The Department of Education fined Grand Canyon University $37.7 million for “deceptive” practices, its largest ever.
GCU Lies About Ph.D. Program Costs
The Biden administration fined Grand Canyon University $37.7 million on Tuesday after a Department of Education inquiry determined that the private institution in Phoenix misrepresented the cost of its doctoral degree programs. (Source: CNN)
Federal Student Aid (FSA), part of the Department of Education, concluded that GCU lied about Ph.D. program costs, which were consistently cheaper than 98% of students who paid for them. The university awarded the most federal student aid during the past four years. In a Tuesday news event, a Department of Education spokeswoman confirmed this was the largest fine ever. Another Biden administration effort to use its enforcement clause to hold institutions accountable for protecting borrowers and taxpayers.
“FSA takes its oversight responsibilities seriously,” FSA COO Richard Cordray said in a press release. “GCU’s lies hurt students, shattered their confidence, and caused unexpectedly significant debt. Today, we are holding GCU accountable, defending students and taxpayers, and honoring federal student aid programs.” After the enforcement order, GCU has 20 days to appeal. GCU must meet five FSA conditions to receive federal funds in addition to the fee.
The school must stop misrepresenting the cost of its graduate programs, engage in a monitoring compliance program, make quarterly reports to the Department of Education about any investigations or legal proceedings against it, notify all currently enrolled doctoral students about the enforcement action and how to file a claim and notify current employees involved in doctoral recruitment so they can inform students. “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,” GCU told Yahoo Finance, claiming mistreatment as a Christian school.
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Comprehensive Disclosure of GCU
The federal court system, which has previously ruled in favor of GCU in Young v. GCU at the district and appellate court levels in a similar case, and other regulatory agencies that spend many days on our campus reviewing the comprehensive and transparent disclosures the University provides to its students do not validate the Department’s actions today. The enforcement action only targets GCU. The borrower loan defense discharge program allows GCU students who believe they were deceived or mistreated to seek a loan discharge. The 2017 FSA inquiry discovered “widespread misrepresentations” about admission costs. Fewer than 2% of GCU students paid the $40,000–$49,000 cost of doctoral programs. The dissertation required “continuation courses” to finish, and 78% of GCU grads paid $10,000 to $12,000 more in tuition.
FSA considered GCU’s enrolment disclosures “insufficient to cure the substantial misrepresentations regarding cost,” according to the news release. According to Student Defense and the HEA Group, one in three graduate institutions leave students owing more than they borrowed, and 25% are for-profit. “Deceptive for-profit graduate programs are a large and growing part of America’s higher education crisis,” Student Defense president Aaron Ament said of GCU’s penalties. College lies cost students time and money they can’t get back. We applaud the Department of Education for preventing graduate schools from misrepresenting program prices, and we hope they will continue to crack down on these exploitative tactics.” 1.3 million borrowers whose universities took advantage of them or shuttered abruptly received $22 billion in assistance from the Biden administration.
