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Grand Canyon University completes transition back to nonprofit status

(KTAR.com Photo/Griselda Zetino)

PHOENIX — Grand Canyon University announced Monday it had completed the transition back to nonprofit status, a successful ending to a two-year quest.

The return to nonprofit status means more access to revenue streams for the school, including donations, grants and tax breaks.

School president Brian Mueller made the announcement in front of several hundred faculty members and students wearing purple.

“I absolutely think this is just the beginning,” he told the crowd. “I think the amount of good that we can do in the next 10 years is going to be overwhelming.”

Mueller said Grand Canyon Education Inc., which had been operating the school, has transferred property, academic operations and assets under an $875 million sale that closed Sunday.

The nonprofit status opens up the university to new opportunities.

“We can seek philanthropic gifts,” Mueller said. “We can go and apply for grants in order to push research forward. Those opportunities weren’t as prevalent for our faculty and students as they were for non-for-profit universities.”

In addition, the university can now be a full voting member of the National Collegiate Athletic Association.

As for tuition, Mueller said the transition will not affect tuition rates for students attending its Phoenix campus. He said students taking classes online could see a small increase of less than 1 percent.

“We’ve been blessed with a financial structure that has really worked, and we hope to keep executing on that so that we make education affordable to all socioeconomic classes of Americans,” he said. “That was our goal originally.”

The private Christian school at 35th Avenue and Camelback Road was founded as a nonprofit in 1949. In 2004, it moved to a for-profit model to pay off $20 million in debt.

The school applied to return to nonprofit status in January and got the OK from the Higher Learning Commission to make the move in March.

A similar request was denied in 2016, in part because GCU intended to outsource some of its services, such as marketing.

Under the new application, Grand Canyon Education would remain a for-profit company that would provide some services for the school, including marketing, recruitment, student service counseling and accounting.

In March, a spokesman said that after the sale, the parent company would become a “third-party provider of educational and related services to GCU and potentially, in the future, to other universities,” a model adopted by many universities.

GCU expected its enrollment to reach nearly 21,000 students at its campus this fall, with another 70,000 registering for online courses.

The university also announced earlier this year it had about $120 million to spend on construction projects this summer. It was building everything from new dorm rooms to a new activities center, with the goal of completing most projects by the start of the fall semester.

Mueller said being a nonprofit again will likely help GCU continue growing. He said the goal is to grow its student population by about 7 percent every year. He added there are plans to continue building out the Phoenix campus until it can hold 30,000 students.

“Once we get to 30,000 students, we’ll have decisions to make as to where we go next,” he said.

The Associated Press contributed to this report.

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