Grand Canyon University Fined $37.7M, Accused of Misleading Students About Costs

• Grand Canyon University is the country's largest Christian university with more than 100,000 students.
• The Department of Education alleges that its students paid roughly 25% more in doctoral program costs than what was advertised.
• The university in a statement categorically denied every accusation made by the Department of Education.
• The fine is the latest move by the Biden administration against for-profit colleges accused of misleading students.

The Department of Education (ED) on Tuesday fined Grand Canyon University (GCU) $37.7 million, saying the school misled students about the costs of its doctoral programs. GCU has denied the allegations.

GCU is a for-profit institution and the country's largest Christian university with more than 100,000 students. It is based in Phoenix, but many of its students are enrolled in online programs.

ED is accusing GCU of misleading more than 7,500 former and current students about the costs of its doctoral program. ED alleges 98% of doctoral students paid more than the cost advertised.

"GCU lied about the cost of its doctoral programs to attract students to enroll," Office of Federal Student Aid (FSA) Chief Operating Officer Richard Cordray said in an ED press release.

"FSA takes its oversight responsibilities seriously. 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."

GSU in a statement said it "categorically denies" every accusation in ED's statement and it will take all measures necessary to defend itself.

"GCU will take all measures necessary to refute these allegations and will continue to move forward with the full endorsement of the State of Arizona and the 26 other regulatory bodies that continually give GCU high marks regarding its academic programs and financial transparency," the university said in its statement. "The Department’s actions do not affect GCU’s scholarships or the ability of doctoral students (who comprise less than 5% of GCU's student body) to receive federal financial aid."

FSA alleges that GCU has misled students since 2017, saying that doctoral programs cost between $40,000 and $49,000, roughly $10,000-$12,000 less than most graduates actually had to pay.

Most of these extra costs come from "continuation courses," which were required for most GCU students to fulfill dissertation requirements, the ED statement says.

GCU previously responded to ED's evidence by pointing to fine print disclosures in "dense" documentation, which ED says it deemed insufficient backing against misrepresenting costs.

ED also imposed five additional requirements for GCU to participate in Federal Student Aid:

• Make no substantial misrepresentations of the cost of its doctoral programs
• Must have a monitor
• Report quarterly to ED
• Tell doctoral students how to use ED's feedback center to submit complaints
• Send a notice to all recruiting, admissions, and other service employees saying they must teach students how to use the FSA Tips line to report misconduct or violations

The press release says GCU has until Nov. 20 to request a hearing or write to the FSA or face the fine effective that date.

Biden Administration Focuses on For-Profit Colleges

GCU is not the first for-profit college or university to be fined by the Biden administration and accused of misleading students.

In April, ED ended for-profit college chain Florida Career College's (FCC) access to federal financial aid after it said the college tampered with student exams. FCC denied the allegations.

Last year, ED fined fellow for-profit DeVry University $24 million, accusing it of misleading prospective students through false advertising from 2008-2015. The university advertised that 90% of graduates who seek employment within six months of graduation acquire a desired job; ED said the job placement was actually 58%.

DeVry filed a lawsuit contesting ED's fine, denying it misled students.

"Our position has always been that any allegation or conclusion that DeVry misled students at any time is wrong, and we strongly believe the department has mischaracterized DeVry's calculations and disclosure of graduate outcomes from past advertising," the university said in a statement alongside the lawsuit.

The Biden administration has also forgiven federal student loans for students they say were misled by their colleges.

In September, the Biden administration forgave $72 million for about 2,300 former students from Ashford University, now a part of the University of Arizona. ED fined the school $22.3 million after finding that "Ashford relied extensively on high-pressure and deceptive recruiting tactics to lure students," ED Undersecretary James Kvaal previously said.

A few weeks later, the administration canceled $37 million in student debt for 1,200 former University of Phoenix students after ED said the university misled students about their ability to get Fortune 500 jobs after graduation.