Federal Trade Commission Sues Grand Canyon University Over Deceptive Practices

the Federal Trade Commission (FTC) announced on Wednesday that it has filed a lawsuit against Grand Canyon University (GCU), marking the second major action against the largest Christian school in the nation in recent months. The lawsuit, coming on the heels of a $37.7 million fine by the Department of Education (DOE), alleges deceptive advertising and illegal telemarketing by the university and its associated entities.

The FTC complaint, filed in federal court in Arizona, targets GCU, its marketer Grand Canyon Education, Inc., and its president and CEO Brian Mueller. The regulatory body asserts that the defendants engaged in deceptive practices, including misleading prospective doctoral students about the duration of its accelerated program, falsely marketing the institution as a nonprofit, and conducting illegal telemarketing to individuals who explicitly opted out of such communications.

Samuel Levine, director of the FTC’s Bureau of Consumer Protection, stated in a press release, “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. We will continue to aggressively pursue those who seek to take advantage of students.”

The complaint accuses GCU of violating the FTC Act and the Telemarketing Sale Rules, seeking compensation for consumers affected by the alleged violations. The FTC is also urging the U.S. District Court in Arizona to impose sanctions on GCU and prevent the university from further violating the law.

The legal action follows a fine imposed by the DOE in October, alleging that GCU had “lied” to over 7,500 former and current students about the cost of its doctoral programs over several years. The DOE claimed that the university falsely advertised a lower cost, with approximately 98% of students paying more than the initially stated amount.

Brian Mueller, president and CEO of GCU, has vehemently denied any wrongdoing and argued that the federal investigations are linked to the DOE’s denial of the university’s effort to convert into a nonprofit institution in 2018. The DOE’s denial of nonprofit status impacts the school’s eligibility for federal student financial aid and continues to classify GCU as a for-profit entity.

Mueller, in a press conference last month, vowed to appeal the DOE’s fine, the largest ever issued by the agency. He maintained that GCU does not mislead or deceive students and characterized the legal actions as a coordinated attack by multiple federal agencies against the institution.

As the legal battle unfolds, the scrutiny on Grand Canyon University raises questions about oversight in higher education and the responsibilities of educational institutions to provide accurate and transparent information to prospective students.