Grand Canyon University considering Nonprofit status

Source: here

My question to you guys is, what are the drawbacks on the alumni that graduated while GCU was still in the for-profit status?

Would this is a great news to students who are current attending the university or would this be a bad news for students? Especially to DL students.

 

There are some important differences between Keiser and GCU.

Keiser offers career-oriented education, both online and through a system of small commuter campuses. These sorts of schools can be operated successfully by either for-profits and non-profits.

GCU wants to be a different kind of school -- and it's the kind of school where non-profit status is the norm. For example, GCU wants to be a "Christian" university. How many other for-profit Christian schools exist? The only one I can think of is Crichton College -- which became for-profit, changed its name to Victory University, appointed Mike Huckabee as Chancellor -- and still failed. The Christian education community clearly has issues with for-profit institutions, as shown by the fact that GCU was kicked out of the Council for Christian Colleges and Universities after it went that route.

And GCU also wants to have a big, traditional B&M campus, with NCAA Division I sports. How many for-profit schools have Division I sports? I think the answer is "zero". And again, it's clear that there are issues with GCU's for-profit status, as shown by the fact that entire Pac-12 conference has boycotted them. This includes U of Arizona and Arizona State, which are the only other Division I schools in the state.

The President of GCU says that there is "a negative stigma in the higher education community over a university having a for-profit status". He's right.

If GCU loses that "negative stigma", then the school's reputation and profile would probably rise over the long term. This would benefit all current and former students. Over the shorter term, however, there could be a significant issue: to go non-profit, GCU would first need to buy back all of its stock, which would cost around $2 billion. It's not clear how they would make that happen.

 

I think it can be a positive thing for GCU. It's true that there is a stigma against for-profits. I'm hoping for this change to occur.

 

Yeah, a lot of professors are all excited about this change. My marketing professor who was previously a dean mentioned that pay raise for instructors may increase due to this change. However, there are a few students who thinks it should stick with for-profit status. Maybe due to the concern of not having enough revenue flowing into the university (relying on tuition/donation). If this conversion is successfully done, Grand Canyon Education Inc. will be the first publicly-traded university to convert to non-profit.

 

Over the last several years, one of the biggest success stories in US higher education has been: Liberty University. What is Liberty's model? Liberty is (1) a Christian school with (2) a large traditional campus featuring (3) Division I athletics, and (4) a huge online operation.

There is only one other school in the country that has all of these features: Grand Canyon University. And GCU is also a success story. You could almost think of GCU as the "the Liberty University of the Southwest".

However, there is still one difference between LU and GCU: LU is non-profit, and GCU is for-profit. And there is no doubt that Liberty sees its status as a competitive advantage. No other school markets its non-profit status quite as vigorously as Liberty:

The President of GCU puts it like this:

He's right. GCU's for-profit status wouldn't matter if they were primarily competing with other private for-profit schools, like the University of Phoenix. But it does matter if they want to compete with private non-profit schools like Liberty. UoP is not going to bash the for-profit model -- but Liberty will.

 

Interesting. I've been adjunct faculty with GCU since 2009. A pay raise would be nice as it's been a while.

I don't know from my position that much changes. The move to a more explicitly Christian program has been an interesting transition. While a conservative Christian myself, I've seen some push-back from faculty who do not self-identify as such. It will be interesting if they start to require (as most Christian schools do) that faculty affirm the official doctrinal statement: Doctrinal Statement | Grand Canyon University

 

I think there is a difference between an organization that is ran by Christians with some Christian principles in its business model and an organization that is actually Christian. I'm not a very conservative Christian, but I am Christian. It's difficult for me to see an organization as Christian when it operates for profit. Being a "Christian" university that operates for profit sounds almost as bad as a church that operates for profit.

 

There is obviously some tension there. GCU is a publicly traded company -- so by law, their primary obligation is to serve the interests of shareholders (who typically want ROI). The interests of other parties -- including students, alumni, and even God Himself -- are legally subordinate to those of the shareholders.

GCU currently tries to avoid acknowledging this tension by emphasizing the "Christian" part of their mission, and downplaying the "for-profit" part. For example, their "About GCU" general information page includes the following phrases:

- "Christian university": 3 times
- "Christian worldview": 3 times
- "Christian heritage": 2 times
- "Christian values and ethics": 1 time

- "for-profit": 0 times

GCU was a non-profit throughout most of its history (from 1949 to 2004). The only reason they went for-profit was because they were faced with financial collapse. Now that their financial situation has improved, it's not too surprising that they want to go back.

 

The obvious problem with GCU becoming a Christian non-profit is that they have previously sold their soul to the Devil. Well, not literally to the Devil, but to Wall Street investment bankers and hedge fund managers, which still seems like a reasonably close approximation.

In 2004, GCU was on the verge of financial collapse; the school was saved by going for-profit and issuing stock. To go back to non-profit status, they would first need to get all of their stock back. And the bankers and managers aren't going to simply donate it to the school in the spirit of Christian charity. On the contrary, the price of LOPE stock surged yesterday, after GCU announced it was exploring a return to non-profit status.

Wall Street analysts are already hard at work, figuring out how to maximize their ROI in LOPE stock: