Arizona school aims to continue expanding campus and increasing in-person enrollments.
Three years and five months after transitioning to nonprofit status, Grand Canyon University (GCU) has successfully sold off $1.2 billion of debt. The milestone marks a major step in a very unusual journey for a Christian school.
One of the nation’s largest Christian universities, GCU was founded as a nonprofit in 1949 but turned into a for-profit entity in 2004 during a period of financial distress. After a decade of increasing its earnings and enrollment, the university returned to nonprofit status. The debt sale, finalized in December, completes GCU’s transition and positions the university for its next phase of growth, GCU president Brian Mueller told CT.
“It was not an easy process, but it ended up being an exhilarating one,” he said. “It’s been described as the largest real-estate-related financing in the state of Arizona history, and so it wasn’t without its complexity; it took some time.”
As a for-profit college, GCU was able to invest $1.6 billion into its academic infrastructure over the last decade, according to Mueller, without significant tuition increases. GCU renovated and expanded its campus, building new classrooms, 25 dorms, a recreation center, and a 7,000-seat arena.
With the money from the junk bond sale, GCU will refinance the remaining debt on a $875 million loan it took out in 2018 as part of the arrangement to separate from Grand Canyon Education (GCE), which remains a for-profit institution. That loan, due in 2025, allowed GCU to buy its assets from GCE.
GCU will also continue freezing on-campus tuition costs and work to grow enrollment, Mueller said. In 2008, the school had around 1,000 on-campus students. Today it has about 23,000—with another 90,000 …