Villanova has tentative agreement to buy Cabrini University campus; Cabrini will close in 2024

Villanova University has reached a tentative agreement to buy the nearby campus of the cash-strapped Cabrini University, which will close at the end of the next academic year in June 2024, the presidents of both institutions told The Inquirer.

Cabrini, a 66-year-old Catholic institution, like Villanova, had been exploring partnerships and merger possibilities, but given a deficit that had grown to more than $10 million in its approximate $45 million budget, Cabrini President Helen Drinan said closure was the path the school needed to take.

While Villanova hasn’t decided what it will do with the 112-acre Cabrini campus, which is about two miles away in Radnor, the Rev. Peter M. Donohue, Villanova’s president, said it will continue to be known as Villanova’s Cabrini campus as a way to preserve the school’s legacy. There are also plans for the establishment of a “Cabrini Scholars” program.

But for the next academic year, Cabrini will continue to operate as usual, with Villanova offering support as needed, Drinan said.

» READ MORE: With a mounting deficit, Cabrini University eliminates academic leadership positions, including the provost (from October 2022)

Both boards of trustees have approved a memorandum of understanding, but a final agreement is still being worked on, the presidents said. They hope to have something by the end of the summer.

“I feel very optimistic about this agreement that we have made,” Drinan said, emphasizing that Villanova is equipped to sustain Cabrini’s mission and legacy. “At the same time, I am totally sensitive to the emotional impact that this is going to have on people. ... It’s going to be hard for a long time.”

Drinan said Cabrini, which currently enrolls about 1,200 undergraduates and 300 graduate students, along with Villanova, will help students transfer to other institutions to complete their education and in the fall will have one-on-one meetings with students to discuss possibilities. Cabrini will graduate its final class of students in May 2024.

She said Cabrini has made arrangements with three other local faith-based colleges — Holy Family University in Philadelphia, Gwynedd Mercy University in Gwynedd Valley, and Eastern University in St. Davids — to help ease transfers so that students can carry over all their credits. Villanova also will be open to transfers, Donohue said. But Villanova’s tuition is nearly twice as much as Cabrini’s.

Cabrini will help the university’s several hundred employees look for new jobs, Drinan said. Villanova, which employs about 3,000 and recently had more than 90 openings, has committed to helping employ some Cabrini staff. A town hall meeting at Cabrini to discuss the plan was held Friday afternoon.

Both Donohue and Drinan said they could not disclose the financial arrangements for the sale because it hadn’t been finalized. The action would be subject to a series of regulatory approvals, including that of the Middle States Commission on Higher Education, the schools’ accrediting body.

Cabrini had $49 million in debt as of last June, according to its audited financial statement. It’s possible that municipal bond debt would be repaid with proceeds from the sale.

Much needs to be worked out, such as how Cabrini’s $38 million endowment would be transferred to Villanova.

“There’s a lot to do,” Donohue said.

While Villanova has no definitive plans for the campus, he said the university will use it. It does have significant deferred maintenance, both presidents noted.

“What we will use it for, how we are going to use it, who will be there, what programs will be situated there, all of that we need to take the next year to kind of plan,” he said. “We don’t want to be disruptive to Cabrini’s final year.”

However, he said Villanova’s law school would not be moving there, seeking to put to rest an earlier rumor.

“I would have never thought that,” said Germaine Calicat, a 2004 Cabrini graduate who is a grants and contracts specialist for Temple University and lives in Philadelphia. “It’s heartbreaking.”

She said she plans to reach out to other alumni to see what they can do to rally behind the university.

John Solewin, a 2011 graduate from Glenside, said the campus became a second home for both him and his sister, Kate Grau, a 2013 graduate. Grau got married on the campus in 2018 to another Cabrini student she met during orientation, he said.

“It feels like my family is moving without a new home,” said Solewin, who used to work at Cabrini and now is director of admissions at Rosemont College, another small Catholic school in the area. “Alumni weekends, homecomings, lacrosse games won’t be the same. Won’t be at all.”

Questions are swirling, too.

“If we need transcripts for a new job, how do you even go about getting your transcripts” if the school is gone, said Grau, an elementary school counselor.

Cabrini has started a website with answers to some questions. On it, the school said Villanova has agreed to maintain and provide access to Cabrini student records after the school closes.

Faculty, who attended the staff meeting either in person or on Zoom, also had concerns.

“Almost all the questions were about what’s going to happen to our students,” said Cathy Yungmann, professor emerita of communications, who started at Cabrini in 1983. “People were really, really concerned about students.”

Yungmann attended the meeting even though she has been retired for a few years. She said she remains attached to the institution where she spent decades.

“When you give most of your career to one institution, it becomes part of you and you become part of it,” she said.

Wendy Rosenfield, a professor of practice in journalism, said the meeting was contentious at times with so much uncertainty, but that faculty were at least relieved that they would still be working for a full year. Her students will be faced with publishing the last year of the student newspaper, the Loquitur, which will be sad but also filled with opportunity.

“In times like these, that’s when journalism has a chance to shine,” said Rosenfield, who has worked at Cabrini for a year.

She’s already posted on LinkedIn that she will be seeking a new job, given Cabrini’s impending closure.

It was Cabrini that approached Villanova about a potential deal, in hopes that it could preserve Cabrini’s legacy and mission and honor the original mission of the campus in offering Catholic education, Drinan said. Villanova has agreed to continue some of Cabrini’s most important work in education, nursing, service, immigration, and the advancement of women, the schools said in a joint statement.

Cabrini was founded in 1957 by the Missionary Sisters of the Sacred Heart of Jesus (MSC), the religious order of the college’s namesake, Saint Frances Xavier Cabrini. It has had a focus on social justice learning throughout its history. Originally a college, it became a university in 2016.

The centerpiece of its campus — the Horace Trumbauer-designed Woodcrest Estate Mansion — was named to the National Register of Historic Places in 2009. The mansion, built in 1901-03 for financial leader James W. Paul Jr., son-in-law of Philadelphia financier Anthony Drexel, has 51 rooms and has been used by the college for formal and informal events for students and alumni and fine arts concerts, as well as offices.

Cabrini’s financial problems have been building over the years. Standard & Poor’s in October downgraded Cabrini’s credit rating to “BBB-” from “BBB,” citing the institution’s long run of enrollment declines and operating losses. The school also announced in October that it would eliminate a handful of senior academic leadership jobs — including the top spot of provost — as part of a larger reorganization to downsize.

At that time, the school was facing a $5 million to $6 million deficit, and enrollment had fallen about 36% since 2016-17 when 2,360 students were enrolled. Drinan said then the school was not facing closure because it was taking steps to deal with the financial problems.

In financial disclosures to bondholders around that time, Cabrini had posted operating losses for nine straight years, back to fiscal 2013. The documents show that enrollment, as measured by total headcount, had fallen for at least five straight years.

» READ MORE: Cabrini cuts staff, programs, as coronavirus pandemic and competition take toll (from March 2021)

In 2021, the university also made cuts in programs and staff as it tried to cope with a deficit.

The incoming class this fall at Cabrini is 200 students, about 100 less than usual, Drinan said.

The financial picture at Villanova is much different.

Unlike many of the region’s smaller Catholic universities, Villanova’s undergraduate enrollment has been steady over the last five years. For the school year that just ended, Villanova, which has a 260-acre campus, had 6,752 full-time undergraduates.

When Moody’s Investors Service upgraded Villanova’s credit rating in February 2022 to Aa3 from A1, it noted that “capacity limitations constrain undergraduate growth prospects.” The acquisition of Cabrini’s nearby campus could solve that problem.

Moody’s also noted that Villanova had become significantly more selective, admitting 23% of applicants starting last fall compared to 49% in 2014. The percentage of admitted students who enrolled increased 32% from 22% over that same time period.

While Cabrini has lost money for 10 consecutive years through last June, Villanova has been consistently profitable on an operating basis. The value of Villanova’s endowment had increased to $1.16 billion as of May 31 of last year, up from $640 million five years earlier. Over the same period, the value of its total pool of investments rose to $1.4 billion from $736 million.

The announcement of Cabrini’s potential closure comes as many colleges across the country continue to cope with declining enrollment, already dropping as the number of high school graduates fell, but then accelerated by the pandemic.

Some area colleges have chosen to merge. The Pennsylvania State System of Higher Education last year merged six of its universities into two entities, while St. Joseph’s University absorbed the University of the Sciences.

Drexel and Salus Universities announced earlier this month that they would proceed with a merger.