Dive Brief: 

• Hilbert College, a small Franciscan institution in western New York, announced plans Wednesday to acquire Valley College, a for-profit with educational centers in West Virginia and Ohio. 
• The colleges will operate independently under a new nonprofit parent entity called Franciscan Services. They plan to establish transfer pathways between the two colleges’ online programs and explore shared services to cut down on costs. 
• Together, the two colleges will serve more than 2,000 students. Both institutions have seen recent enrollment growth, with new online and athletics programs driving student increases last year at Hilbert. Valley College, which has about 1,000 students, has seen steady enrollment increases over the past decade.  

Dive Insight: 

The transaction brings together colleges with strikingly different student populations. More than half of Valley College’s students study online, and its four educational centers largely serve adult students, typically thought of as those who are ages 25 and older. 

At Hilbert, 750 students are residential undergraduates, while around 150 are in graduate programs or studying online, according to the announcement. Around 9 in 10 of the college’s undergraduates are ages 24 and under, according to federal data. 

As a small private nonprofit, Hilbert is also among a group of higher education institutions facing strong economic challenges. Those include pressure to offer tuition discounts to entice students to enroll and an expected drop-off around 2025 in the traditional college-age population due to declining birth rates during the Great Recession. 

The deal is meant to address some of those issues, according to the announcement. 

“Through this strategic acquisition, both Hilbert College and Valley College are leaning into the changes affecting higher education, including declining high school graduation rates, increasing workforce development needs, and regional and national higher education trends,” Valley College President Tony Palmieri said in a statement.

Hilbert has been on the forefront of some of these issues. In fiscal 2016, Hilbert brought in $16.6 million in tuition and fees, but awarded $4.1 million in scholarships, according to an audited financial statement. That means the institution gave up about 25 cents for every dollar it collected. 

By fiscal 2021, that amount grew to about 42 cents for every dollar collected — even as the college’s enrollment dipped over that period. That year Hilbert brought in $17.4 million in tuition and fees, but dispersed $7.3 million in financial aid. 

However, Hilbert’s enrollment has recently ticked up — growth that officials partly attribute to new online programs. In fall 2022, Hilbert’s enrollment reached 900 students, according to Michael Brophy, the college’s president. That’s compared to 784 students the year before. 

Brophy cast the acquisition as helping both Hilbert and Valley become stronger institutions, including by having greater purchasing power for resources like technology and textbooks. That combined power could help stave off some of the troubles plaguing small colleges. 

“Small classes are good, small advising settings are good,” Brophy said. “But small as a college scale does not work. Small colleges have a very difficult time.”

Brophy envisions transfer partnerships between Hilbert and Valley, which he anticipates will eventually transition from a for-profit to a nonprofit as a result of the deal.

The two institutions also could help each other develop better programs. Valley, for example, specializes in allied health and health science programs, and Hilbert could use the institution’s expertise to develop its own degrees in these fields down the line. 

The acquisition of Valley College is subject to state, federal and accreditor approval. Officials are hopeful the deal will be complete this spring. A spokesperson declined to share financial details about the acquisition.

These kinds of transactions have been appealing to other private nonprofit colleges. Saint Joseph’s University, a Jesuit institution in Philadelphia, recently announced plans to acquire the Pennsylvania College of Health Sciences, another nonprofit in the state. 

The expansion will allow the university to grow its reach and add over 20 programs in allied health and nursing. The acquisition marks the second Saint Joseph's will seek to complete in less than two years. 

Other nonprofit institutions have also sought to acquire for-profit colleges in recent years. In 2021, the University of Arkansas System approved the acquisition of Grantham University, then an online for-profit, to grow its virtual offerings.