Villanova agreed to put $40 million into Rosemont College as part of acquisition

Villanova University has agreed to give Rosemont College up to $40 million as part of their merger agreement, according to Rosemont’s recent financial filings.

The two Catholic universities on the Main Line announced in March that they had reached agreement for the financially struggling Rosemont to merge into the much larger Villanova beginning in 2027 and becoming final in 2028.

Villanova gave Rosemont $5 million in December “to maintain exclusivity while closing a merger agreement” and $10 million after the agreement was signed, according to Rosemont financial statements made public this month. Villanova also agreed to put in escrow $5 million for Rosemont’s operating costs in April, and an additional $8 million and $12 million in June 2026 and June 2027, respectively.

» READ MORE: Financially strapped Rosemont College will merge with Villanova University

If Rosemont does not need the money or decides to close its doors for good earlier than 2028 as planned, any remaining assets would revert to Villanova under the merger agreement, said Villanova spokesperson Jonathan Gust.

» READ MORE: Rosemont College’s accreditation has been reaffirmed after last year’s warning

As currently structured, the agreement calls for the more than century-old Rosemont, with its neo-Gothic architecture and leafy campus less than a mile from Villanova, to become known as Villanova University, Rosemont Campus, in 2028.

Rosemont, with an enrollment of 774 students, was one of 13 colleges The Inquirer examined last fall and found to be in poor financial health, using an index developed by a finance executive at a small college in Illinois.

» READ MORE: FINANCIALLY FRAGILE The Inquirer examined the financial health of 13 small, private Philadelphia-area universities

Rosemont had reported operating losses for five straight years through June 2023 and, since 2020, had borrowed millions from its restricted endowment to meet operating expenses.

Among the 13 small, private colleges included in The Inquirer’s analysis, Rosemont’s $16 million endowment was the smallest and its facilities had the oldest average age, which at times affected finances.

In its most recent financial statement, the college noted that it fell below the required composite 1.5 score on the federal Education Department’s scale for colleges to be considered fully financially responsible.

“The score represents what the fiscal condition may have been as of June 30, 2024,” the college said in a statement. “Since that time, Rosemont has taken proactive steps to strengthen its financial health.”

» READ MORE: Rosemont College’s accreditation has been reaffirmed after last year’s warning

The school also said it had approved a 9.7% tuition hike — much larger than most schools — for 2025-26; its tuition and fees for last academic year were $23,700, compared with more than $67,000 at Villanova. The college also indicated it had modified its costly financial aid programs, meaning it would be doling out less money to students.

“Many discounts or awards were deemed to be losing the college money and have now been minimized to better cover costs,” the financial statement said. “Previous aid packages were covering room and board, resulting in substantial losses.”

The tuition increase comes at a time when the college is trying to maintain enrollment and convince incoming freshmen that they should still come to Rosemont. The college declined to say how many students have submitted deposits, committing to attending Rosemont in the fall, but said its deposits “were tracking in line with previous years.”

Founded in 1921 as a women’s college, Rosemont has had long-standing struggles. In 2009, the year it became coed, the school had a $1 million deficit in its then-$20 million budget.

In 2015, the college reset its tuition, a tactic in which colleges lower the sticker price to attract more families but simultaneously reduce financial aid. (Ultimately, Jim Cawley, who became president in 2022, said the move had not had sustained success and the college went back to discounting.)

As its financial challenges grew, Rosemont started borrowing restricted funds from its endowment to cover “immediate operational needs.” There was a $3 million loan in 2020, when the endowment was worth $17 million, followed by a $2 million loan in 2023. Finally, in April 2024, Rosemont borrowed another $2 million from its endowment to help pay off a $3 million line of credit.

In its most recent audited financial statement, the college noted it paid off the endowment loans with interest.

The multiyear transition for the merger will begin in 2027, and students currently enrolled will have until June 2028 to complete their Rosemont degrees. The college will continue to operate independently during that time, with most of its extracurricular activities intact. Its varsity sports, however, will stop after next academic year.