With more than $2 million needed to continue through the spring semester, Iowa Wesleyan University’s long-term fate is in the hands of Iowans, alumni and anyone who holds a special fondness for the small liberal arts school, its president believes.
With a little more than a week before trustees convene Nov. 15 to consider a possible closure, officials are scrambling to come up with a plan to find $2.1 million in relief to carry on through spring, or $4.6 million to last through December 2019.
University officials are reaching out to lenders, federal authorities, alumni and others. Students have even launched an online campaign.
“We are in a tough cash position right now,” Titus said. “Our future is in our hands. We have a window here to respond … This is a community that really awes me. It has stepped up so many times in support of this institution.”
The university, which dates to before Iowa joined the union, is the oldest coeducational university west of the Mississippi River. Its small student body, now about 700, has included noted scientist James Van Allen, who discovered the Earth’s radiation belts, and astronaut Peggy Whitson, who broke the record for an American being in space the longest.
Although Iowa Wesleyan latest financial perils are urgent, this is not the first time the university has rethought its fiscal approach and sought outside help.
In fall 2014, it struck a deal with Wells Fargo — acting as a trustee on behalf of the college’s bondholders — promising to enroll a certain number of students through 2018, a commitment Titus said his school kept as its current total enrollment of about 700 is nearly double what it was in 2014.
In need of more help in 2016, Iowa Wesleyan refinanced its loan and bond obligations to take advantage of low interest rates by securing a fixed-rate direct loan from the U.S. Department of Agriculture worth $21.4 million.
USDA Rural Development at that time also awarded a $5 million loan guarantee to Two Rivers Bank & Trust, as such was required, according to Grant Menke, state director of USDA Rural Development in Iowa. Iowa Wesleyan in October 2016 announced the deal as a new partnership via participation in the USDA’s “Community Facilities Program.”
“This program is designed to support rural development and advance institutions committed to rural development,” according to a news release at the time.
The loan comes with a fixed interest rate of 2.375 over 35 years. All the money was advanced to Wesleyan, and the first two years of the payback schedule — from October 2016 to 2018 — were to be interest-only payments.
Wesleyan is current on its payments, according to Menke. “This loan specifically was to improve or prevent the loss of service at Iowa Wesleyan University,” he said.
In that it failed by itself to achieve that goal, Wesleyan on Thursday updated the community on its financial woes and stark future and reported its board of trustees will reconvene Nov. 15 to assess a path forward.
Menke said the Nov. 15 meeting will be significant — most notably whether it shows Wesleyan has drummed up new revenue sources.
Titus said he’s optimistic — based on the way the community and region has rallied around the school since news of its potential demise broke.
“We have been fighting like crazy for this institution for the almost six years since I have arrived, and we have lots of fight left in this institution and this president,” Titus said. “I believe in this institution and in this community and take really seriously our responsibility to the regional economy here. I am absolutely resolved and committed to do everything we can to find a pathway forward.”
Students, board members, and alumni across the country have weighed in on the news in recent days. Longtime Wesleyan Trustee Mary Elgar said the university doesn’t have the healthy endowments or extensive donor networks some schools enjoy, leaving it without a solid financial base. But she also reported moving online tributes and community outcry in recent days, sharing her own heartfelt history growing up by the school to parent alumni and university supporters whose footsteps she eventually followed in.
“Wesleyan was an extended part of our yard for my brothers and I,” said Elgar, who graduated from Iowa Wesleyan in 1975 and joined its board of trustees in 1999. “My mom was a Zeta and held rush parties during my growing-up years.”
Today, Elgar lives two blocks from campus, drives past it several times a day, and has witnessed firsthand its impact on the community and region.
“The last couple of years have been so exciting at Wesleyan because we have grown our student body and have international students here — there are so many wonderful things going on,” Elgar said. “It’s just amazing that we haven’t been able to achieve the financial support that a fine institution like Wesleyan deserves.”
Wesleyan officials have estimated the school’s annual economic impact on Southeastern Iowa at about $55 million.
“I don’t think people have begun to realize what would happen if Iowa Wesleyan was no longer here,” Elgar said.
Wesleyan’s endowment is $7.5 million, Titus said. The last thing Titus said the university wants to do is use the endowment and deplete their resources even more.
About 69 percent of students at IW are Pell Grant eligible, a subsidy the U.S. federal government provides for students who need to pay for college. Across the country, only 30 to 35 percent of college students are Pell Grant recipients, Titus said.
“We have a lot of families in financial need. It’s been very expensive for us to provide that,” Titus said, explaining why as enrollment at the university increases they continue to struggle financially.
Titus said he thinks IW needs 1,000 students enrolled or more and more diverse financial profile of students for the university to remain sustainable.
In a letter posted to the university’s website Friday, Nov. 1, Titus wrote that several anticipated gifts to the university had not materialized. In an interview with the News, Titus said over the last six months, there were $15 million worth of proposed donations to the university.
“It has only produced about half a million dollars of cash,” Titus said. “We’ve had some other really generous gifts come in that we are very appreciative of, but they just don’t provide the cash that is needed right now.”
Titus said the nearly two weeks before the university’s board of trustees reconvenes is not a deadline by which they have to have all the money raised to keep the university open. Instead, it’s creating space for a response.
Students over the weekend launched a GoFundMe page promoting a goal of raising $10,000 and pleading, “Don’t let us get evicted.”
Nick Fencl, a senior at Wesleyan from Burlington, came to IW to play football and baseball and stayed because he said he felt like the coaches cared.
While Fencl said the student body is anxious about the future, a lot of people are hopeful. “The current situation is difficult, but it’s nothing new. The glory of it is they’ve always found a way to get through it,” Fencl said.
Freshman Wesleyan student from Chicago, Ill. Jeremiah Boyd-Johnson is looking to transfer, however. Although he hopes to finish his freshman year at Wesleyan, he said he has to make sure he’s “secure” as a college student.
Amari Funderburg, a junior at Wesleyan also from Chicago, Ill., said she is scared of what the future holds. After waiting outside of Titus’ office Monday morning to give him a friendly hug and say hello, Funderburg shared that she began applying to other universities, but if there is a way for her to stay at Wesleyan she would.
The pre-med student chose IW because of the small campus. Funderburg was raised by a single parent — her mother — and because of that her FAFSA estimated family contribution was zero dollars. Without the scholarships and financial aid available to her, she would have dropped out of college last year.
“Here, you’re seen as an individual, a student who has a future,” Funderburg said.