GCU appeals nearly $38 million fine from feds

PHOENIX (3TV/CBS 5) – Officials at Grand Canyon University have announced they will appeal a multi-million dollar fine issued by the U.S. Department of Education after allegations that the school misled the costs of its doctoral programs.

The feds say that GCU’s data show that less than two percent of graduates completed the program with the advertised costs. But university president Brian Muller denied the allegations within the hour, adding that the school’s third-party accreditor found its marketing practices were appropriate and clear. In a news conference held Thursday, the school announced that it is appealing what it calls an “unprecedented and unjust” fine levied against GCU. The school adds it has vowed to defend “broader efforts to target” the university by the feds.

During the news conference, Muller further detailed what the university claims are retaliatory efforts by the feds after the Education Department failed to recognize its nonprofit status, like every other entity, including the IRS. “What’s really going going on here? That was absolutely ludicrous, ridiculous,” he told the media. Arizona’s Family has previously reported that the Federal Trade Commission and the school’s third-party education accreditor have found no problems with its marketing efforts. GCU has also refuted claims that the school cold-calls potential students and only reaches out to those who have expressed interest in the degree programs.

“GCU does not mislead or deceive students in any way,” Mueller said. “In fact, the opposite is true given that GCU goes above and beyond what is legally required and is considered by its peers to be a leader in higher education transparency. Rather than applaud such efforts or work cooperatively with GCU in a matter that could easily be resolved in a 10-minute phone call, the Department has instead chosen to impose a record fine, which speaks to their agenda and motivations.”

Muller demonstrated in a slideshow presentation that the school provides direct cost estimates for each school year and degree program. Federal guidelines only require that the net price be shown for first-year, first-time students in undergraduate programs. In addition, GCU’s own research shows that only 2% of universities show total program costs for doctoral programs. “The GAO report , which we don’t believe GCU was part of, shows that 91% of the colleges reviewed have misleading information or understate the net price in their financial aid offers to prospective students. That includes 41% of colleges that do not even provide a net price in their offers to students,” the university said in a news release.

“The point of sharing these studies is not to disparage other universities,” Mueller explained. “Rather, it highlights the selective enforcement from the Department in singling out GCU. We maintain that not only is there nothing misleading about GCU’s disclosures but that we provide higher levels of transparency than are observed in higher education. In short, we are taking a leadership role in this issue.”

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