St. Scholastica faces $5.6 million budget gap, layoffs deepen concerns

Several faculty members have already lost their jobs at the College of St. Scholastica, and internal emails showed administrators racing to close a $5.6 million budget gap before the 2027 fiscal year, raising new questions about what programs, services and student supports in Duluth could be cut next.

The emails, which pointed to imminent reductions, put a sharper spotlight on how much trouble the college was in before the problem reached the surface. For students in classrooms on the Duluth campus, the consequences could show up first in fewer course options, thinner advising and fewer staff members to support enrollment, financial aid and day-to-day operations. For employees, the gap signals that more layoffs could follow if leaders cannot quickly reduce costs or find new revenue.

The budget pressure matters well beyond the campus gates. St. Scholastica says it has an economic impact of more than $227 million on the region, and the college has long served as a major employer and training ground for students who stay in the Twin Ports, St. Louis County and nearby communities after graduation. Founded in Duluth in 1912 by Benedictine Sisters, the school now says it has more than 33,000 alumni and about 3,000 students on its Duluth campus each year.

The financial strain comes as the college moves through a leadership transition. President Barbara McDonald said she would retire effective July 1, 2026, and Brenda S. Kelly was later named the 14th president, also effective July 1. That shift could shape how aggressively St. Scholastica cuts costs, especially as the Board of Trustees has already approved Strategic Plan 2030 with a focus on institutional sustainability, student success, academic programming and lifelong learning.

The college has also faced outside funding losses. In 2025, it lost a $3.9 million U.S. Department of Education grant that had supported its occupational therapy program, a five-year award that had totaled $3,979,407. The college launched a Center for Professional Training and Lifelong Learning in January 2025 and has said plans are underway for a 2027 renovation of the main campus Science Center for an Advanced Practice Suite, moves that suggest leaders are trying to invest for the future even as they trim spending now.

The scale of the hole is easier to see against the college’s most recent public financial snapshot. For the fiscal year ending June 2024, ProPublica reported revenue of $112,437,840 and expenses of $107,808,817, with assets of $210,673,724 and liabilities of $63,546,812. The new $5.6 million gap is larger than that year’s reported surplus, a sign that St. Scholastica’s next round of decisions could affect classrooms, payroll and the college’s role in the Duluth economy for years to come.