Another Shot at Becoming a Nonprofit

Grand Canyon University announces another attempt at converting from a publicly traded for-profit to a nonprofit.

January 5, 2018
 
Grand Canyon's Phoenix campus

Officials at the for-profit Grand Canyon University are announcing today that they will attempt another conversion to nonprofit status and have submitted an application to the institution's accreditor.

"The Board of Directors of [Grand Canyon Education Inc.] together with the Board of Trustees of GCU are again considering the possibility of returning the university to its historical nonprofit status, which it held from 1949 to 2004," Brian Mueller, president and chief executive officer of GCU, said Friday in a written statement. "We believe this development would be in the best long-term interests of our students, faculty and staff, the community and our investors."

Nearly four years ago, the Arizona-based Christian institution started the process to convert to nonprofit status and failed. Grand Canyon enrolls more than 19,000 students at its Phoenix campus and more than 70,000 students online, making it one of the nation's largest online institutions.

At the time, GCU officials said they were looking to avoid the "stigma" of being part of the for-profit sector, which had taken significant public relations hits due in part to high-profile closures, scrutiny from the Obama administration and a drumbeat state and federal investigations. But Grand Canyon's regional accreditor, the Higher Learning Commission, rejected the plan.

Company officials said they hope new guidelines from the accreditor about shared services agreements will lead to a different outcome for this nonprofit bid. Experts have said that the political environment -- specifically the Trump administration's deregulation-oriented Education Department -- is also a positive factor as for-profits consider changing status or seeking a sale. Grand Canyon's proposed conversion would allow students, faculty and staff to participate in academic and co-curricular opportunities with other institutions without being segregated based on tax status, the company said. It also would create more philanthropic opportunities, allow GCU to maintain affordable tuition and give the university an opportunity to become a full voting member of the National Collegiate Athletic Association.

"Today, GCU has a very strong financial model and there is no need to go back to the public markets for further capital," Mueller said. "The current proposal to the HLC provides the best of both worlds by re-establishing a nonprofit regionally accredited university that can continue to grow and meet the demand of families interested in affordable, private Christian education while allowing Grand Canyon Education to continue as a tax-paying, multibillion-dollar market cap, publicly traded company in the fast-growing educational service market industry."

Mueller said it is important to note that the proposal to HLC is not being done to "escape current regulations that are imposed only on the for-profit sector."

This story will be updated.

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