After the Accidental Email

Derek Wappel found a new college for the fall after he learned his was shutting down because of financial hardship. Now he wonders if he’s walking into the same situation he’s leaving.

Wappel, a 19-year-old who will be entering his sophomore year in the fall, attended Saint Joseph’s College in Rensselaer, Ind. But Saint Joseph’s in February announced that it is suspending operations after the current semester. So Wappel attended a college fair and considered his transfer options. Eventually he decided on another, smaller private Roman Catholic institution in Indiana, Holy Cross College in Notre Dame.

Holy Cross is located about two hours northeast of Saint Joseph’s by car. It’s a little farther away from Wappel’s hometown, Valparaiso, but not by much. And Wappel, a tennis player who was looking to continue his collegiate sports career, was in touch with a tennis coach he knew at Holy Cross.

Wappel visited the campus at Holy Cross, which is adjacent to both the University of Notre Dame and Saint Mary’s College. He liked Holy Cross and decided to attend.

“I got to play tennis, I enjoyed meeting the professors and I liked the school,” he said. “It was like Saint Joe’s -- a nice, small school.”

Then he saw reports that a Holy Cross administrator accidentally sent an email to the college’s student body at the end of last week speculating that he might be spending next year closing down the college. Wappel looked again and grew concerned that Holy Cross resembles Saint Joseph’s in some undesirable ways. Both institutions experienced administrative turnover and tight budgets in recent years, for example.

“I’m starting to see a lot of similarities,” Wappel said. “So I don’t know.”

While Holy Cross’s other current and prospective students may not have Wappel’s experience with a closing college, they face the same questions about an institution whose financial struggles have suddenly been laid bare. The mistaken email was sent out at a time when many colleges and universities are still seeking to shore up their incoming classes. It also came as news circulated that accreditors have ordered Holy Cross to develop plans to balance its budget after several years of deficits.

Current Holy Cross students told reporters they were disturbed and concerned when the email about the college’s finances went out by mistake. But some said they were reassured by later communications from the college’s administration. It’s not clear now whether the college will lose students because of the email gaffe and worries about its budget.

College leaders said the situation at Holy Cross is not like the one that led Saint Joseph’s to suspend operations. Holy Cross is not closing next year, said David P. Bender, chairman of the Holy Cross College Board of Trustees.

“I am not concerned about the college closing in the near future,” said Bender, who is a partner at the law firm Haynes and Boone. “Holy Cross has challenges, but the challenges are no different than those other private colleges are now facing.”

The email that was accidentally sent to students lays out some of those broad challenges. Kelly Jordan, vice president for student affairs at Holy Cross, sent the email Friday. It contained a string of messages between Jordan and an administrator at a college preparatory academy, including a line saying the email was to be confidential. After the email went out to Holy Cross students Friday, the college tried to recall it. But many students had already opened it.

Jordan wrote about small liberal arts colleges around the country closing because “… the costs have become far greater (esp. in the last five to seven years) than the revenue that can be generated from the small number of students who can afford to attend these schools and choose to do so,” according to a report in The South Bend Tribune.

Kelly’s email also mentioned specific changes at Holy Cross, saying its board unexpectedly fired its president and that three of five vice presidents had since resigned or asked to resign.

“I am not sure how all this is going to play out for the college (i.e., if it can even remain in operation),” Kelly’s email said, according to The South Bend Tribune.

Kelly is no longer employed at Holy Cross. He joins Brother John Paige, the college’s president, who was suddenly replaced in early April by Father David Tyson. Other top administrators to depart are Brother Jesus Alonso, vice president for strategic initiatives, and Michael Brach, vice president for advancement, according to The South Bend Tribune.

Holy Cross declined a request to interview Father Tyson, who holds the title of interim president. It instead released a statement saying that Father Tyson and a Board of Trustees committee are reviewing the college, including its finances, structure, management, governance and curriculum. Father Tyson is developing a new financial plan for the college that will be made available when it is complete, the statement said.

“The interim president and the Board of Trustees want to reassure all of the constituents of the college that they are working to ensure a bright future and to secure the mission of Holy Cross College for generations of students to come,” the statement said. “There will be no further comment from the college on this matter. As well, Holy Cross College requests that members of the media not visit campus as students are preparing for finals and graduation.”

Finals run from May 9 to May 12. The college’s commencement is scheduled for May 20.

The college’s accreditor, the Higher Learning Commission, has ordered Holy Cross to produce an interim report on its budget and audit information for review by June 12. HLC also ordered the college to develop a four-year plan to end a cycle of annual borrowing and position cuts to balance its budget, according to a Sunday report in The South Bend Tribune.

The report outlines an operating deficit of $139,000 in the 2014 fiscal year and a deficit of $930,000 in the 2015 fiscal year. The college is losing money in the 2016 fiscal year as well, posting an operating deficit of $883,015. In addition, it has overestimated its annual giving, the report said.

Holy Cross has also been increasing short-term debt, according to the Tribune report. Last year, the college had to use a $2 million line of credit and a $1 million bridge loan from the Brothers of the Holy Cross to maintain cash flow until it received tuition revenue for the fall.

The college’s revenue totaled $18.5 million in the fiscal year ending in June 2015, the most recent year its federal filings are available. That was down by about $1 million from the previous year. Holy Cross says it enrolls 530 students. Its endowment has been reported to be extremely small, about $1.5 million.

Bender, the college’s board chair, expressed confidence that Father Tyson can transform the college. Father Tyson is an experienced leader in higher education, having previously served as president of the University of Portland from 1990 to 2003.

Holy Cross also has an advantage in its proximity to the University of Notre Dame, Bender said in a telephone interview Wednesday -- it is working on ways to partner with the university. The partnership could take a number of forms, but it will not be a merger, he said.

“I can’t go into detail because we’re in the process of finalizing some things right now,” Bender said. “The opportunity is for the college to have a partnership with someone that can help in a variety of ways -- everything from assisting on how things reduce the bottom line to student recruitment, retention -- all of those things that small colleges are facing.”

As a tuition-dependent college, Holy Cross is looking at reducing costs, Bender said. It is also working to build its endowment and grow its enrollment.

“We think we have some unique characteristics because we’re situated so close to Notre Dame,” he said. “The ability for students to be part of that community and enhance those opportunities, we think, is going to significantly affect our ability to attract students.”

Holy Cross has no reason to believe it is going to miss its enrollment targets this year, Bender said.

The Higher Learning Commission’s required plans will be helpful, he added. He said the college’s board was ahead on the issues and that the accreditor’s requirements give it credibility as it makes operational changes and budget cuts.

“We’re not in any danger of losing our accreditation,” he said. “That needs to be clear.”

Asked about the email Jordan mistakenly sent to students, Bender said it was just the opinion of one man who has not been a part of Board of Trustees discussions.

“Sure, there’s been some phone calls from parents and some students that have asked about it,” Bender said. “But we’re not getting a deluge of phone calls and emails from people that are concerned about it. We don’t see any impact so far in our efforts to enroll a full class, or on retention, or anything else. It wasn’t helpful, but so far we’re not seeing any serious effect.”

Some current students seem to agree with that notion, including one freshman who told WSBT.com that students understand the email was the reaction of one administrator and not sent in an official capacity from the college.

Wappel, the tennis player from Saint Joseph’s, isn’t so sure. He’s already put down about $2,700 to attend Holy Cross. But now he points out that he’s heard assurances from college leaders in the past, only to be told later the institution he was attending was shutting down.

“If this was my first time going through this and everybody said it’s going to be OK, I’m probably going to believe them,” Wappel said Tuesday. “But I’ve been in that spot before.”

Shortly afterward, Wappel spoke with his admissions counselor and tennis coach, who told him everything is going to be fine. Now, he said, he feels a little better.