Washington: In a landmark decision, the largest Christian educational institution in the United States, Grand Canyon University, is being levied a record $37.7 million fine by federal authorities. This action comes in the wake of allegations that the university intentionally deceived its students regarding the actual expenses associated with its graduate programs.
Grand Canyon University, an establishment that boasts an enrollment exceeding 100,000 students, primarily in virtual learning programs, is now contending with the most substantial fine ever issued by the U.S. Department of Education. However, the university vehemently denies these allegations, labeling them as “baseless fabrications and misleading assertions.”
The Education Department’s investigation has unveiled that Grand Canyon University deliberately provided misleading information to over 7,500 of its current and former students concerning the actual costs of its doctoral programs. As far back as 2017, the institution indicated to students that their doctoral programs would be within the range of $40,000 to $49,000. Yet, recent findings demonstrate that less than 2% of graduates completed their programs within this specified range, with an overwhelming 78% incurring an additional expenditure of 10,000 to $12,000.
This supplementary cost primarily arose from “continuation courses” that became necessary to fulfill the dissertation requirements, as per the Department’s report. Richard Cordray, Chief Operating Officer for Federal Student Aid within the Education Department, commented, “Grand Canyon University’s falsehoods have had adverse consequences on students, eroding their trust and resulting in unexpectedly high levels of student debt. Today, we hold Grand Canyon University accountable for its actions, thereby safeguarding the interests of students and taxpayers while upholding the integrity of federal student aid programs.”
The Biden administration has imposed this fine as part of a broader initiative aimed at enhancing accountability within the U.S. higher education system. The Department of Education recently established a new regulation designed to reduce federal funding to for-profit colleges whose graduates encounter difficulties in repaying their loans, thereby paving the way for increased transparency regarding academic institutions’ performance.
Grand Canyon University has a 20-day window to appeal this substantial fine. In addition to the fine, the Department is imposing stringent new conditions that the university must fulfill to continue receiving federal financial support. These conditions encompass refraining from making “substantial misrepresentations” regarding the costs of doctoral programs and, when communicating program costs, the institution must adhere to the average expenses incurred by program graduates.
Furthermore, the university is obligated to report any ongoing investigations or lawsuits, and it must inform current doctoral students about the procedure to file complaints with the Department of Education.
Grand Canyon University has been the leading recipient of federal student aid over the past four years. It is important to note that earlier this month, the university released a statement, asserting that federal agencies were unfairly targeting them with “baseless allegations” in retaliation for a lawsuit the institution filed against the Department of Education in 2021.
Grand Canyon University initiated the lawsuit after its request to be classified as a nonprofit institution was denied by the agency. The university transitioned to a for-profit status in 2004 when it faced financial turmoil. In 2018, the institution applied to regain nonprofit status; however, the Trump administration hindered this transition by deeming the university too closely tied to its former parent company. Notably, the university is classified as a nonprofit by its accreditor and the Internal Revenue Service.
In response to the imposed fine, Grand Canyon University argues that its disclosure practices have been endorsed by the court in a separate lawsuit and were validated by the school’s accreditor. The university suggests that the fine is part of a broader pattern of action taken by the Department of Education and decries the agency’s refusal to address the matter through a federal mediator.
Grand Canyon University, headquartered in Phoenix, serves an approximate 20,000 students on its physical campus, while the majority of its enrollment comprises students pursuing online courses from various locations. As of 2021, the university had around 80,000 students enrolled in online programs, evenly distributed between undergraduate and graduate programs.
This hefty fine has garnered support from organizations advocating for student loan borrowers, emphasizing the significance of preventing educational institutions from misrepresenting program costs to their students. Aaron Ament, President of Student Defense, declared, “When educational institutions provide students with false information, it deprives them of both time and financial resources. We welcome the Department of Education’s steps to deter graduate schools from misguiding students regarding program costs, and we hope they will continue to combat such predatory practices.”