By Matthew Holloway |
The U.S. Department of Education under Secretary Linda McMahon has formally restored Grand Canyon University’s nonprofit status, a reversal of a years-long dispute that had kept recognition of the Phoenix-based university’s tax-exempt classification in limbo.
The Department of Education’s (USDOE) action means it will now consider Grand Canyon University (GCU) a nonprofit institution for federal purposes, aligning its treatment under federal student-aid rules with the university’s longstanding recognition as a nonprofit by the Internal Revenue Service.
“We are appreciative that officials within the current Department of Education adhered to the recent Ninth Circuit decision in our favor and conducted an objective and thorough review of GCU’s operations in determining GCU’s nonprofit status under the correct legal standard,” GCU President Brian Mueller said in a statement. “We look forward to working with the Department in a cooperative manner moving forward and being part of the conversation to address the many challenges facing higher education.”
The move follows a May decision by the USDOE to reverse a $37 million fine against GCU, imposed under the Biden administration with prejudice. The fine was the largest ever levied by the agency against a university.
In November 2024, the U.S. Court of Appeals for the Ninth Circuit ruled that the Department of Education had unlawfully denied GCU nonprofit status and remanded the matter to the department for reconsideration under the correct legal standard. In 2018, the IRS reaffirmed GCU’s 501(c)(3) tax-exempt status after a multi-year audit, concluding that the university met all requirements of a nonprofit educational institution.
The restoration of nonprofit recognition comes as several Arizona members of Congress and other lawmakers have publicly advocated for the university’s status.
U.S. Rep. Eli Crane (R-AZ02) took to X on Monday to highlight the Education Department’s decision, calling the reinstatement of nonprofit status a significant development for the institution.
U.S. Rep. Andy Biggs (R-AZ05) also posted on X following the department’s announcement, noting the change in federal recognition and urging continuation of support for aligned legislative efforts.
In previous years, Arizona Republican lawmakers, including Reps. Gosar and Biggs had criticized the Department of Education’s handling of the university’s nonprofit status and its regulatory actions. They characterized earlier denials and fines as misplaced or excessive and called for greater alignment between federal treatment and GCU’s IRS-recognized status, per the Arizona Sun Times.
Gosar told the outlet at the time, “GCU is being targeted for its religious views and for being the largest Christian university in the country. The Department of Education should recognize GCU’s lawful nonprofit status and stop the harassment.”
With the Education Department’s updated decision, the agency will now consider GCU’s application as a nonprofit institution in future federal evaluations, including eligibility for Title IV federal student financial aid programs.
“This decision removes the cloud of confusion over our nonprofit status and allows us to put our complete focus and resources on our mission to provide affordable, Christian higher education to students from all socioeconomic backgrounds,” Mueller added. “We are excited to move forward with clarity and purpose.”
According to the university, nonprofit recognition is also expected to expand access to private scholarships restricted to nonprofit institutions, increase eligibility for nonprofit-specific grants and partnerships, restore eligibility for future government relief programs, reduce legal expenses associated with defending its status, and solidify GCU’s standing as a voting member of NCAA athletics.
Matthew Holloway is a senior reporter for AZ Free News. Follow him on X for his latest stories, or email tips to Matthew@azfreenews.com.
