Leaders of the for-profit Grand Canyon Education are expecting a more accommodating regulatory environment under President-elect Donald Trump.
“I believe that we're going to have a voice in what's going to happen in this next administration in terms of what the future of higher education should be,” Brian Mueller, the company’s chairman and CEO and president of Grand Canyon University, said on a call with analysts Wednesday.
The company, which primarily provides marketing and educational services to Grand Canyon University, has had its share of clashes with the U.S. Department of Education under the Biden administration.
They include a fight over Grand Canyon University’s for-profit status with the Education Department and a nearly $40 million fine the agency leveled against it over marketing practices in Grand Canyon’s doctoral programs. The company has appealed both determinations..
At the time of the fine a year ago, Mueller responded with fiery rhetoric, saying in a statement, “We need to fight this tyranny from federal government agencies.”
The department’s actions against and investigations into Grand Canyon have also paved the way for private legal actions.
This summer, the company was hit with a class-action lawsuit alleging that it lied to students about doctoral program costs at Grand Canyon University. The complaint cited Education Department analysis as one piece of evidence backing its allegations. The company labeled the allegations “completely without merit.”
Regulations in development by the Biden administration may also impact the university and Grand Canyon Education. Mueller noted as much on the call and cited the new gainful employment rules, which largely apply to the for-profit sector and pressure institutions to ensure positive economic outcomes for graduates.
“There are a lot of rules being discussed for future implementation in higher education, they are not going to be helpful to students, and they are not going to be helpful to the economy,” Mueller said.
He specifically pointed to the new gainful employment rules, describing them as “so counterproductive to what we are doing here.”
The Education Department in September delayed the reporting deadline under the rules from Oct. 1 until Jan. 15. As it turns out, that new deadline will now run right into Trump's Jan. 20 Inauguration Day.
Despite its run-ins and disagreements with the Education Department during Biden’s term, Grand Canyon Education’s business has been growing. Over the first nine months of its current fiscal year, revenue grew 8.5% year over year to $740.4 million. Net income, meanwhile, jumped by roughly $20 million to $144.4 million.
Pushing the company’s revenue higher in the third quarter was higher-than-expected enrollment at Grand Canyon University. Its headcount reached 123,002 students as of Sept 30, up 4% from 2023.
The Education Department's delayed, glitch-ridden rollout of the new Free Application for Federal Student Aid had a negative impact on the company’s enrollment.
While Grand Canyon University’s overall enrollment grew, Mueller said both applications and registrations were down for students who completed the FAFSA. Moreover, enrollment at Grand Canyon University’s physical campuses this quarter fell about 2.3% from last year to 24,657 as of Sept. 30, driven by a decline in traditional student enrollment that Mueller tied to the FAFSA problems.
“Although this is a disappointing result, this is equal to or better than what is occurring nationwide,” Mueller said.
He added that the company expects enrollment at the physical campus to rebound and noted that initial results were positive from the Education Department's FAFSA fixes for next year’s enrollment cycle.
