Iowa Wesleyan University closing after 181 years

MOUNT PLEASANT — One of the oldest universities west of the Mississippi and the second-oldest in the state — Iowa Wesleyan University — is closing 181 years after opening in 1842.

After spending the last six months scrounging for funds to continue operating, and coming up short, the 20-member board of trustees for the private liberal arts institution on Tuesday voted unanimously to close at the end of this academic year in May due to “a combination of financial challenges.”

⧉ Related article: Students, community members react to Iowa Wesleyan closing

Those challenges include increased operating costs “due to inflationary pressures”; enrollment trends; a “significant drop” in philanthropic giving; and Gov. Kim Reynolds’ denial "of a proposal for federal COVID funding.“

During a news conference Tuesday, Iowa Wesleyan President Christine Plunkett said her campus asked Reynolds for $12 million in federal American Rescue Plan Act — or ARPA — funds to help it transition to a sustainable enrollment level of 1,000 students.

“We felt that we had taken extraordinary steps, our enrollment has grown from 386 to over 750 undergraduates in the last several years,” Plunkett said, highlighting other economic-related efforts to grow the state’s workforce.

“What we were seeking was an opportunity to continue to carry out those activities over a two- to three-year period, at which point our projections showed that we expected to reach a sustainable enrollment level,” she said. “So it's disappointing for us.”

Governor’s office sought third-party audit

In a statement Tuesday, Reynolds said, “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,” Reynolds said. “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.”

As to Wesleyan’s claims of denied ARPA funds, Reynolds said her office didn’t get a request until Feb. 3.

“As I’ve said many times, we endeavor not to spend one-time federal dollars on ongoing expenses,” Reynolds said, noting that upon receiving the Wesleyan ask, her office engaged an independent third-party accounting firm to gauge its financial health.

That firm found Iowa Wesleyan had taken a $26.1 million loan from the U.S. Department of Agriculture using its campus as collateral — a loan that could be recalled in full as early as November 2023.

Wesleyan’s auditor also reported ongoing fiscal concerns, citing “significant operating losses and reduced liquidity raise substantial doubt about its ability to continue as a going concern.”

“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,” she said, noting her office has had $122 million in requests from other universities and community colleges statewide.

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

Older than Iowa

A gold banner announcing the Wesleyan closure on Tuesday was added atop of the college’s website, which still urged student prospects to “schedule a visit,” learn more about its computer science major, and “experience Iowa Wesleyan.”

Some of its most notable alumni include famed astrophysicist and University of Iowa space pioneer James Van Allen and Peggy Whitson, a retired NASA astronaut.

Iowa Wesleyan, established four years before Iowa achieved statehood in 1846, has been struggling to survive for years — alongside many of the region’s smaller private four-year institutions competing for a shifting demographic of students who are facing a changed and changing higher education landscape post-pandemic.

The campus in fall 2018 announced dire financial circumstances and potential closure — but found a path forward after seeking partners and government funding via the USDA loan.

In 2020, Iowa Wesleyan came close to partnering with a Catholic school in Florida but abandoned that prospect after due diligence concerns from both sides.

Then in January 2021, Iowa Wesleyan and Southeastern Community College announced a novel collaboration allowing both to continue operating separately while also offering “smooth, affordable academic pathways” between the schools.

Southeastern — which has five campuses, including one in Mount Pleasant where Wesleyan is based — did not have news of the closure on its website Tuesday.

Plunkett started serving as interim president for Iowa Wesleyan in 2019, when its past head Steve Titus announced his departure amid the campus’ shaky financial standing.

Iowa Wesleyan first found Plunkett in 2015 to serve as interim chief financial officer through a Registry for College and University Presidents, which functions as a kind of clearing house for academic administrators willing to serve in temporary roles.

Before Wesleyan, Plunkett led a struggling secondary school and then a battered private college in Vermont, both of which eventually closed due to financial challenges.

She told reporters Tuesday that Wesleyan leadership started this year aware of a potential closure.

“Both the board and our community of faculty and staff were aware this year, starting at the beginning of the year, that it was going to be a particularly tough year for us,” she said. “We could see early on the impact of the economy on philanthropic giving. We could see early on the impact of our expenses going up due to inflation. And we could also see the impact of enrollment growth, which we still have but was slower growth than previously.”

Wesleyan board Chair Robert Miller said trustees vowed not to start a semester “if we did not have the funds to complete it.”

“And that is what has forced us to this decision today.”

‘Just heartbroken’

Despite what Plunkett and Miller described as campus awareness, Iowa Wesleyan’s wrestling program last week announced one of the country’s top female wrestlers had committed to the university, which launched both men’s and women’s wrestling programs in 2019.

As of Tuesday, Wesleyan had enrolled about 100 students for the next academic year — all of whom have been contacted and told to look for other higher education opportunities.

In announcing Wesleyan’s closure Tuesday, officials said the decision came after an “intensive analysis” of its finances and “considerable exploration of all feasible strategic alternatives.”

It came despite not just enrollment growth but improved student retention and success in efforts to address economic and workforce challenges in Southeast Iowa.

Because those gains — including a year-over-year enrollment uptick from 782 in fall 2021 to 820 in fall 2022 — have not been enough post-COVID to ensure financial stability, Plunkett on Tuesday said the campus now is focused on ensuring its “over 850 students have a smooth transition to another educational opportunity.”

Iowa Wesleyan has established four “teach-out agreements” so students can complete their programs on time and for a comparable cost. Those agreements are with William Penn University; Upper Iowa University; University of Dubuque; and Culver-Stockton College, all of which have committed to accepting 100 percent of the credits any Iowa Wesleyan student wants to transfer.

The campus on April 10 also will host a teach-out and transfer fair for students, along with a job fair for employees and graduating students. Wesleyan reports 110 full-time employees, including 35 faculty and 75 staff members.

Miller said Wesleyan and its leaders 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,” Miller said. “We are just heartbroken.”

When the university closes May 31, the USDA will take ownership of the 60-acre physical campus.

Iowa Wesleyan numbers

1842 founded

878 total enrollment, including 701 traditional undergraduate students

310 Iowa students

$34,550 tuition

100 percent of undergrads receive financial aid

$26,000 average financial aid package

14-to-1 average student-faculty classroom ratio

110 full-time employees

18 athletic programs

70 percent of undergrad students participate in a sport

12,376 alumni in Iowa

$70 million university economic impact

Source: Iowa Wesleyan University

Vanessa Miller covers higher education for The Gazette.

Comments: (319) 339-3158; vanessa.miller@thegazette.com