Grand Canyon University Facing Legal Trouble
In recent developments, Grand Canyon University (GCU) has encountered significant challenges following a Department of Education fine of $37.4 million. Additionally, GCU is now entangled in a lawsuit initiated by the Federal Trade Commission (FTC) for allegedly engaging in deceptive advertising and illegal telemarketing activities, alongside a risk-based audit launched by the Department of Veterans Affairs. These actions against GCU all trace back to findings by the Department of Education indicating that GCU misled over 7,500 students regarding the costs of their doctoral programs in order to boost enrollment.
FTC Allegations Against GCU
The FTC’s lawsuit alleges that GCU employed deceptive marketing strategies to attract students to its Ph.D. programs, including misrepresenting the costs of these programs. The pricing of a program plays a crucial role in a student’s decision-making process, particularly for graduate school attendees who often face limited funding and sizable loan amounts. Hence, transparency regarding expenses is paramount. Samuel Levine, director of the FTC’s Bureau of Consumer Protection, highlighted that GCU deceived students by presenting itself as a non-profit institution while inaccurately portraying the costs and course requirements for earning doctoral degrees.
GCU’s Price Misrepresentation Issue
The basis for both the fine from the Department of Education and the FTC lawsuit revolves around how GCU advertised prices for its doctoral programs. The Department of Education discovered that GCU advertised prices that only 2% of program graduates ultimately paid, with 78% of graduates paying $10-12,000 more in total tuition than initially advertised. This discrepancy arose from “continuation courses” necessary for dissertation completion, which were not adequately disclosed in enrollment and financial aid materials.
Department of Education’s Refusal to Acknowledge GCU’s Non-Profit Status
In 2021, the Government Accountability Office (GAO) raised concerns about colleges, including GCU, transitioning to non-profit status while their former for-profit owners maintained substantial financial interests in the institutions. This ongoing issue has led to further scrutiny and challenges for GCU’s operations and reputation.