Christian University Penalized $37.7 Million for Deceiving Students
The Department of Education fines Grand Canyon University $37.7 million for misleading students
The Department of Education on Tuesday imposed a hefty $37.7 million fine on Grand Canyon University (GCU) for allegedly deceiving students about the cost of its graduate programs. This marks the largest fine ever issued by the U.S. Education Department and poses significant consequences for GCU, one of the largest Christian universities with over 100,000 enrolled students.
The Federal Student Aid division, part of the Department of Education, discovered that GCU provided false information to more than 7,500 current and former students regarding the expenses associated with its doctoral programs.
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The DOE news release states, “GCU falsely advertised a lower cost than what 98% of students ended up paying to complete certain doctoral programs.” Despite claiming that doctoral programs would cost between $40,000 and $49,000 since 2017, the university failed to deliver on this promise. Instead, the majority of graduates paid significantly more.
According to the Department of Education, less than 2 percent of graduates completed their programs within the advertised cost range. Shockingly, 78 percent of students had to pay an additional $10,000 to $12,000 for “continuation courses” required to meet dissertation requirements.
GCU attempted to justify the increased costs by referencing enrollment disclosures in fine print. However, the Federal Student Aid division deemed these disclosures insufficient to rectify the substantial misrepresentations regarding cost.
Richard Cordray, Chief Operating Officer for Federal Student Aid, expressed, “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.”
Despite the accusations, GCU vehemently denies any wrongdoing and plans to appeal the fine. In a statement, the university asserts, “To be clear, GCU does not mislead or deceive students in any way. In fact, the opposite is true given that GCU goes above and beyond what is legally required.”
GCU has a 20-day window to appeal the fine. Additionally, the Department of Education has imposed new conditions on the university to continue receiving federal funding. These conditions include refraining from making substantial misrepresentations about the cost of doctoral programs and using the average cost paid by graduates when discussing program expenses with students.
The department also requires GCU to report any ongoing investigations or lawsuits and provide current doctoral students with information on how to submit complaints to the Education Department.
This action by the Biden administration is part of its broader efforts to promote accountability among U.S. universities. The Education Department recently implemented a regulation that could potentially cut federal funding to for-profit college programs if graduates struggle to repay loans. Furthermore, the agency aims to enhance transparency by providing students and families with more comprehensive information about college outcomes.
Grand Canyon University has been the recipient of the highest amount of federal student aid disbursed by any U.S. institution over the past four years.
Earlier this month, GCU released a statement accusing federal agencies of unfairly targeting the school with frivolous accusations as retaliation for an ongoing lawsuit against the Education Department. The lawsuit was filed in 2021 after the agency rejected GCU’s request to be classified as a nonprofit college. Although the university is considered a nonprofit by its accreditor and the Internal Revenue Service, it became a for-profit college in 2004 to avoid financial collapse. The Trump administration blocked its attempt to revert to nonprofit status in 2018.
In response to the fine, GCU maintains that its cost disclosures have been upheld in court and by its accreditor. The university views the fine as part of a disturbing pattern by the Education Department and criticizes the agency for declining a request to address the issue through a federal mediator.
GCU has also raised concerns that the federal investigation may be targeting a Christian school. CEO Brian Mueller expressed uncertainty but highlighted the fact that the two largest Christian universities in the country are under investigation, raising questions about coincidences.
While GCU’s campus in Phoenix enrolls approximately 20,000 students, the majority of its overall enrollment comes from students taking online classes from outside Arizona. As of 2021, the university had 80,000 students enrolled in online programs, with an equal distribution between undergraduate and graduate programs.
Overall, the Biden administration has approved $22 billion in relief for 1.3 million borrowers who were taken advantage of or affected by sudden college closures.
The Associated Press contributed to this report.
How might the financial impact of the $37.7 million fine affect GCU’s educational resources and the quality of education?
On about college costs and outcomes.
The consequences for GCU could be severe. Apart from the monetary fine, the university’s reputation is at stake. GCU has been widely recognized for its extensive online programs and flexibility, attracting students from across the country. However, this incident may tarnish its image and make potential students question the trustworthiness of the institution.
Moreover, the fine could have a detrimental impact on GCU’s finances. With a hefty $37.7 million to pay, the university may face financial challenges and need to implement cost-cutting measures. This could potentially affect the quality of education and the resources available to students.
The Department of Education’s action sends a strong message to all universities that misleading students about the cost of education will not be tolerated. Students and families rely on accurate information to make informed decisions about their future. When universities fail to provide this information truthfully, they put students at a financial disadvantage and compromise their educational aspirations.
It is crucial for universities to be transparent about the costs associated with their programs. Students deserve to know exactly how much they will need to pay, including any additional expenses that may arise throughout their studies. By enforcing accountability, the Department of Education aims to ensure that universities uphold their responsibility to provide accurate and reliable information.
This incident also emphasizes the need for students to thoroughly research and verify the information provided by universities. Prospective students should scrutinize cost disclosures, read the fine print, and seek additional clarification if needed. It is essential to make informed decisions based on reliable information and to be aware of potential discrepancies between what is advertised and what is actually paid.
The Department of Education’s fine on GCU serves as a cautionary tale for all universities. Institutions must prioritize honesty and transparency in their interactions with students. Providing accurate information about costs is not only a legal requirement but also an ethical obligation. Students deserve nothing less than complete transparency, and universities must deliver on their promises to ensure a fair and equitable education system.
As the appeal process begins for GCU, it remains to be seen whether the university can overturn the fine and regain the trust of its students and the broader educational community. In the meantime, this case serves as a wake-up call for all universities to reassess their practices and ensure compliance with federal regulations. Upholding integrity and accountability should always be at the forefront of higher education institutions’ missions.
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