The federal government unlawfully denied Grand Canyon University (GCU) its nonprofit status, per a new federal court ruling.
Last week, the Ninth Circuit Court of Appeals ruled in Grand Canyon University v. Miguel Cardona that the U.S. Department of Education (ED) was wrong to refuse the Christian university their nonprofit status.
Circuit Judge Daniel Collins reversed the summary judgment by District Court Judge Susan Bolton favoring ED. Collins remanded GCU’s nonprofit status back to ED for review.
ED had determined that GCU’s organizing documents satisfied the IRS organizational test’s requirements; however, ED denied GCU when it came to the operational test. ED determined that GCU’s primary activities and its stream of revenue both didn’t benefit the university. Collins disagreed.
Collins ruled that ED had invoked the wrong legal standards, going beyond the Higher Education Act (HEA) requirements to impose exceeding IRS regulations. Rather, Collins ruled that HEA standards only require ED to determine whether GCU was owned and operated by a nonprofit corporation and whether GCU satisfied the no-inurement requirement.
“The Department invoked the wrong legal standards by relying on IRS regulations that impose requirements that go well beyond the HEA’s requirements and instead implement a portion of § 501(c)(3) that has no counterpart in the definition of the term ‘nonprofit’ set forth in HEA § 103(13),” ruled Collins.
The inurement requirement allows nonprofits to buy from for-profit companies at fair market value.
GCU has been battling with ED over its nonprofit status since 2019, when ED denied the IRS status granted to GCU. GCU had historically been a nonprofit school, save a stint in the early 2000s when the university went for-profit to avoid bankruptcy.
After GCU sued ED in 2021 over the denial, ED launched a coordinated investigation with the Federal Trade Commission and Department of Veterans Affairs for unfair or deceptive practices.
Last year, ED levied a $38 million fine against GCU.
GCU maintained that ED targeted them over their ideological differences, since they are a Christian university.
Bob Romantic, GCU executive director of the office of communications and public relations, said in a press release that the nonprofit status would allow GCU to thrive more than it has been able to under a for-profit status.
“While the university remains exceedingly proud of what it achieved during its short stint as a for-profit institution, building up GCU from the brink of bankruptcy into the largest Christian university in the country, nonprofit status best allows the university to accomplish its goals around research, grant writing, development, being full members of the NCAA, etc.,” said Romantic. “Today’s decision is a long-awaited correction to the Department’s unlawful application of a standard that improperly denied GCU of its nonprofit status, and we are hopeful for a quick affirmation of the university as a nonprofit institution.”
President-elect Donald Trump pledged to dismantle ED “very early” in his administration in a campaign video last year, citing America’s high spending and poor student outcomes compared to other nations.
“[We’re] sending all education and education work and needs back to the states. We want them to run the education of our children, because they’ll do a much better job of it. You can’t do worse,” said Trump. “We’re going to end education coming out of Washington, D.C., we’re going to close it up, all those buildings all over the place, and yeah people that, in many cases, hate our children. We’re going to send it all back to the states.”
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Grand Canyon University (GCU) will now cover the college costs for over 300 students this academic year.
The university expanded its Canyon Rising Scholarship (formerly the Students Inspiring Students Scholarship) to meet the needs of 305 high-achieving, low-income high school seniors. 100 of those scholarships will also include total coverage of costs for on-campus housing and meal plans.
GCU President Brian Mueller said in a press release that the university had a duty to give back to the community around it by offering opportunities for growth.
“As GCU continues to grow, it is important to the university that the community surrounding it grows along with it,” said Mueller. “Historically, education is the great equalizer in society, providing equality of opportunity for all socioeconomic classes.”
Mueller shared that the majority of students within the scholarship program were first-generation college students and students of color.
“Since this program’s inception, the overwhelming majority of scholarship recipients have been first-generation college students and students of color because that is the demographic of the community in which we reside,” said Mueller.
The scholarship program is open to over 20 high schools in GCU’s inner-city neighborhood.
GCU began its Canyon Rising Scholarship (Students Inspiring Students Scholarship) in 2016. The university initially partnered with Alhambra High School.
GCU has offered over 1,000 scholarships since the program’s inception eight years ago.
Those admitted into the program participate in an honoring ceremony at the start of the school year at GCU’s Global Credit Union Arena, attended by loved ones of the students as well as donors to the program.
GCU revealed in its press release that it plans to expand career counseling efforts to assist these program students for job preparation post-graduation. Jennifer Mitchell, GCU K12 and Collegiate Advancement director, explained that the counseling fulfills GCU’s goal of sustained success to impact not only program participants’ futures but the well-being of their communities.
“Our program leaders will work to connect scholars with real-life work experience in their neighborhood, which means a greater likelihood they’ll stay and be part of the transformation of their community,” said Mitchell.
These scholarships are renewable for up to eight semesters and not subject to GCU CAP policy. In order to be eligible for the next round of Canyon Rising Scholarship grants, students must qualify to receive the maximum Pell Grant amount as determined by the Free Application for Federal Student Aid (FAFSA), have a minimum 3.0 unweighted high school GPA, be a graduating senior from an Arizona high school, and be an incoming high school senior starting in the fall 2025-26 academic year.
In order to get started, students must apply to GCU, which doesn’t require an application fee; submit their high school transcripts; meet with their university admissions counselor to review eligibility requirements; complete FAFSA (GCU school code 0010704); and register for courses and begin their degree program at GCU.
Those accepted into the scholarship program must also participate in the Canyon Rising Scholarship Seminar, which equips students with introductions to university management, LEAD support, presentation for success at GCU, and expectations for the school year.
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Almost 30,000 students will graduate from Grand Canyon University later this month, marking the third time the school has produced this many alumni in a year.
“We are blessed to be able to celebrate the accomplishments of another record class of graduates who are meeting the needs of today’s workforce and fulfilling their purpose as servant leaders throughout the world,” GCU President Brian Mueller said in a statement.
On April 25-26, GCU will hold commencement ceremonies for 5,388 traditional students on the Phoenix campus, while the 23,597 graduating online students will have commencement May 1-3. The total number of students in the graduating class is 28,985, including those who completed their degrees in Summer 2023, Fall 2023, and projected graduates from Spring 2024.
In the 2022-23 year, 29,116 students graduated, while 30,000 graduated in the 2021-22 year.
“While enrollment numbers and graduation numbers are declining nationwide, we have continued to produce a significant number of graduates who are impacting industries throughout the country,” Mueller said.
Of all graduates, 15,580 completed their undergraduate degree, and 13,405 were graduate students earning master’s or doctoral degrees.
The Honors College had 682 graduates, raising the total to more than 2,500 since the college started in 2013.
In the 2023-24 academic year, enrollment at GCU surpassed 25,000 on the Phoenix campus, with another more than 92,000 studying online. Additionally, GCU grew from nine to 10 colleges when the College of Science, Engineering and Technology split into two, forming the College of Engineering and Technology and the College of Natural Sciences.
GCU also opened a physical location for its Grand Canyon Theological Seminary in the fall. The 17,000-square-foot Seminary offers GCU’s Master of Divinity program and provides a meeting space for local pastors.
The Phoenix-based university also created the Center for Workforce Development and added two more Accelerated Bachelor of Science in Nursing program sites, bringing the total number of sites to six. GCU is on track to open three more sites in the 2024-25 academic year.
Mueller attributed the growth to students, faculty, and above all, God.
“That is a testament to the extraordinary power of education when delivered creatively across multiple platforms and taught from a Christian worldview perspective,” Mueller said. “It is also a reflection of both our outstanding students and the support they receive from our faculty and staff.”
Elizabeth Troutman is a reporter for AZ Free News. You can send her news tips using this link.
Arizona’s Republican Superintendent of Public Instruction is standing up for an in-state university in a battle against the federal government.
This week, Arizona’s school’s chief, Tom Horne, sent a letter to Secretary Miguel Cardona of the U.S. Department of Education, urging the agency head to “change [his] position on Grand Canyon University (GCU) and come to a satisfactory resolution.”
Earlier this month, Cardona said of his department’s efforts over GCU: “Going after predatory schools preying on first generation students. They have flashy marketing materials, but the product is not worth the paper it is printed on. Increased enforcement budget to go after these folks and crack down. Levied largest fine in history against a school that lied about costs and terminated a school from Title IX. We are cracking down not only to shut them down, but to send a message not to prey on schools.”
Horne reminded Cardona of a 2023 letter that he had transmitted, asking for his department to “sit down with Grand Canyon University and work out any differences.” He explained that GCU was “a major ally to my effort to raise academics in Arizona schools, and any harm you do to them would do harm to my goal of academic excellence.” The Superintendent added that there was a “severe teacher shortage in Arizona, and the elimination of GCU would be a severe blow.”
In his latest letter, Horne informed the high-ranking cabinet member that “GCU reports that they have asked your department for evidence of intent and verified student complaints regarding the accusation your department is making, and you have refused to provide that information.”
As he wrapped up his letter, Horne wrote, “in the U.S., anyone accused of wrongdoing is presumed innocent and entitled to their day in court. For a Cabinet-level official, one who is sworn to uphold the U.S. Constitution, your threat against GCU is contrary to those constitutional guarantees and unworthy of your position. It is unwarranted, unjust and the latest episode of harassment against this school by the federal government.”
The state school’s chief concluded by asserting that Cardona had, so far, “chosen to be unreasonable” in his approach and actions against GCU.
In October 2023, the U.S. Department of Education fined GCU $37.7 million, accusing the university of lying “to more than 7,500 former and current students about the cost of its doctoral programs over several years.” Richard Cordray, the Chief Operating Officer of the Department’s Office of Federal Student Aid, said, “Today, we are holding GCU accountable for its actions, protecting students and taxpayers, and upholding the integrity of the federal student aid programs.”
GCU responded to the recent comments by the U.S. Education Secretary, stating, “GCU has been asked repeatedly why it believes it is being targeted by federal agencies of the Biden Administration. Here’s what we can tell you: Mr. Cardona’s inflammatory comments make very clear the Department of Education’s intentions and their disdain for institutions that do not fit their ideological agenda. What’s also clear is that ED has no lawful grounds to carry out those intentions based on their disingenuous and factually unsupportable allegations.”
Daniel Stefanski is a reporter for AZ Free News. You can send him news tips using this link.
The largest Christian university in the U.S., Grand Canyon University (GCU), defended itself against “disturbing and defamatory” public comments made by the U.S. Department of Education Secretary Miguel Cardona.
“Mr. Cardona’s inflammatory comments, which are legally and factually incorrect, are so reckless that GCU has no choice but to demand an immediate retraction,” the statement says. “He is either confused, misinformed or does not understand the actions taken by his own agency.”
At the House Appropriations Committee hearing last week, Cardona said “we are cracking down not only to shut them down, but to send a message to not prey on students.”
The Goldwater Institute filed a lawsuit on behalf of GCU in February due to the Biden administration imposing a $37 million fine on the school. The conservative think tank claims the administration has refused to provide documents that explain why it fined GCU.
“GCU has been asked repeatedly why it believes it is being targeted by federal agencies of the Biden Administration,” the school’s statement reads. “Here’s what we can tell you: Mr. Cardona’s inflammatory comments make very clear the Department of Education’s intentions and their disdain for institutions that do not fit their ideological agenda. What’s also clear is that ED has no lawful grounds to carry out those intentions based on their disingenuous and factually unsupportable allegations.”
The Education Department’s conduct extends normal regulatory activity, the statement says.
“It epitomizes the weaponization of federal agencies’ power against a private Christian university,” according to the statement.
GCU is confident an impartial court of law would exonerate it from the allegations.
“GCU’s intent is to fight these accusations all the way to the Supreme Court if necessary,” the statement says. “The Department of Education’s intent, based on the frivolous nature of its accusations and defamatory statements from ED officials, seems to be to damage the university’s reputation, use its ‘findings’ as a rationale to seek loan forgiveness for students under the borrower’s defense to repayment program and impose unprecedented fines and legal fees. In other words, regardless of the inevitable legal outcomes in GCU’s favor, the process becomes the punishment.”
GCU has more than 118,000 students. The Phoenix university says it will continue to thrive.
“With 118,000 students and growing, GCU is thriving and will continue to thrive. In an industry that is struggling and slow to change, GCU has created a model that has allowed it to freeze tuition on its ground campus for 16 straight years, increase diversity and social mobility by ensuring that higher education is affordable to all socioeconomic classes (over 40% of GCU’s ground campus student body are students of color), maintain lower student loan default rates than the national average and lower student debt levels than other private universities, and produce nearly 30,000 graduates in each of the past three years.”
The statement continued, “If a government-run institution produced those kinds of outcomes, it would be applauded. At the largest private Christian university in the country, it draws unwarranted threats from the Secretary of Education and the ire of the federal government.”
Elizabeth Troutman is a reporter for AZ Free News. You can send her news tips using this link.
