How Liberty University Built a Billion-Dollar Empire Online

Alec MacGillis:

The real driver of growth at Liberty, it turns out, is not the students who attend classes in Lynchburg but the far greater number of students who are paying for credentials and classes that are delivered remotely, as many as 95,000 in a given year. By 2015, Liberty had quietly become the second-largest provider of online education in the United States, according to The Chronicle of Higher Education, its student population surpassed only by that of University of Phoenix, as it tapped into the same hunger for self-advancement that Trump had with his own pricey Trump University seminars. Yet there was a crucial distinction: Trump’s university was a for-profit venture. (This month, a judge finalized a $25 million settlement for fraud claims against the defunct operation.) Liberty, in contrast, is classified as a nonprofit, which means it faces less regulatory scrutiny even as it enjoys greater access to various federal handouts.

By 2017, Liberty students were receiving more than $772 million in total aid from the U.S. 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.

And it was no secret which part of the university was generating most of that revenue, said Chris Gaumer, a Liberty graduate and former professor of English there. “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,” he said. “It was understood that on the online side, they were making a killing.” …

Ivy League Summary: Tax Break Subsidies and Government (Taxpayer) Payments:

1. Ivy League payments and entitlements cost taxpayers $41.59 billion over a six-year period (FY2010-FY2015). This is equivalent to $120,000 in government monies, subsidies, & special tax treatment per undergraduate student, or $6.93 billion per year.

2. The Ivy League was the recipient of $25.73 billion worth of federal payments during this period: contracts ($1.37 billion), grants ($23.9 billion) and direct payments – student assistance ($460 million).

3. In monetary terms, the ‘government contracting’ business of the Ivy League ($25.27 billion – federal contracts and grants) exceeded their educational mission ($22 billion in student tuition) FY2010-FY2015.