Largest Christian university in US faces record fine after federal probe into alleged deception

WASHINGTON -- The country's largest Christian university is being fined $37.7 million by the federal government amid accusations that it misled students about the cost of its graduate programs.

Grand Canyon University, which has more than 100,000 students, mostly in online programs, faces the largest fine of its kind ever issued by the U.S. Education Department. The university dismissed the allegations as "lies and deceptive statements".

"Grand Canyon University categorically denies every accusation in the Department of Education's statement and will take all measures necessary to defend itself from these false accusations," the school said in a five-page statement.

An Education Department investigation found that Grand Canyon lied to more than 7,500 current and former students about the cost of its doctoral programs.

As far back as 2017, the university told students its doctoral programs would cost between $40,000 and $49,000. The department found that less than 2% of graduates completed programs within the range, with 78% paying an additional $10,000 to $12,000.

The additional cost often came from "continuation courses" that were needed to finish dissertation requirements, the department said.

"GCU's lies harmed students, broke their trust and led to unexpectedly high levels of student debt," said Richard Cordray, chief operating officer for Federal Student Aid, an office in the Education Department. "Today, we are holding GCU accountable for its actions, protecting students and taxpayers, and upholding the integrity of the federal student aid programs."

The Biden administration is issuing the fine amid a broader push for accountability among U.S. universities. The Education Department recently finalized a new regulation that could cut federal funding to for-profit college programs that leave graduates unable to repay loans, and the agency plans to give students and families more information about outcomes from all colleges.

Grand Canyon has 20 days to appeal the fine. The department is also adding new conditions the school must meet to continue receiving federal money.

The school will be barred from making "substantial misrepresentations" about the cost of doctoral programs, and if it tells students about the cost of doctoral programs, it must use the average cost paid by graduates.

It also has to report any other investigations or lawsuits, and it must also send a notice to current doctoral students telling them how to submit a complaint to the Education Department.

For the past four years, Grand Canyon has disbursed more federal student aid than any other U.S. institution, the department said.

Earlier this month, Grand Canyon issued a statement saying federal agencies were unfairly targeting the school with "frivolous accusations" in retaliation for an ongoing lawsuit the university filed against the Education Department in 2021.

Grand Canyon sued after the agency rejected the school's request to be classified as a not-for-profit college. It became a for-profit college in 2004 after investors saved it from financial collapse. It applied to become a not-for-profit again in 2018 but the Trump administration blocked the move, saying the college remained too close to its previous parent company.

It's considered a not-for-profit by its accreditor and the Internal Revenue Service.

Responding to the fine, Grand Canyon said its cost disclosures have been upheld in court during a separate lawsuit, and by the school's accreditor. It said the fine is part of a "disturbing pattern" by the Education Department, adding that the agency declined a request to address the issue through a federal mediator.

"This speaks volumes about their agenda-driven motivation to bring harm to the university and the coordinated efforts being taken against GCU," the school said.

The university enrolls roughly 20,000 students at its campus in Phoenix, but most of its overall enrollment comes from students who take online classes from outside Arizona. It enrolled 80,000 students in online programs as of 2021, with a roughly even split between undergrad and graduate programs.

The fine was applauded by groups that advocate for student loan borrowers.

"When colleges lie to students, it costs them time and money they'll never get back," said Aaron Ament, president of the group Student Defense. "We're glad to see the Department of Education take action to prevent graduate schools from misleading students about the costs of their programs, and we hope they will continue to crack down on these types of predatory schemes."

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