(Bloomberg) — Saint Francis University was out of its league, and Father Malachi Van Tassell knew it.
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Bigger, richer universities were raiding its men’s basketball team, luring away one star player with a six-figure deal, and Van Tassell, the school’s president, worried that his athletic department was just turning into “a farm team for larger conferences.”
“We simply cannot compete” with those top schools, said Van Tassell.
So he and his board did something that only a handful of schools have done in the last 25 years: They pulled Saint Francis, a small Catholic school in western Pennsylvania, out of Division 1 sports and moved it down two ranks to Division 3. That’s where it will compete starting this autumn, after graduating its final class of D1 students this month.
No more superstar athletes, no more cross-country trips for big games, but also, as Van Tassell sees it, a lot less financial stress for a school that’s been racking up operating deficits.
A year after the university announced the move, Van Tassell says there are nascent signs his plan is paying off: Deposits made by incoming freshmen are rebounding, and the school is attracting more student-athletes than it had anticipated. “We are right where we thought we would be.”
The new era of professionalism in US college sports is only heaping more financial pressure on schools that are already grappling with a shrinking pool of college-age kids, cutbacks in federal funding and waning applications from overseas. At least eight small US colleges have announced plans to shutter or be acquired this year. Even powerhouse D1 schools are seeking new ways to raise revenue and fund all their athletic programs.
For Van Tassell, who was an assistant professor of accounting at the school for 12 years, the unsustainability of it all became clear a few years ago, when half of the men’s basketball team — including the player who’d sign that lucrative name, image and likeness contract — registered to transfer. “That’s where I said, ‘You know what? Something’s gotta give.’”
Saint Francis announced the shift to D3 in March last year. Ironically, it came just weeks after the men’s basketball team, the school’s most high-profile sports program, qualified for the National Collegiate Athletic Association’s March Madness tournament for the first time in more than three decades.
Van Tassell started receiving phone calls from college officials across the country looking for advice on how to navigate the new D1 landscape. Small schools in particular are feeling the pressure most, he said.
Experts at consulting firm Huron, which has advised more than 40 D1 schools on athletics-related challenges, say that so far none of its clients are preparing to follow Saint Francis’ lead.
“We’ve been surprised, given the financial pressures on these institutions,” said Tim Walsh, a managing director. “But more often we’re seeing folks increase their investments to keep up with the more aggressive competitors.”
Backing away from athletics can hurt enrollment and damage relationships with donors and alumni, according to Huron. In fact, NCAA data show that shifting into higher, more competitive divisions has been far more common in the last 25 years than dropping down.
Only two schools descended one step to D2, where students usually get partial athletic scholarships and the competition is less intense, during that period. Four dropped from D1 to D3, a level with no sports scholarships, including the University of Hartford, which decided on the shift in 2021. Hartford has seen its enrollment creep up in recent years after an initial slide.
For Saint Francis, which is about 80 miles (129 kilometers) east of Pittsburgh, the gamble is that the new rank will be better for its finances and its student body.
The D1 classification had been straining its balance sheet long before the NCAA’s adoption of NIL contracts, according to Van Tassell, who became president in 2014. From that year through 2024, athletic expenses roughly tripled while income generated by the program was mostly flat, tax documents show.
Still, the decision to leave D1 hit hard at first. Enrollment dropped roughly 8% for the fall 2025 semester, largely driven by an exodus of around 250 student athletes. Some 40% of the student body had been on a roster, including all of its international students, who tend to pay full tuition.
Samantha Przybys, a golf player and communications major who graduated this month, said the departure of so many athletes deflated the campus.
“I feel like my college experience took a big turn,” she said. “I don’t know how people would want to come here without that incentive through athletics and scholarships.”
In January, S&P Global Ratings lowered the university’s credit rating to BBB-, one step above junk, with a stable outlook. S&P cited a four-year enrollment slide, to 1,651 full-time students this past fall, and noted expectations for a two-year budget gap.
Ultimately, however, S&P sees the move as a positive for Saint Francis, saying it will save the school as much as $6 million after fiscal 2026 and give it more financial-aid flexibility. S&P, which said the school had $45 million in total debt, expects operating deficits will shrink.
“BBB- is somewhere they can sit more comfortably as they get the kinks worked out,” said Beth Bishop, a senior analyst.
New Vision
The vision now, Van Tassell says, is to attract students who want to play college sports, but not at the intensity of D1. Saint Francis will still offer all of its teams, employ full-time coaches and invest in facilities.
And to help bolster enrollment, the school has also leaned into workforce training, launching an aviation-maintenance program and partnering with the University of Pittsburgh Medical Center to offer nursing and patient-care-technician certificates.
Demand for these certificate and advanced-degree programs has surged, school officials say. That jump, combined with the overall pickup in deposits from incoming freshmen, has Van Tassell predicting a financial turnaround.
“Check back with us in a year,” he says, “and we’ll be on our way to an upgrade.”
–With assistance from Stefani Reynolds.
(Adds information on president’s teaching background.)
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