On firm financial footing, St. Joe’s says it is open to partnerships and wants to add programs

Even before the pandemic, many colleges, private and public, had been struggling with falling enrollment and tight finances, with trends showing even fewer available high school students later this decade.

So it was no wonder that the comments from St. Joseph’s University president Mark C. Reed to a business journal late last month quickly rippled. In an interview, Reed talked about how schools like his need to adjust for the future.

“Ultimately what we would love to do is add new programs … There’s lots of different ways to do that,” he told The Business Journals for a story published Oct. 29. “You can start the programs from scratch. You can acquire them. You can merge with another institution. When you look around in the greater Philadelphia area, there’s no shortage of educational institutions.”

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Just mentioning the word merger and St. Joe’s — one of the city’s iconic higher education institutions — became social media and education insider fodder.

“Ahhh, we’re in pretty good shape financially, academically and in enrollment,” tweeted one alumnus, Marty Tantum. “That’s the time to move forward. We’re just trying to take the offensive. Go Hawks!”

Within four days of the posting of the story, under a headline referring to St. Joe’s as “a struggling college,” Reed had sent out a 1,300-word plus message to alumni and parents, assuring them the university that straddles the Philadelphia-Lower Merion line was on solid ground for some time to come.

“It would be an overstatement to say that we are immune to strains of the pandemic, but we are well positioned to withstand any circumstance, as we have for nearly 170 years,” he said in his Nov. 2 email, which the school said was part of a larger update that had already been in the works.

The Jesuit university, which has taken steps under Reed to bolster its financial and market position, told The Inquirer that it is looking at ways to bring more health care programs into its repertoire and potentially other programs, too. Partnering with another institution may be quicker and more effective than building the programs from scratch, the school said.

But it also sought to dispel any confusion. "To be crystal clear, however: We are not a candidate for acquisition, and we are not actively engaged in any transactions,” spokesperson Marie Williams said in a statement. “We welcome conversations with other institutions who would want to merge into us, be acquired by us, or partner or collaborate at various levels.”

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There have been pay cuts and job cuts across the higher education sector as the coronavirus takes its toll. The Pennsylvania State System of Higher Education announced earlier this year that it was looking at integrating six of its 14 universities into two entities as enrollment has plunged 22% since 2010. First-year enrollment at colleges around the country was down 16% this fall, while schools had to cover new expenses for virus testing, cleaning, technology, and classroom preparation.

St. Joe’s has faced new costs and enrolled a smaller freshman class than originally anticipated this fall. But in his message to alumni and parents, Reed said the university finished the last fiscal year in the black, has maintained an A-minus rating from the credit rating agency S&P and has seen its endowment, now at $315 million, grow by more than 50% over the last five years.

While the pandemic poses challenges, he said: “I am confident we will weather this storm and manage through as well as we possibly can.”

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In 2014, before Reed’s arrival, St. Joseph’s was dealing with one of the most serious financial crunches in its history. It was facing a shortfall, cutting positions, slashing budgets, digging deeper into endowment earnings, and it had planned to add hundreds more freshmen, which would have brought in more money but also decreased selectivity and academic quality. Faculty pushed back.

When Reed arrived, he made the decision to allow enrollment to get smaller to improve academic quality and selectivity. St. Joseph’s enrolls 4,200 undergraduates this year, about 600 fewer than when Reed took over in 2015.

Several faculty members said they have become more confident about the university’s fiscal position under Reed.

“St. Joe’s is healthy and does not need a merger for survival,” said Randall Miller, a history professor who recently retired after 47 years at the university. “Any merger in terms of St. Joe’s would not be about St. Joe’s needs but about St. Joe’s wants.”

St. Joseph’s has partnered with other institutions, including the Barnes Foundation, and has since added programming in horticulture.

A couple years ago, it launched a School of Health Studies and Education. The university has been looking at a couple of local institutions with health care programs as prospective partners, according to one source with knowledge of the effort. The university declined to comment.

“Conversations around partnerships happen regularly with varying degrees of formality," Williams said. "We would not violate the confidence of these conversations by disclosing whom they are with.”

Robert Kelchen, a higher education professor at Seton Hall University, said the idea seems worth exploring.

“They know they have an area where they could strengthen," he said. "I think we’ll see more colleges try to add specialty programs in that way.”