Grand Canyon University, Feds rumble after for-profit slapped with $38 million lawsuit

Now that GCU is forced to engage in an appeals process, President Brian Mueller calls the entire dispute a "colossal waste of time and resources" and says the disagreement could have been handled in a 10-minute phone discussion.

Grand Canyon University (Ariz.) President Brian Mueller was fired up last week, announcing that he’s going toe-to-toe with the Department of Education. Mueller, who believes GCU has been unjustly targeted, is appealing the Department’s $37.7 million fine waging that the university engaged in false advertising.

It’s the largest fine issued against a university for deceptive practices.

“None of this makes any sense,” said President Mueller at a press conference. “It’s completely and totally backward.”

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The Department announced it was fining the university on Oct. 31 for misrepresenting the costs of its doctoral program. Less than 2% of GCU graduates completed their doctoral program within the $40,000 to $49,000 commitment that GCU advertised. The “fine print” that GCU discloses to students about the trust costs of the program was “insufficient to cure the substantial misrepresentations regarding cost,” the Department said in a press release.

“GCU’s lies harmed students, broke their trust, and led to unexpectedly high levels of student debt,” the Department said. “Today, we are holding GCU accountable for its actions, protecting students and taxpayers, and upholding the integrity of the federal student aid programs.”

The Department claimed GCU had awarded the most federal aid in the past four award years. School enrollment has reached more than 115,000 students this current academic year.

However, GCU parried this claim, stating these claims aren’t substantiated by student testimony and that the website’s cost disclosures are in full-size red text placed above its Degree Program Calculator, a tool the university created in-house.

Mueller believes the fine is retaliation for GCU suing the Department in 2021 for denying its recognition as a non-profit institution, despite the green light from the IRS, the State of Arizona and both its regional and state accrediting bodies. The Higher Learning Commission’s 2021 review of the university found GCU’s recruitment and marketing materials “clear and transparent.”

“I’ve talked to literally thousands of people in group and individual settings, and I’m getting the same message: This is government overreach, this is the weaponization of a department that has an opinion that isn’t shared by anybody else,” Mueller said.

Mueller pointed to its 23 total regulatory bodies and agencies with which GCU is in good standing. “Everybody else has [acknowledged our nonprofit status]. Everybody,” Mueller said, “except this same group of people.”

GCU has kept its tuition frozen for 15 years, and after accounting for scholarships, which more than 90% of students qualify for, the average tuition is around $9,200, according to ForbesMoreover, GCU’s three-year student loan default rate is 1.57%, superior to the average rate among public and private non-profits and for-profit institutions, according to rates provided by Best Colleges.

Now that GCU is forced to engage in an appeal process, Mueller calls this entire dispute a “colossal waste of time and resources” and says the disagreement could have been handled in a 10-minute phone discussion.

Alcino Donadel
Alcino Donadel
Alcino Donadel is a UB staff writer and first-generation journalism graduate from the University of Florida. His beats have ranged from Gainesville's city development, music scene and regional little league sports divisions. He has triple citizenship from the U.S., Ecuador and Brazil.

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