FTC Sues Grand Canyon University Over Deceptive Practices
The FTC alleges GCU not only engaged in deceptive marketing practices, but also called people on the National Do Not Call Registry.
Image via Adobe, by Ulf
UPDATE JANUARY 2, 2023: Only two months after Grand Canyon University (GCU) was fined nearly $38 million by the U.S. Department of Education for deceptive practices involving its doctoral program, the Federal Trade Commission (FTC) has also filed suit against the school.
Not only is the FTC alleging GCU lied to students about the cost of its doctoral programs, the federal agency claims the schools advertised itself as a non-profit despite operating the school for profit for the university and its investors, reports AZ Family. Additionally, the FTC is alleging it illegally called people on the National Do Not Call Registry, as well as numbers it bought from lead generators.
GCU said in a statement that the FTC’s latest move is “yet another example of the Biden Administration weaponizing federal government agencies in a coordinated effort to target institutions to which they are ideologically opposed.”
Original November 2, 2023 article:
PHOENIX, Ariz. — The U.S. Department of Education’s Office of Federal Student Aid (FSA) levied the largest-ever fine against Grand Canyon University (GCU) for “deceiving” thousands of students regarding the cost of its graduate programs.
An investigation by the FSA determined that GCU, the largest Christian university in the United States, lied to more than 7,500 former and current students regarding the cost of its doctoral programs, according to a press release. The university also dispersed the most federal student aid of all participating institutions for the past four award years.
“GCU lied about the cost of its doctoral programs to attract students to enroll,” said FSA Chief Operating Officer Richard Cordray. “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.”
As far back as 2017, the university allegedly told students its doctoral programs would cost between $40,000 and $49,000 but the department found less than 2% of graduates completed programs within the range, with 78% paying an additional $10,0000 to $12,000. The additional cost typically came from “continuation courses” that were needed to finish dissertation requirements, the department said.
GCU referenced several enrollment disclosures in fine print as justification for the increased costs, noting they have been upheld in court during a separate lawsuit and by the school’s accreditor, Yahoo Finance reports. However, the FSA determined the disclosures were “insufficient to cure the substantial misrepresentations regarding cost.”
The school has 20 days to request a hearing with the Office of Hearings and Appeals or submit written material to FSA stating why the fine should not be imposed. The FSA issued five conditions that GCU must follow to continue to receive federal aid funding, including:
- Stop making misrepresentations about the cost of attending its graduate programs
- Engage in a monitoring compliance program
- Make quarterly reports to the Education Department about any investigations or legal proceedings against it
- Send a notice to all currently enrolled doctoral students about the enforcement action and how to file a claim
- Send a notice to current employees involved in doctoral recruitment to inform students about how to file a complaint using FSA tips.
Students who attended GCU and feel they were misled or that GSU engaged in misconduct can apply for a loan discharge under the borrower loan defense discharge program.
The school denied the allegations in a statement, writing it will take “all measures necessary to defend itself from these false accusations” and that the fine “speaks volumes about their agenda-driven motivation to bring harm to the university.”
Earlier this month, GCU issued another statement saying it is being unjustly targeted as a Christian institution by federal agencies in retaliation for an ongoing lawsuit the school filed against the Education Department in 2021, the Associated Press reports. GSU sued the department after it rejected its request to be classified as a nonprofit college. It became a for-profit college in 2004 after investors protected it from financial collapse. GCU applied to become a nonprofit again in 2018 but the Trump administration blocked the move.
The fine is part of the Biden administration’s broader push for accountability among U.S. colleges and universities. The Education Department recently finalized a new regulation that could cut federal funding to for-profit college programs that leave graduates unable to repay loans.
One in three graduate schools leave students owing more than they originally borrowed and more than 25% of those are enrolled in for-profit schools, according to a study by Student Defense and the HEA Group.
If you appreciated this article and want to receive more valuable industry content like this, click here to sign up for our FREE digital newsletters!
About the Author
Amy Rock, Executive Editor
Amy is Campus Safety’s Executive Editor. Prior to joining the editorial team in 2017, she worked in both events and digital marketing.
Amy has many close relatives and friends who are teachers, motivating her to learn and share as much as she can about campus security. She has a minor in education and has worked with children in several capacities, further deepening her passion for keeping students safe.
Related Content
Leading in Turbulent Times: Effective Campus Public Safety Leadership for the 21st Century
This new webcast will discuss how campus public safety leaders can effectively incorporate Clery Act, Title IX, customer service, “helicopter” parents, emergency notification, town-gown relationships, brand management, Greek Life, student recruitment, faculty, and more into their roles and develop the necessary skills to successfully lead their departments. Register today to attend this free webcast!
