Main Information
A lawsuit has been filed against Grand Canyon University, a Christian university based in Phoenix, accusing it of deceiving prospective students to obtain a doctoral degree and promoting itself as a nonprofit organization, marking the latest dispute regarding the university’s status as a nonprofit. The university claims that the lawsuit is “another example of the Biden administration using federal government agencies in a coordinated effort to target institutions they oppose ideologically.”
Key Background
In October, the Department of Education announced it would impose a $37.7 million fine on Grand Canyon University — the largest fine ever imposed by the department — after it was found that the university misled more than 7,500 students about the cost of doctoral programs for years. An investigation that began in 2017 revealed that the university stated that some doctoral programs cost between $40,000 and $49,000, but less than 2% of graduates completed their degrees within that range — with 78% of graduates from Grand Canyon University’s doctoral programs paying up to $12,000 above the stated costs. The university denied these claims, stating that “the coordinated allegations are not supported by any organization that oversees the university,” such as the IRS and government regulators. The university also accused the fine of being retaliation for a lawsuit it filed against the Department of Education in 2021 regarding its nonprofit status.
Ongoing Reading
Grand Canyon University is facing a lawsuit from the Federal Trade Commission for allegedly deceiving prospective doctoral students and illegal marketing. The lawsuit was filed against the university and Grand Canyon Education, a for-profit company that owns and operates the university after the university collaborated with investors to prevent its closure in 2004, along with Brian Mueller, who serves as the university’s president and CEO of Grand Canyon Education. Although the university sought nonprofit status from the federal government back in 2018 — and the IRS acknowledged this — the Department of Education continued to classify it as a for-profit institution, and the FTC alleges in the lawsuit that the defendants claimed that Grand Canyon University is a nonprofit organization while continuing to operate as a for-profit company for Grand Canyon Education and its investors.
The lawsuit filed in federal court in Arizona alleges that Grand Canyon University and Grand Canyon Education informed prospective accelerated doctoral students that the total cost of programs equated to the price of 20 courses, when in reality most doctoral students were required to take additional “continuing courses” costing “thousands of dollars extra.” The lawsuit also claims that the defendants engaged in marketing practices to encourage enrollment at the university that resulted in “millions of disruptive phone calls” to individuals who had explicitly requested not to be contacted. The agency claims that the defendants violated agency law and telemarketing sales rules, seeking compensation for consumers and asking the court to prevent the defendants from continuing to violate agency laws.
A spokesperson for Grand Canyon University stated in a statement shared with Forbes that the lawsuit “is another example of the Biden administration using federal government agencies in a coordinated effort to target institutions they oppose ideologically,” and that the university “vehemently denies these unfounded allegations and will take all necessary measures to disprove them.”
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