For-Profit Grand Canyon Education Is No Longer Seeking Nonprofit Status

For the past 18 months, Grand Canyon Education Inc. has been working to convert from for-profit to nonprofit status. That process came to a halt on Friday, when Grand Canyon announced that its accreditor, the Higher Learning Commission, would not support the change.

Grand Canyon, which was a nonprofit institution for most of its history before becoming a for-profit in 2004, said in 2014 it was seeking to change back in an effort to shed the stigma associated with for-profit operations, according to a statement released on Friday. But the accreditor’s Board of Trustees voted no.

“We certainly thought it possible that the board might take issue with aspects of the proposal, and, as is commonly the case, afford us an opportunity to present a revised proposal for subsequent consideration,” the Grand Canyon statement says. “We were extremely surprised that the HLC board … chose instead to deny our application outright, without any opportunity to address any stated concerns.”

Grand Canyon’s lengthy statement, which expresses frustration with the accreditor’s decision, cites one reason for the denial as the university’s outsourcing of “academic- and student-support services” to a third party.

In the statement, Grand Canyon says that such a finding by the accreditor “paints a distorted picture of our proposed transaction.” It goes on to note that the institution would have absolute authority over the development of educational content, selection of programs offered, and assessment of student learning.

The Higher Learning Commission said in a statement on Friday that it had made its decision because the university had not met the requirements for the transition. The statement noted that the commission’s criteria do not allow “for the separate school-corporation and service-corporation model.”

In recent years, several for-profit colleges have restructured as nonprofits. In research released last fall Robert M. Shireman, a senior fellow at the Century Foundation and former Education Department official, found that for-profit colleges may choose to become nonprofit institutions in order to act as “covert for-profits,” in which “their backers profit in ways that are not standard at traditional universities.”

For more, see this Chronicle article.

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