MOUNT PLEASANT, Iowa – Iowa Wesleyan University’s Board of Trustees unanimously voted Tuesday, March 28, to close the university at the end of this academic year, the university announced.
Iowa Wesleyan now is scheduled to close its doors on Wednesday, May 31.
The decision is based on a combination of financial challenges – increased operating costs due to inflationary pressures, changing enrollment trends, a significant drop in philanthropic giving, and the rejection of a proposal for federal COVID-19 funding by Iowa Gov. Kim Reynolds, university officials said in a news release.
“It is with deep sadness that we announce the Board of Trustees has made the heartbreaking decision to close our beloved Iowa Wesleyan after 181 years as an educational pillar in this community,” Christine Plunkett, president of Iowa Wesleyan University, said in the release. “Our focus is now on assuring our over 850 students have a smooth transition to another educational opportunity.”
This decision follows an intensive analysis of Iowa Wesleyan’s financial operations and considerable exploration of all feasible strategic alternatives. The vote to close comes as the university has been experiencing enrollment growth, improvements in student retention, and success with efforts to address economic and workforce development challenges throughout southeast Iowa, including the formation of a unique partnership with Southeastern Community College in West Burlington.
While the university’s overall enrollment has increased post-pandemic, it is still not yet at a threshold needed for financial stability, university officials said.
“Today, my thoughts are with the students, faculty, and staff who are stunned by this announcement, and the people of Mount Pleasant who have long revered the university as a pillar of their community. The state is committed to supporting them during this time of transition. I have directed the Iowa Economic Development Authority and Iowa Workforce Development to reach out to community and business leaders, and work together to keep the local economy strong,” Gov. Reynolds said in a statement on Monday afternoon.
“We know our action will be felt deeply by all Iowa Wesleyan University faculty, staff, students, families, alumni, donors, Mount Pleasant, and the entire region of Southeast Iowa,” said Robert Miller, the board chairman. “Like many colleges and universities nationally that have recently announced closure, IW has been confronted with many headwinds including increasing operating costs, declining numbers of high school graduates nationally, and insurmountable inflationary pressures. We have worked tirelessly to find solutions at all levels but to no avail.”
Iowa Wesleyan has secured four teach-out agreements with William Penn University, Upper Iowa University, University of Dubuque, and Culver-Stockton College so students can complete their degrees. The teach-out plans ensure the students can complete their program on time and for a comparable cost to Iowa Wesleyan. Additional teach-out agreements may be added.
Iowa Wesleyan submitted a proposal for money from the federal American Rescue Plan Act (ARPA) funds that were provided to the State of Iowa. As a primary employer in southeast Iowa that provided a wide range of educational, economic, workforce, social, and cultural opportunities, Iowa Wesleyan requested $12 million from Gov. Reynolds aligned with her Empower Rural Iowa Initiative.
“As a higher education institution that serves rural Iowa, we are disappointed in the lack of state support for this effort. All our indicators have been trending in a positive direction, but we needed funding to buy some additional time,” Mr. Miller said. “We are just heartbroken.”
When the university closes on May 31, the physical campus will become the responsibility of the United States Department of Agriculture.
As for the request for $12 million, Gov. Reynolds added that: “It wasn’t until February 3, 2023, that my office received a request from the university for $12 million for ongoing operating costs. As I’ve said many times, we endeavor not to spend one-time federal dollars on ongoing expenses. To better understand their request and the financial health of the university, my office engaged an independent, third-party accounting firm to conduct due diligence. The firm reported that Iowa Wesleyan had a $26.1 million loan from the USDA, using their campus as collateral, that could be recalled in full as early as November 2023. Additionally, Iowa Wesleyan’s auditor cited ongoing concerns about the university’s fiscal health, stating ‘significant operating losses and reduced liquidity raise substantial doubt about its ability to continue as a going concern.’ The firm also highlighted that while enrollment at Iowa Wesleyan has grown over the past three years, their financial health has continued to deteriorate over the same period. Based on this and other factors, the independent accounting firm determined that providing one-time, federal funds would not solve the systemic financial issues plaguing the university.”
