Iowa Wesleyan University announced on Monday it will permanently close at the end of the current semester. In a statement posted on its website, the 181-year-old private university in Mount Pleasant cited financial problems, including a decline in donor support and Gov. Kim Reynolds’ refusal to provide assistance using American Rescue Plan Act (ARPA) funds.
“Iowa Wesleyan University’s Board of Trustees unanimously voted today to close the university at the end of this academic year,” the statement said. “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.”
The university has reached agreements with William Penn University in Oskaloosa, Upper Iowa University in Fayette, the University of Dubuque and Culver-Stockton College in Canton, Missouri, to help students finish their degrees on time after Iowa Wesleyan closes.
“Our focus is now on assuring our over 850 students have a smooth transition to another educational opportunity,” University President Christine Plunkett said in the statement.
The university has been a major part of the economy in the Mount Pleasant area since it opened in 1842, four years before Iowa became a state. It currently has 110 full time employees.
Iowa Wesleyan faced severe financial problem that threatened to close the university in 2016 and 2018, but was able to survive thanks to fixed rate loans guaranteed by the U.S. Department of Agriculture. The school owes about $26 million on those loans, and used its campus and buildings as collateral for them.
According to Robert Miller, chair of the university’s board of trustees, “All our indicators have been trending in a positive direction, but we needed funding to buy some additional time.”
Enrollment has seen a small but steady increase over the last three years. The university has also gradually raised tuition. But by the beginning of the year
In its statement, the university said that it “Iowa Wesleyan requested $12 million from Governor Kim Reynolds aligned with her Empower Rural Iowa Initiative,” believing that as “a primary employer in Southeast Iowa that provided a wide range of educational, economic, workforce, social, and cultural opportunities” it met the criteria for funding.
“As a higher education institution that serves rural Iowa, we are disappointed in the lack of state support for this effort,” Miller said.
Gov. Reynolds’ office released a statement on Monday, in which the governor defended her refusal to assist Iowa Wesleyan.
After some general commiseration about the closing (“Today, my thoughts are with the students, faculty, and staff”) and implying that the university waited too long before asking for help (“It wasn’t until February 3, 2023, that my office received a request”), Reynolds explained that regardless of when the application was made, she wouldn’t have approved it because she considered it bad use of state money.
“As I’ve said many times, we endeavor not to spend one-time federal dollars on ongoing expenses,” the governor explained.
Reynolds said she had hired an unnamed “independent accounting firm” to assess Iowa Wesleyan’s financial situation. And based on its report, the university’s own audit report “and other factors, the independent accounting firm determined that providing one-time, federal funds would not solve the systemic financial issues plaguing the university,” the governor said.
During a news conference held via Zoom on Monday, President Plunkett explained the university was under no illusion that the $12 million would solve its financial problems.
“The information the governor released in her statement is accurate,” Plunkett said. “But our request for funding was to be able to cover operational expenses for a transitional period. As we continue to grow towards a sustainable enrollment number of 1,000 students.”
The president explained, “We felt that we had taken extraordinary steps, our enrollment has grown from 386 to over 750 undergraduates in the last several years … 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.”
In her statement, Gov. Reynolds said she had “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” in the Mount Pleasant area.
The governor did not say in her statement if she had considered providing another form of financial assistance to Iowa Wesleyan. During her reelection campaign last year, Reynolds frequently boasted about the state’s budget surplus of $1.91 billion that she said could be used to meet unexpected economic challenges in Iowa. Reynolds won Henry County, where Iowa Wesleyan is located, with 69.5 percent of the vote in the 2022 general election.
Iowa Wesleyan University, which opened five years before the University of Iowa was founded, is the oldest coeducational institution of higher learning west of the Mississippi.
“When the university closes on May 31, the physical campus will become the responsibility of the United States Department of Agriculture,” the school said in its statement.