How Liberty University Built a Billion-Dollar Empire Online

It was the start of the 2017 Fall Family Weekend at Liberty University, the school founded by Jerry Falwell Sr. 47 years ago in Lynchburg, Va., and the lines were especially long to get into the basketball arena for the mandatory thrice-weekly student convocation. There was a festive feel in the air — as usual, a live band kicked things off with some Christian rock.

Penny Nance, a newly named Liberty trustee who is the head of the socially conservative group Concerned Women for America, took the stage to say that with Donald Trump in the White House, the country was much closer to overturning Roe v. Wade and putting “true limits on the abortionist’s hand.” Tim Lee, a Texas preacher and evangelist who lost his legs in the Vietnam War, gave a sermon bemoaning “homosexuals and pornographers,” declaring that one problem with “pulpits today is that they’ve got a lot of girlie men in them.” A young man in front of me in a Nautica T-shirt clapped and shouted, “That’s right!”

Liberty is spread out on more than 7,000 acres overlooking Lynchburg, a former railroad-and-tobacco town on the James River below the Blue Ridge Mountains. The student body on campus is 15,500 strong, and the university employs more than 7,500 people locally. Throughout the university grounds, there is evidence of a billion-dollar capital expansion: mountains of dirt and clusters of construction equipment marking the site of the new business school; the $40 million football-stadium upgrade, to accommodate Liberty’s move into the highest level of N.C.A.A. competition; and the Freedom Tower, which at 275 feet will be the tallest structure in Lynchburg, capped by a replica of the Liberty Bell.

In 2010, undercover investigators from the Government Accountability Office scrutinized 15 for-profit colleges, finding that every one of them had misled applicants and that four had encouraged them to lie on their federal student-aid forms. The Obama administration seized on the findings as it began a yearslong clampdown on for-profit education, which by 2013 was gobbling up a fifth of all federal student aid, more than $25 billion, despite enrolling only 10 percent of students — and also producing about a third of all federal student-loan defaults.

Liberty, too, was hugely reliant on federal money, in the form of Pell grants, Department of Veterans Affairs benefits and federally subsidized loans. By 2010, it had more than 50,000 students enrolled and was pulling in more than $420 million annually. But because Liberty was technically not for-profit, it was spared many of the administration’s new regulations, including its requirement that a certain threshold of graduates be able to attain “gainful employment,” which was designed to hit for-profit colleges much harder. It was also spared from the pre-existing rule that for-profit colleges could get no more than 90 percent of their revenue from federal sources.

If anything, Liberty benefited from the crackdown. The Obama administration’s actions helped put out of business large for-profit chains like Corinthian and ITT Technical Institute, clearing formidable competition from the field. Though there were other nonprofit institutions with online offerings — Arizona State, Southern New Hampshire and Western Governors, as well as premium players like Stanford and Duke — none were operating at Liberty’s scale. The university now touts itself on its website as “the largest private nonprofit university in the nation.” In a sense, said Ben Miller, who served as a senior policy adviser in Obama’s Department of Education, the crackdown on for-profits offered Liberty a “marketing advantage.”

Read the full story at The New York Times

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