Finlandia University Closing Series: College Closures Impacts on Small Towns

Recently reported by the Daily Mining Gazette, City Manager Mary Babcock notified the city council that liens placed on properties by the Department of Education, and will likely slow down any sort of progress the state receiver made in selling properties. Additionally the liens make the Department, Finlandia’s largest creditor, the first in line to benefit from the sale of property. Hancock has said that are working with the State Reciever, O’Keefe LLC’s Patrick O’Keefe, toward solutions. Including possibly petitioning the Deartment of Education, and Michigan representatives for help.

Certainly the department could do it, you know, and the taxpayers would just not have that money back. It’s doable, but it’s a process, and you’re petitioning a bureaucracy to do something it has not done before, or doesn’t have the confidence to do. – David Jesse

Colleges that close in small towns can have devastating impacts on local communities and economies. Even private institutions often act as important centers within communities as a place for events, debates, concerts and more.

And it can really devastate a place for a long time. Not only is it a lot of land, but when you think about the amount of money spent by students, and the parents, for parents weekend or bringing their kids up. That affects restaurants, and so you’ve got to find a way to build all of that back up. And in a lot of small rural areas, right, the college is the center of town. And now what you’re trying to do is, find a new center. So not only do you need that money, that was lost by all of the students leaving. And think of all of the faculty jobs that now leave town. And that goes beyond teachers, to the landscapers, the dining hall, those running administrative tasks. Those jobs are all gone as well. So now you are trying to find a new sort of town square.” – David Jesse

Ohio Valley University closed in 2020 after years of financial difficulties. As did Iowa Wesleyan University this year. Both schools have significantly more debt than Finlandia University. Iowa Wesleyan owes close to 26 million dollars to the USDA. Ohio Valley has approximately another 14 million still left on the books, and has yet to sell a campus building.

Keweenaw Report reached out for comment from President Pinnow and Patrick O’Keefe. We would like to thank the City of Hancock and Leadership Reporter David Jesse for their participation in this series. You can find parts one and two linked below. As well as a link to David Jesse’s The College that Mortgaged Everything published in the Chronicle of Higher Education, for those interested in reading his original coverage.

The College that Mortgaged Everything by David Jesse of the Chronicle of Higher Education