February 27, 2017

Ben Sponseller, a kid from St. Edward High School in Lakewood, Ohio, near Cleveland, arrived at Saint Joseph’s College as a freshman in the fall of 1970. He graduated in 1974 with a double major in English and Education. Married to his college sweetheart, Susan Gavin Sponseller, ’74, for 41 years, he’s a father of five and a grandfather of two. Since 2013 he has served as chairman of the college’s Board of Trustees. He never expected to be well known but since the Board’s announcement on February 3 that the college would suspend operations after the May 6 commencement, his name has appeared in news reports and innumerable social media posts, usually not in a good way. He accepts that. It’s part of the responsibility he took on as point man for the Board. Here, he lays out the case for the Board’s decision as part of his ongoing efforts to help the College family understand what happened and why, as much as anyone can understand it. He wants you to know that his heart is broken over the decision, and that, as with most of the College family, acceptance will be a long time in coming, but he hopes that understanding the truth of the situation can lead to a sort of healing.


Q: Where do you start to tell the story?

Sponseller: I’d like to lay out the facts and figures that led the SJC Administration to submit to the Board the resolution on February 3, 2017 that has led to so much turmoil, the resolution calling for suspension of operations at the school.

It’s important that people understand what led up to that decision, that it didn’t happen overnight and that it wasn’t made quickly or lightly. 

For the past decade plus, one of the Board’s most respected members has repeatedly cautioned the Board that we must increase enrollment and donations. Let me discuss enrollment first, and connected to that, our discount rate, then donations and other financial factors.


Some of you may have seen our expanded student recruiting efforts: a larger staff, re-designed materials, social media improvements, and even billboards along major highways. For the past decade we have taken steps to examine and re-examine the geographic areas from which we recruit. This includes attempting to attract students from several foreign countries.

The collective efforts have not, over the years, resulted in a notable increase in enrollment, or in income generated from tuition. SJC certainly is not alone in its frustration, as there is now a smaller pool of potential students, especially those preferring a rural school with a liberal arts program.

There are larger societal factors at work here. The declining birth rate has reduced the number of traditional college-age students. At the same time, some people are beginning to wonder if a college education is really necessary, given the expense. All of those factors have made the task of recruiting students much more competitive. (To see an example of this competition in action, consider that 73 colleges were represented at a transfer fair in Halleck Center on February 16, 2017.)

Discount Rate

Another of the many factors in the perfect storm that swamped our boat was the discount rate. Over the years in an effort to increase and/or maintain enrollment, we continued to increase our discount rate. A discount rate is just what it sounds like: a tuition discount offered to students.

It works like this: Let’s say tuition is X. We say to students, “We know that tuition is X, but you can come to St. Joe for substantially less than X.” At SJC, our discount rate has averaged 65%. Some get more, some get less, but our average much higher than the national average discount rate of slightly above 50%. The theory for that high discount rate is that, for the college, some income is better than none, and we help fulfill our mission to educate students, who come from all income levels.

Discount rates are very, very common at colleges. Almost any student with a respectable GPA coming to a school like SJC gets some kind of a discount. These days, I don’t know how you can attract students and run a college like ours without a discount rate.

The trouble with our higher-than-average discount rate was that we hadn’t been able to find enough donations to make up for the difference. This is not the fault of the students; the discount rate allowed them to come here, and we wanted them here. But we just didn’t have anywhere to go to make up that money, and so it was a big drain on our cash flow. In black-and-white, the discount rate accounts for $14 million of the $24 million in total tuition charges.


Over the decades SJC has benefited from many generous givers. Most of them, but not all of them, have been alumni. For quite a few years, large alumni gifts, many of them from one-time donors, seemed to arrive just in time to avoid financial disaster. Sometimes they came in the form of a few members of the Board of Trustees stepping up (more on that later). Other times, we received a bequest from someone who remembered SJC in his or her will. Certainly, the biggest gift of all was from Juanita Waugh, who left us 7,600 acres of income-producing property. This could not have come at a better time. Without its annual income from farmers and windmill rents, I speculate, years ago we would have had to take drastic action similar to our February 3 decision.

However, in the past several years, we have not been able to maintain and grow the giving both in terms of dollars as well as big givers. Typically, a college’s main source of giving is its alumni. For a variety of reasons, we were never able to tap into alumni giving as much as we needed to. Over the past 10 years, the rate of response from SJC alumni to the college’s appeals has been 18%. That is less than two out of ten alumni supporting the college with the regularity of giving that we need. I truly believe the alumni that do give, give generously and I appreciate it immensely.

People have asked why the Board did not send out the equivalent of an SOS to all alumni prior to the February 3, 2017 announcement. Perhaps this was a mistake, but, examining the facts and figures of all previous giving, and not just from alumni, the analysis just did not even remotely suggest that we could realize the dollars we needed, even over a reasonable multi-year period.

Our needs were in the tens of millions of dollars. We had to analyze our capacity for raising funds. The best data we had was from past experience. Our most successful fundraising effort was our 21st Century Campaign, which began in 2005. We ended up with a goal of $13.1 million in pledges. It took us eight years to collect the $12.1 million dollars from those pledges and we never did receive payments on some of them. In fact, since 2005, $23.1 million in pledges have been made to the College.  However, the College has never received approximately $9.2 million in pledged support from a total of 195 donors during that time period.

I sincerely hope the Alumni Association’s current $20 million fundraising campaign, with its deadline of April 1, 2017, proves this analysis incorrect. I wish them well.

In the fall of 2014 a subset of the Board reviewed the concept of corresponding with alumni at a much higher level of urgency than in the past. It was never sent, out of concerns that it would be perceived as more of a reason NOT to give than to give. Some thought that people would not be inclined to give if we made it sound too much like a request to maintain the status quo, if it was about operating expenses and not a more exciting cause, such as a major campus improvement. It’s always a fine line in fundraising to convey urgency without the hint of doom. This subset of the Board had input into this decision.

Over the past 18 months, using a variety of media and formats, the plea for income from our base of financial supporters, including visits to alumni and potential donors around the country, did become more direct and urgent—but still did not elicit the kind of financial response we needed.

So, without a healthy increase in donations, and with little to no growth in tuition income, we were forced to look at the endowment as a source of income. Beginning to draw down the endowment, although we had good intentions to repay it, was the beginning of the end.

Other Financial Factors Influencing the Board’s Decision

There were several factors that come into play that, when all combined, doomed us to major cash flow issues. These include the following:

  • We have deferred maintenance over the past 15-plus years to help balance the budget. Finally, in some areas, we reached the point where we had no choice but to spend money that was not budgeted on critical repairs. One does not have to walk far on campus to see the need for capital improvements or where money has been recently spent, such as the Halleck Center storm and flooding remediation. That project required the installation and repair of storm sewers and rain-handling   repairs, which cost $150,000.
  • Put off too long was the replacement of coal-fired boilers with a natural gas system. Some students and alumni may recall a relatively short period of time (that felt like months) when heat on campus was very unreliable. The replacement of the boilers and related costs totaled $1.1 million.
  • There were other repairs/maintenance items, such as the removal of diseased trees from campus, tuck-pointing, roof repairs, repairing the leaks of the water tower, for a total cost of as much as $250,000.
  • Restructured debt. In 2013, the college moved from an interest-only debt repayment structure to an interest and principal structure (much like a home mortgage). This resulted in a competitive interest rate and the requirement that, after so many years of interest-only payments, we would begin to actually pay down the debt. Having both interest and principal due every month put a strain on cash flow. The principal balance is now close to $27 million. We have been meeting with our creditors to develop a solution.

Q. You’ve outlined many of the financial challenges faced by the college. What impact did those challenges have on the students?

Sponseller: We’re seeing the impact, and it’s varied and traumatic. Specifically:

Students Need Teachers

Earlier this year, it became apparent that our major fundraising effort, which would be based on a bold strategic plan, would not be initiated in time to raise the funds necessary to meet our expenses beginning roughly mid-2017. This caused great concern because we do not want to miss payroll. If a college has no funds to pay teachers, those teachers will need to find employment elsewhere.

Students Need Loans

The auditors who work with the school have strict guidelines that must be followed. Our discussion with the auditors included all routine matters, including our debt covenants with our lenders. Due to the college’s current financial condition there is significant concern about our ability to continue to pay our bills. When this situation occurs, an auditor is required to issue a specific type of audit opinion. This is called a going concern audit opinion. The impacts of a going concern audit opinion for a college are significant.

Because of that anticipated going concern opinion from the auditors, the students’ ability to get Department of Education financial aid (loans, Pell Grants, etc.) is seriously jeopardized. Therefore, our students would not be able to get the financial aid needed to pay their SJC bills. As much as it pains me to think they may not be coming to SJC, it would be unfair to students to lead them to believe they can obtain the federal financial aid needed to pay for their education when we know that our ability to access those funds is in question. They would be better off going to another school that can give them a higher level of assurance that they can obtain the financial aid they need.

Students Want to Graduate from an Accredited College

The Higher Learning Commission (HLC), the organization that accredits SJC, has been thorough in its evaluation and forthright with its findings, including the implications of SJC’s probation. It gave us an objective evaluation, guidance while we prepared our responses, and a hearing that encouraged open dialogue and an opportunity to state our case.

Unfortunately, we were not able to demonstrate the financial progress necessary to avoid probation.

The HLC letter dated November 16, 2016, available to the public on the HLC’s website, outlines clear financial expectations that must be addressed by SJC and documented in a filing by January 8, 2018. The letter further states the college will have a comprehensive evaluation no later than March 2018. In such a precarious financial position, it would be irresponsible not to be concerned that SJC could have its accreditation withdrawn at one point.  

Vendors Need to be Paid

With low cash-flow, we jeopardize our ability to pay vendors. Without vendors, we may not be able to provide critical services. We rely on vendors for natural gas for heating, maintenance supplies, electricity, internet service and a number of other supplies and services. Vendors supply everything from paper to copy machines to soap. 

Q. What about the re-engineering or re-imagining of SJC that has been discussed?

Sponseller: Many people are under the mistaken impression that a re-emergence of SJC is a foregone conclusion and that it will happen very soon.

If the college can find the financial wherewithal to continue a few programs in the short term, it will. If uninterrupted educational offerings are not financially viable, the Administration will create a team that will design a new model that meets the SJC mission, HLC accreditation requirements, has a solid financial foundation, and meets the needs of higher education in our society.

When the Board passed the resolution to suspend operations, it gave the Administration until June 30, 2019 (over two years) to create a plan to present to the Board. The Board instructed the Administration to undertake a study to determine the practicality of developing a plan that would enable the Board of Trustees to remove the current suspension. In this case, as in life, there is no guarantee. But we do have dedicated people pursuing this.

I have been very open in my Q&A sessions that the new plan must be based on a viable and sustainable financial model. It must be well-researched to assure it appeals to the needs of students at the time it is introduced. It was never the plan to have a re-engineered SJC up and running in the next few months, which is why the Administration was given over two years to develop one.

Our financial troubles, like so many other small colleges throughout the United States, are formidable. We know it’s going to take time to come up with a viable plan. We don’t see St. Joe reopening under the same model that it is today. We’ve had to face the reality that it is not a financially sustainable model.

The Board has discussed the possibility of a partnership, not at length but we have discussed it. It is not out of the realm of possibilities, but at the present time, primarily because of our debt, we are not an attractive potential partner. Until such time that we can seriously present ourselves with a more solid financial foundation, it would not be fair for me to speculate with whom we might join forces. 

I believe most everyone knows from the HLC probation letter that we must submit a report in less than a year showing not just a plan, but actual proof that our financial house is on a solid foundation. As I see it now, this will be extremely difficult.

It’s a tricky business to foretell the future. SJC has been criticized for telling the Indiana Department of Workforce Development that, in so many words, we may not be able to re-emerge. This is not news to anyone on the Board, nor is it contrary to what the faculty, staff, and students have been told. The February 3 Board resolution does not tell the Administration to re-open no matter what. It tells the Administration to determine the financial feasibility and practicality for developing a plan. I hope this information realistically and honestly not only  creates hope for the future, but also lays out the expectations for a financial model that ensures success so no actions similar to the February 3 vote will ever reoccur.

Q. These have been some very hard truths that you’ve shared. Do you see any positives in this situation?

Sponseller: My dad always told me to look at the donut, not the hole. At SJC, the donut is 127 years of educating people who are out in the world, contributing to society in ways that go wider and further than anything we can imagine.

I think as always, that the College’s greatest strength and its greatest assets have been its people: students, faculty, staff and alumni. The conflict that we have experienced since the February 3 announcement, and maybe even before, has been because people are passionate about the College and are committed to it. I’d like to address each group in turn.

SJC Students

I recognize that the students love SJC for the same reasons that I do: they love the camaraderie with other students that is so strong here, and they love their relationship with professors, who always take the time to guide them.

I know that our students have made significant sacrifices to go to school here. It’s no secret that we don’t have state-of-the-art dorms; we don’t have a fancy student center. What we do have is students who look beyond the superficial and value the relationships they have with fellow students and with the faculty and staff. And I really value that.

In the early 1970s, college campuses were full of very active students concerned with peace and justice. I was one of those students, and I took our mission seriously. I respect students who stand up for something good. I understand that some disagree with the decision to suspend operations at the College, and I hope that they can express their disagreement with respect. I certainly respect them. I wish all the students well and I know they will carry what they’ve learned at St. Joe to wherever they go next.

Faculty and Staff

I want the faculty and staff, and the students too, to know that we really tried to keep this place open. We did everything we could and we were very committed to keeping it open. I stand in front of the faculty and staff knowing what sacrifices you have made to help us with this goal. You stuck with us year in and year out. In many of those years, you didn’t see a pay increase. We decreased our contributions into your retirement account. You were asked to pay more for your health care. All of those, and more, were sacrifices that you have made and we all say thank you.

The Alumni

If I could talk with my fellow alumni one-on-one, I’d start by saying, thank you for all you’ve done. Many, many alumni have been motivated to help St. Joe. Many have given large sums of cash. Others have given much of their time. Still others have allowed SJC to benefit from their talents. Many have given generously of all three.

We never took the position that we’re totally dependent on alumni support. We tried to manage the budget, look for other sources of revenue, and kept our spending to a minimum. I’m very sorry that our efforts were not enough to save the school we all love.

The Board of Trustees

Similarly, I would like everyone to know the sacrifices of the Board of Trustees, which has 30 plus volunteer members. We have dedicated people who work very hard, especially on all the committees of the Board, to bring their ideas forward. They commit a lot of time; they make themselves available for phone calls and discussion outside of regular Board meetings; they contribute ideas and insights into the issues facing the College.

As a group, they contribute generously from their own resources. In fiscal year 2014, Board members donated a total of $256,000 to the college; in FY 2015, $758,000; and in FY 2016, $855,000.

They are eager and willing to give of their talents to make St. Joe a better place. It’s been a working Board that takes its mission seriously.

It’s important that people know that this is a fully voluntary Board, and that includes me. I took office in 2014 as Board chair. At one question-and-answer session on campus, a student asked if I would be willing to take a pay cut. No Board member gets paid for serving. In fact, they’re expected to make generous contributions.

Q. Are you considering resigning from the Board?

Sponseller: I’ve been asked if I would resign as Board chair. I serve at the pleasure of the Board. If the Board asks me to resign using the procedures we have in place, I will accept that and do everything I can to make a smooth transition that serves the students of SJC, whom I still care for greatly. Regardless of what happens, I will continue to financially support SJC and help my alma mater in any other way I can.

I would like to see SJC survive. I have worked for many years as a Board member to make this happen. It causes me great anxiety to have to face the financial reality that so coldly and loudly says the money just isn’t there to keep the doors open. I care deeply for the school, its students, faculty, staff and alumni. I will let my actions speak for themselves.

I am very sad about the suspension, but the facts and figures left us no choice.

Q. What are your own memories of SJC?

Sponseller: I was attracted to SJC because of Core. With the Core program and the professors, I got a great education that taught me how to learn. After I graduated, I took on a variety of jobs that at the beginning I realized I wasn’t qualified for, but because of the skills I learned at SJC, I knew I could figure it out. I could learn.

I reflect back and realize what a tremendous sacrifice so many of the faculty members—both C.PP.S. priests and brothers, and lay people—made to get me where I am today. I feel a deep obligation to them and to SJC, and I always want it to succeed.

I joined the Board so that I could help the college find its way to a solid footing. One of the things I learned from the C.PP.S. members was, don’t just talk, do something. Joining the Board gave me the opportunity to do something. I’ve worked hard to serve the students, faculty and staff. We’ve worked hard to stretch every dollar as long as we could. Looking back on all the years of struggle, we did somehow find a way to keep the doors open.

I wish we could have found a way this time, but there were too many things working against us. This is hard on me, as I know it is hard on everyone who is on campus. One thing I have going for me is that I am married to the best woman in the world, a fellow Puma, who, like me, loves our alma mater. I hope it will live on forever. And no matter what happens in the next chapter of St. Joe’s history, it will live on forever in all our fellow Pumas, and in the people they influence in this world.