“Indianapolis Monthly” Recounts the Rise & Fall of St. Joseph’s College

Published on: Jul 26, 2017 

The following story is republished with permission from Indianapolis Monthly Magazine, from their July 2017 online issue.

A Eulogy for St. Joseph’s College

Leaders at SJC allowed its finances to get so bad for so long, the situation became impossible to fix. If the historic Catholic school ever returns now, it will be a miracle.

Early in the evening on February 3, a few hundred students, faculty, and alumni of St. Joseph’s College filed into an auditorium to learn the fate of one of the oldest schools in Indiana. Several months earlier, an accrediting organization had put the 128-year-old institution in Rensselaer on probation for failure to address its massive debt. School leaders, who had been scrambling to find a solution ever since, were ready to announce the board of trustees’ vision for the future. Inside the auditorium, a standing-room-only crowd filled the space. Following a prayer and opening remarks from then-president Robert Pastoor, chairman of the board Ben Sponseller approached the microphone. His voice was somber, as if he were delivering a eulogy. Earlier that day, Sponseller told the audience, the St. Joseph’s board had voted to suspend all academic activities on the 180-acre campus, effective in May. All students not graduating in spring would need to find another university. Two Q-&-A forums would take place the following Monday, one for faculty and one for students. “May the Lord be with you,” he finished, and began to step away from the podium.

The audience erupted with objections. “Two days! Why do we have to wait two days?” former student body president Jose Arteaga shouted toward Sponseller, demanding immediate answers but getting none. “It’s pathetic!” yelled another attendee. Students dropped their faces into their hands, some weeping openly. From start to finish, the most important meeting in the school’s history lasted fewer than 5 minutes.

Since the board’s announcement in February, tensions have been high on and off the rural campus, due in large part to the lack of clarity on what happens next. In addition to practical questions about how to pay off its $27 million debt and handle student transfers, more philosophical, painful ones have emerged: How did this happen? What will this do to Rensselaer? Who’s to blame? The board and former president have hinted that a fundraising campaign might resurrect the school, but most stakeholders believe it is gone for good.

As colleges around the state resume this month, St. Joe’s classrooms sit empty for the first time in more than a century. The closing has been rough on the faculty, but students who have spent thousands of dollars at an institution that no longer exists may be the hardest hit. “For some people, a sense of community will simply evaporate,” says St. Joseph’s professor emeritus John Groppe. “And for some, it will be wrenching.”

Founded by Catholic missionaries in 1891, Saint Joseph’s College began its life as two simple buildings surrounded by miles of farmland. Five years later, it bestowed 12 diplomas to its first graduating class. An iconic brick chapel rising into Romanesque twin towers went up in 1909, with a reflecting pond out front elongating its already-impressive figure. Until 1925, SJC served as a junior college for those preparing for professional and seminary schools. From 1925 to 1931, the institution changed into a seminary, admitting only students preparing for the priesthood. It pivoted again in 1936, when it began to operate as a senior college granting four-year degrees. During this time, the school was nearly self-sustaining, with an on-campus farm supplying hogs, turkeys, dairy cows, and large gardens to feed students and staff. Seminarians picked the food, while nuns ran the kitchens. Over the next three decades, SJC grew into a 130-acre institution.

In September 1962, newlyweds John and Rose Marie Groppe moved from South Bend and Toronto, respectively, to SJC to begin teaching jobs, he in English and she in philosophy. The post-WWII baby boom had high school graduates flocking to colleges across the United States, and schools like SJC were expanding, building facilities, and hiring faculty to meet demand. Just days after the Groppes arrived, former President Dwight D. Eisenhower visited to lay the cornerstone of a new student center, drawing a crowd of 25,000 people to a Republican-party rally on campus.

The SJC community thrived in the ’60s and ’70s. For many years, Groppe held classes in his spacious, third-floor office with its creaky hardwood floors, high ceilings, and couches where young scholars considered literature in light of the Civil Rights movement and other cultural awakenings. “It was a very exciting place to teach from day one,” John Groppe says. “We were rethinking what it meant to be a Catholic intellectual.”

The demographics of students and faculty started to change after the Groppes came to town. Female students began taking classes in 1968, when enrollment peaked at 1,454 students. And in a place once dominated by professors who were married with children, single faculty members became common. The number of people in service to the Catholic Church at SJC also shifted. In 1965, 37 priests and brothers taught there. In recent years, only five members of the religious community held staff positions.

One thing that didn’t change on campus was the close-knit feel of the place. Junior Lucy Grenda of Westfield looked at schools in the Carolinas, Florida, and elsewhere in Indiana before deciding to play volleyball and study elementary education at SJC. Grenda knew she wanted a small school, and the student body of about 900 fit that bill. She moved into 78-year-old Seifert Hall, a women’s dorm so close to academic buildings that she could wake five minutes before class started and still be on time. Grenda loved strolls around Lourdes Grotto, with its waterfalls, path detailing the stations of the cross, and blooming trees. In Rensselaer, she and friends frequented Willow Switch Coffee Bar and Rick’s Pizza.

Lori Locke, a 1994 SJC graduate who studied business, also loved the small-school experience there. She fondly recalls driving to and from volleyball games with her teammates in the “Puma Van.” During the college’s annual Little 500 go-kart race in spring, she and her fellow athletes lined the streets to cheer on drivers taking laps. “They were some of the best years of my life,” Locke says. “It was the kind of place where the school president and his wife personally passed out chocolate-chip cookies around campus.”

While campus life was idyllic, the school’s finances were less so. SJC never enjoyed a huge endowment ($15.7 million at its peak), and attendance slowly declined at the end of the 20th century. Father Charles Banet, hired as president when the number of students was near its peak in 1965, served for 28 years—the longest term in the school’s history. During that time, the deficits and debt began to grow as fewer students contributed to the coffers. By the end of his tenure, SJC barely had 600 residents on campus. When Albert “Skip” Shannon took the top job in 1993, he spearheaded a series of projects that included a new classroom building, residential suites, a fitness center, and an outdoor track-and-field facility. While the improvements gave the aging institution a partial facelift, they were financed with bank loans, and only added to the financial burden.

As far as most faculty members and students knew, though, the institution was in no worse shape than many its size. Certainly, none of the administration’s public announcements suggested any trouble. St. Joseph’s seemed fine heading into the new millennium.

In June 2013, SJC announced it was renegotiating $27 million in debt. With interest, the college would owe more than $42 million over the next 20 years. Alarming? It should have been. But neither Dennis Riegelnegg, the president who had replaced Shannon a few years earlier, nor the board raised any red flags. Riegelnegg resigned without much explanation in 2014, and in the press release introducing Pastoor as his replacement, the new president spoke of a “dynamic future.” That turned out to be true, although not in the way Pastoor intended.

Perhaps the only people who realized the emergency that $27 million debt represented were a few alumni who gathered that summer to devise a plan called “Fight for St. Joe.” Among them were Doug Monforton, CEO of a chemical company in Michigan; Paul Muller, who works in finance in Missouri; and Mark Nestor, a risk-management consultant in Michigan. Four months into Pastoor’s tenure, he met with the group to hear their ideas. Initially, their plea for an immediate fundraising campaign fell on deaf ears. “There was no real outcome to the meeting, and a subsequent follow-up letter to Dr. Pastoor went unanswered,” wrote Nestor in an op-ed in the Rensselaer Republican. Pastoor declined IM’s interview request to discuss the matter.

In 2015, the president finally issued a letter calling on alumni to contribute to the school, omitting any critical numbers that might have moved would-be major donors to action. He hired a Virginia consulting firm called The Pelican Group for $700,000 to assist with a strategic master plan, one that would never be implemented.

On February 8, 2016, a five-person team from the Higher Learning Commission—a body that accredits colleges in 19 states—arrived on campus. There, it conducted a comprehensive evaluation of the school, with a special emphasis on its finances. The HLC pored over SJC’s records and conducted interviews with its leadership. A few months later, the visitors delivered their verdict: a letter stating that the school was on probation for the size of its debt relative to its endowment and income. The HLC told Pastoor the college had until 2018 to rectify the issue, and that the group expected updates on progress.

Not long after he received the letter, Pastoor shared the news with the student senate. “He told us they had years  to fix it and every student would graduate,” says Parker Balvich, one of the senators. “Everyone felt relieved. We trusted the guy. He came in and reassured us that it would all be okay.” But by the end of January 2017, rumors began spreading about SJC’s closing. A few weeks later at the auditorium meeting, that became official.

In the weeks following the February announcement, students were grieving and trying to navigate their new reality. Scholars just a semester shy of graduation squeezed in newly formed, condensed versions of classes to earn enough credit hours to graduate in May. Small colleges swooped in to recruit bright, paying customers with promises of open arms, seamless transitions, and tuition discounts. Among them were Walsh University, Olivet Nazarene University, Ohio Wesleyan University, Goshen College, and Marian University.

A single factor didn’t bring SJC to its knees financially. Many did, and those are now laid out clearly on the school’s website. In addition to the school’s massive debt, its deteriorating facilities needed at least $34 million worth of repairs. SJC’s generous use of tuition discounts and scholarships (65 percent, compared with a national average of 50 percent) left it in the hole by about $14 million annually. Increasing technology costs and higher health-benefits costs further strained the budget. Fundraising was anemic.

Sponseller, the board chairman, says schools similar to SJC that are on solid financial ground have used online classes more effectively and possess nicer facilities. Selling prospective students was difficult, he claims, when ceiling tiles were falling down because maintenance had been deferred for too long. But he rejects the notion that SJC leaders sat on their hands as things got worse. “We took, I think, some pretty bold steps to increase enrollment,” he says. In March 2013, SJC froze its tuition and offered a guaranteed tuition rate plan to create a competitive advantage. It also targeted students outside of the United States. But the school struggled to convince prospective students to come to a rural community when they had other options, some urban, others closer to home.

On the fundraising side, SJC leaders claim they did everything they could as well. But a few past donors who spoke to IM say representatives of the college never alerted them about any emergency prior to 2016. Presidents and boards are ultimately responsible for bringing in donations, and in a 2015 analysis the school conducted of 28 similar colleges, SJC ranked 25th in dollars given. By that time, one or two years of fundraising wasn’t going to solve the problem, anyway. Those efforts needed to have been made decades ago.

The final graduation ceremony at SJC on May 6 was bittersweet. Seniors pressed caps to their heads, and gowns billowed as they processed to the fieldhouse to receive their diplomas. Clusters of alumni lined the walkway path and held signs saying “You’re always a Puma” and “We love you.” The student senate asked Sponseller, Pastoor, and three other college leaders they voted “no confidence for” not to attend. Pastoor resigned six days later.

On May 13, Father Barry Fischer became rector of SJC, leading an effort to reengineer the defunct college. He has tasked a small group with exploring options and developing a workable plan by August 2019. Sponseller remains involved. One potential path forward would be to merge or partner with another private college. Currently, the school is seeking permission from the Indiana attorney general to modify restrictions on what remains of its endowment and institutional funds. It needs money to help with things like utility bills to preserve its buildings, as well as severance payments.

Students have been forced to move on. Balvich, the student senator, plans to take classes at Wabash College in the fall. Grenda is starting over at Quincy University in Illinois as a junior and will continue playing volleyball. The facilities are nicer there, but it doesn’t have her Puma teammates. “I got so attached to St. Joe,” she says. “I’m sure people will be welcoming, but it’s scary.” Arteaga, the outspoken former class president, was able to graduate on time. His younger brother, Miguel, had to transfer to Ball State University. “He’s still unsure about how many credits will count and what the financial-aid package will be,” Arteaga says. “There’s a lot more uncertainty for him.”

The impact on the town of Rensselaer is uncertain, too. Resident Sheila Maxwell attended a community-impact meeting not long after the closing announcement. There, they brought up the economic repercussions of families with children moving away: $6,000 in state funding per student. One local business owner estimated that 40 percent of his revenues could be tracked to SJC. And people expressed concerns about the closing of facilities that once hosted weddings and softball games. “As a community, we really need something,” Maxwell says. “If it’s another educational institution, that would be great. I tried to keep an open mind about the board’s intentions, but I’m not sure where I am now.”

Personally, Maxwell will miss attending student plays, hearing professors’ concerts in the chapel, and seeing the athletic director run through town. This spring, she hurriedly gathered bits of St. Joseph’s history from old student newspapers, telegrams—one from John F. Kennedy—photos, and journals to preserve the college’s legacy before those things disappear.

For his part, Sponseller still believes the college will return in some form one day. Even if it doesn’t, however, he thinks the bitterness and anger surrounding the closing is misguided. “My wish is that people who have been overcome with hatred can get over it and get back to a life that allows them to love and appreciate all the people around them,” he says. “I feel so bad for them. I pray to God they can deal with it and return to happiness. I hold no grudges, and I wish them very well.”

St. Joseph’s College has reinvented itself before, but never with $27 million in debt. Groppe, the professor emeritus, counts himself among the people who are skeptical about a turnaround. “This was the final graduation,” he says, fighting back tears. “You have the same hopes for the entire student body that you have for those seniors. But there will be no homecoming for them.”

Jasper County Online News would like to thank Indianapolis Monthly Magazine for their graciousness in allowing us to republish their forgoing story.

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