Grand Canyon University fined millions by federal education officials: Here's what to know

PHOENIX - Officials with the U.S. Department of Education announced on Oct. 31 that they are fining Grand Canyon University.

The fine, according to the statement, totals $37.7 million.

Here's what you should know about the action taken by Federal officials.

Why is GCU being fined?

In its statement, officials with the U.S. Department of Education's Office of Federal Student Aid accused GCU of misstating the cost of its programs.

"An FSA investigation found GCU lied to more than 7,500 former and current students about the cost of its doctoral programs over several years. GCU falsely advertised a lower cost than what 98% of students ended up paying to complete certain doctoral programs," read a portion of the statement.

What exactly did GCU officials do?

Federal education officials say based on their investigation, they determined that starting as early as 2017, GCU officials have not been fully informing students about the cost of their doctoral programs.

"GCU stated that those doctoral programs cost between $40,000 and $49,000. GCU made these false claims about the cost on the school’s website and net price calculators, as well as in its enrollment agreements, catalogs, policy handbooks, and other marketing materials," read a portion of the statement. "GCU’s statements about the total cost to complete these programs were false and misleading because, based on GCU’s own data, less than 2% of graduates completed within the cost that GCU advertised."

What was the real cost of enrolling in those programs?

According to the statement, a ‘vast majority’ of the graduates needed so-called ‘continuation courses’ to complete the dissertation requirements in doctoral programs.

"GCU’s data further shows that 78% of the graduates in those programs had to pay $10,000 to $12,000 more in tuition costs—roughly a 25% increase, depending on the program—than GCU explicitly advertised," read a portion of the statement.

Federal officials said GCU officials, when given an opportunity to respond to the evidence gathered, pointed to "a series of fine print disclosures included in some of its enrollment agreements and other documents distributed to students." However, federal officials said the disclosures were "insufficient to cure the substantial misrepresentations regarding cost."

"The new disclosures fail to address or correct the significant misrepresentations about the cost of the program. Furthermore, the disclosures are also buried in dense documents and are much less prominent than the misrepresentations. As a result, they do not cure the "net impression" that the program will be less expensive than it actually is," read a portion of the statement.

Federal officials said GCU did not contest a determination made by FSA that 98% of students enrolled in certain doctoral programs had to pay more than the advertised cost. 

What's GCU's response to the accusations?

In a lengthy statement posted to the university's website on Oct. 31, school officials state they categorically deny "every accusation in the Department of Education’s statement and will take all measures necessary to defend itself from these false accusations."

Officials with GCU have previously published an open letter to U.S. Education Secretary Miguel Cardona over the school's ongoing dispute with the Department of Education.

In that letter, school officials wrote, among other things, that their lawyers found it "incredulous that, given the nature of the Department’s claims and all of the positive contributions GCU is making in higher education, that a monetary fine of any amount is being considered."

In a statement issued on Oct. 5, GCU officials also accused "government officials associated with the U.S. Department of Education, Federal Trade Commission and under the authority of the Department of Veterans Affairs" of coordinating efforts to target GCU in "what appears to be retaliation for the university filing an ongoing lawsuit against [Department of Education] regarding its nonprofit status."

According to the Associated Press, GCU sued after the school's request to be classified as a nonprofit college was rejected. The school became a for-profit college in 2004, after it found investors to save it from financial collapse. It later applied to become a nonprofit again in 2018, but the Trump administration blocked it, saying the college remained too close to its previous parent company.

Can GCU appeal the fine?

Federal officials said GCU has 20 days to request a hearing, or submit written material to the FSA on why the fine should not be imposed.

Is GCU facing other restrictions from the federal government?

According to federal officials, five specific conditions have been added to GCU's Provisional Program Participation Agreement concerning the school's continued involvement in programs associated with Title IV of the Higher Education Act of 1965.

The conditions, according to officials, require GCU to:

• Not make "substantial misrepresentations related to the cost of obtaining a degree in its doctoral programs."
• Tell students the average total fees and tuition paid by graduates, and the maximum number of credits a student can take that are eligible for Title IV funds, should GCU opt to inform prospective or current doctoral students about the cost of completing the school's doctoral programs.
• Find a monitor to oversee its compliance with the two conditions listed above
• Report to the Department of Education every quarter about "investigations, actions, or other legal proceedings by its accrediting agency or any government agency," in addition to reporting any "pending litigation in which a plaintiff seeks class certification."
• Send a notice to all currently-enrolled doctoral students on how to use the Department of Education's feedback center to submit a complaint
• Send a notice to all current employees who "provide recruiting, admissions, and other services to doctoral students" on how to use the FSA Tips Line to submit information about misconduct or violations.