In January of the following year, the Sisters of St. Joseph decided to admit lay residential students, Accordingly, they bought a large tract on the west side of Indian River Drive and started building on it two three-story dormitories for residential students, one for men and one for women.

The Sisters moved their novitiate to property at the end of Britt Road in North Stuart before the first residential students arrived for the fall term of 1967, but the transition to a co-ed residential two-year college was not a smooth one.

The new dorms were not finished and the residential students had to be housed in an old hotel building in downtown Stuart and bussed to the campus.

The lack of adequate residential supervision resulted in disciplinary problems as well as friction with the local community.

Having started off on the wrong foot, the college found that it was impossible to overcome the negative image it had acquired and was not able to break even financially and closed in May 1972.