When the small, private school began talks with Trocaire College to join forces last summer, it termed the process a “cooperative agreement,” not a merger.

When Medaille announced Trocaire would acquire all its assets – two campuses, programs, students, faculty and staff – under the Trocaire name this spring, it called the plan an “integration” to preserve Medaille’s legacy.

But the positive spin didn’t prevent the deal from falling through in mid-May, resulting in Medaille announcing the 148-year-old school will close Aug. 31.

In the end, Medaille succumbed to a deadly mix of fewer students, rising debt and a modest endowment that squeezed its limited resources dry.

“Medaille University has been under significant budgetary constraints over the last several months due to several factors, including declining enrollment, outstanding liabilities and other challenges that are affecting colleges and universities across the region, state and nation,” says a statement on its website.

And it’s far from alone. Many small, private colleges that depend mostly on tuition to survive face the same forces that felled Medaille.

In reality, Medaille was in financial trouble for years, largely due to enrollment challenges that threatened many colleges even before the Covid-19 pandemic.

“I’ve seen people describe what happened to Medaille as ‘all of a sudden,’ ” said Nathan Daun-Barnett, chair and associate professor in the Department of Educational Leadership and Policy at the University at Buffalo. “But this sector of higher education has had big challenges for the past seven to 10 years.”

Birth rates and college enrollments have been declining at least that long, resulting in some 12,000 campuses closing nationally between July 2004 and June 2020, according to the National Student Clearinghouse Research Center.

The pandemic caused even bigger enrollment drops: 4.4% nationally last fall, including a 13% dip in first-year enrollment, the center reported.

Daun-Barnett said some schools are recovering, mostly large public universities and top-tier schools, but small, private colleges were “really hurt” by Covid.

In addition to Medaille, several other small schools announced closures in recent months, including Cazenovia College near Syracuse, St. Augustine College in Illinois, Pennsylvania College of Health Sciences and St. John’s University’s Staten Island campus.

A modest safety net

Besides enrollment, a huge factor in the struggles facing small colleges often is their limited endowment funds – essentially a savings account that produces income in good times and acts as a rainy day fund during difficult periods.

“Endowments help colleges get through when times are tough, and Medaille had a modest endowment,” said Daun-Barnett, a former Medaille trustee. “We had challenges ahead of the pandemic, and what really kept us afloat was the federal pandemic aid.”

Medaille’s endowment was only $2 million going into the Trocaire “integration,” compared to $33 million for Trocaire.

Even for schools with healthy endowments, the deck is stacked against competing with public colleges and universities, at least in New York, where the state’s Excelsior scholarship allows students whose families earn $125,000 or less to attend SUNY schools tuition-free.

A projected “enrollment cliff” starting in 2025 will make competition even more fierce, especially in places like Western New York, which has 21 colleges and universities – 20 once Medaille closes.

“We are a saturated market, and the publics have state support that the privates don’t, so they’ll be able to weather this better,” Daun-Barnett said.

Medaille’s collapse set off a scramble among other local institutions to enroll its displaced students.

Other schools, both public and private, rushed to offer “teach-out” agreements to attract Medaille students after the closure announcement. They include Villa Maria College, Canisius College, D’Youville University, Alfred University, Hilbert College, Niagara University, Buffalo State, SUNY Fredonia and more. All agreed not to charge higher tuition than the $33,250 a year Medaille charged.

Medaille also sacrificed to invest in Say Yes Buffalo, part of the national Say Yes to Education Program that helps city school students succeed and go on to college, Daun-Barnett said. Medaille had the third-largest number of Say Yes students from the Buffalo Public Schools, but as a private school, it had to absorb the difference between state and federal aid and tuition, he said.

“It’s difficult for small, private colleges to be open-enrollment schools, because you have to write off tuition once financial aid is applied,” he said. “I’m becoming skeptical of some of these institutions continuing to afford to do so.”

Say Yes Buffalo Executive Director David Rust said the Say Yes program has helped Western New York schools rebound from enrollment declines more quickly.

Adapting to the times

But he said those recovering best quickly pivoted to offer quality online programs during the pandemic and new programs adapted to student and employer needs post-Covid.

He pointed to Villa Maria, D’Youville and Hilbert as schools that have worked closely with Say Yes and industry partners “to bring back students into their programs.”

They are among the schools participating in Say Yes Buffalo’s modern youth apprenticeship program, which allows students to earn an associate degree while apprenticing at a local company. Participating employers include M&T Bank, Wegman’s and Rich Products, “and our employers are growing by the week,” Rust said.

Rust said Hilbert, in particular, has shown great innovation in developing new online programs, which are now preferred by 29% of students, a more than three-fold increase since the pandemic, according to a 2022 survey by Educause.edu.

‘Small is not good’

Hilbert President Michael Brophy said Hilbert came out of the pandemic in pursuit of new ways to serve students and employers, including a partnership with BestSelf Behavioral Health for online courses leading to Drug and Alcohol Counseling certification for its employees.

Online or hybrid offerings in business, criminal justice, cybersecurity, forensics, communications and psychology have helped Hilbert increase its enrollment by 20% in 2022.

Hilbert is also in the process of acquiring Valley College, a small, private college serving primarily adult students transitioning to new careers with campuses in Ohio and West Virginia.

“We want to continue to grow because in our sector at this point in time, small is not good,” Brophy said in announcing the plan early this year.

Daun-Barnett noted that college enrollment is “counter-cyclical” with employment: “When employment is high, people don’t come back to school,” he said. “They come back when jobs are hard to find.”

Schools that diversify their programs to cater to sectors in need of workers – like health care – and offer more short-term certifications and industry training will fare better in a climate where people are questioning the value of a four-year education, he said.

“It saddens me that Medaille couldn’t find a way to sustain themselves,” he added. “It’s unfortunate for the students and the people who will be looking for new employment as a result.”

A long struggle

Medaille Professor Lou Pozantides, who has taught speech and communications at the school since 2002, is among them. While he still teaches part-time at SUNY Fredonia, last week he changed his LinkedIn status to “Open to Work.”

Pozantides said Medaille would have fared better if it involved its faculty in decision-making, especially during Covid when it became clear the school faced a multi-million dollar deficit.

In May 2020, Medaille faculty voted “no confidence” in the leadership of then-President Kenneth Macur, citing “years of budgetary mismanagement” prior to the pandemic.

Pozantides said Medaille’s Faculty Council had ideas for new programs and marketing that the administration declined to consider. At the same time, Medaille continued to spend money on capital projects like new athletic fields that it hoped would attract more students.

“Yes, the reason for the closure was due to Covid – and the board of trustees and the upper administration,” Pozantides said. “The bottom line is the school was not run properly.”

Pozantides praised Interim President Lori Quigley, who stepped in when Macur abruptly resigned last June, for trying to save Medaille.

“She ran the school with almost no debt and kept the doors open,” he said. “She deserves the biggest kudos ever.”

When Trocaire agreed to acquire Medaille, Pozantides said faculty were hopeful they could keep teaching their students. But Trocaire “suddenly pulled out with no explanation,” he said. “I think they found the liability of Medaille was just too high.”

Pozantides said he hates to see Medaille students’ lives disrupted so soon after Covid, a beautiful campus in the heart of Buffalo go vacant and key programs like the only veterinary technician program in WNY disappear.

“I think that if Medaille files for bankruptcy, it may make it easier for another college to purchase it and bring back the programs,” he said. “That is my hope.”