PHOENIX — For the last decade, Grand Canyon University has been fighting with the U.S. Department of Education to regain its non-profit status. The status can be a major tax benefit for a university.
"They came out, in 2019, officially saying we are going to keep that tag on you. There is nothing you can do, going forward, to remove that tag. So, in 2021, we said we have no choice. You have back us into a corner,’ said President Brian Mueller.
So, GCU leaders filed a lawsuit in 2021.
Fast forward to now and President Mueller says the Department of Education started retaliating. He said the Feds usually look at universities with bad graduation rates, high default rates on student loans and other things. But, GCU’s president insists his school raises no red flags in those areas.
"All of the metrics that would typically say to the department we have a troubled university, we have to look into, our metrics are stellar in all of those areas. So, why these little minor investigations,” added President Mueller.
He told ABC15 things hit a fever pitch last month when he says the Feds accused GCU of miscommunicating about its doctorate programs and being deceptive about their costs.
Mueller says the Feds intend to issue a fine.
"I said, 'You know we are never going to agree with that. You understand, right? Because students aren't saying that. If you wanted us to change this or that, we would have willingly done that. You're going to announce a fine,'” said President Mueller.
ABC15 reached out to the Department of Education to get a response. A spokesperson for the department sent the following statement:
“The U.S. Department of Education is committed to holding schools accountable for serving students’ best interests. We take our oversight obligations seriously, follow the facts where they lead, and will not be dissuaded from enforcing the law and protecting students, taxpayers, and the federal student aid program. Regarding this school, the Department included specific terms in the program participation agreement that allows Grand Canyon to participate in federal student aid programs. Those terms are designed to protect students from what the Department determined were misrepresentations regarding the cost of some students’ programs. This is the Department taking reasonable and prudent actions as a regulator.”
On Friday, ABC15 received an updated statement from the U.S. Department of Education:
“The U.S. Department of Education is committed to holding schools accountable for serving students’ best interests. We take our oversight obligations seriously, follow the facts where they lead, and will not be dissuaded from enforcing the law and protecting students, taxpayers, and the federal student aid programs. We are unapologetically challenging schools that mislead their students, whether for profit or not.
For this particular school, the Department determined, under the last Administration, that GCU does not meet the Higher Education Act’s definition of a non-profit because the majority of GCU’s revenues continued to go to its former owner, a for-profit entity. The school sued to challenge this determination, twice, and the Department prevailed, twice. The school appealed both of those cases. The Department prevailed in the first appeal, and the appeal in the second case is pending.
Unrelated to those lawsuits, through a separate investigation, the Department determined that fewer than 2% of the students who graduated from GCU’s doctoral programs that require dissertations paid the amount that GCU advertised as the total cost. GCU has not disputed this statistic. Most students paid thousands more than the advertised cost. In light of these substantial misrepresentations and other compliance issues identified by the Department, the Department included specific terms in the school’s Provisional Program Participation Agreement to allow it to participate in the federal student aid programs. Those terms are designed to protect students from substantial misrepresentations regarding the cost of their programs. This is an example of the Department taking reasonable and prudent oversight actions as a regulator to protect students and taxpayers and has nothing to do with the school’s religious affiliation as a Christian University or history of litigation against the Department.”
Targeted, or not, the battle between GCU and the Department of Education doesn't seem to be going away.