St. Gregory's University closing in December

St. Gregory's University in Shawnee, Oklahoma, will be closing its doors at the end of the semester, officials announced yesterday.

The board made 'the difficult, but necessary,' decision following the denial of a loan application to the U.S. Department of Agriculture, according to the announcement. 'Without this component in the financial plan, the ability to sustain the university at this point is not possible. The Board of Directors continues to work actively to resolve financial difficulties and to explore possible partnerships in order to move forward.'

Nothing on the website or in news accounts explain why a college expected to get a loan from the USDA. The college must have already been in dire financial shape to have its existence beyond December hanging on this one loan. Inside Higher Ed's story links to a Shawnee News-Star article from January which links, without elaboration, the de-annexation of the 520-acre campus from the City of Shawnee, USDA-sponsored refinancing of debt, and assistance from the Citizen Potawatomi Nation.

Originally established as the Catholic University of Oklahoma in 1915, St. Gregory's University, in Shawnee, Oklahoma, St. Gregory's College granted associate's degrees as a junior college until it was accredited in 1997 to offer four-year degrees. The university grew out of the Sacred Heart Mission, founded in 1875. A look at the college's website shows little to distinguish it from other small private colleges -- no core curriculum, the usual assortment of majors, sports, and activities. As a dad in the midst of my second go-round through the college application process, I've seen the piles of brochures from small colleges. Each brochure differs from the next only in the college name, the school colors, and the mascot that appears in a cover photo next to smiling students.

St. Gregory's had recently announced that it would accept the Classic Learning Test, a newly designed standardized college admissions test geared toward classically educated students. St. Gregory's is listed on Wikipedia as one of about three-dozen Ex corde Ecclesiae Catholic universities and colleges, constituted and explicitly governed under Roman Catholic church authority. Many of the other schools on the list are explicit in their aim to be faithful to Catholic doctrine and traditional in their curriculum and teaching methods, like Ave Maria University, Thomas More College of Liberal Arts, and Christendom College. For whatever reason, St. Gregory's leadership didn't effectively communicate its apparent countercultural shift to the conservative Catholics in Oklahoma and the region who might have appreciated it.

The higher-ed bubble is starting to burst, and small, non-selective private colleges with few distinctives may be the first to suffer from the drop in demand. (Similarly situated state colleges won't suffer because taxpayers can always be squeezed for more money.) Small private colleges can't keep up with deeper-pocketed schools in the arms race in student amenities. That arms race and the accompanying ad blitz means that local students, once the core of a small college's student body, will be lured away to bigger cities and bigger schools. To compete for out-of-area students to make up for the loss of commuters, a small college has to offer apartment-style housing, food-court-style dining, and on-campus distractions to compensate for the lack of entertainment options in town.

The only way to survive may be to run the other direction -- offer a strong core curriculum, adopt low-tech teaching methods, and make a virtue out of austerity. I'm thinking here of the New College Franklin, where the church library serves as the classroom for Great Books seminars, students board with parishoners, and community organizations serve in lieu of extracurricular activities. Why shouldn't Oklahoma's Benedictine-run college offer a focused but deep curriculum and intentional Catholic spiritual formation and become the school of choice for Catholic students interested in the Benedict Option?

UPDATE 2017/12/08: Bobby Ross, Jr., writing for Religion News Service / Reuters, provides a much clearer explanation about St. Gregory's USDA loan application and why it was denied:

Here in Oklahoma, St. Gregory's had hoped a $12.5 million rural development loan from the Citizen Potawatomi Nation - made possible thanks to federal money dispersed to the tribe - would keep it alive.

To qualify for the loan, the Sooner State's only Catholic university even de-annexed from Shawnee, a city of 31,000, to meet the requirement of being located in a rural area. However, the U.S. Department of Agriculture denied the loan, saying St. Gregory's wasn't in a rural area at the time of the last U.S. Census.

"Once the loan was denied, we were basically out of cash, and we needed to let our students find new homes quickly," the university president said. "We couldn't delay. There was really no time to appeal the decision of the USDA," [St. Gregory's President Michael A.] Scaperlanda said.

This may be the program involved: Community Facilities Guaranteed Loan Program. The definition of "rural" requires that the place have a population no greater than 20,000; Shawnee had a population of 29,857 at the last census.

So the loan denial was a simple matter of ineligibility, but the question remains: How did finances get so bad so fast that a (pardon me) "Hail Mary" pass -- hoping for approval of a loan from funds that really weren't intended for the purpose of keeping a small-city private college open -- was the only hope of staying in business for the entire academic year? It strikes me as the sort of situation that occurs when someone had been hiding the true state of the college's finances, perhaps to hide his or her own misuse of college funds.

A quick web search turned up a few other small colleges that had benefited from USDA Rural Development programs -- direct grants, direct loans, loan guarantees, or some combination thereof:

• Hiwasse College, Madisonville, TN: $ 7.7 million in direct loans and loan guarantees to renovate a dorm and the college library.
• Ripon College, Ripon, WI: $14.3 million in direct loans to renovate athletics, health, and wellness facilities.
• Newberry College, Newberry, SC: 2015 refinancing of money borrowed in 1981 and 1982 for construction projects.
• East Central College, Union, MO: $1 million loan to renovate a newly acquired building for advanced manufacturing programs, with the local electric cooperative as intermediary.

Note that all of these loans involve capital improvements. In contrast, St. Gregory's seems to have been hoping for a USDA-guaranteed loan to fund operating expenses.