The Federal Trade Commission (FTC) has filed a lawsuit against Grand Canyon University, the largest Christian school in the nation, over claims it deceived prospective doctoral students about the cost and course requirements of its doctoral programs over several years.
The legal challenge was filed in the U.S. District Court for the District of Arizona on Dec. 27.
It names Grand Canyon Education (GCE), Inc., Grand Canyon University (GCU), and Brian Mueller—the CEO of GCE and president of GCU as defendants.
GCE owned GCU until 2018, the lawsuit states.
According to the lawsuit, the Phoenix, Arizona-based school—which has more than 100,000 enrolled students—told prospective students that the total cost of the university’s “accelerated” doctoral programs was equal to the cost of 20 courses, or 60 credits.
However, in reality, the school requires that almost all doctoral students take many more additional “continuation courses” which amount to thousands of dollars in costs, the FTC alleged.
In a press release announcing the lawsuit, the FTC noted the U.S. Department of Education reported that fewer than 2 percent of GCU doctoral program graduates completed their program within the cost bracket advertised by GCU and that nearly 78 percent of the students have to take five or more continuation courses.
The FTC said in its lawsuit that the school has “continued their deceptive marketing of doctoral practices despite investigations by the Department of Education and the FTC.”
Along with claims that GCU misled students regarding the cost of its doctoral programs, the FTC lawsuit claims the school deceptively advertised itself as a nonprofit to prospective students despite “operating the school for the profit of GCE and its investors.”
‘Deceptive, Abusive Telemarketing Practices’
“The FTC alleges that GCU has been operated for the profit of GCE and its stockholders, and pays 60 percent of its revenue to GCE pursuant to an agreement designating GCE as the exclusive provider for most university-related services,” the FTC said in a press release.
The agency further alleged that GCU’s president, Mr. Mueller, also benefits as both CEO and a stockholder of GCE, and receives a salary, bonuses, and other compensation from both Defendants GCU and GCE which is tied to the school’s performance.
Furthermore, the FTC claims the school engaged in “deceptive and abusive telemarketing practices,” by calling prospective students who submitted their contact information via the school’s online website, even if the prospective students had specifically requested not to be called.
School officials did so in an effort to boost enrollment at GCU, the FTC claims.
“Defendants’ marketing activities have also resulted in millions of abusive telemarketing calls to consumers who have specifically requested that Defendants not solicit them, and to individuals on the National Do Not Call Registry,” the FTC alleged.
GCE also purchased information about potential students from lead generators and used that information to contact the individuals, the FTC alleged.
The lawsuit accuses GCU of violating the FTC Act, which prohibits “unfair or deceptive acts or practices in or affecting commerce” and the Telemarketing Sale Rules (TSR).
It asks the Court in Arizona to issue a permanent injunction preventing the school from making future violations of the TSR and the FTC Act, and to force GCU to provide unspecified “monetary relief ” as well as “any additional relief the Court determines to be just and proper.”
FTC Claims Are ‘Absurd’
“Grand Canyon deceived students by holding itself out as a non-profit institution and misrepresenting the costs and number of courses required to earn doctoral degrees,” said Samuel Levine, director of the FTC’s Bureau of Consumer Protection. “We will continue to aggressively pursue those who seek to take advantage of students.”
A spokesperson for GCU told The Epoch Times in an emailed statement: “The FTC’s allegations related to GCU and GCE are unfortunately yet another example of the Biden Administration weaponizing federal government agencies in a coordinated effort to target institutions to which they are ideologically opposed.”
The spokesperson added that GCU categorically denies the FTC’s “unsubstantiated allegations and will take all measures necessary to refute them.”
“Given the major problems that exist in higher education related to high tuition costs, significant student debt, poor student loan default rates, long completion times, etc., it is baffling that the federal government has chosen to target a Christian university that is addressing those issues in very positive ways,” the spokesperson said.
“No other institution in higher education is facing this level of government scrutiny, which speaks volumes about these agencies’ motivations and agenda,” the spokesperson concluded.
“This is unfortunately yet another example of the Biden Administration weaponizing federal government agencies in a coordinated effort to target institutions to which they are ideologically opposed,” he told Arizona’s KTVK/KPHO.
Mr. Romantic further alleged the claims regarding the school’s doctoral program were refuted twice in federal courts and are “not substantiated by other objective third parties.”
The school was also certified as a nonprofit by its accreditor, the Higher Learning Commission, and the Internal Revenue Service in 2018, he said.
Mr. Romantic said that despite this, the Education Department took an “unprecedented step” of disregarding the IRS determination by classifying GCU as a for-profit institution.
He also denied the FTC’s claims regarding the school’s alleged deceptive and abusive telemarketing practices, stating the school does not make calls to potential students.
The Epoch Times has contacted a spokesperson for GCU for comment.
The FTC’s lawsuit against GCU comes after it was fined $37.7 million by the Education Department for allegedly misleading thousands of students about the costs of its doctoral programs; marking the largest fine of its kind ever issued by the Department.
The school denied all the Education Department’s accusations at the time and said it planned to appeal the fine.
From The Epoch Times
