Grand Canyon Education

Founding

Grand Canyon College was founded as a nonprofit institution in 1949 in Prescott. Arizona Southern Baptists felt the need to establish a faith-based institution that would allow local Baptists the opportunity to obtain a bachelor's or master's degree without going east to one of the Baptist colleges in Texas or Oklahoma. On October 8, 1951, Grand Canyon College relocated to its current location in Phoenix. In 1984, the college's trustees voted to transition the college to a university for the 40th anniversary of the school in 1989, becoming Grand Canyon University. At this time, it also changed governance from the Southern Baptist Convention to the GCU Board of Trustees.

Restructuring/conversion to for-profit

Suffering financial and other difficulties in the early part of the 21st century, the school's trustees authorized its sale in January 2004 to California-based, Significant Education, LLC, making it the first for-profit Christian college in the United States. Significant Education was a subsidiary of education entrepreneur Michael K. Clifford's company. Clifford became managing director of the privatized institution, with the former board of trustees serving in an advisory role. Significant Education changed to a corporation in 2005 and became publicly traded under a new name Grand Canyon Education, Inc in 2008. It trades on NASDAQ under the ticker symbol "LOPE."After the infusion of capital, Grand Canyon University's size increased. After having fewer than 1,000 students enrolled in 2008, the university had 17,500 students in the spring of 2017. A 2015 economic impact study revealed that the university was adding about $1 billion into the state's economy each year during its expansion. In February 2017, Arizona Governor Doug Ducey said that the neighborhoods surrounding the university have experienced a 30% increase in housing values while concurrently seeing a 30% decrease in crime rates.In 2008, the university was sued by the United States federal government for paying enrollment counselors according to how many students they had enrolled while at the same time accepting federal financial aid, a violation of the Department of Education's incentive compensation ban. GCU eventually reached a settlement in the case, and was forced to pay a $5.2 million fine to a former employee and the federal government.By 2014 the accumulated student loan debt of Grand Canyon students was estimated to be more than $5.9 billion.Due to GCU's for-profit status, Arizona State University had refused to play against GCU in any sport, even though both are NCAA Division I schools and located only 16 miles apart. ASU eventually reversed its decision, and sporting events between the two universities recommenced in the fall of 2020.

Attempts to return to non-profit status

In fall 2014, the college announced the exploration of a return to non-profit status. Grand Canyon's regional accreditation body, the Higher Learning Commission , rejected the university's petition for conversion to non-profit status in 2016, stating that the school's proposed strategy, particularly its plan to outsource some of its activities to outside vendors, did not meet the criteria for "such a conversion". In 2018, the university submitted another application to HLC to change to non-profit status. This second application was accepted on July 1, 2018. Although some organizations have approved this transition, the U.S. Department of Education still classifies the university as a for-profit university. The government specifically stated that GCU is a captive client to Grand Canyon Education, and the college is operating for the benefit of shareholders of a for-profit company. The university plans to challenge the department's ruling. Grand Canyon Education has also been accused of engaging in securities-law fraud with its relation to GCU.Grand Canyon University was alleged to switch from for-profit status to non-profit status due to its yearly $9.2 million property tax bill. Numerous school officials said this was unsustainable and was one of the key reasons a required switch from for-profit to non-profit status was made, to reduce that burden. Some critics of for-profit education still criticize that the relationship between GCU and Grand Canyon Education, Inc. is too intertwined. A former department of education official notes that no other university in the country has its CEO working for its contractor and itself. Brian Galle, Professor of Law at Georgetown Law, has written extensively about the relationship between the non-profit and for-profit entities and argues that because the non-profit is wholly dependent on the for-profit, the non-profit status should not be allowed.In 2021, a federal judge dismissed a lawsuit by GCU that claimed the university didn't receive all the coronavirus relief funds to which it was entitled because it was a non-profit entity.