St. Joe's enrollment plan troubles students

When St. Joe's students root for their basketball team, they chant, "The Hawk will never die." That's helped get them to the first round of the NCAA tournament.

Now if there were only a fight song for their school's financial health.

The Catholic university that straddles the Philadelphia-Lower Merion line faces perhaps the most tumultuous test in its 163-year history. At stake: its academic mission.

Hit by an $8.7 million shortfall, St. Joseph's is cutting positions, slashing budgets, and digging deeper into endowment earnings. And in perhaps the most controversial step, the school said it would accept 1,500 freshmen for the fall - 225 more than in 2013 - which would bring in more money but also make the school appear less selective, a concern for faculty and students.

Class sizes could rise, and some adjunct professors could lose their jobs - actions that have led to faculty and student protests. The faculty Senate last month unanimously let two top financial administrators know it had no confidence in their work.

The vote, which is only symbolic, underscores the animosity that has been growing for several years between the faculty and administration.

Randall Miller, a history professor, handed out a blistering string of C's to the school during a faculty meeting last month:

"Confusion, chaos, crisis, concealment, cabal, conspiracy, contempt, cynicism, cowardice - these are troubling terms," he said, "for they run counter to our professed values and bespeak a loss of the trust. . . . They are the vocabulary on the campus. And that alone speaks volumes about our troubles."

In an interview last week, the university's top three officials - its president, board chair, and senior vice president - acknowledged missteps in communication with faculty and students and said they were working to repair the rift.

But they asserted that St. Joseph's is sound fiscally - they pointed to reports by financial-rating companies - and insisted the administration was ensuring the school's long-term health.

"These are challenging times related to enrollment and affordability for the whole industry," said Robert D. Falese Jr., board chair and retired bank executive. "The question here isn't our financial position and our financial management. The question is how we go forward."

U.S. colleges have struggled to meet enrollment targets and cut expenses as they adjust to a drop in high school population and mounting pressure to control tuition.

"What's happening at St. Joseph's is not surprising," said Terry W. Hartle of the American Council on Education. "It's necessary, given the circumstances that many institutions face."

With 8,860 undergraduate and graduate students, St. Joseph's runs on a $230 million budget and an endowment of $205 million.

Though financial pressure this year is most acute, the problem has been building largely because the university has increased the aid to needy students from $60 million in 2011 to $85 million in 2013, said senior vice president John W. Smithson. Tuition, fees, and room and board at St. Joseph's top $52,000.

Annual operating surpluses have eroded from nearly 14 percent in 2006 before the recession to just 2.7 percent last year.

For the second consecutive year, administrators realized midyear they were running over budget. The problem, Smithson said, was threefold: 35 fewer freshmen and 26 fewer transfer students than expected. Financial aid ran over. The rest of the gap came from overruns caused by a new budgeting method.

To faculty, who say they have been shut out of the decision-making, it sounded like "voodoo accounting," as the historian Miller called it.

"I don't believe what they say in terms of the budget," said Claire A. Simmers, professor and chair of the management department in the university's business school. Simmers spoke at the meeting where the no-confidence vote was taken against Smithson and Louis J. Mayer, vice president of financial affairs. The student newspaper, the Hawk, also demanded that Smithson and Mayer leave: "We no longer trust these administrators to lead us through the terrible circumstances they are responsible for creating."

The board of trustees and the president, the Rev. C. Kevin Gillespie, remain steadfastly behind Mayer and Smithson. They point to recent financial ratings by Standard & Poor's and Fitch - an A minus and A, respectively - as evidence of stability.

"Their finances are not a concern," said Carolyn McLean of Standard & Poor's.

Nicholas Paolizzi, the student body president, says he nearly jumped out of his chair at a January meeting when he heard the plan to take more freshmen, raising the acceptance rate to between 88 and 92 percent. The rate had been 78 percent.

The university also reduced budgets campuswide by 4.2 percent and eliminated 35 positions.

Students are concerned, Paolizzi said:

"My inbox for the last two months has just been crazy."

President Gillespie said the acceptance rate would likely reach only the mid-80s, not 92 percent. The quality of St. Joe's students, he said, will not diminish. That's because the school this year saw an 8 percent increase in applications, which he credited to the addition of the 38-acre Maguire campus, niche programs like autism treatment, and strong sports.

Some students worry about the effects of St. Joe's growth.

"Will there still be the same personal relationships?" asked Felicia Carter, 21, a senior from Philadelphia.

Smithson countered that in 2008, St. Joseph's accommodated 1,463 freshmen with less housing and no Maguire campus.

"We think we're very capable of having a class like that," he said.

Students say they are frustrated by the administration's response to concerns. Chanelle Greene, a senior from Bowie, Md., said Gillespie pounded his fist on the table, raising his voice, when meeting with student protesters.

"I was taken aback," Greene said. "I did not expect him to react that way to our demands, which are basically to keep the integrity of SJU."

Her mother, Monique, was so upset at her daughter's treatment that she complained to the president. Gillespie said he became upset because a few professors were taking entire class periods to discuss the controversy.

"We take the issues and questions seriously," he said, but cautioned, "Sometimes we disagree."

Problems have been building: More than a year ago, consultants found a campus where "suspicion and mistrust abound."

Much of the consternation goes back to when Smithson was hired without an external search or faculty input. The 1968 graduate led the board of trustees from 2003 to 2007, when the previous president, the Rev. Timothy R. Lannon, was hired. In February 2010, Lannon wanted help so he could focus on fund-raising and other high-level issues. He hired Smithson to an interim position.

Faculty questioned the propriety of hiring a former board member who had hired the president.

Falese countered that the position was posted and personnel procedures followed before Smithson's hiring became permanent.

The administration, Gillespie said, is working to improve relations - establishing a task force on "shared governance" and bringing three faculty members into his cabinet. They serve on the academic committee of the board of trustees.

"Despite all of this, there's a tremendous sense of hope and resolve," said Miller, the history professor. But pressure will likely continue. The administration is preparing next year's budget, which will be made final in May. Smithson said further cuts were possible.

Location: Philadelphia/ Lower Merion Township

Founded: 1851

Enrollment: 8,860

Acceptance rate:

78 percent

Yield (percentage of students accepted who enroll): 20 percent

Tuition, fees, and room and board: $52,272

Budget: $230 million

Endowment: $205 million

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