La Salle University’s enrollment dropped 28% since 2019. What is the school doing to cope?

La Salle University’s enrollment has dropped 28% since 2019 in overall headcount.

And the loss of full-time undergraduate enrollment is even worse, plummeting by 46.5%, to 1,705 in 2023-24.

In that same time period, applications also have fallen, and only one in every 10 students accepted enrolls. And La Salle’s core operating loss ballooned from $1.4 million in 2019 to $11.3 million last year, while its operating revenue fell to $92 million from $115 million over the same period.

» READ MORE: New La Salle president has made much of his career as a university fundraiser

That’s the picture recent financial statements and records paint of the 161-year-old Catholic university in Philadelphia’s Logan section, which has graduated such local notables as Mayor Jim Kenney, state Rep. Dwight Evans, and U.S. Rep. Madeleine Dean.

Daniel J. Allen, La Salle’s president, said he’s not naive about the challenges facing La Salle, and the last thing he would want is to sound Pollyanna-ish.

“I’m realistic about our situation,” Allen, who has been La Salle’s president for two years, said last week. “La Salle has had a tough go of it. ... It’s a tough time in higher education right now. At the same time, I couldn’t be more confident about this university. And I couldn’t be more confident in the plan that we have articulated for its future.”

Allen, formerly senior vice president for university advancement at DePaul University in Chicago, said La Salle will embrace its smaller size and build a realistic budget around it.

The university will evaluate the academic structure within its three schools — nursing and health sciences, business, and arts and sciences — with an eye toward combining academic departments and administrative oversight positions. There are no plans for layoffs or program cuts, Allen said.

» READ MORE: About 100 employees at La Salle University face layoffs or salary cuts

The university will also bring back baseball, add new sports for women, beef up its cheer and dance clubs, and start a band — all designed to improve student life and school spirit. That accompanies a contract extension for its iconic basketball coach, Fran Dunphy, who will return next year, and renovations already underway in its sports arena.

» READ MORE: La Salle has a plan to attract more students: Revive baseball, add several women’s sports, start a band

Closing or merging the university are not on the table, he emphasized.

“I’ve not entertained any serious conversations about selling the university,” he said. “We have a plan to get to a place where we are generating a net positive operating margin through better operations.”

He thinks the university can do that over the next five years.

» READ MORE: La Salle is cutting seven sports to better align with comparable athletic programs

La Salle’s plan will be carried out by a relatively new team of administrators in enrollment, finance, athletics, advancement, academic affairs and the school of arts and sciences, all of whom started since Allen arrived.

Some professors like the path the university has outlined.

“I was extremely encouraged by the vision and the planning and the strategies over the next few years, given the changing demographics of the college population in the United States,” said Charles Gallagher, a sociology professor who has been at La Salle for 16 years and who attended a meeting on campus Thursday where the plan was discussed. “We’re thinking about how we right-size ourselves. ... How do we do what we do better? I left feeling very optimistic about it.”

But others questioned adding sports after cutting some just a few years ago, while also combining academic departments.

“To be told that now those sports are possible while strong departmental autonomy is not really feels like a kick in the teeth,” tweeted one professor, whose tweets can be seen only by approved followers.

Founded in 1863, La Salle counts among its graduates William J. Burns, director of the Central Intelligence Agency; Matthew Quick, author of Silver Linings Playbook; and Cheryl Reeve, head basketball coach of the U.S. women’s team, to name a few.

But over the last decade, La Salle has faced increasing financial challenges. In 2015, under Colleen Hanycz, the university’s first female an leader, La Salle laid off 23 employees and launched a review that led to cutting 19 academic programs. The university also instituted a “tuition reset,” slashing its then-$40,400 tuition price by 29% for fall 2017. As with other tuition resets, the university also cut institutional aid, so students didn’t save near that amount but officials hoped the lower price would lure more middle-class families.

In 2018, it announced that it was selling 46 pieces of art from its museum to help fund teaching and learning initiatives in its strategic plan. Then hit hard by the coronavirus, like other colleges, the university in 2020 laid off 53 employees — nearly 7% of the full-time workforce — and cut salaries or hours for 48 others and eliminated 51 vacant staff positions.

» READ MORE: A 29 percent tuition cut caps renaissance at La Salle

Still, enrollment has continued to decline, from 4,933 (including undergraduate, graduate and doctoral students) in 2019-20 to 3,556 in 2023-24, with a record-low freshman class last fall.

Its student acceptance rate rose from 75% in 2019-20 to 82% in 2023-24, indicating a decline in selectivity, and its yield — the percentage of students admitted who enroll — fell from 15% to 10%.

Allen attributed the drop to fewer high school students nationally and questions mounting nationally about the value of higher education. He acknowledged that La Salle, like other city universities, also is impacted by perceptions of safety issues.

The current admissions cycle is showing more promising numbers, he said. La Salle is nearly 10% ahead in applications from first-time students over the same time last year, and deposits from students enrolling at La Salle are up 27%, to 159, the school said. That’s significant, Allen said, considering that La Salle hasn’t made financial aid offers yet, given ongoing problems with the federal education department’s new FAFSA form.

» READ MORE: La Salle plan to sell museum masterpieces stuns art community

Applications and deposits from international students and graduate students are up by higher percentages, he said.

The fiscal year ending May 31, 2017, was the last time the school operated in the black, a spokesperson said. Since then, it has run deficits.

The school’s $93.7 million operating budget for the current fiscal year included an $11.5 million loss that was lowered to $6.5 million through bond restructuring and draws from reserves, according to a recent bond offering statement.

In fiscal years 2023 and 2022, the university experienced “significant losses as well as negative cash flows” largely because of its decline in undergraduates and the end of federal COVID-19 relief funding, according to financial statements.

“These recurring financial results, as well as the industry-wide and regional trends in declining undergraduate enrollment raised substantial doubt about the University’s ability to continue [to meet financial obligations] as a going concern...,” the report said.

However, given the plans La Salle outlined for fiscal year 2024, including a voluntary retirement program and planned sale of real estate, that concern was alleviated in October, the report said.

Allen said the university will not mount “extraordinary measures” to close the deficit, but aim to improve over time.

“The reality is we can’t make those kinds of changes that quickly without compromising the quality of education we are providing to our students,” he said.

The school recently sold two student apartment buildings on the campus perimeter that were no longer needed, generating about $8 million, he said. About 800 students live on campus, down from 1,509 in 2019.

Over the next five to six years, the university anticipates selling more property it deems expendable to generate $10 million more, he said. The entire campus was appraised at $300 million, according to Standard & Poor’s Ratings Services.

In support of turnaround efforts, La Salle recently undertook a debt restructuring that will save it $24 million by allowing it to only pay interest on municipal bonds through fiscal 2028, La Salle said. After that, its debt service will jump over two years to a projected $13.8 million from $7.2 million, according to the bond offering statement.

“We feel we put together a very, very tight plan that takes that into account,” Allen said.

It’s not realistic to try to rebuild La Salle’s enrollment to what it once was, Allen said, given the marketplace.

“As we think about the future of the university, we think about a lesser better concept,” he said. “Perhaps fewer students, perhaps fewer programs, perhaps a different type of infrastructure to serve those students ... but always about quality.”

A total enrollment of just under 4,000 “seems right to us,” he said.

The university also over time will lower its discount rate — that’s the average percentage of institutional aid a student receives — from 66%, to about 60%, he said. That will help boost net tuition revenue, he said.

Expect tuition increases over time, but nothing dramatic in one year, he said, and the school to increase institutional aid to help students who can’t afford the higher price. La Salle’s current tuition and room and board stands at $51,510.

“I think we provide a better value and better experience than what we have our price at,” Allen said.