As Drexel undergoes a presidential transition, its leaders outline plans and problems to overcome

It’s not the first time that John A. Fry and Denis P. O’Brien will be passing the leadership baton.

The two worked together in 2016 when O’Brien, former president of Exelon Utilities, was on his way out as chair of the Chamber of Commerce for Greater Philadelphia, and Fry, president of Drexel University, was on his way in.

Now, Fry is the one heading out, slated to cross town and become president of Temple University on Nov. 1 after a 14-year tenure at Drexel. And O’Brien, who had been a member of Drexel’s board of trustees, will take the helm. O’Brien was named interim president last month, and the two have been working together, meeting individually and with teams.

» READ MORE: Drexel names Denis O’Brien interim president; John Fry to start as Temple’s president Nov. 1

“Denis has been in the office every day for a month now,” Fry said, noting that they have separate offices in the presidential suite across from each other.

“Feels like a year,” O’Brien said, sitting across from Fry in a Drexel conference room earlier this week. “Has it only been a month?”

The private West Philadelphia university is amid big projects, including a merger with Salus University, a plan to convert from a quarter to a semester system — among a larger academic restructuring — and implementation of an agreement with the U.S. Department of Education’s Office of Civil Rights to improve Drexel’s handling of antisemitism complaints.

» READ MORE: As Drexel’s John Fry gets voted in as Temple’s next president, here’s what he plans to do

O’Brien, a Newtown Square resident who has been on Drexel’s board for more than two decades and worked for Exelon and affiliated companies for more than 37 years, said he is planning to keep those efforts going, as the university searches for its next president.

“John has a great playbook and we’ve got a lot of really significant and important initiatives all teed up and underway,” said O’Brien, 64, who noted that he will not be a candidate for the permanent job. “And so my strategy is not to reinvent anything but just take those things forward as fast as we possibly can.

“John and I have known each other a long time. I feel like we’re going to have a great handoff and great continuity.”

O’Brien was on the search committee when Fry was hired, and has served on the trustees’ executive committee and chaired its buildings and property committee, overseeing major projects including Schuylkill Yards — a multibillion dollar development carried out in partnership with Brandywine Realty Trust that transformed parking lots and industrial buildings between Drexel’s campus and 30th Street Station.

O’Brien is not drawing a salary in his interim role. Fry’s total compensation in 2022 was about $2.2 million, with a base salary of more than $886,000.

Fry’s departure also comes as Drexel, like many other universities, is facing a budget crunch, with net tuition revenue down and enrollment still uncertain for the fall in part because of ongoing problems with federal financial aid forms. Both Fry, 64, and O’Brien acknowledged that “cost adjustments” or “reductions” will be necessary, but did not elaborate when asked whether that could include staff cuts.

“Higher education is somewhat challenged now,” O’Brien said, pointing to recent college closures locally, including University of the Arts and Cabrini University. “Drexel is going to have some of the same challenges. And it’s going to have some financial challenges that we’re going to have to really work through to make sure our revenue structure and cost structure are in the right place.”

Fry declined to release Drexel’s projected enrollment figures for the fall, saying it was still too early with the start of the quarter a month away and ongoing impact from snags in the Free Application for Federal Student Aid (FAFSA).

“It’s jumping around in all sorts of ways that we haven’t experienced before,” he said.

Enrollment stood at 21,700 last school year, down 10% from 2017, a significant drop but not as much of a percentage decrease as Temple, La Salle and some other schools have experienced in recent years.

On the positive side, the university has lost fewer students this summer, known as melt, than in previous years, and nearly 90 students from the University of the Arts have put down deposits to enroll, Fry said. The school also will expand 1,200 students with the addition of Salus, he said, and its medical school branch campus in Reading is full; there are plans to open another one in Atlantic City.

But with a better economy, graduate student enrollments have softened as people find it more lucrative to go into the job market than go back to school, Fry said.

That, in part, has driven a decline in Drexel’s net tuition revenue, Fry said. In 2023, it stood at $610 million — $17 million less than it was in 2015.

Fry said he’s still hopeful that Drexel will hit its enrollment targets, but won’t really know until official numbers are gathered six weeks after the semester starts.

Enrollment isn’t the only thing causing a budget crunch.

“Some of the cash flow challenges have to do with medical malpractice settlements, which don’t ever come planned,” Fry said. ”Because we were involved at Hahnemann Hospital, those are trailing lawsuits. They follow us to this very day. ... Some of these cases are over 10 years old.”

Hahnemann was the teaching hospital for Drexel’s School of Medicine. It closed in 2019.

Drexel, Fry said, finished fiscal year 2023 with a positive operating margin. He declined to release results for this year, explaining that the numbers were in auditing and wouldn’t be available until October.

Fry pointed out that the university has weathered financial changes in the past, including the impact from the pandemic and the abrupt closure of Hahnemann, both of which forced financial belt-tightening. Colleges also are having to cope with increased competition, a decline in high school students and pressures from national and world events, including Hamas’ Oct. 7 attack on Israel and the subsequent military response in Gaza.

“This environment is only going to continue to be tumultuous for all universities,” Fry said.

Drexel has sought to bolster its endowment, which is now in excess of $1 billion. Leases of land for the development of Schuylkill Yards already added $108 million to the endowment and $70 million more is expected, Fry said.

But, he said, “it’s not close to exceptionally well-endowed institutions like Penn, which really insulates institutions from a lot of what we’re talking about.”

The University of Pennsylvania’s endowment exceeds $21 billion.

O’Brien got his bachelor’s degree in industrial engineering from Rutgers University-New Brunswick and an MBA from Drexel. He is married and has three grown children, one of them a Drexel graduate and one still in college, a sophomore at Pennsylvania State University. An Eagles season ticket holder, he grew up in Havertown and lived there most of his life, before recently relocating to Newtown Square.

Fry, who will depart Drexel on Sept. 30, said he will take October off before joining Temple. During that time, he said, he plans to settle into his new 18th-century house in Newtown Square and prepare it for entertaining Temple guests.

But he said he will continue to be available for consultation as O’Brien needs.

“My commitment and loyalty to Drexel will never end,” Fry said.