Why a strong Iowa economy is putting the hurt on the state's private colleges and universitiesDecember 27, 2018
Iowa's surging economy is bringing hard times to many of the state's private colleges and universities.
As Iowa's unemployment rate continues to fall — its 2.4 percent rate in October was the lowest since March 2000 — the state's private, liberal arts colleges are taking a hit, with enrollment falling and revenue margins shrinking.
“Higher education moves opposite the economy,” said Kent Henning, Grand View University president. “When the economy is shedding jobs, people are more inclined to continue their education. When the economy is putting people to work, there’s less incentive for people to go on to college.”
The numbers back him up:
- Overall enrollment at Iowa’s private liberal arts colleges and universities has dropped 10 percent in the last decade or by nearly 5,000 students, Iowa College Aid data shows.
- More than half of the state's private colleges have seen the gap narrow between their revenue and expenses, and at least seven institutions posted negative balances in the fiscal year that ended in June 2017, a Des Moines Register review of 990 tax returns showed.
The repercussions have been harsh: Several private colleges are struggling to attract students, even as they heavily discount tuition. Some, like Simpson College, are slashing jobs or programs.
And at least one, Iowa Wesleyan University, recently was on the brink of closing.
Others, such as Dordt College in northwest Iowa, have innovated to find a niche in the Iowa marketplace.