Iowa Wesleyan University to close at end of academic year

MOUNT PLEASANT, Iowa (KWQC) — Iowa Wesleyan University’s Board of Trustees unanimously voted Tuesday to close the university at the end of this academic year.

According to a media release from the university, the decision was because of financial challenges like increased operating costs from inflationary pressures, changing enrollment trends, a significant drop in philanthropic giving, and the rejection of a proposal for federal COVID funding by Governor Reynolds.

“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,” said Christine Plunkett, president of Iowa Wesleyan University. “Our focus is now on assuring our over 850 students have a smooth transition to another educational opportunity.”

Iowa Wesleyan has worked with William Penn University, Upper Iowa University, University of Dubuque, and Culver-Stockton College to have teach-out agreements for students to complete their degrees, according to the release. The plans ensure students can complete programs on time and for comparable costs. More teach-out agreements may be added.

University officials said the decision was made after an analysis of Iowa Wesleyan’s financial operations and looking at all feasible strategic alternatives.

The university’s overall enrollment has increased post-pandemic, it is still not yet at the threshold needed for financial stability, according to the release. The university has been experiencing unprecedented 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.

“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, chairman of the Board of Trustees. “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.”

According to a report by the State Higher Education Executive Officers Association, 35 American colleges and universities closed in 2021.

Highereddive.com has tracked college and university closings since 2016. Iowa Wesleyan is Iowa’s only school to close. Illinois has seen five close, including Lincoln College, MacMurry College, Robert Morris University, Morthlan College, Chicago ORT and Shimer College.

Mount Pleasant Area Chamber Alliance said in a statement; “As an organization and community, we are saddened by the recent announcement of Iowa Wesleyan University closure. We will begin working with local and state organizations for next steps. We will navigate by looking forward to new opportunities and ways to retain the talented workforce. The Mount Pleasant community is resilient and strong.”

According to university officials, Iowa Wesleyan submitted a proposal for $12 million from Governor Kim Reynolds aligned with her Empower Rural Iowa Initiative from the federal American Rescue Plan Act, also known as ARPA, funds that were provided to the state of Iowa.

“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,” says Miller. “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, university officials said.

In a statement from Governor Kim Reynolds in response to the announced closure of Iowa Wesleyan University:

“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.

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 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. If the state would have provided the federal funding as requested and it was used to finance debt or other impermissible uses according to US Treasury guidelines, the state and taxpayers could have been liable for potential repayment to the federal government. Moreover, the state has separately received $122 million in requests from other universities and community colleges across the state.

With this information, I made the difficult decision to not pursue the university’s funding request.”

In an email to staff, Iowa Wesleyan University President Christine Plunkett and Iowa Wesleyan Board of Trustees Chair Robert Miller said:

We have a difficult and painful decision to share about the future of our beloved Iowa Wesleyan University.

It is with deep sadness that we announce the Board of Trustees has made the decision to close Iowa Wesleyan University at the end of this academic year due to a lack of financial support. 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 funding by Governor Reynolds. As you can imagine, this is a profound decision that will be deeply felt by everyone in our community and throughout Southeast Iowa.

Our immediate priority is the students, faculty and staff who embody Iowa Wesleyan today. We have 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.

President Plunkett and her leadership team will work closely with faculty and staff as the university prepares for closure. Several meetings will be held over the next week so everyone can develop a plan to secure new employment.

We honor and respect the history and legacy of Iowa Wesleyan, and we have much gratitude for the faculty and staff who have worked extremely hard and with remarkable resilience throughout our current financial circumstances. Many of our indicators were trending in a positive direction, but we needed more time and funding to complete a full recovery.

We are tremendously proud of the innovative educational model Iowa Wesleyan University built to serve our rural area and provide an influx of graduating students, many of whom remain in the region to live and work. We are disappointed Governor Reynolds did not approve funding for Iowa Wesleyan through her Empower Rural Iowa Initiative.

The Board and administrative leadership understand you will have many questions and emotions around this announcement. We acknowledge that you will want answers about your future, and we will have a website to provide initial Q&A information and resources for students, faculty, staff, alumni and community partners to outline the path going forward.

Please note that we are committed to serving all students through the end of this term and will work tirelessly to create a smooth transition to another college or university.

It is with both gratitude and sadness that we share this announcement. Thank you, in advance, for your caring support for each other as we move forward during this difficult time. Today and tomorrow… We are Wesleyan!

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