainly may have been the case at St. Rose, where the past President successfully survived Board pressures amid mounting concerns, with a now-obviously unsuccessful narrative that things would improve.

#2 Fear of Faculty

For many institutions facing financial hardship, an unfortunate and necessary move is to reduce an institution's offerings, closing and teaching out low-enrolled programs that aren’t independently financially viable. 

In most governance environments, any President – or Provost – who ventures down this path risks facing a vote of no confidence, a groundswell of vocal detractors, and potentially finding themselves embroiled in blog posts and news articles for months. 

For many in leadership worried about where they’ll go next, that’s enough of a threat – either real or perceived – to cause them to slow down and not act. 

Or in the case of St. Rose, where program reductions were pursued, it can cause a total vacuum at a leadership level, which was the case at one point when the college churned through no less than four provosts in two years. 

#3 A Sincere Lack of Clarity 

Finally, perhaps the most common cause is simply a sincere lack of clarity around what to do, when to do it, and how. 

For organizations facing financial fallout, there’s no shortage of suggestions from those impacted, so sorting through the sea of solutions can be a daunting task. 

Whether it’s to launch new programs or close old ones, sell buildings or open a new campus, improve marketing or shift modalities, the myriad of well-intentioned suggestions is unrelenting. 

And it’s easy to take the easy way out, cutting and addressing only the most obvious and egregious of financial failures, while failing to drive the deep, dramatic change needed to identify, protect, and elevate a new business from the ashes of an old one. 

So What Is an Organization to Do?

At least in the case of St. Rose, I’d like to highlight a few things that I think the organization could have or should have done to find a profitable path forward. 

1. Diagnose the Disease Sooner

   While the institution certainly made cuts, St. Rose appears to have held onto narratives that things would somehow miraculously turn around rather than acknowledging that as a high-cost, private, tuition-dependent college in a mid-size market, with significant debt, the truth was far less rosy.
   

2. Move with the Market
   As the market moved online in droves, St. Rose kept nearly 100% of their instruction on ground. I previously reached out to St. Rose to encourage them to consider how they could make a move to be a premium online player within the Tri-City area.
   
   While Albany is home to early online innovators like Excelsior, and neighboring SUNY Empire, the market lacks a more elevated online brand, like Northeastern’s online efforts to Boston or Pepperdine’s to the Greater L.A. market. And while this move may have been a stretch, inaction online on the part of Siena, Union, and Skidmore still left the window open to potentially launch and scale a new revenue stream regionally. 

3. Cut Deeper
   The university certainly pushed cuts, with program closures and staff and faculty reductions, but it’s clear those should have gone much further. By pushing profitability down to the program level I believe the institution would have seen that they still had a strong base in education programs.
   
   While completions in education have cut in half over the past decade, they have stabilized since 2017, highlighting that there was still a strong play to maintain their role as a leading regional leader in teacher preparation.

   

   Education Complete YoY (Source: Lightcast)

Coupled with some small but meaningful growth in other program areas like psychology, it certainly appears there was still a healthy subset of programs within their portfolio. 

Psychology Completions YoY (Source: Lighcast)

4. Generate a True Go-Forward Plan
   A college can’t cut its way to success. Program reduction is often a necessity, but growth is the only moat to protecting an institution in the long run. So beyond budget cuts, it’s critical to develop a meaningful, practical plan for how the institution can return to growth.
   
   In the case of St. Rose, perhaps that would have meant shuttering whole schools while elevating their education offerings and/or expanding online.
   

5. Liquidate Real Estate
   For many institutions, the fastest path to a cash infusion is to reduce its real estate portfolio. In the case of St. Rose, the institution has 80 buildings across 35 acres. While they did put 10% of their buildings up for sale, it appears to have been too late or priced based more on their debt rather than the true market rate.
   
   One of the best ways to navigate that situation? Sell your campus buildings and lease them back from the buyer. It can provide you 10+ years to figure out an alternative physical strategy while allowing you to access the capital previously locked up in the asset.
   
   If your institution is struggling, I can’t stress enough: Liquidate your real estate and reinvest that money back into the market to fuel your go-forward plan. 

6. Get Real When It’s Terminal
   Finally, when we know an institution is facing an inevitable demise, we can move to end-of-life care.
   
   For colleges and universities that can mean exploring mergers and acquisitions but also transitioning individual programs or entire schools to competitors. By doing so, they can get ahead of a closure announcement and create a narrative that can retain some legacy from the declining institution, while infusing enrollment into the receiver, and most importantly doing right by the students impacted.

Bringing It All Together

So when considering St. Rose, here’s roughly what I would have proposed:

• Continue to cut declining and/or unprofitable programs

• Attempt to expand online, especially around areas of core competence such as Education

• Fire sale the real estate portfolio, offering 10-year lease backs for anything outside of the core campus buildings if they can’t sell on their own 

• Use all funds generated from the real estate liquidations to invest in the growth plans around new core offerings, rather than make up budget shortfalls for unprofitable programs

• And if all that failed, I’d attempt to create the St. Rose School of Education and offer a complete suite of education programs, along with the core campus real estate, to SUNY Albany or Sienna, and see if either would be interested in catching those programs and planting a larger flag mid-city

So Why Didn’t St. Rose Act Sooner?

Ultimately, this is a question better answered by someone far more informed than myself. But I will say, it’s a bit odd to see an institution with over 2,500 students, a growing endowment, and a rather hefty real estate portfolio fold so quickly. 

My hunch is the institution was anticipating more of a Covid bounce back than came to fruition, and they couldn’t ultimately recover from the lack of starts coupled with the collapse of their retention rate from the pandemic. 

St. Rose Retention YoY in Orange, Competitors in Gray (Source: Datausa.io)

Despite a healthy growth in applications in 2021, the institution started just 356 new students (freshman and transfer) in 2022, the same year that they graduated 870 undergraduate and graduate students. That’s a net loss of over 500 tuition paying students. 

Coupled with the roughly $50 million in debt the institution appears to have been carrying, and it created a rather abrupt insolvency. 

What’s unfortunate though is that it appears the institution did seek mergers, but at a time when it was likely too late for an acquirer to be able to achieve much value through acquisition, which resulted in an 11th hour ask to the State for bridge funding that went unanswered. 

Final Thoughts

I do want to reiterate it’s not my intention to kick St. Rose while they’re down. It was an impactful and important organization to the region, one that has positively impacted tens of thousands of students, including myself. And for all I know, they very well may have pursued much of what I’ve outlined above. 

But unfortunately, at the end of the day, it appears – at least publicly – that their efforts were too little, too late. And for many other struggling institutions, particularly small, private, tuition-dependent schools, their fate will almost certainly be replicated. 

So if your organization is facing similar financial uncertainty, please heed this warning: 

Don’t Believe Your Optimistic Budget. Take the Medicine and Take Action Now.

Because…

You Can Either Invest In Your Growth Or Subsidize Your Demise

And it’s better to go down swinging than to slowly sink into the abyss knowing there was more you could have done. 

In Conclusion

So what did I miss? What did I get wrong? This is obviously an incredibly complicated situation, as are all institutional closures, and no doubt there are nuances far beyond my own experience and understanding.

What advice would YOU have for an institution facing a potential closure?

If you’ve got a take, I’d love to hear it!

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About the Author
Seth is the founder and CEO of Kanahoma, a San Diego-based performance marketing agency on a mission to build a better agency for organizations building a better world.

You can learn more about who we are and what we do at www.Kanahoma.com.