However, during an industrial boom of the 1860s and 1870s, several new colleges, mostly targeted at male students, opened in Terre Haute, including Indiana State Normal School in 1865 and the Rose Polytechnic Institute in 1874.
Recognizing that women were also in need of higher education, and also wanting to put a particular emphasis on the teaching of Christianity, Jane B. Coates of Greencastle purchased 13 acres in the Strawberry Hill section of Terre Haute and founded the Coates College for Women in 1885.
Although Coates was nondenominational by design, the college's bylaws required at least two-thirds of the trustees to be Presbyterian.
Enrollment grew quickly and had surpassed 100 students by 1889, even though the college had only three faculty members at its start.
Jane Coates financed more purchasing and construction and also brought in more instructors, including noted sculptor Janet Scudder.