グランド・キャニオン・エデュケーション (LOPE) 2026年第3四半期決算説明会: 在籍者数は5.2%増

主要ポイント

• 2026年第3四半期のサービス売上高は前年同期比2.4%増の2億6,730万ドルとなりました。3つのプラットフォーム全体の総入学者数は5.2%増加した一方、新規入学者数合計は横ばいでした。
• GAAPベースの営業利益は前年同期の1,800万ドルから5,150万ドルに増加し、営業利益率は6.9%から19.3%へと上昇しました。GAAPベースの希薄化後EPSは1.67ドル、調整後希薄化後EPSは1.77ドルでした。
• GCUのオンライン入学者数は、新規入学者が横ばいだったものの、維持率の改善に支えられ7.1%増加しました。経営陣は2026年第4四半期のオンライン新規入学者数が1桁台半ばの伸びになると見込んでいます。
• 従来のグラウンドキャンパスにおける秋学期の新規入学者数は横ばいとなり、総入学者数は経営陣の予想を3%下回りました。2027年秋学期には4つの施策を通じてグラウンドキャンパスで10%超の成長を牽引する計画です。
• 閉鎖中および募集停止中の拠点を除くハイブリッドキャンパスの入学者数は14.1%増加しました。同プラットフォームは48拠点で8,000人近くの学生を抱え、総収容人数の60%強で稼働しています。
• グランドキャニオン・エデュケーションは第3四半期中に504,708株を約7,510万ドルで自社株買いしました。年初来の自社株買いは1,926,375株、3億640万ドルに達しました。

主要財務データ

事業および営業業績

GCUオンラインキャンパス

オンラインの総入学者数は7.1%増加した一方、前年同期の高いハードルを背景に新規入学者数は横ばいとなりました。経営陣は、総入学者数の伸びは高い維持率と質の高い学生層によるものとしています。オンライン受講生の70%以上が、教育、カウンセリング、看護、ソーシャルワーク、会計、サイバーセキュリティなどの資格・免許取得プログラムに在籍しています。

同社は9月、10月、11月に広告宣伝費を増額する一方、入学者カウンセラー関連の支出を削減しました。経営陣によると、見込み客の獲得（リードジェネレーション）は引き続き好調で、獲得単価は安定して推移しているとのことです。

純授業料率が低いプログラムへの構成比シフトにより、学生1人当たりのオンライン売上高は前年同期比で小幅に減少しました。これは、学外の教室および実験室施設における売上貢献度の高いABSN（学士取得者向け加速看護プログラム）の学生によって一部相殺されました。

従来のグラウンドキャンパス

秋学期の新規入学者数は横ばいとなり、総入学者数は経営陣の予想を3%下回って着地しました。新入生の平均GPAは3.6、オナーズ・カレッジの新入生の加重平均GPAは4.1でした。

経営陣は2027年秋学期に向けて以下の4つの施策の概要を説明しました。

1. Common App：9月と10月に同プラットフォームを通じて5,600件を超える出願がありました。GCUは、このチャネルにより2027年秋学期に800人を超える新規入学者数が上積みされると見込んでいます。
2. 建設・産業技術カレッジ：経営陣は、2027年にグラウンドキャンパスで少なくとも1,500人の新規入学者を見込んでいます。
3. オナーズ・カレッジ：55,000平方フィートの新施設が開設されました。GCUは2027年秋学期に、オナーズ・カレッジで純増400人の新規入学者を見込んでいます。
4. ロースクール：GCUは2027年秋学期に、法学準備課程（プレロー）で少なくとも100人、ロースクールで100人、法学修士課程で100人の入学者を見込んでいます。アリゾナ州最高裁判所は新設ロースクールを満場一致で承認しており、GCUは米国法曹協会（ABA）の認可取得を引き続き目指しています。

経営陣は、これらの施策を合わせることで、2027年秋学期にグラウンドキャンパスの入学者数を10%以上押し上げ、その後の5年間にわたる成長を支えると見込んでいます。

ハイブリッドキャンパス

閉鎖中および募集停止中の拠点を除くハイブリッドキャンパスの入学者数は14.1%増加しました。GCEは48拠点を収容人数の60%強で運営しており、長期目標として80拠点、1拠点当たり看護学生約300人、その他医療プログラムの学生約300人の確保を掲げています。

同社は2027年に、ネバダ州リノ、フロリダ州ジャクソンビル、ルイジアナ州ニューオーリンズ、アリゾナ州レイクハバスの4拠点を開設する計画です。経営陣によると、ハイブリッドキャンパスの学生1人当たり売上高はオンライン受講生の3倍以上とのことです。

資本配分

GCEは第3四半期中に504,708株を約7,510万ドルで自社株買いし、9月30日以降にさらに225,770株を買い戻しました。年初来の自社株買い総数は1,926,375株、総額3億640万ドルに達しました。2026年10月に取締役会が承認した3億5,500万ドルの枠拡大を含め、残りの自社株買い授権枠は3億9,450万ドルでした。

同社はまた、主に自社株買いやその他の一般的な企業目的に充当するため、期間5年、限度額1億ドルのリボルビング信用枠契約を締結しました。第4四半期のガイダンスでは、同信用枠からの借入は想定していません。

経営陣の業績予想（ガイダンス）

経営陣は第3四半期実績を反映して2026年通期のガイダンスを更新し、足元のトレンドに基づいて第4四半期のレンジを絞り込みました。

• 売上高の予想レンジは、GCUの秋学期入学者数が予想を下回ったことや、第3四半期のオンライン新規入学者数が横ばいだったことを反映して引き下げられました。
• 経営陣は、2026年第4四半期のオンライン新規入学者数が1桁台半ばの成長に戻り、オンライン総入学者数の6%～7%の成長を後押しすると見込んでいます。
• プログラム構成のシフトにより、学生1人当たりのオンライン売上高は前年同期比で小幅に減少すると予想されています。
• グラウンドキャンパスの入学者数予想の引き下げに伴い、営業利益率の見通しは下方修正されました。経営陣は2026年通期の利益率について、引き続き横ばいを見込んでいます。
• 積極的な自社株買いによって現預金残高が減少したため、受取利息は前年同期比で減少すると見込まれています。
• 2027年について経営陣は、オンライン入学者数が5%～6%増、グラウンドキャンパスが10%超増、ハイブリッドが2桁台前半の伸びとなり、全体の入学者数は7%を超える成長を達成すると見込んでいます。

リスクと注視事項

• グラウンドキャンパスの入学者数は過去3年間にわたりほぼ横ばいで推移しており、第3四半期の入学者数の未達は第4四半期の業績に影響を与える見込みです。
• オンライン入学者数の増加は、広告によって増加したリードの転換（コンバージョン）に一部依存しています。経営陣は、転換の時期が当初の想定よりも遅れたと説明しました。
• 卒業生数の増加と復学（再入学）者数の減少がオンライン入学者数を圧迫していますが、維持率の改善がその影響を一部相殺しています。
• 資格・免許取得を目的としたオンラインプログラムの成長加速は、サービス提供コストが高くなるか、または純授業料率が低くなる可能性があるため、利益率を圧迫するリスクがあります。
• 2027年初頭に計画されている新規ハイブリッド拠点は追加費用を生じさせますが、経営陣は入学者数の増加に伴い拠点ごとの収益性は改善しているとしています。
• 新設ロースクールに対するABA（米国法曹協会）の認可は、第1期生が卒業するまで付与されません。

アナリスト質疑応答（Q&A）の要点

アナリストは、第3四半期のオンライン新規入学者数の伸びに関する予想と実績の乖離に着目しました。経営陣は、6月から8月にかけて広告を増やしたものの、見込み客の転換が想定より遅れて生じたと説明しました。10月、11月、12月の動向を踏まえ、同社は第4四半期のオンライン新規入学者数の伸びが1桁台半ばになると予想しています。

また経営陣は、ウェブ経由のリード獲得は減少傾向から安定推移に転じた一方、学区、病院、企業、軍事基地と直接連携する外部カウンセラーが引き続き入学者数を下支えしていると述べました。広告費は増加傾向にあるものの、入学者カウンセラーの採用は減速しており、顧客獲得コストは安定して推移していると説明しました。

グラウンドキャンパスについて経営陣は、Common Appによる出願、建設・産業技術プログラム、オナーズ・カレッジの拡張、新設ロースクールなどは一過性の施策ではなく上積み（追加的）な施策であると強調しました。また、ロースクールの当初の入学者数見積もりは保守的であると述べたものの、2027年秋学期に向けて示された正式な目標値は修正しませんでした。

決算説明会トランスクリプト全文

決算説明会の完全なトランスクリプト

経営陣による説明

Operator

Good day, and thank you for standing by. Welcome to the Q3 2026 Grand Canyon Education Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Sarah Collins, General Counsel. Please go ahead.

Sarah Collins

Joining me on today's call is our Chairman and CEO, Brian Mueller. Please note that many of our comments today will contain forward-looking statements that involve risks and uncertainties. Various factors could cause our actual results to be materially different from any future results expressed or implied by such statements. These factors are discussed in our SEC filings, including our annual report on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K. We undertake no obligation to provide updates with regard to the forward-looking statements made during this call, and we recommend that all investors review these reports thoroughly before taking a financial position in GCE.

With that, I'll turn the call over to Brian.

Brian Mueller

Good afternoon, and thank you for joining Grand Canyon Education's Third Quarter 2026 Conference Call. Total new enrollments for all 3 platforms were flat for the quarter, while total enrollments were up 5.2%. Total revenue was up 2.4%. As a reminder, the difference between the total enrollment growth rate and the revenue growth rate is largely a result of $7.5 million of service revenue moving from the third quarter to the fourth quarter due to the late fall semester start date.

Importantly, total online enrollments were up 7.1%. The quarter did not meet our expectations from a new enrollment perspective due mainly to the ground campus new enrollment miss, and that will impact our fourth quarter, which we will discuss later. However, we are still in a strong position, and I'm very confident about our long-term goals of 7% enrollment and revenue growth with slight margin expansion, partly because of 4 strategies that will reignite growth on the ground campus, which I will explain later in the call.

Now I'd like to provide details on each of our 3 platforms. Platform one, the GCU online campus. New enrollments were flat against very tough comps, while total enrollments were up 7.1%. Total enrollment was up because of very high retention rates. Retention rates are up because of the high quality of the student body across all 3 platforms. Over 70% of the students studying online are in licensure programs. Students pursuing degrees in education, counseling, nursing, social work, accounting, cyber, et cetera, are very clear about their career paths and as a result, performed well academically and have high retention rates.

An increasing percentage of these students are recruited by outside counselors working directly with school districts, hospitals, counseling centers, businesses, military bases, et cetera. This has helped us maintain growth while making adjustments in the changing advertising and lead generation environment. During the months of September, October and November, we continue to increase our advertising spend to generate leads and are seeing strong interest in the professional careers we are targeting. The increased spend is offset by a reduced enrollment counselor spend. We expect new online enrollments to return to a mid-single-digit growth rate in the fourth quarter. And given current retention rates, that will produce a 6% to 7% total enrollment growth rate in the fourth quarter.

Platform two, GCU's traditional ground campus. Fall new enrollments were flat compared to prior year, which caused total enrollment to be 3% below our expectations. The fall enrollment results were disappointing from a growth perspective, but very encouraging from a quality perspective. Average incoming GPAs were 3.6 for the incoming class and 4.1 weighted at the fast-growing Honors College. The energy around this college and the desire of Arizona companies to offer internships and eventually full-time employment to its graduates is at an all-time high.

We have 4 strategies we are implementing to grow the ground campus over 10% for the fall of 2027. All 4 strategies will produce growth over the next 5 years. Number one, Grand Canyon University is now on the Common App and has been since August. Over 1.5 million high school seniors in the country who apply to college use the Common App. So GCU has always been at a significant disadvantage not being on it. In September and October, applications from the Common App alone are over 5,600 and have boosted total applications for the fall of 2027 in the low double digits over prior year. GCU expects to be up in new enrollments by over 800 for fall 2027 from the Common App.

Number two, GCU expects the new College of Construction and Industrial Technologies to add a minimum of 1,500 new students to the ground campus in 2027. Careers in construction, manufacturing and industrial technologies are exploding throughout the country. GCU has 3 bachelor's programs and 12 certificate programs and will be adding students in significant numbers beginning in January. These are all students that they wouldn't have had in prior years.

Number three, GCU just opened a state-of-the-art 55,000-square-foot facility to house one of the fastest-growing Honors Colleges in the country. The fastest-growing area of applications coming from the Common App is for the Honors College. GCU started this fall with about 3,400 students in the college, but expects to add a net new 400 students for the fall of 2027. These students come from all over the country, have weighted incoming GPAs of 4.1 and are helping to build a growing academic brand strength of the university.

Number four, GCU is opening the Grand Canyon University Law School in the fall of 2027. The curriculum is written, the Dean has been hired and the construction of the space is moving rapidly. The University's new College of Law has received unanimous approval from the Arizona Supreme Court. This marks a historic milestone in Arizona legal education and establishes a pathway for GCU graduates to pursue licensure as attorneys in the state. The university is still pursuing ABA accreditation, which is not granted until after the first cohort of students has graduated.

So the Arizona Supreme Court approval is important to the first class of students. GCU expects to add a minimum of 100 additional prelaw students, 100 law students and 100 master's degree students in legal studies for the fall of 2027. These graduate students from a revenue perspective will be worth 3x what an online student is worth to Grand Canyon Education. To sum up, GCU expects the ground campus to be reignited by adding 800 additional new students because of the Common App, 1,500 additional new students in the College of Construction and Industrial Technologies, 400 in the Honors College and 300 in the new law school that would get us to 10% growth on the ground campus for fall of 2027. But all the strategies will provide growth for at least the next 5 years.

Platform three, the hybrid campuses. Grand Canyon Education's hybrid campuses had an increase in enrollment year-over-year of 14.1% in the third quarter, excluding the closed sites and those that are in teach-out, which exceeded our expectations. We have turned the corner with this platform and the future is bright. We currently have 48 locations that are slightly above 60% in total capacity. The goal is to have 80 locations with about 300 nursing students per location and an additional 300 students in other health care-related programs.

GCE opened 2 new sites in the 9 months that ended September 30, 2026, and closed 1 site. We plan to open 4 new sites in 2027, and they will be in Reno, Nevada; Jacksonville, Florida; New Orleans, Louisiana; and Lake Havasu, Arizona. Additional program offerings are being added, including the graduate nursing program with specializations at Northeastern University, which started this past fall, a hybrid occupational therapy bridge to master's program to the already successful St. Catherine's Occupational Therapy Assistant Hybrid Program beginning in the fall of 2026. An online science degree with Utica University and GCU launched a Bachelor's Science in Occupational Therapy Assistant Program and a special language pathology program at its West Valley location.

GCU is also adding a Bachelor's in Medical Laboratory Sciences Program in the fall of 2026. We currently have almost 8,000 students attending our hybrid campuses and the revenue per student is more than 3x that of an online student. To summarize this section, we expect GCU's online campus to grow in 2027 between 5% and 6%, the traditional ground campus to grow over 10% and the hybrid campuses to grow in the low double digits, bringing total enrollment growth to over 7%.

There are a couple of other items I'd like to mention regarding the third quarter. Service revenue was $267.3 million for the third quarter of 2026, an increase of $6.2 million or 2.4% as compared to $261.1 million for the third quarter of 2025. The increase year-over-year in service revenue was primarily due to an increase in university partner enrollments of 5.2%, including an increase in GCU online enrollments of 7.1% and university partner enrollments at the off-campus classroom and laboratory sites, excluding sites in teach-out or closed at 14.1%. This was partially offset by 6 days -- 6 less days of ground traditional revenue at GCU of $7.5 million in the third quarter of 2026 as a result of the shift of 6 days of revenue from the third quarter to the fourth quarter due to the later fall semester start date.

In addition, there was a slight decline year-over-year in revenue per student for online students due to the continued mix shift to students that have a slightly lower net tuition rate, partially offset by service revenue per student for ABSN students at off-campus classroom and laboratory sites, which generate significantly higher revenue per student. Operating income and operating margin for the 3 months ended September 30, 2026, was $51.5 million and 19.3%, respectively, as compared to $18 million and 6.9%, respectively, for the same period in 2025. Operating income and operating margin, excluding amortization, nonrecurring costs and fixed asset disposals was at $54.7 million and 20.5%, respectively, for the 3 months ended September 30, 2026.

Net income was $43 million for the third quarter of 2026. GAAP diluted income per share for the 3 months ended in September 30, 2026, is $1.67. Included in our Form 8-K filed with the SEC, we have included non-GAAP net income and non-GAAP diluted income per share for the 3 months ended September 30, 2026, and '25. We believe the non-GAAP financial information allows investors to develop a more meaningful understanding of the company's performance over time. As adjusted non-GAAP diluted income per share for the 3 months ended September 30, 2026, and 2025 was $1.77 and $1.78, respectively, which is $0.01 above consensus estimates.

Last, I would like to provide color on the guidance we have provided in our 8-K filed today. As a reminder, the guidance that we have provided in the outlook section of our 8-K filed today is GAAP net income and diluted income per share with the components to adjust the GAAP amounts to non-GAAP as adjusted net income and non-GAAP as adjusted diluted income per share. We have updated full 2026 guidance to include the third quarter actual revenue and earnings metrics. We have narrowed the range in the fourth quarter to reflect current trends. The third quarter 2026 GCU online new start growth was lower than our expectations, but we expect new online enrollments to return to mid-single-digit growth in the fourth quarter of 2026.

Total online enrollment growth remains resilient due to continued retention improvements despite pressure from increasing graduations and a continued decline in reentries. We continue to anticipate online revenue per student will be slightly down year-over-year due to the mix shift to programs that have slightly lower net tuition rates. The revenue range has been lowered to reflect the actual GCU fall enrollments and the online flat new enrollments in the third quarter because of the tough comps. Online new enrollments will accelerate in the fourth quarter and total company enrollments will start to recover. A complete return to 7-plus percent enrollment increases will take place when the ground is reignited to a 10% increase in the fall of 2027.

On the expense side, we have lowered the projected operating margin due to the lower ground enrollment expectations. We continue to make investments to support university partners' growth goals and anticipate margins to be flat in 2026. As has been previously discussed, the online programs primarily that lead to licensure in which GCU is growing at an accelerated rate, either cost us more to service than the traditional online programs or at lower net tuition rates, which puts some pressure on margins. As it relates to the hybrid pillar, we will incur additional costs for the new hybrid locations that will open in early 2027, but we are experiencing increased site-level profitability due to increased enrollments.

We are estimating that interest income will decline year-over-year in 2026 due to the decline in cash balances due to more aggressive stock buybacks. Our guidance does not assume any drawing on the line of credit in quarter 4. As a reminder, effective July 1, 2026, we entered into an amended and restated master services agreement with GCU, which restructures the services fees such that going forward, service fees are calculated at 60% of tuition and academic-related fees only, ancillary fees and other revenue are for the sole benefit of GCU and a reimbursement payment that the company had been making to GCU in respect of certain academic-related costs is eliminated, and in lieu of the prior nonrenewal fee that was due if GCU did not renew the MSA at the end of the term, the company would continue to provide services to and receive service fees from GCU for an 18-month period following termination.

As previously disclosed, the company estimates that under the amended MSA, its operating income will decline by an immaterial amount due to the elimination of the academic reimbursement payment. In addition, we entered into a 5-year $100 million revolving credit facility agreement. The company intends to use borrowings under the revolving credit facility primarily to fund repurchases of its common stock under its Board-approved stock repurchase program as well as other general corporate purposes. Refer to our 8-K dated October 1, 2026, for additional details about the credit agreement.

In the third quarter of 2026, we continued to aggressively buy back our stock as we believe it remained undervalued. We repurchased 504,708 shares of our common stock at approximately $75.1 million and another 225,770 shares were repurchased since September 30, 2026, bringing the total repurchase year-to-date 1,926,375 shares for $306.4 million. This is a significant portion of the company's 2026 projected cash flow from operations and is greater than historical repurchases in each of the past 3 years.

We have $393 million (sic) [ $394.5 million ] remaining available as of today under our share repurchase authorization, which includes the increased authorization by the Board in October 2026 of $355 million. The company will evaluate if we believe our stock remains undervalued and determine the best use of our liquidity and cash flow.

I will now turn the call over to the moderator so we can answer questions. Thank you for attendance.

Operator

Our first question for today comes from the line of Jasper Bibb from Truist.

質疑応答

Jasper Bibb

Just on the new enrollment online in the third quarter. I know you said it ended up being flat. I think you're kind of thinking more mid- to high single digits last quarter. Can you just frame kind of what the gap ended up being there and then why you're confident in getting back to mid-single-digit start growth in 4Q and 2027?

Brian Mueller

Yes. It was a little bit under what we thought, but the lead generation is very strong. We started spending more in June, July and August, and those leads are now starting to convert. And so we were a little bit behind what we thought in terms of converting those leads, but it looks very strong for October, November and December.

And so we're predicting based upon where we are right now, mid-single-digit new online growth in the fourth quarter, and that could get us -- that should get us back to 6% to 7% total online growth for the fourth quarter. And so a little bit late, but in terms of the overall quality and quantity of the leads and the conversion rates, it looks very good. It's not really off of what we originally projected. It's just a little bit later.

Jasper Bibb

Okay. That makes sense. I know GCU put out some of their own numbers in August. It just kind of seemed like the online enrollment you could back into from those was maybe a little bit stronger than things ended up being. I guess, I'm wondering if through the quarter, you had a little bit of a better July and August and September is a little bit weaker. I guess, I'm just kind of trying to understand if there was a difference in the month as you kind of work through the quarter.

Brian Mueller

No, it didn't come out exactly on a month-by-month basis as we originally predicted, but the overall number is going to be about the same as what we predicted. And so it's just a little bit later. I don't think the concern should not be about online enrollments. We're doing -- our outside counselors are really keeping things strong. We're making adjustments. We've kind of flattened out from a lead generation from a web leads perspective. Everybody has been talking about how that's dropping because people aren't going to your website to hear what you say about yourself. But that's flattened out now. That's bottomed out and it's pretty steady.

We know what to expect from a month-to-month basis. We're working really hard with Meta and with other AI companies. And we're starting to -- we're not going to talk a lot about exactly what we're doing because I think it's pretty creative. And we are starting to understand what the future is going to be. But the interest, especially in the programs we're advertising for, is very strong. And so where we're going to end up the year is pretty close to what we originally thought. It's just coming a little bit later, but we do expect a strong fourth quarter.

Jasper Bibb

Okay. No, that makes sense. Maybe last one for me. The marketing kind of expense growth outpaced revenue a little bit this quarter. Was that a timing thing? Could you maybe talk about what you're seeing in cost of acquisition and any color on how that's trending?

Brian Mueller

Yes. The cost per acquisition is holding real steady. We are putting more into advertising, understanding that the new world is taking time, but we feel like we're out in front of it as compared to most other people that are trying to make this adjustment, and we're starting to understand what the future is going to be. So we're excited, and we feel good about that. And we're doing more with less from an enrollment counselor standpoint. And so we're not hiring as rapidly as we would have in the past. And so we're saving money on the enrollment counselor salary side. We're spending more on the advertising side.

The lead generation is strong. And we think that we understand the future, and we're really excited about 2027. If we can do what we believe we can do from an online standpoint and have for 18 years, and we continue to do what we're doing from a hybrid perspective, which that's on a very strong path, it's the ground campus. And the ground campus is interesting because, yes, it's true. We've been basically flat for 3 years. But in this environment, if you're flat, you're good, especially if you don't go downmarket to get students, and we have not done that.

The average incoming GPAs of our ground campus students are actually continuing to go up. Our Honors college gets stronger. And so those 4 strategies that we talked about are strategies that are all additive. Not being on the Common App was -- we didn't understand how big a limitation that was, I don't think. Just in the September and October alone, we've got 5,600 -- over 5,600 applications that have come directly from the Common App. We have had no contact with over 4,000 of that 5,600. And so those are people that went out there to the Common App to apply to colleges and put in their qualifications. They took a look at Grand Canyon University, our tuition rate, got interested and applied.

And so that is a significant amount of activity. The greater amount of activity is going to happen in January and February. And so that combined with the construction school, which is all additive. And then the numbers I gave for the law school were very conservative. They were very conservative. The -- we're very excited about that for a lot of reasons. But the Arizona Supreme Court, that meeting was particularly surprising because they were -- they have been so impressed with what GCU has done in this marketplace the last 18 years, quality of what we've produced, that they took an unprecedented move by approving us and allowing our grads who passed the bar examination in Arizona to immediately begin practicing without completing the ABA approval process, which we will. That was a stamp of approval that really was encouraging and exciting for us.

I think we'll actually start more than 100 JD students in the fall. And we've got a pretty strict line from an admissions requirement perspective. We're not going to go under -- the data around law schools are really tested. You go below a certain pre-law examination score and the chances for success are very low. And first-time pass rates on that bar examination is something we're really gearing towards having 100% rate at that. And so I think we'll start more JD students than 100. The master's degrees in legal studies are really interesting. They are 30-credit programs. They're around $30,000 a program. They're about a year, but so many of our students are graduating in 3 years that a lot of students, for example, in our fast-growing real estate program at the baccalaureate level in our business school.

We have a 30-credit-hour master's in legal studies, real estate law program that a lot of students are interested in to round out their real estate education. And we think we can add a great deal more than the 100 students that we're projecting in that area. And then the pre-law program, that's probably a conservative estimate, too, because we're going to be offering a 3 plus 2 program and giving students a chance to complete their law degree in 5 years, starting from scratch. And so that thing could be bigger than we're projecting. And then the Honors College, the building is spectacular, and it's going to be a big draw.

And so if we can get 10% growth on our ground campus and do what we're saying in the other 2, it's going to complete -- it's going to very significantly change our financial outlook going forward. And all 4 of those strategies are not strategies that are onetime wonders. Those are all -- law school could grow to between 2,000 and 3,000 students. The Honors College is going to grow to 7,000-plus students. The construction school, I think, will grow to possibly 10,000 students over 6 or 7 years. And so those are -- the numbers we're quoting there for the ground campus are all beginning numbers with significant growth potential that would really change the financial outlook of GCE significantly. So I hope that helps in terms of 2027. Look, we'll be giving guidance, obviously, early in the year, official guidance, but I wanted to give a little bit of a look in terms of that 7% number.

It looks like we have reached the end of our third quarter conference call. We appreciate your time and interest in Grand Canyon Education. If you still have questions, please contact Jacob Lambert. Thank you very much for your attendance.

Operator

Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.