Making College Affordable with Brian Mueller

Well, thank you for having me. We are excited. We are excited for this. We're excited about the work you guys are doing, and the students that we've been getting from Classical Conversations have been outstanding. Very well prepared, academically sound, just great people. So we've got a relationship going that's really exciting for us.

Yeah, it's, you know, Grand Canyon had always been a really good place. They opened up in 1949 as a small private Christian university founded by Southern Baptists in Prescott, Arizona, moved to Phoenix in 1951, and always had about 1,200 students. They had great programs in education and nursing and healthcare, and good small college athletics, good fine arts, really good people, administrators, faculty, great students. But like a lot of small private Christian universities, were struggling financially and got in a huge problem around 2004. They got $20 million in debt and were about ready to close the doors. And they asked us to come on in 2008, and we were very excited because we are seeing private Christian universities either dwindle in their population or close or be too expensive for most people to attend. And so we were excited about doing something different. We came in and we wanted to do something big. So we wanted to get access to public capital. We understood the public markets because of our experience at Phoenix. And so when we came in 2008, we went to the public markets, got an infusion of $54 million, and we brought that back to Phoenix. And we thought there were two large markets in higher ed: traditional students leaving high school and going to a college campus and spending three or four years there, getting prepared for life and work, and then working adult students going back to school as adults. And we thought if we had both two large student populations in both those major markets, leveraging a common infrastructure, we can flip the economics of higher education and make it affordable to all socioeconomic classes of Americans. And to be honest with you, it worked out way better than we thought. The traditional campus has now grown to 25,000 students, and we're on our way to 40,000 students. The online campus now has 95,000 students in it, and we're building 80 hybrid campuses across the country. 40 of them are stood up, and we'll get to 80 in the next five or six years. And we're about 6,000 students in those programs, and that's going to grow to near 50,000 students. And so the demand for higher education, it's rooted in biblical truth, is just there's no end in it. And we're very excited about what's going to happen in the next 10 years.

It's, you know, it's a very, very vibrant campus. There's so much going on. Obviously, everybody that's involved in our academic programs, we've got the 21st ranked campus in the country now in terms of classrooms, laboratories, residence halls, 32 restaurants, fine arts facilities, athletic facilities, largest club sports program in the country, largest intramural program in the country, outdoor rec, just a very vibrant, exciting place to be. After we had been here for three years, in 2011, we came in 2008, we had to make a big decision because it looked like what we were doing was going to work. And should we really invest in the community we were in? It's a community of immigrants. When we got here in 2008, there were 42 languages spoken within five square miles of here. Today, there's 70 languages spoken within five square miles of here. I tell our students, you know, we can go out and we can do international mission trips, but the reality is God is bringing the world to us, and I think he expects us to be a very, very vibrant part of what's going to happen in this community going forward. So we put together a five-point plan, and we've been executing that for over 10 years now. The first thing a neighborhood like this needs is jobs, and we've created 16,000 jobs, and we hire people in the neighborhood to entry-level jobs. We give them a salary, it gives them benefits, but they can send their kids to college for nearly free if they're employed here. And so we continue to grow the university out, we continue to grow 10 additional businesses that we started out, and we continue to hire people in the neighborhood. We become a major employment force in the city of Phoenix. Second thing is safety. We have a major safety initiative going on, and we're making huge, huge progress. We're determined to make our campuses safe because we have our own police force. Crime is very nonexistent, but we want the neighborhood to be faithful. We're making huge progress. We have the largest Habitat for Humanity program in the world going on. That's the third initiative. We've rehabbed over 500 homes now. Our goal is 800. We have a huge tutoring program after school for the kids in our neighborhood. That's led to a major scholarship program. We awarded a thousand full-ride scholarships to kids that come right out of our inner-city neighborhood. And we have a thing called CityServe where we've distributed over $16 million worth of brand new household goods to 60,000 families in the state of Arizona. And so that's become kind of part of the educational experience when students come here. Certainly, there's an academic experience, there's a student life experience, those are both very vibrant. But we want the students to learn to live a life of service, especially serving disadvantaged populations, right from the get-go. And we want to make that part of who they are when they graduate. And that's become really our faith expression. We've lived out our faith as we try to revitalize this neighborhood, and it's caught people's attention.

Yeah, we've frozen tuition for 16 straight years. The average student after scholarships pays about $9,000 a year for tuition at a private university on a 21st ranked campus in the country. So it's, wow, most students less than the average state university student. So $9,000, way less than in-state tuition, let's just put it that way, in most states, probably all states, but I haven't checked recently.

Yeah, this all started six years ago when we were a for-profit institution. That's how it allowed us to go to the public markets to get access to capital. But we saw a way to go back as a nonprofit institution six years ago, and we executed that. And it was approved by the IRS, the State of Arizona, Higher Learning Commission, and for some reason, the Department of Education denied our nonprofit status. And that's where all the problems began. After trying to win them over, which we could not, we eventually had to file a complaint. And when we filed the complaint, they started to retaliate. And they open up these investigations, and they look and look and look at thousands of documents. And finally, they said, 'Well, you misrepresented the cost and time to complete a doctoral degree.' And I said, 'Well, if any students complained that they were misled?' They go, 'No, we're not saying it's based upon student complaints. It's based upon how we read your website.' And it was a fishing expedition. Eventually, they levied a fine against us. They suggested a fine. The fine has not been levied. Largest fine in the history of the Department of Ed. And it was within a couple weeks of levying a significant fine against Liberty University. We're the two largest Christian universities in the country, so they're not even being subtle about what they're doing.