|Iowa Wesleyan Announces Closure; Blames… the Governor?
Yesterday, the SE Iowa community got the news they had long suspected, yet doubted would ever actually occur – that Iowa Wesleyan University, after 181 years, would close its doors for good. For those familiar with the University’s operation it was not surprising due to the fact that the University had consistently been operating in the red over the last decade. It’s worth noting, the University had racked up over $26 Million in debt with the USDA alone. However, what caught many off guard was the fact that IWU leadership decided on an announcement with one last push to defer blame, and wrongfully accused the Governor as the reason for the institutions’ closure.
This quickly led to the Governor having to issue a statement clarifying what actually occurred over the last two months:
“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. 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.”
President Plunkett’s accusation was even so egregious that the President of the Iowa Association of Independent Colleges and Universities weighed in when being interviewed by the Iowa Capitol Dispatch:
“To blame the governor is absolutely, 100 percent preposterous,” Steinke said. “That makes me angry. In fact, to blame the governor is stupid. And yet the only person they blame is the governor,” he said. “I mean, there is no blame assigned to the trustees, to the administration, to the officials of the university – no, there’s none of that. No, they say this is all because the governor didn’t give them $12 million. Let me tell you something: That was an unbelievably dumb request. The governor was never going to provide $12 million in COVID money to a private, not-for-profit college that was on the verge of collapse.”
Steinke also noted that Iowa Wesleyan’s proposal that the governor give them $12 million of COVID relief funds demonstrates a lack of understanding as to how such funds can be legally used. He noted that the university’s financial problems date back to at least 2018, when the school reported it was on the brink of closing. That was long before the pandemic and long before Reynolds was approached for financial help.
It’s unfortunate President Plunkett decided to play politics rather than take responsibility for the financial disaster the university’s leadership put the institution in over the last decade, but it’s indicative of her long record of incompetent leadership.
As also reported by the Iowa Capitol Dispatch, in 2014, Plunkett announced she was resigning as President of Vermont’s Burlington College while a group of protesting students surrounded her car. Her resignation followed revelations of a similar financial disaster, the schools accreditation being suspended, and votes of no confidence from students, faculty and staff. In 2016, Burlington College closed, and by then, President Plunkett had already parachuted into the Midwest to escape the disaster her and Jane Sanders (Yes, the wife of the self described ‘democratic-socialist’ Senator Bernie Sanders) had caused. What was her next job after helping shutter Vermont’s Burlington College? Her role leading the budget for Iowa Wesleyan University as Vice President for Finance and Treasurer.
The greatest challenge facing the community now is when Iowa Wesleyan closes on May 31st, the campus will be owned by the U.S. Department of Agriculture. University leadership at the time put up the entire campus as collateral when the USDA provided them with their loan – an astonishingly poor decision. Over the last 24 hours I’ve been identifying who the main point of contact with the USDA will be, and talking with local and regional leaders to strategize how the community can best move forward with the University’s assets. In addition, I’ll be meeting with community stakeholders at Mount Pleasant City Hall on Friday to explore those options. I’ve also asked representatives of many of our state colleges and universities to provide information on openings to the current faculty at staff at the University. They all seemed very receptive, as many of them have open positions that have needed filled for some time.
This is obviously devastating news for the SE Iowa community but the rallying of support I’ve seen so far has been truly incredible. This is not the result anyone wanted, but nevertheless, we must now find a way forward. As many of the folks responsible for this disaster seek to find someone else to blame, or run for the hills, the SE Iowa community is prepared to work through this tragedy and find solutions.