Grand Canyon University faces $37.7M fine over misleading students on doctoral degree expenses

The federal Education Department plans to impose a fine of $37.7 million on Grand Canyon University (GCU), an Arizona-based institution, for misleading students in its marketing of doctoral degrees, as announced by officials on Tuesday.

The announcement follows GCU President Brian Mueller’s public expression of dissatisfaction with the investigation in early October, in which he accused the Education Department of unfairly targeting his school by coordinating with other federal agencies.

School officials have speculated that the actions of the agencies were influenced by the school’s religious affiliation as well as a long-standing dispute between GCU and the Education Department regarding the school’s nonprofit status. GCU is one of the leading private Christian universities in the United States.

Federal regulators disputed this narrative on Tuesday, stating that their investigation found GCU to have misrepresented the cost of its doctoral degrees, with most students paying thousands of dollars more than the advertised price.

According to federal regulators, fewer than 2% of students who graduated from GCU’s doctoral programs requiring dissertations actually paid the total cost advertised by the university.

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Record-breaking fine

The fine imposed by the Education Department is the largest of its kind to date, according to federal officials. As part of the agreement that allows GCU to participate in federal student aid programs, the agency has also included additional terms, including the appointment of a monitor to ensure compliance with federal advertising laws.

Richard Cordray, the U.S. Department of Education’s Federal Student Aid chief operating officer, stated, “GCU deceived students by misrepresenting the cost of its doctoral programs, enticing them to enroll.” Cordray added, “FSA takes its oversight responsibilities seriously. GCU’s deceptive practices have harmed students, eroded their trust, and resulted in 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.”

In response, GCU issued a statement categorically denying all allegations made by the Department of Education and vowing to take all necessary measures to defend itself against these unfounded accusations. The university reiterated its previous rebuttals of the investigation’s findings and portrayed the fine as evidence of the coordinated and unjust actions taken by the federal government against the largest Christian university in the country.

GCU also highlighted that it provides more disclosure than legally required, citing resources such as its online degree program calculator.

According to federal records, Grand Canyon University is the largest recipient of federal financial aid dollars and received over $1 billion in funds during the 2020-21 academic year. In August, the university announced that it would enroll more than 118,000 students this year, with 25,800 studying on-campus and an additional 92,000 enrolled in online programs.

During an impromptu employee meeting in early October, President Mueller urged staff and other affiliates of the university to contact federal lawmakers in defense of the institution.

Several Republican state lawmakers recently sent a letter to the Education Department, accusing it of conducting a “witch hunt against Christian education.”

GCU has 20 days to request a hearing with the Education Department’s Office of Hearings and Appeals or submit written materials explaining why the fine should not be imposed.

In addition to the fine, the Education Department has imposed specific conditions on GCU to ensure its continued participation in federal student aid programs.

Unjust targeting: Grand Canyon University seeks support from staff amid advertising investigation