GCU hit with $37.7 million fine as feds say school ‘deceived’ doctoral students

By Sasha Hupka

On October 31, 2023

The U.S. Department of Education will fine Grand Canyon University $37.7 million for “deceiving” students in its marketing of doctoral degrees, officials announced Tuesday.

The news comes after GCU President Brian Mueller publicly aired grievances with the investigation in early October, accusing the Department of Education of coordinating with other federal agencies to “unjustly target” his school.

School officials suggested the agencies’ actions were related to the school’s religious affiliation and a yearslong dispute between GCU and the Department of Education over the school’s efforts to regain its nonprofit status. GCU is one of the largest private Christian universities in the country.

On Tuesday, federal regulators pushed back on that narrative. The agency said its investigation determined that GCU misrepresented the cost of its doctoral degrees, with most students paying thousands of dollars more than the advertised cost.

“GCU lied about the cost of its doctoral programs to attract students to enroll,” said Richard Cordray, the U.S. Department of Education’s federal student aid chief operating officer. “GCU’s lies harmed students, broke their trust, and led to unexpectedly high levels of student debt. Today, we are holding GCU accountable for its actions, protecting students and taxpayers, and upholding the integrity of the federal student aid programs.”

The fine is the largest of its kind ever levied by the Department of Education, according to federal officials. The agency also added new terms to an agreement that allows GCU to participate in federal student aid programs.

The additional provisions include a requirement that the school engage a monitor to ensure that its advertising complies with federal law. GCU also must report any other investigations or lawsuits to the agency and must notify current doctoral students of how to submit a complaint to federal officials.

Cordray said the penalties should notify other higher education institutions that the federal agency is taking its oversight responsibilities seriously.

“Our message is that they will be held responsible for any malfeasance that violates the law and harms students,” he said.

GCU officials said in a statement that the university still “categorically denies” the department’s accusations and “will take all measures necessary to defend itself.”

“Rather than the Department protecting students, we are being forced to protect our students from this targeted and unwarranted government overreach,” school officials said.

Agency alleges GCU ‘lied’ to more than 7,500 students

Federal officials say GCU “lied” to more than 7,500 current and former students since 2017.

The school stated that its doctoral programs cost between $40,000 and $49,000 on its website and in other marketing materials, federal regulators said. But fewer than 2% of students who graduated from GCU’s doctoral programs requiring dissertations paid that amount in total, according to the Department of Education.

Instead, federal officials say the vast majority paid an additional $10,000 to $12,000 more than the advertised cost in tuition alone. Officials said most were required to take “continuation courses” to complete their dissertation requirements, which added extra costs.

Mueller previously said the school provides more disclosure than legally required, pointing to tools such as its online degree program calculator. He also said the university’s cost disclosures have previously been upheld in court.

GCU officials doubled down on that message in a Tuesday statement, saying continuation courses are common in higher education doctoral programs, and the school’s graduates incur less debt than the national average.

But federal officials called GCU’s disclosures “fine print.” They said the disclosures are “buried in dense documents and are much less prominent than the misrepresentations.”

School officials disagreed with that characterization. In their Tuesday statement, they said a financial disclosure is provided above GCU’s degree program calculator “in full-size red type.”

GCU intends to appeal fine, school officials say

GCU officials said they will fight to refute the investigation’s findings and intend to appeal the Department of Education’s fine.

Federal officials said the school has 20 days to request a hearing with the Department of Education or submit written material describing why the fine should not be imposed.

In the meantime, school officials are continuing to encourage staff and other affiliates to contact federal lawmakers in the university’s defense.

Several Republican state lawmakers last week sent a letter to the Department of Education accusing it of conducting a “witch hunt against Christian education.” It was signed by Senate President Warren Petersen and House Speaker Ben Toma, as well as several other lawmakers.

This piece was republished from AZ Central.