Regent Selim Hobart Peabody began at the Illinois Industrial University in 1878 as professor of mechanical engineering and physics. He graduated from the University of Vermont in 1852, ranking third in his class, with high academic standing especially in mathematical and physical sciences. His career included various positions as principal at multiple high schools, a professor at Polytechnic College, and chair of physics at the Massachusetts Agricultural College in Amherst.
Institutions across the nation were rebounding from an economic depression. The University of Illinois faced mounting debt, a meager endowment and lack of appropriations from the state legislature. One of Peabody's major achievements was to put the University on a steady financial footing as he negotiated the sale of some of the lands granted to Illinois that were located in Minnesota and Nebraska but not exempt from taxation. He was also instrumental in procuring funds from the state for the support of general instruction. These combined initiatives more than tripled the annual university income.
During this time, many other land-grant institutions also changed their names to "State College" or "State University" and eliminated "Agricultural" or "Industrial" from their names. Peabody successfully persuaded state legislators to change the name of the University from the Illinois Industrial University to the University of Illinois, which became effective on June 19, 1885.
Although Peabody successfully navigated the University through bad financial times, he was not as adroit with campus and governance issues. Peabody faced tough challenges that ultimately led to his decision to resign. Student unrest continued over issues such as compulsory chapel attendance and a ban on fraternities. Alumni modified the law to allow for the direct election of Board of Trustees rather than by appointment of the governor, a move Peabody vigorously opposed without success.