General FAQs
Why have St. Ambrose University and Mount Mercy University decided to pursue a strategic combination?
St. Ambrose University and Mount Mercy share roots and similar missions as two long-standing independent, private and not-for-profit Catholic universities based in Iowa. St. Ambrose was founded in 1882 and Mount Mercy in 1928. The two universities share consistent values, beliefs, and priorities about education. They each have substantial reputations for workforce related student success. Given these shared values and successful outcomes in their other collaborations, the presidents of each university, Dr. Amy Novak of St. Ambrose and Dr. Todd Olson of Mount Mercy, are taking a proactive approach to the current higher education landscape to increase access and affordability to quality education for both traditional students and adult learners.
What are the terms of this new agreement?
The new agreement signed by President Novak and President Olson on August 1, 2024 marks the two universities’ intent to combine under one institution. Once the required approvals from the Higher Learning Commission and other parties are received, St. Ambrose will become the nonprofit parent organization of Mount Mercy. If all progresses as expected, the first stage of approvals will occur in spring 2025. That will be followed by a “transition period” during which, in accordance with U.S. Department of Education requirements, St. Ambrose will continue to operate Mount Mercy as a separate university maintaining its own degree authorization, accreditation and federal student financial aid participation. At the end of the transition period, which is expected to last until mid-2026, the two universities will be fully combined under St. Ambrose with distinct campuses, educational offerings and intercollegiate athletic programs in both Davenport and Cedar Rapids. The Mount Mercy name will also be retained in the strategic combination, with that institution becoming the Mount Mercy Campus of St. Ambrose University.
How is this different from the agreement the universities announced in May 2024?
The agreement announced in May was an academic agreement (often called a consortial agreement or co-registration agreement) that allows students to take a range of courses from either university, starting in fall 2024. This arrangement provides more pathways for undergraduate and graduate students at both institutions. This academic agreement holds true, regardless of the status of the strategic combination and can continue to be executed while the new agreement is in review by the Higher Learning Commission and U.S. Department of Education.
What led to the signing of these agreements?
Beginning in January of 2023, the president of St. Ambrose University, Dr. Amy Novak, and the president of Mount Mercy University, Dr. Todd Olson, began to discuss whether, and how, the two universities might come together in mutually beneficial and enriching ways. Those initial meetings led to further conversation, which led to a more than year-long exploration of the viability of a strategic relationship.
Can you provide more details on the timeline leading up to the agreements being signed?
In January of 2023, the university presidents met to discuss the state of Catholic higher education. These discussions led to both universities pursuing a Nursing Articulation Agreement in June of 2023 that gives St. Ambrose students preferential admittance when applying to Mount Mercy’s MSN program.
In that same month, a taskforce comprised of members of both university’s boards and key university administrators convened to outline a joint vision statement for a possible deepened collaboration.
In December 2023, the board of trustees of both universities signed a letter of intent (LOI) to begin a robust due diligence process and explore the potential of a deeper and more comprehensive venture, including the potential of reducing costs and increasing operational efficiencies by sharing administrative operations.
In January 2024, the presidents collaborated again (along with the presidents from Loras and Clarke) to pen a joint OpEd on how Catholic higher education is an asset for Iowans.
In April 2024, upon review of the majority of the results of the due diligence process, the respective boards voted to continue pursuing a possible combination. Also in April 2024, the provosts of both universities signed a new agreement (sometimes called a consortial agreement or co-registration agreement) that allows students to take a range of courses at either university, beginning in fall 2024.
In May 2024, the universities announced the April agreement referenced above and expressed their intent to pursue strategic combination. The presidents immediately began gathering leaders from both institutions to begin academic and operational analysis work as part of integration planning discussions. Through this work and continued due diligence by both boards, St. Ambrose and Mount Mercy came to the conclusion that it was in the best interests of both universities to move forward with pursuing a strategic combination.
On August 1, 2024, President Novak and President Olson signed a definitive agreement seeking strategic combination and submitted this agreement to the Higher Learning Commission and U.S. Department of Education for approval.
Are you forging this agreement to save costs?
The main goal of the agreement is to expand access and affordability to quality education for traditional students and adult learners alike, while also increasing opportunities for students on both campuses. Cost savings and more efficient operations are expected if the strategic combination is approved, ideally allowing both institutions to continue to serve their student populations, communities, and region for many years to come.
What information can you share about the financial strength and stability of each institution?
St. Ambrose University shares these key metrics regarding its strength and stability:
- Current endowment of $247.5 million as of July 31, 2023. This is up more than 50% over the past five years
- 36th largest endowment out of 187 Catholic Colleges (CollegeRaptor.com).
- The endowment is also largely unrestricted, with only 21% restricted by donor intent.
- Strong unrestricted resources, with unrestricted cash and investments exceeding 275% of annual expenses and 410% of long-term debt.
- Low levels of long-term debt, with debt under 20% of total assets.
- Department of Education Composite Score that is consistently at 3.0, the highest level.
- Consistent full-accrual operating surpluses.
- Bond rating of A- with a stable outlook.
Mount Mercy University shares these key metrics regarding its strength and stability:
- Endowment of $39.3 million as of June 30, 2023. This is up 41% over the past five years.
- Total debt of $12.9 million as of June 30, 2023. This is less than 15% of total assets and less than 50% of the annual operating budget.
- Bond rating of B (Forbes).
What is the enrollment of each institution?
St. Ambrose University had a total of 2,703 (both full and part-time, graduate, and undergraduate) students enrolled in the 2023-24 academic year.
Mount Mercy University had a total of 1,449 (both full and part-time, graduate, and undergraduate) students enrolled in the 2023-24 academic year.
How does the collaboration between St. Ambrose and Mount Mercy represent a new model for Catholic higher education?
This collaboration represents a proactive approach to capitalize on the current academic and financial strength of both St. Ambrose and Mount Mercy and lays the foundation for a new, responsive, and sustainable model of Catholic higher education.
Father Dennis Holtschneider and Dr. Donna M. Carroll, co-presidents for the Association of Catholic Colleges and Universities, state that this is precisely the type of proactive activity they have been encouraging colleges to explore. “We know these are challenging times for our colleges and universities,” says Carroll. “We fully support the work St. Ambrose and Mount Mercy are doing to lead the way in creating a responsive and sustainable future for Catholic higher education.”
Can you describe the strategic combination being pursued?
The intention of the combination is to strategically align and bring together the two universities to provide an innovative new model for Catholic higher education.
The strategic combination will allow both institutions to share resources, administrative functions, and economies of scale to achieve cost savings and operational efficiencies, providing long-term sustainability for the universities and reduced costs for students and families.
If the combination is approved, both universities will maintain separate residential campuses, separate co-curricular programs, and use of both the St. Ambrose and Mount Mercy names. St. Ambrose will function as the parent organization in this combination. Upon completion of combination, Mount Mercy would become known as the Mount Mercy Campus of St. Ambrose University.
Is there a chance the strategic combination will not move forward?
At this point in the process, with the due diligence and collaboration work that has already been completed, it is believed that the Higher Learning Commission and U.S. Department of Education are likely to approve the requested combination. If by chance they do not, the two universities would continue to operate independently, with their joint academic agreements still in place.
How will you keep the public informed as you move forward?
We will update this FAQ as we move forward in the process. Consider bookmarking this page and checking back regularly for updates. We also will reach out proactively to our communities with updates.
