Phoenix-based Grand Canyon Education Inc. (Nasdaq: LOPE) recently unveiled plans to invest a substantial $240 million in expanding its hybrid educational programs to educate an additional 50,000 students nationwide, according to information provided by AZ Tech Council. Brian Mueller, GCE's chairman and CEO, is set on launching 80 new facilities that will couple online coursework with hands-on lab work, a model that blurs the lines between traditional and digital classrooms.
The expansion includes a strategic focus on programs like nursing to help address the critical shortage in the healthcare profession, with occupational therapy and an electrician program in Austin, Texas also on the agenda, "Each location is about a 20,000-square-foot facility," Mueller said, and "Each location is about a $3 million investment. Right now, the goal is to have upward of 600 students per location," he explained in statements as detailed by ABC15 News. Out of the planned 80 locations, 44 have already been opened and GCU locations constitute half of these, demonstrated by the recent launch in St. Louis and upcoming openings in Kansas City and other cities.
In the backdrop of these developments, Grand Canyon Education also posted impressive financial numbers, outpacing Wall Street predictions with a net income of $34.88 million on service revenue of $227.46 million for the second quarter that ended on June 30, these figures represent a climb from last year's $28.97 million net income on revenue of $210.58 million during the same quarter.
While other educational institutions face staff cutbacks and decreasing enrollments, GCE is charting a different course, the company intends to hire 200 individuals by year's end to support operational needs sparked by enrollment surges at partner universities, about 80% of these roles are Phoenix-based, with the rest scattered across the country, detailed by AZ Tech Council.
Amid these efforts, a legal battle looms large as the U.S. Department of Education has not acknowledged GCU's nonprofit status, a decision which has led to an ongoing lawsuit and appeals process, "The IRS has the written authority to rule on nonprofit status," Mueller expressed frustration, "The other group that has the authority to make that decision is the state. The state also ruled that we have the authority to operate as a nonprofit. It was an unprecedented move by the U.S. Department of Education to deny that. That’s never been done before", he cited in an interview with AZ Tech Council. Recent changes to the power balance between courts and federal agencies provide a glimmer of hope for GCE in its legal confrontation.
