- Iowa Wesleyan University, a private, nonprofit liberal arts institution, announced on Tuesday will be closed at the end of the academic year in May.
- The 181-year-old university blamed its demise on a “combination of financial issues,” including inflation, changing enrollment trends, a big drop in donations and a state governor who rejected a proposal to use a share of federal coronavirus relief money to keep the long-beleaguered institution afloat.
- It has arranged student transfer options, called curriculum plans, with several Iowa colleges, including William Penn University, the University of Dubuque and Upper Iowa University. Officials said the university enrolls more than 850 students.
For years, Iowa Wesleyan in Mount Pleasant has struggled to stave off closure amid severe financial difficulties. In 2018, the university he considered shutting down because he needed millions of dollars to get to the spring term.
He was eventually spared, in part because he took out a loan with the US Department of Agriculture. She secured the financing through the USDA program authorized by a federal law, the Rural Development Act of 1972. The law allows the agency to lend money to “community facilities” deemed necessary, such as health care or higher education facilities.
The department currently owes more than $26 million.
Two years later, Iowa Wesleyan attempted to partner with the Florida institution on its way to financial rescue. However, the agreement fell through, as Saint Leo University has become dubious significant debts of Iowa Wesleyan.
Now Iowa Wesleyan has run out of options.
“Like many colleges and universities nationwide that have recently announced closings, IW has faced many headwinds, including rising operating costs, declining high school graduation rates nationally and insurmountable inflationary pressures,” said Robert Miller, chairman of the Board of Trustees. university council. declaration. “We have worked tirelessly to find a solution at all levels, but to no avail.”
Iowa Wesleyan has asked Republican Gov. Kim Reynolds for $12 million in federal coronavirus aid.
However, in the statement Reynolds said her office only received the request on Feb. 3. After the state hired an accounting firm to audit Iowa Wesleyan’s finances, it learned the USDA loan could be requested as early as November of this year, Reynolds said.
Iowa Wesleyan’s own auditor said the university was facing “significant operating losses and reduced liquidity,” according to Reynolds.
A hired accounting firm found that one-time federal funds cannot solve the systemic financial problems plaguing the university, Reynolds said.
“If the state provided federal funding as requested and it was used to fund debt or other impermissible uses as directed by the U.S. Treasury Department, the state and taxpayers could be responsible for any repayment to the federal government,” she said.
The USDA will assume responsibility for the Iowa Wesleyan campus once it closes, the university said. Its average net price — what students pay after all financial aid is factored in — was $34,988 for full-time students in the 2020-21 academic year, according to recently available federal data.