Several federal agencies under the Biden administration seem to be targeting Grand Canyon University in retaliation for the school’s lawsuit against the Department of Education.
On Oct. 31, the Department of Education levied a fine of $37.7 million against GCU, accusing the university of “substantial misrepresentations” about the costs to complete its doctoral programs.
It’s the latest in a series of volleys between the feds and the school.
GCU, the nation’s largest Christian university, claimed in an Oct. 5 statement that the U.S. Department of Education, Federal Trade Commission, and Department of Veterans Affairs are “coordinating efforts to unjustly target GCU in what appears to be retaliation for the university filing an ongoing lawsuit against ED regarding its nonprofit status.”
Founded in 1949 as a nonprofit institution, GCU retained the status until its partnership in 2004 with private investors to avoid closing.
In 2018, the university reverted to its nonprofit status, which administrators say has been recognized by the Internal Revenue Service, Higher Learning Commission, the state of Arizona, and NCAA Athletics.
However, the Department of Education has insisted on labeling GCU as a for-profit institution for federal financial aid purposes.
“They came out, in 2019, officially saying we are going to keep that tag on you,” GCU President Brian Mueller said. “There is nothing you can do, going forward, to remove that tag. So, in 2021, we said we have no choice. You have backed us into a corner.”
In February 2021, the university filed a lawsuit against the department, arguing that its classification of GCU as a for-profit institution would tarnish GCU’s reputation and enable unsubstantiated allegations while inviting the scrutiny often reserved for for-profit institutions.
The Department of Education has historically scrutinized for-profit universities due to their higher student loan default rates. But GCU asserts its student loan default rates are significantly lower than the national average at non-profit universities, making the targeting unjustified.
The university claims the department and other federal agencies have retaliated by overwhelming it with extensive requests for information and records concerning its operations.
The requests have reportedly caused GCU more than 3,500 staff hours and millions in legal costs.
GCU says it has been more transparent about the costs of its programs than it is legally required to be and that the department’s claims are based on the officials’ subjective opinion rather than any student complaints.
Reached for comment regarding its dispute with the department, GCU provided The College Fix with an updated statement, in which the university decried the fine as “further evidence of the coordinated and unjust actions the federal government is taking against” it.
The university has also taken flak from the Arizona Veterans Services State Approving Agency, which helps the Department of Veterans Affairs manage educational benefits for the state’s veterans.
The agency has denounced two of GCU’s advertising statements – “Cybersecurity experts are in high demand” and “Every company needs cybersecurity” – as “erroneous, deceptive or misleading.”
Describing the statements as common sense, prevalent in higher education marketing, and confirmed by government data, GCU alleged the agency was “unduly influenced” by the Department of Veterans Affairs to smear the university.
The Federal Trade Commission, for its part, has launched an investigation into GCU’s education services provider, Grand Canyon Education, for allegedly making cold calls to prospective students.
GCU claimed that only students who had expressed interest in attending were called, while noting that the calls had not caused any known complaints and constituted only 2 percent of the total calls Grand Canyon Education made on its behalf.
The College Fix reached out to the three federal agencies for comment this week.
While the Federal Trade Commission said “we cannot comment beyond the fact that there is an investigation,” The Department of Education and Arizona State Approving Agency have yet to respond.
In a Fox News interview, GCU President Mueller suggested that the coordinated assault on GCU by federal agencies was not only a result of the school’s lawsuit against the Department of Education, but could even be religiously motivated.
“The two largest Christian universities in the country are being investigated,” Mueller said, referring to Liberty University in Virginia. “And so is that [a] coincidence? I don’t know.”
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