Conservative think tank sues Department of Education over $37M Grand Canyon University fine
A conservative public policy think tank in Arizona is suing the Department of Education over the unprecedented $37.7 million fine it levied against the largest Christian university in the U.S.
The Phoenix-based Goldwater Institute announced last week that it filed a lawsuit to obtain relevant emails between officials in the Department of Education and other federal agencies regarding the hefty fine against Grand Canyon University (GCU) last fall.
In October, the Department of Education slapped GCU with the largest fine in the department's history for allegedly misleading students about the cost of its doctoral program, according to an Oct. 31 statement.
Get Our Latest News for FREE
An investigation by the department's Office of Federal Student Aid found that "GCU lied about the cost of its doctoral programs to attract students to enroll" to more than 7,500 current and former students, the statement said.
The Education Department claims GCU misrepresented the cost of its doctoral programs on its website by advertising that it would cost between $40,000 to $49,000 when fewer than 2% of graduates completed their course of study within that price range.
Required "continuation courses" often added $10,000 to $12,000 to the final cost, the department said.
Investigators dismissed GCU's fine-print disclosures about the additional costs as inadequate notice of "substantial misrepresentations regarding cost."
The Federal Trade Commission (FTC) also slapped GCU with a lawsuit in December that alleged the school engaged in illegal telemarketing practices while also deceiving students about tuition costs and its nonprofit status.
The Goldwater Institute noted that the $37 million fine is astronomical compared to the $2.4 million fine Penn State received for not reporting Jerry Sandusky's sexual abuse of boys, or the $4.5 million fine levied against Michigan State for its failure to address Larry Nassar's sexual assaults against hundreds of students.
"Contrast those small fines and those egregious crimes with the government’s complaint against GCU," Goldwater Institute staff attorney Stacy Skankey said in a statement. "The purported reason for the unprecedented fine was that the school insufficiently informed PhD students that they may have to take continuing courses while completing their doctoral dissertations."
"Though the government makes broad claims against the university, the federal government did not cite any student’s complaints, nor did Education Department personnel even visit GCU as part of their purported 'investigation,'" she added.
Skankey asserted that the fines against GCU from different federal agencies appear to be coordinated and are "based on extraordinarily thin allegations." The think tank's attempts to obtain the relevant records from the Department of Education via a Freedom of Information Act (FOIA) request reportedly failed.
"The Department of Education is refusing to turn over these public records — so we’re suing the agency in federal court to get them anyway," she said.
Throughout its fight with the federal government, the GCU administration has suggested that they have done nothing wrong and are being singled out because of their Christian worldview.
GCU President Brian Mueller has remained defiant in the face of the federal fines, telling The Christian Post last fall that the amount they are being expected to pay is "absolutely ridiculous" and that they do not intend to pay "a dime."
During a press conference in November announcing GCU's appeal of the $37 million fine, Mueller pointed to a 2022 report by the U.S. Government Accountability Office (GAO) examining broader financial disclosures in higher education. The GAO report found that 91% of the colleges reviewed "do not include or understate the net price in their aid offers," 41% of which do not provide a net price in their offer to students.
Regarding the FTC's lawsuit and allegations, Mueller called them "the height of absurdity" in a statement provided to CP at the time, and pushed back against the charge they engaged in "abusive" telemarketing practices by cold-calling prospective students.
"It only reaches out to those who have inquired about GCU’s programs or otherwise expressed interest in attending the university," Mueller said, adding that such practices are common among institutions of higher education and that GCE employs a telemarketing compliance firm to ensure compliance with relevant laws.
Founded in 1949 as a nonprofit by the Southern Baptist Convention, GCU became a for-profit institution in 2004 amid financial struggles. The school subsequently sought to revert to its nonprofit status, a move that Mueller noted was approved by the IRS, Higher Learning Commission, State of Arizona, Arizona Private Postsecondary Board and NCAA Athletics.
"That transaction was blessed by the IRS, State of Arizona and our accrediting body (Higher Learning Commission) so of course we identified ourselves as a nonprofit because we were and are," Mueller said.
Mueller noted that only after 18 months did the Department of Education reject their status for the purposes of Title IV funding in 2018, after which the school stopped identifying as one.
The Christian Post has reached out to the Department of Education for comment and will update this story if it responds.
Jon Brown is a reporter for The Christian Post. Send news tips to [email protected]
