Grand Canyon University Fined for Misleading Students About Costs

Grand Canyon University (GCU), the nation’s largest Christian university, has been hit with a record fine of $37.7 million by the federal government that alleges the institution misled over 7,500 students about the costs associated with its graduate programs, the Department of Education (DOE) announced on Tuesday.
“GCU lied about the cost of its doctoral programs to attract students to enroll,” said Richard Cordray, chief operating officer of the department’s Federal Student Aid office, which conducted the investigation. “FSA takes its oversight responsibilities seriously. GCU’s lies harmed students, broke their trust and led to unexpectedly high levels of student debt.”
The FSA investigation found that since 2017, GCU had been misinforming students about the costs of their doctoral programs, advertising expenses between $40,000 and $49,000. However, less than 2% of graduates managed to complete the programs within the advertised costs.
GCU’s fine print disclosures were deemed “insufficient to cure the substantial misrepresentations regarding cost,” and the university did not contest the determination that 98% of students enrolled in certain doctoral programs paid more than advertised, the DOE noted.
The vast majority of doctoral students who graduated between 2017 and 2022 ultimately had to pay $10,000 to $12,000 more than GCU initially advertised because they needed to enroll in “continuation courses” in order to complete their dissertation requirements, an expense approximately 25% more than GCU had promoted.
Located in Phoenix, Arizona, GCU has a student body of over 100,000 students, with a majority of them taking classes online.
Grand Canyon University denied the allegations and said it will take all measures necessary to defend itself.
“In fact, we believe our disclosures related to continuation courses are more extensive than other universities, yet only GCU is being targeted by the Department,” it said.
GCU added that it believes it is being “unjustly targeted” as the nation’s largest Christian university and that individuals within the government agencies have used their positions “to attack institutions with whom they are ideologically opposed.”
GCU is considered a nonprofit by the IRS but considered a for-profit by the Department of Education for the purpose of financial aid. The university is suing the government over that decision, litigation is in progress. GCU contends it has been “unjustly targeted” by government in retaliation for the lawsuit about for-profit status.
An official with Federal Student Aid has said the investigation into GCU and the litigation are entirely unrelated.
The Department of Education’s fine on GCU won’t directly result in any debt relief for students. But borrowers who believe they were misled by the university about the cost of their doctoral degree programs, can file a claim for relief under the borrower defense to repayment program. That program grants student debt forgiveness to borrowers who can show that their school deceived or mislead them.
The borrower defense program is one of several existing student loan forgiveness programs that the Biden administration has used to cancel a total of $127 billion of federal student loan debt since taking office.
While the Biden administration has been criticized by some Republicans and borrower advocates for not addressing the rising cost of college tuition, many blame deceptive for-profit colleges for fueling the rise in outstanding federal student loan debt, which currently stands at $1.6 trillion.