Such Great Heights
What Happened at Siena Heights University?
On June 30, 2025, Siena Heights University announced it will close at the end of the 2025–2026 academic year, after more than a century of operation. Founded in 1919 by the Adrian Dominican Sisters in Adrian, Michigan, SHU served nearly 1,800 students last year through a mix of traditional, regional, and online programs - including what appeared to be a growing SHU Global Campus with more than 20 online offerings.
To outside observers, SHU appeared to be doing many of the “right” things: expanding online, focusing on regional reach and impact, and keeping enrollment in the ballpark of its peers. So how did it still end up here?
To unpack that, we dug deep into the financial, strategic, and operational decisions to understand what went wrong - and what others can learn from it.
A Good Balance Sheet Can Still Sink You
On paper, Siena Heights looked healthy. Their most recent public filings showed $84M in assets against $18M in liabilities - an asset-to-debt ratio many CFOs would envy.
But here’s the catch: the bulk of those assets were tied up in illiquid forms - land, buildings, and even equipment - all tied to a traditional campus footprint. The university did not have enough unrestricted, liquid cash to meet its obligations or cover an accelerating operating deficit of $2–4M per year.
While it might appear that selling assets could bridge the gap, in reality:
The Adrian campus is in a depressed regional real estate market and highly specialized in use, making it slow and potentially undervalued in liquidation.
Endowments and restricted funds cannot simply be tapped to meet payroll or pay down debt.
A looming expiration and reduction of their line of credit (cut in half to $2M last year) further constrained access to short-term cash.
This is a critical reminder: high net assets mean little if you can’t access them quickly - liquidity and cash flow, not paper assets, determine survival.
The Ceiling on Tuition as a Lifeline
Another piece of the puzzle lies in SHU’s revenue model. Like many tuition-dependent private institutions, SHU relied heavily on student payments. Over the past decade, they raised sticker tuition from $23,750 in 2015 to $30,778 in 2025 - nearly 30% growth (granted, roughly on par with the national average).
But in recent years they also introduced the Siena Tuition Advantage, a price certainty program that froze tuition rates for two years for full-time students. While a smart marketing move to reassure students, it effectively locked them out of the traditional stopgap strategy of hiking tuition during financial stress - a lever many institutions have used, repeatedly, to balance their budgets.
Add in a heavy discount rate (average aid per undergrad $14,600, with 84% of students receiving aid), and the net tuition revenue per student was already squeezed. With enrollment already falling (from 2,700 in 2015 to 1,830 in 2023), raising tuition further risked accelerating declines - which suggests they had effectively hit the ceiling of what the market would bear.
Line of Credit Dependency
SHU’s financial reports also revealed a dependency on its revolving line of credit to bridge cash flow throughout the year - an increasingly precarious situation as the institution fell out of compliance with lender covenants. When auditors issued a “going concern” warning in 2024, it signaled lenders could pull back, making continued operations untenable.
When you’re using credit to fund basic operations, and then you violate the covenants that keep that credit available, you’re essentially out of rope.
Too Little, Too Late
Perhaps the hardest lesson here is this: SHU was doing many of the right things - but not fast enough, and perhaps not boldly enough.
They built out SHU Global, growing to over 20 online programs and earning national recognition. They opened regional centers to extend their reach and serve working adults. And yet:
The online portfolio was not yet independent or profitable enough to carry the institution.
The physical campus model continued to drain resources.
The regional centers, while well-intentioned, may have been an expensive distraction, extending the overhead of a traditional model without clear returns.
The institution’s leadership pursued the moves we’ve come to expect - online programs, regional access, tuition guarantees - but these strategies alone could not overcome years of financial inertia and declining demographics.
If You Build It, They Still May Not Come
(Note: Edited 7/16 to correct an earlier, incomplete analysis of 990 data.)
One often-overlooked dimension of Siena Heights’ story is this: even after developing a nationally ranked online portfolio, building out SHU Global, and opening regional centers, the institution was unable to drive enough growth to offset the broader financial challenges the institution was facing.
A multi-year review of the university’s IRS 990 filings shows that, after what appears to be years of modest and fragmented marketing and enrollment investment, Siena Heights did increase its spend with external partners in recent years - crossing the $100,000 threshold with multiple vendors. Unfortunately, this investment may have come too late, and despite the increased effort, it was not enough to reverse declining enrollment trends.
The lesson here isn’t that they didn’t invest at all - it’s that meaningful, sustained investment in marketing and enrollment strategy must happen earlier and at sufficient scale to make an impact.
Lessons in the Weeds
There are uncomfortable but important takeaways for everyone in similar circumstances:
You can’t “asset” your way out of a liquidity crisis. If your assets aren’t liquid and your line of credit is constrained, those buildings might as well be liabilities.
You can hit the ceiling on tuition increases. Particularly in price-sensitive markets, there’s a point at which students simply won’t (or can’t) pay more - and freezing tuition can remove a key safety valve.
Debt requires discipline. Once you rely on credit lines for operations and trip your covenants, you’re in a position where lenders, not leadership, are calling the shots.
Doing the right things too late still ends poorly. Online growth, regional expansion, and affordability messaging can all help - but if executed late or without fundamental restructuring, they may not save the institution.
Don’t starve the very thing you’re trying to grow. If you build new programs, campuses, or online portfolios, they often require a sustained, multi-year investment to generate the growth necessary to offset financial challenges. Without providing that runway, even well-designed initiatives may struggle to bear fruit in time.
Final Thought
The story of Siena Heights is not just about declining enrollments - it’s about the limits of half-measures in an unforgiving market. It’s about a university that saw the future, tried to adapt, but couldn’t shed the weight of its traditional model quickly enough to survive.
For those watching from the sidelines: pay close attention. This is a glimpse at what happens when long-standing structural imbalances, demographic shifts, and financial discipline collide.
The question to ask yourself isn’t are we doing the right things? but are we doing them fast enough, boldly enough, and with the discipline to address the root issues?
- Seth
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.
Seth does a great job of capturing all the key levers that impact the ongoing functions of most universities.