Brian Mueller, president of Grand Canyon University, explains in “The Bottom Line” how multiple authorities are investigating the school.
The Federal Trade Commission (FTC) filed a lawsuit on Wednesday against Arizona-based Grand Canyon University (GCU), Grand Canyon Education (GCE), Inc. and GCE CEO Brian Mueller, who is also president of GCU, for allegedly misleading students about the cost of its doctoral programs over several years.
The FTC also alleges in its lawsuit that the school misled prospective students that it was a nonprofit organization and that it engaged in deceptive and abusive telemarketing practices.
In the complaint filed in the U.S. District Court for the District of Arizona, the FTC accused GCU and GCE of telling interested parties that the total cost of the university's “accelerated” doctoral programs was the cost of 20 courses or 60 credits.
But according to the FTC, almost all graduate students are required to take additional “continuing courses” that cost thousands of dollars.
Arizona-based CHRISTIAN UNIVERSITY announces plans to appeal the $37.7 million federal fine
The president of Grand Canyon University (GCU) told Fox News Digital on Tuesday that the university is in the sights of the Department of Education. (Fox News / Fox News)
The FTC points to a U.S. Department of Education report that found less than 2% of the university's graduate students complete the course within the advertised cost, adding that nearly 78% of students take five or more continuing courses.
In addition to allegations that the school falsely advertised the program's pricing, the FTC said the school advertised as a nonprofit organization but that GCE and its investors profited from the university.
“The FTC alleges that GCU was operated for the profit of GCE and its shareholders and pays 60% of its revenues to GCE pursuant to an agreement designating GCE as the exclusive provider of most university-related services,” an FTC press release read .
THE COUNTRY'S LARGEST CHRISTIAN UNIVERSITY CLAIM IT IS UNFAIRLY TARGETED BY FEDERAL AUTHORITIES
According to the FTC, Mueller also benefits as GCE's CEO and shareholder and receives bonuses tied to GCE's performance.
“Grand Canyon deceived students by portraying itself as a nonprofit institution and misrepresenting the cost and number of courses required to obtain a doctorate degree,” said Sam Levine, director of the FTC’s Bureau of Consumer Protection. “We will continue to aggressively pursue those who seek to exploit students.”
GCU told Fox News Digital that this is “unfortunately” another example of the Biden administration “using federal agencies with weapons” to target institutions it ideologically opposes.
The Department of Education is responding to Liberty University, claiming it is trying to tarnish its image
“The FTC, the U.S. Department of Education, and the U.S. Department of Veterans Affairs publicly announced in October 2021 that they would target for-profit institutions, and that is exactly what has happened, even though GCU is legally recognized as a nonprofit organization by the IRS in the state of Arizona and Higher Learning Commission (HLC),” the school said. “GCU categorically denies these unfounded allegations and will take all necessary measures to refute them.”
The school said the FTC's allegations of misleading students about costs associated with the doctoral program have been refuted twice in federal court, citing Young v. GCU as one of the cases.
In Young v. GCU, the courts rejected the claim that GCU's disclosures misrepresented the time or cost of completing a doctoral program.
Student loan debt causes teachers to resort to porn to pay it off
“The FTC’s accusation that GCU is working in the interests of Grand Canyon Education is equally absurd,” the school said. “Revenue sharing agreements with third-party educational services companies are common in higher education, and GCU's master services agreement with GCE follows these industry norms, including the 60-40% revenue sharing identified by the FTC. In fact, GCU receives a higher level of service for this divide than many institutions receive.”
The school said the FTC and the Department of Education decided to disregard transfer pricing studies and fairness opinions from two accounting firms it described as “nationally recognized, highly respected and independent” that concluded that the transaction's purchase price and the terms of GCU's master services agreement were fair market value and beneficial to GCU.
As for Mueller's dual role at GCU and GCE, the school said such arrangements were permitted under Higher Learning Commission guidelines and were approved by the commission after review.
A QUARTER OF STUDENT loan borrowers said they would boycott repayment
Signage outside the Federal Trade Commission (FTC) headquarters in Washington, DC. (Photographer: Ting Shen/Bloomberg via Getty Images / Getty Images)
The FTC accuses the defendants of also using abusive telemarketing calls to boost enrollment. GCE's website asked interested parties to provide their contact information on digital forms. The information was then allegedly used to “illegally contact” people who did not want to be called, as well as people listed on the National Do Not Call Registry.
According to the FTC, the defendants thereby violated the FTC Act and the Telemarketing Sales Rule. The commission voted unanimously to give employees permission to file the lawsuit.
The school said the FTC's claim about abusive telemarketing calls was “completely without merit.”
“This allegation is similar to the graduate student complaint brought by the FTC and the DOE in that they address practices that are common in higher education institutions, but they focus on GCU to impose punitive measures and harm the university,” the school said .
GCU, the largest Christian university in the U.S., announced plans in November to appeal a $37.7 million fine imposed by the Department of Education because the Arizona-based school misled students about the cost of its doctoral programs.
The Department of Education claimed an investigation found that GCU “lied” to over 7,500 former and current students about the cost of their doctoral programs.
CLICK HERE TO GET THE FOX NEWS APP
After the fine was imposed, Mueller held a news conference to announce plans to appeal the fine and oppose the federal government's broader efforts to target the university.
“I have spoken to thousands of students, parents, staff, alumni and community stakeholders in Arizona, and they all tell me the same thing: We must fight this federal tyranny, not just to stand up for ourselves, but to ensure “This.” “This kind of ideological overreach by the government and the arming of federal agencies doesn’t happen in others,” Mueller said. “The American people are losing confidence in the federal government to be fair and objective in its operations, and there are clearly no checks and balances to prevent this type of behavior from the Department of Education, which has spiraled out of control and continues to expand its authority “extends selective enforcement powers.”