‘Non-Profit’ Liberty University Made Over $1 Billion, Doesn’t Pay Taxes

Liberty University in Lynchburg, Virginia, is a non-profit Christian institution that reportedly brought in over $1 billion in 2017. 

ProPublica reports that most of Liberty’s money is taxpayer dollars:

By 2017, Liberty students were receiving more than $772 million in total aid from the Department of Education — nearly $100 million of it in the form of Pell grants and the rest in federal student loans. Among universities nationwide, it ranked sixth in federal aid.

Liberty students also received Department of Veterans Affairs benefits, some $42 million in 2016, the most recent year for which figures are available. Although some of that money went to textbooks and nontuition expenses, a vast majority of Liberty’s total revenue that year, which was just above $1 billion, came from taxpayer-funded sources.

Chris Gaumer, a Liberty graduate and former professor of English at Liberty, told ProPublica how important Liberty University Online education is to the school:

When I was there, at faculty meetings the commentary was that online was funding the school, while they were trying to just break even on the residential side. It was understood that on the online side, they were making a killing.

Liberty reportedly spent $16.8 million on Google ads in 2016, but skimps when it comes to its students, notes ProPublica:

The rate of Liberty graduates who default on their loans within three years of graduating is 9.9 percent, several points higher than the average for nonprofit colleges, though still below that for for-profit colleges. Most striking, though, is how little the university spends on actual instruction.

It does not report separate figures for spending on the online school and the traditional college. But according to its most recent figures, from 2016, the university reports spending only $2,609 on instruction per full-time equivalent student across both categories.

Liberty University is second only to the University of Phoenix when it comes to online students, but the big difference is the University of Phoenix is a for-profit school that pays taxes, while Liberty is a non-profit that does not pay taxes, reported The New York Times in 2017.

Hundreds of phone recruiters work for Liberty University Online, notes ProPublica:

They are instructed not to press prospective applicants too hard on their academic qualifications. Applicants have to submit past transcripts, but any grade point average above 0.5 — equivalent to a D-minus — would suffice, said the former employee in the nonmilitary division. Recruiters, he told me, “would say, ‘Congratulations, you’ve been accepted.’ They’d make it seem competitive.”

Liberty’s president, Jerry Falwell Jr., and other school officials insisted that the minimum G.P.A. for applicants is 2.0.

However, Ron Kennedy, the executive vice president for Liberty University Online enrollment management, acknowledged that the recruiters working under pressure might say otherwise: “It’s a call center.”

ProPublica spoke to former recruiters of Liberty University Online about that pressure to sign up students:

They get no more than 45 seconds between calls, and sometimes managers override even that short break. There are no formal quotas — a federal regulation that went into effect in 2011 forbids them. But as one former employee put it, the “highly motivated goal” is for each recruiter to sign up eight new students a day. Multiplied across 300 cubicles, that is 2,400 per day. Of those, only a small fraction end up paying and starting courses, but that is still an extraordinary haul for any kind of education business.

(Sources: The New York TimesProPublica. Photo Credit: Jason Dickert/Flickr)

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