The Department of Education on Tuesday levied a $37.7 million fine against Grand Canyon University (GCU) over accusations of misleading students about the cost of its graduate programs.
GCU, one of the largest Christian universities with more than 100,000 enrolled students, faces the largest fine of its kind ever issued by the U.S. Education Department.
Federal Student Aid, part of the Department of Education, found that GCU lied to more than 7,500 current and former students about the cost of its doctoral programs.
“GCU falsely advertised a lower cost than what 98% of students ended up paying to complete certain doctoral programs,” according to a DOE news release.
As far back as 2017, the university told students its doctoral programs would cost between $40,000 and $49,000, but the vast majority of graduates paid far more than that.
Less than 2 percent of graduates completed programs within the range, while 78 percent paid an additional $10,000 to $12,000 for “continuation courses” needed to meet dissertation requirements, the department said.
GCU referenced several enrollment disclosures in fine print as justification for the increased costs, but FSA found the disclosures “insufficient to cure the substantial misrepresentations regarding cost,” according to the press release.
“GCU’s lies harmed students, broke their trust and led to unexpectedly high levels of student debt,” said Richard Cordray, chief operating officer for Federal Student Aid, an office in the Education Department.
“Today, we are holding GCU accountable for its actions, protecting students and taxpayers, and upholding the integrity of the federal student aid programs.”
The university denies all accusations and intends to appeal the fine.
“To be clear, GCU does not mislead or deceive students in any way,” the school wrote in its statement. “In fact, the opposite is true given that GCU goes above and beyond what is legally required.”
GCU has 20 days to appeal the fine. In addition to the fine, the department added new conditions the school must meet to continue receiving federal money.
The school will be barred from making “substantial misrepresentations” about the cost of doctoral programs, and if it tells students about the cost of doctoral programs, it must use the average cost paid by graduates.
It also has to report any other investigations or lawsuits, and it must also send a notice to current doctoral students telling them how to submit a complaint to the Education Department.
The move is the latest effort from the Biden administration to use its enforcement provision to push for accountability among U.S. 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, and the agency plans to give students and families more information about outcomes from all colleges.
For the past four years, GCU has disbursed more federal student aid than any other U.S. institution, the department said.
Earlier this month, GCU issued a statement saying federal agencies were unfairly targeting the school with “frivolous accusations” in retaliation for an ongoing lawsuit the university filed against the Education Department in 2021.
GCU sued after the agency rejected the school’s request to be classified as a nonprofit college. It became a for-profit college in 2004 after investors saved it from financial collapse. It applied to become a nonprofit again in 2018 but the Trump administration blocked the move, saying the college remained too close to its previous parent company.
It’s considered a nonprofit by its accreditor and the Internal Revenue Service.
Responding to the fine, GCU said its cost disclosures have been upheld in court during a separate lawsuit, and by the school’s accreditor. It said the fine is part of a “disturbing pattern” by the Education Department, adding that the agency declined a request to address the issue through a federal mediator.
“This speaks volumes about their agenda-driven motivation to bring harm to the university and the coordinated efforts being taken against GCU,” the school said.
GCU has suggested the federal investigation is targeting a Christian school.
“Well, they haven’t said it is, and I certainly haven’t said it is,” Chief Executive Officer Brian Mueller told Fox News Digital last week.
“And I hope that it’s not, but that the two largest Christian universities in the country are being investigated? Is that a coincidence? I don’t know.”
The university enrolls roughly 20,000 students at its campus in Phoenix, but most of its overall enrollment comes from students who take online classes from outside Arizona. It enrolled 80,000 students in online programs as of 2021, with a roughly even split between undergrad and graduate programs.
Overall, the Biden administration has approved $22 billion in relief for 1.3 million borrowers whose colleges took advantage of them or closed abruptly.
