Last year, St. Ambrose University announced it would acquire Mount Mercy University, another Catholic institution in Iowa, in what officials called a "strategic merger." If all goes well, by next summer, Mount Mercy University will be renamed "St. Ambrose University, Mount Mercy Campus," retaining its name, Catholic identity and mission, and some signature programs.

Similar to other small Catholic universities that have merged in recent years, the two institutions hope to improve their long-term financial prospects by consolidating costs and resources while expanding educational opportunities for students.

"We were very proactive in looking for opportunities that would bring true long-term stability," said Todd Olson, president of Mount Mercy University. "Combining the resources and assets of both institutions really builds a stronger financial model."

Kevin Cavanagh, managing director of Higher Ed Consolidation Solutions, a higher education consolidation consulting firm, noted that like other private institutions, Catholic universities are facing a decline in the number of high school graduates while operating costs rise. Catholic universities often face even more severe demographic challenges because the surrounding Catholic high schools—once seen as a reliable source of enrollment—have enrolled more non-Catholic students to compensate for a sharp decline in traditional enrollment. Cavanagh also noted that many Catholic elementary and secondary schools have closed over the past 25 years.

According to data from the National Catholic Educational Association compiled by the U.S. Department of Education, the number of Catholic elementary and secondary schools in the United States decreased by 27.3% between 2000 and 2023, falling to 5,920. In the 2024-25 school year, 63 Catholic schools closed and only 24 opened, according to the NCEA report.

Meanwhile, a recent analysis by The Hechinger Report found that nearly 80 nonprofit colleges and universities have closed or merged over the past five years, more than half of which were religiously affiliated.

Cavanagh believes mergers can provide a viable path for some Catholic universities, but this option is often overlooked, seen as failure rather than a tool. "These universities are not at fault for the changing trends," Cavanagh said, "but how they respond will truly determine whether they can achieve success for their institutions."

The 'era of consolidation' in higher education

Gary Stocker, founder of College Viability, said higher education is entering an "era of consolidation." Stocker noted that mergers have been a common business strategy for years in industries such as banking, airlines, hotels, car rentals, and fast food, and higher education is now just "testing the waters."

Stocker believes there are too many colleges and degree seats, and not enough students to pay for them, even with institutions offering 50% to 60% tuition discounts. "Unless the number of universities decreases, closures and mergers will continue," he said.

In recent years, several Catholic universities have closed, merged, or formed partnerships in response to challenges. Villanova University acquired the campus of Cabrini University—which closed the same year—in 2024 to expand its physical footprint in the Philadelphia area. Rockhurst University in Kansas City, Missouri, established a "strategic alliance" with Spring Hill College in Mobile, Alabama, in March, allowing students at both institutions to participate in each other's programs. Seattle University expanded its academic portfolio in June by absorbing Cornish College of the Arts, a non-Catholic private school. Ursuline College, outside Cleveland, announced in September it would merge with Gannon University, another Catholic institution in Erie, Pennsylvania, and the merger was recently approved by accrediting agencies. If all goes well, the merger will be completed in December 2026, and Ursuline College will officially be renamed "Gannon University, Ursuline College Campus."

The presidents of both institutions said Gannon and Ursuline were both seeking long-term financial stability in response to demographic challenges. According to federal data, Gannon's fall 2023 enrollment rose to 4,548, up about 6% from five years earlier; while Ursuline's student population fell nearly 14% over the same period, to 923. Gannon President Walter Iwanenko Jr. said both institutions met their fall undergraduate enrollment targets.

Iwanenko said Gannon wanted to partner with an institution with a similar mission, sound financial health, but different programs and locations. Ursuline faced additional demographic challenges: as a small women's college, its sponsor, the Ursuline Sisters of Cleveland, had declining membership and required a change of sponsorship, according to President David King. King said Gannon's programs and Catholic identity were highly compatible with Ursuline's, and the merger allows both institutions to achieve cost efficiencies and offer programs in two markets. "It's a bit of a unicorn," Iwanenko said. "Because of the strengths of both institutions, this partnership is a very good fit."

Merging early, but is it enough?

Cavanagh said Catholic universities need to think proactively—long before they run out of money—about finding institutions to merge with. He suggested that when institutions use endowment funds to pay operating expenses, or when enrollment declines over 5 to 10 years and affects teaching capacity, they should consider exploring a merger. If it gets to the point where they cannot pay salaries for six months, it is usually too late.

That was the case for the College of New Rochelle in New York, a now-closed Catholic institution that failed to find a merger partner. Cavanagh, who was an administrator at the college and involved in discussions at the time, said the institution was too heavily in debt and was forced to enter into a teach-out agreement with Mercy College (now Mercy University) in 2019.

When Mount Mercy reached a merger agreement with St. Ambrose, the institution was in good short-term financial shape, Olson said. But looking ahead several years, he questioned whether Mount Mercy could survive demographic challenges and rising costs. Both institutions lost students between fall 2020 and fall 2024: St. Ambrose's enrollment fell 16.7% to 2,500, and Mount Mercy's fell 17.8% to 1,402, according to data from a Mount Mercy spokesperson. Olson said that although St. Ambrose has a larger endowment and is more financially stable, both sides want a more stable and promising financial model for the future. After the merger is completed next summer, Olson expects the two institutions to consolidate administrative roles and services, and enrollment will eventually increase as courses and graduate programs become available to students on both campuses.

However, Stocker said that in general, merging just two institutions may not be enough to put them on a viable path. Larger mergers involving 5 to 15 institutions may be needed. He envisioned that one official could represent 10 different institutions at a high school event, offering a wide range of courses, degrees, majors, and activities; administrative positions such as vice president of marketing, chief financial officer, or president could cover 30,000 students rather than 1,000. Stocker also suggested that 50 Catholic universities could share resources such as marketing, admissions, insurance, and construction under a national organization. Cavanagh believes establishing a national Franciscan or Jesuit network is possible, which would be "far more powerful than allowing schools in certain parts of the United States to gradually disappear."

Meeting the challenges

Cavanagh said mergers between Catholic institutions "can be quite complex, even when they appear very natural on the surface." For example, religious orders may own the campus land, while the college owns or leases the buildings. As with other mergers, these colleges also need to deal with different financial and debt burdens. When two merging institutions are accredited by different accrediting agencies or located in different states, obtaining approval can be complicated.

During the Ursuline-Gannon merger process, Ursuline's leadership devoted significant effort to integrating programs or functions in the information technology and business offices, King said. Cavanagh noted that depending on the merger structure, one campus may need to give up NCAA membership, and institutions also need to consider whether academic portfolios are aligned, complementary, or overlapping. But Cavanagh said that typically, blending two different campus cultures—and gaining buy-in from the campus community—is the most challenging part of a merger. Strong alumni associations may oppose a merger, and boards composed of alumni or members of sponsoring religious orders may have "emotional and personal connections" to the institution, which is understandable. "When you have a personal connection to an institution, it's harder to make business decisions, and I think that is deeply ingrained in many Catholic institutions," Cavanagh said.

In the Ursuline-Gannon merger, preserving the Ursuline name was critical to the merger's success, King said. When the merger was announced, the first questions people asked were: "What will happen to our name? What will happen to our identity?" Iwanenko said some Gannon employees worried about job security and raised questions that leadership did not yet have answers to. King said concerns about the merger created a "more rapid, deeper reservoir of anxiety" that was widespread on campus. Therefore, communication was needed to alleviate anxiety, King said. King said the presidents of Ursuline and Gannon frequently discussed who should inform colleagues on each campus and how to deliver the message. They focused on how to help the campus community "understand as meaningfully as possible in the moment where we are, where we're going, and what this means for them."

Despite the fear and uncertainty, once the new structure is in place, Ursuline students will be able to continue their academic programs, campus residential life, and athletic programs, King said. But Ursuline students will also gain new opportunities by enrolling in Gannon programs. "We will offer students more and do it more efficiently," King said.