For-Profit GCU’s Winding Path to Division I

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For all the crazy moves seen during the current stretch of conference realignment, the most controversial has been Grand Canyon University’sjump from Division II to Division I and the Western Athletic Conference. Should GCU successfully navigate the Division I membership process, it will become the first for-profit college in Division I.

That has raised the question of whether a publicly traded company should be a member of Division I. Opinions range from no big deal to outrage to being glad that there will be a member of Division I which is “honest”. Over the next four years, we’ll get a chance to see how appropriate Division I thinks a for-profit member is. But already we can start to make some comparisons.

The Athletic Department

In terms of expenses, GCU compares favorably to the rest of the 2013–14 WAC membership. GCU, in Division II without many of the NCAA distributions that Division I enjoys, currently would rank third in the 2013–14 WAC, and second among basketball schools behind only Seattle.

Here is where Grand Canyon would rank in some key academic numbers against the rest of the six member 2013–14 WAC. Note that these numbers are based on athletes which started college in 2005 and that Seattle and Grand Canyon reported the Division II Academic Success Rate, which is similar to the Division I Graduation Success Rate but also includes walk-ons:

  • Baseball GSR: 2nd
  • Baseball Federal Rate: 1st
  • Men’s Basketball GSR: 3rd
  • Men’s Basketball Fed Rate: 3rd
  • Overall GSR: 3rd
  • Overall Fed Rate: 5th

Grand Canyon’s two revenue or borderline revenue sports compare favorably with the rest of the WAC. The one number that sticks out though is arguably the most important: the number of scholarship athletes who start at GCU and ultimately earn degrees. But remove #1 Seattle (83%) and last place Utah Valley (26%) and the rest of the schools are all within 10 percentage points of each other.

Anecdotally, GCU also seems as ready to compete in Division I as many other Division II schools. They have a brand new basketball arena and student rec center. They have a small administrative staff, but comparable to some schools at the lower end of Division I. And they are coming off an extremely successful year athletically where they won the Division II Directors’ Cup and a national title in track.

Compare GCU Athletics to another school the WAC potentially might add, Chicago State. Chicago State has been in Division I since 1994 and was a member of the then-Mid Continent Conference (now Summit League) until 2006. Since then the school has been a struggling independent. The Cougars had the entire athletic department banned from the postseason for failing to meet minimum participation requirements in 2007. This year, three teams are under APR penalties, which is a slight improvement from last year where four teams were penalized.

Chicago State’s budget would rank dead last in the 2013–14 WAC. CSU would also rank behind Grand Canyon in every academic measure listed above, except for the overall federal graduation rate, where Chicago State is ahead by two percentage points. Facilities are comparable with Chicago State playing in a five-year old basketball arena and planning to open a new baseball stadium this year. Chicago State’s administrative staff is also a little larger, but that’s to be expected from a program which has been in Division I for almost 20 years.

When it comes to adding an athletic department ready to offer a Division I experience to athletes, it is hard to draw a big distinction between Grand Canyon and Chicago State. CSU’s greater Division I experience and larger staff is offset by Grand Canyon’s better academic performance among athletes and larger budget.

The University

Adding Grand Canyon’s athletic department is not as ridiculous as it may seem then. This is not a University of Phoenix campus renting out a high school basketball gym and slapping uniforms on a few students. The larger issue is with the university itself.

Grand Canyon University, in what appears to be a growing trend, has a split identity. Grand Canyon existed as a small, faith-based institution since 1949. It was purchased by a for-profit education company in 2004. The campus continued more or less as it was, but to that traditional campus learning environment, a large online program was attached. About 4,000 students are enrolled as full-time residential undergrads, with total enrollment of over 40,000 including online programs.

As a for-profit enterprise, Grand Canyon’s goal is to make money. A huge source of Grand Canyon’s revenue is federal student aid. A Senate report found that in 2010, 87% of Grand Canyon’s revenue was federal education funds, totaling $225 million dollars. For all that federal funding, Grand Canyon delivers a federal graduation rate of less than 50% for all students and settled a lawsuit with the Department of Education and a whistle-blower for impermissible recruiting practices designed to boost enrollment.

Elite college athletics is often justified as marketing for the university. Analogies for athletics include phrases like the “front porch” of the university or the “curb appeal”. More studies are completed all the time that show schools which play athletics at a higher level or have greater athletic success see increases in the both the size and quality of their applicant pool.

The concern with allowing GCU to jump to Division I is that the NCAA’s top level will be used by a for-profit company as a marketing tool to boost enrollment—and thus revenue—while not delivering degrees. The reverse is also true. If GCU decides to invest heavily in athletics to complete at the Division I level and does not generate significant additional outside revenue, a big chunk of GCU’s athletic department will be, more or less, federally funded. Essentially that means more federal funding diverted away from spending on instruction and student services toward what is more or less marketing.

Division I Membership

To be eligible for Division I membership, a school must first have been an active member of Division II for five years, meet Division I sport sponsorship and financial aid minimums, and receive an offer of membership from a Division I conference. Grand Canyon has met those requirements.

Grand Canyon’s next step is to submit, along with the WAC, its application to reclassify to Division I. That application has a number of parts but most important is the initial strategic plan which must accompany the application and address the Division I philosophy statement. Two parts of the Division I philosophy statement could be impacted by GCU’s for-profit status:

  • “Subscribes to high standards of academic quality, as well as breadth of academic opportunity.”
  • “Recognizes the dual objective in its athletics program of serving both the university or college community … and the general public.”

The strategic plan must also address elements of the operating principles in Division I’s certification program (currently suspended). The following would be a place where for-profit status could come up:

  • “The institution admits only student-athletes who have reasonable expectations of obtaining academic degrees.”

As a school progresses through the four-year membership process, it must update and change its strategic plan based on feedback from the Division I Administration Cabinet. The Administration Cabinet may question whether the university itself subscribes to high standards of academic quality given the overall graduation rate. The cabinet could question how an athletic department of a for-profit college serves the general public. Finally, the graduation rate of the school could come up again when asking whether athletes are being admitted with sufficient chance of obtaining a degree if the majority of students overall do not graduate.

So to say that Grand Canyon has “joined” Division I or that the NCAA has “let” them take advantage of Division I membership is inaccurate. Grand Canyon has expressed a desire to move from Division II to Division I and has met some of the initial criteria. It is only now that the Division I leadership has an opportunity to review whether Grand Canyon meets all of those requirements, which may come down to a decision over whether for-profit colleges fit with Division I.

But as explained above, that will be a very close question if the Administration Cabinet or Board of Directors decide to deny Grand Canyon’s upward move. In terms of the experience being offered to student-athletes, there’s a great deal of evidence that Grand Canyon is doing as well or better than many Division I institutions and is at least consistent with its future conference mates. It will take a strong focus on some of the less concrete requirements for Division I membership to keep Grand Canyon out.

What do you think about for-profit colleges competing at the NCAA Division I level? Let us know in the comments section below, or connect with us on Facebook, Twitter, or Google+!

Posted on by John Infante
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One Response to For-Profit GCU’s Winding Path to Division I

  1. Anonymous says:

    My daughter was recruited to play basketball at GCU. GCU required at least a 3.0 GPA for admission. My daugher’s GPA was 3.25 received from a private Catholic HS.

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