The Board evaluated the College's dwindling financial resources, its projected cash flows, strategic challenges, and possible solutions to generate the needed money to support our operations through the summer months and beyond. After analyzing these factors it became clear to the Trustees that the College would not have sufficient resources to meet its obligations. The size of the shortfall was so large that the College would need to achieve unprecedented fundraising or enrollment results in order to continue to operate. The mounting challenges with the finances, accreditation agencies, and regulatory bodies impacting student loan eligibility were deemed too great to overcome. Therefore, the Trustees reached the somber conclusion that the best course of action for our students, faculty, and staff was to implement a significant operations reduction, using the remaining resources to support the transition for our community while keeping hope alive for a future Saint Joseph's College.
Our primary focus at this point is on taking care of the immediate needs of our students, faculty, and staff, but this summer, a small group including alumni and community leaders will begin the process of looking toward the future of SJC. Our goal is to create a College that is connected to the SJC mission and the needs of the Community, financially sustainable, and relevant for generations to come.
No, Dr. Pastoor has not resigned. The Chairman of the Board continues to see Pastoor in this position.
We are working through the many factors and details that will determine how long the transition period will last. The Board of Trustees needs to make many decisions – starting with establishing a Transition Team – that will determine the scope and duration of the transition period and the extent of their authority. They will look at everything in order to determine under what circumstances the transition period could end, including but not limited to:
After the spring semester, there will be minimal academic, administrative and necessary maintenance operations at the Rensselaer campus.
SJC has been approached by multiple institutions about the potential for partnerships. This summer, a small group appointed by the Board of Trustees will begin the process of looking toward the future of SJC, which may include possible partnerships with other schools. This group will report its findings to the Board of Trustees by June 30, 2018
Since the Board’s decision was not certain, it was necessary to continue moving forward to strengthen the College until the Trustees made their final decision.
A Transition Team of the Board, along with others with specific expertise. They will make decisions regarding a variety of items including restructuring debt, academics, severance, benefits, donor restricted funds and many other issues.
This decision was driven solely by our desire to serve students. In the event that the Board decided to suspend operations, the College had to be prepared to provide viable academic opportunities for students. Accordingly, SJC had conversations with other institutions that could provide Teach-Out opportunities for our students. Since then, other institutions have stepped up to offer to also become Teach-Out partners. We're very grateful for the many schools that have offered to partner with us to offer our students a variety of ways to complete their degrees. This outpouring of support has been a solace and support during an incredibly difficult time and we are most appreciative.
Many factors contributed over many years to the financial issues, including but not limited to:
Like many Colleges over the last several decades, the College borrowed in order to invest in improved facilities (Core Building, Residential Apartments, etc.) in an attempt to enhance the student experience, a desire to increase enrollment and to remain competitive with other Colleges and Universities. More recently, in June of 2013 the College refinanced all outstanding debt obligations due to a rapidly approaching balloon payment coming due. This refinancing avoided the balloon payment but increased the College’s total debt burden by almost $4 million. It was at this time that the College’s total outstanding debt obligations increased to the current level of approximately $27 million.
At the October 2016 meeting of the Board of Trustees, the College presented the Trustees with a proposal to monetize the Waugh Farmland in an attempt to generate necessary liquidity to fund the College’s continued implementation of the transformation plan. That option was pursued vigorously. While a partner was identified which could have engaged in a transaction it was discovered that the price which might be realized in such a transaction would fall well short of what is needed to facilitate the implementation of the Transformation Plan.
The College’s costs are not fully covered by tuition fees. In the past five years, we raised a total of a little more than $14.3 M in contributions, but the scholarships awarded over those five years totaled $66M resulting in a shortfall of $51.7 million. This shortfall caused the College to have to engage in traditional business efforts in order to balance its budgets. These efforts included personnel layoffs, freezing salaries, and deferring maintenance, and, at times, reliance on endowment to fund remaining deficits. From September 2015 to January 2017, President Pastoor initiated 33 fundraising “asks,” each time communicating the financial challenges that Saint Joseph’s College faces. Through those attempts, less than $800,000 was raised, a significant shortfall from what is needed to address the needs of the institution.
In round numbers, SJC needed $5M to stay operational through summer 2017 and $20M to get through the next several years. A great deal more would be needed to secure the College’s stability long into the future. A comparison of contribution revenues with scholarships is included on the graph to follow.
The annual operating budget for the College is $26.4M and the net revenues from student fees (tuition, room and board) are $16M annually. Thus, we have tried each year to generate the balance from other sources (farm income, endowment income, contributions, etc.) but have continued to operate with large losses
The largest fundraising effort in the College’s history was the $13 million 21st century capital campaign. These monies were collected over the course of many years.
For a breakdown of expenditures by classification for the current year, see the chart below.
When the College went through this process it was still operating under the hope that it could generate sufficient liquidity to provide the needed time to improve finances. These efforts of the faculty would not have an immediate impact on the financial situation but could have shifted faculty’s time in order to provide opportunities for future revenue generation through grant seeking. Also, these changes were just in the planning stages. The impacts of the reallocations would not have been realized until next academic year. and were far short of the savings needed.
Since November 2015, we have been working on a five-year transformation plan to get to a balanced budget, but many of the opportunities to generate funds did not materialize. Due to the desire to do everything possible to try and keep the College alive, it wasn’t until the last of these options was exhausted that the Board reached the devastating conclusion that we must suspend operations.
In light of the decision, fundraising has slowed. We have had people indicate a willingness to continue to give. The Chairman of the Board of Trustees has submitted a proposed letter to the President of the Alumni Association that would go out to all alumni seeking contributions to keep SJC open, or if not enough cannot be raised, then the proceeds of the campaign would be used to help bolster the limited funds available for severance payments to staff and faculty. The president of the alumni association is considering calling a meeting of the alumni board to consider this suggestion. The date for that meeting is not yet determined. The Board and Transition Team will have discussions regarding gifts for a reengineered College in the future. They are mobilizing to determine next steps and will invite others to be part of that vision, including fundraising. The goal is to create a College that is connected to the SJC mission and the needs of the Community – financially sustainable and relevant for generations to come.
After much consideration, the decision was made to suspend all activities on the Rensselaer Campus for the 2017-18 academic year, while the College evaluates how to reposition itself in a highly challenging Higher Education marketplace.
After significant introspection and countless hours of discussion among key administrators, the College has come to the solemn realization that its prior plans to grow out of the current financial challenges cannot be realized. The financial challenges are too steep in light of the current and potential resources available.
As a result, the Board has concluded that the College cannot continue in its current form and needs to change the very fabric of the institution. This change must occur immediately to preserve our remaining resources to prepare for a launch of a future, reengineered Saint Joseph’s College.
The Board of Trustees also considered several options for significant operational restructuring and completely closing the College. Restructuring options would have required a significant capital infusion and closure would have meant no future for Saint Joseph’s College. The suspension of the Rensselaer campus operations allows us to prepare to launch a new, reengineered future for the College.
The College must suspend all academic activities on the Rensselaer campus at the end of the spring 2017 semester and athletic activities at the end of their respective seasons. The goal of this action is to make Saint Joseph’s College as strong as possible either to begin anew or to become an attractive partner for another educational institution.
Despite our best efforts, we were not able to escape the financial challenges that many tuition-dependent smaller universities have faced over the past several years. These challenges include fierce competition for students, the rapid rate of technological development, increased and evolving federal regulations, among others.
We are in the process of lining up academic institutions that will help our students' progress toward completing their degrees.
You will find a current listing of partners here: http://www.saintjoe.edu/teach-out-schools
This list will continue to be updated as additional schools are added.
We are committed to providing personalized transfer support to all students who need assistance in identifying an institution that works for them.
Our Student Financial Services office will work with you directly on any questions you may have. Additional resources can be found on the Federal Student Aid website.
It is important that our students know that it is not in their best interest to withdraw in the middle of the semester due to the lost progress toward their degree. We anticipate retaining most of our students as we address their immediate needs. We will discuss logistics in more detail with any student needing guidance.
All eligible seniors will graduate as planned on May 6, 2017. On-line summer classes would be provided to facilitate convenient access for our students. We will communicate directly with seniors to finalize their arrangements, including accelerated classes, to enable all eligible seniors to graduate.
Currently, 904 students are enrolled at Saint Joseph’s College.
There are approximately 200 employees at Saint Joseph’s College and we are committed to doing all we can to facilitate a smooth transition for our employees.
After the spring semester, there will be only minimal administrative and necessary maintenance operations at the Rensselaer campus.
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