Wednesday, November 27, 2019
In a significant set back for a former for-profit university, the U.S. Department of Education has decided that Grand Canyon University is not a nonprofit for the purposes of Title IV funding even though it has been recognized by the IRS as tax-exempt under Internal Revenue Code section 501(c)(3). The University had also (eventually) secured approval from its accreditor for the terms of its conversion from for-profit to nonprofit status, even given a continuing and extensive financial relationship with a for-profit company. The Department of Education found that relationship to be particularly troubling, concluding that the primary purpose of the relationship "was to drive shareholder value" for the for-profit "with GCU as its captive client - potentially in perpetuity." The University has responded with a detailed statement and a lengthy letter, signaling it plans to aggressively fight this adverse decision.