The federal government has imposed a record-breaking fine of $37.7 million on Grand Canyon University, the largest Christian university in the country. The fine comes as a result of accusations that the university misled students about the cost of its graduate programs. Grand Canyon University, which boasts over 100,000 students, mainly in online programs, has vehemently denied the allegations, referring to them as “lies and deceptive statements” in a five-page statement.
An investigation conducted by the U.S. Education Department found that the university had provided false information to more than 7,500 current and former students regarding the cost of its doctoral programs. Despite informing students that the programs would range between $40,000 and $49,000, less than 2% of graduates completed their programs within this price range. Instead, 78% ended up paying an additional $10,000 to $12,000. The additional costs were often a result of “continuation courses” necessary to fulfill dissertation requirements.
Richard Cordray, the chief operating officer for Federal Student Aid, a department within the Education Department, stated that Grand Canyon University’s lies had harmed students, broken their trust, and led to unexpectedly high levels of student debt. Cordray emphasized the importance of holding the university accountable, protecting students and taxpayers, and upholding the integrity of federal student aid programs.
This fine comes as part of the Biden administration’s efforts to increase accountability among U.S. universities. The Education Department recently introduced a new regulation that could potentially cut federal funding to for-profit college programs that leave graduates unable to repay their loans. The agency also plans to provide students and families with more information regarding outcomes from all colleges.
Grand Canyon University has 20 days to appeal the fine. In addition to the fine, the Education Department has imposed new conditions that the university must meet to continue receiving federal funding. The school will be prohibited from making substantial misrepresentations about the cost of doctoral programs. If the cost is disclosed, it must be based on the average cost paid by graduates. The university is also required to report any ongoing investigations or lawsuits and must inform current doctoral students about how to submit complaints to the Education Department.
Over the past four years, Grand Canyon University has disbursed more federal student aid than any other institution in the U.S., according to the Education Department.
Earlier this month, the university issued a statement claiming that federal agencies were unfairly targeting them with frivolous accusations. They believe this is in retaliation for a lawsuit they filed against the Education Department in 2021 after their request to be classified as a nonprofit college was rejected. Although the university is considered a nonprofit by its accreditor and the Internal Revenue Service, it became a for-profit college in 2004 before applying to become a nonprofit again in 2018. The Trump administration blocked their move, citing their close ties to their previous parent company.
Grand Canyon University defended itself against the fine, stating that its cost disclosures have been upheld in court in a separate lawsuit and by their accreditor. They view the fine as part of a disturbing pattern by the Education Department and claim the agency declined their request to address the issue through a federal mediator.
While the university has around 20,000 students enrolled at its campus in Phoenix, the majority of its student body consists of online learners from outside Arizona. As of 2021, the university had enrolled 80,000 students in online programs, with an almost equal distribution between undergraduate and graduate programs.
Advocacy groups for student loan borrowers praised the fine, stating that when colleges deceive students, it costs them both time and money. They hope that the Education Department will continue cracking down on such predatory schemes.
