A private university once affiliated with Baptists in Arizona has been fined the largest sum ever levied against a school by the U.S. Department of Education.
The DOE and its office of Federal Student Aid said the $37.7 million fine against Grand Canyon University is because the university “lied to more than 7,500 former and current students about the cost of its doctoral programs over several years.”
The school “falsely advertised a lower cost than what 98% of students ended up paying to complete certain doctoral programs,” a DOE news release explained.
University officials have denied the allegations and said they will fight the fine.
However, FSA Chief Operating Officer Richard Cordray said: “GCU lied about the cost of its doctoral programs to attract students to enroll. FSA takes its oversight responsibilities seriously. GCU’s lies harmed students, broke their trust and led to unexpectedly high levels of student debt. Today, we are holding GCU accountable for its actions, protecting students and taxpayers, and upholding the integrity of the federal student aid programs.”
This news comes just weeks after the DOE threatened to levy a similarly enormous fine against Liberty University in Virginia for mishandling and underreporting sexual abuse claims while receiving massive sums of federal grants.
Liberty also is fighting that potential fine.
Both Grand Canyon and Liberty have carved out a space as campus-based schools with online student bodies far larger than their residential campuses. The two schools vie for the record of being the nation’s largest Christian university.
Grand Canyon began its life as Grand Canyon Baptist College, affiliated with the Arizona Baptist Convention.
Grand Canyon began its life as Grand Canyon Baptist College, affiliated with the Arizona Baptist Convention. After facing near-bankruptcy, the school was converted to a for-profit business. Then after gaining stability and growth, it converted back to nonprofit status.
Grand Canyon University has 20 days to request a hearing with the DOE’s Office of Hearings and Appeals or submit written material to FSA indicating why the fine should not be imposed. The school also will have to fight specific conditions placed on it to continue participating in the federal student aid programs.
The DOE claims the university misled doctoral students as far back as 2017. It asserts that 98% of students had to pay $10,000 to $12,000 more than the advertised price tag of $40,000 to $49,000.
The news release states: “When given an opportunity to respond to the Department’s evidence, GCU pointed to a series of fine print disclosures included in some of its enrollment agreements and other documents distributed to students. These disclosures are 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.”
Grand Canyon University is a major recipient of federal dollars through student aid programs. The DOE reports that in the last four years, Grand Canyon has disbursed more federal student aid than any other U.S. institution.
Grand Canyon last month 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.
That dispute involves Grand Canyon’s request to be classified as a nonprofit. While considered nonprofit by its accreditor and the Internal Revenue Service, it remains classified as for-profit by the DOE.
Grand Canyon sued after the agency rejected the school’s request to be classified as a nonprofit college. It became a for-profit college in 2004 after investors saved it from financial collapse. It applied to become a nonprofit again in 2018 but the Trump administration blocked the move, saying the college remained too close to its previous parent company.
It is considered a nonprofit by its accreditor and the Internal Revenue Service.
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