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# U.S. Department of Education Office of Federal Student Aid Fines Grand Canyon University $37.7 Million for Deceiving Thousands of Students

# U.S. Department of Education Office of Federal Student Aid Fines Grand Canyon University $37.7 Million for Deceiving Thousands of Students

October 31, 2023

**Contact:  **press@ed.gov

                                    -        
The U.S. Department of Education (Department) office of  Federal Student Aid (FSA) today announced a $37.7 million fine against Grand Canyon University (GCU), which disbursed the most federal student  aid of all participating institutions for the past four award years. An FSA  investigation found GCU lied to more than 7,500 former and current students  about the cost of its doctoral programs over several years. GCU falsely  advertised a lower cost than what 98% of students ended up paying to complete  certain doctoral programs.

“GCU lied about the cost of its  doctoral programs to attract students to enroll,” said FSA Chief Operating  Officer Richard Cordray. “FSA takes its oversight responsibilities seriously.  GCU’s lies harmed students, broke their trust, and led to unexpectedly high  levels of student debt. Today, we are holding GCU accountable for its actions,  protecting students and taxpayers, and upholding the integrity of the federal  student aid programs.” 

GCU has 20 days to request a  hearing with the Department’s Office of Hearings and Appeals or submit written  material to FSA indicating why the fine should not be imposed. In addition to  the fine, the Department imposed specific conditions on the school to continue  participating in the federal student aid programs.

**Widespread  misrepresentations related to the cost of doctoral programs**

FSA’s investigation determined that as far back as 2017,  GCU was not fully informing students about the cost of its doctoral programs.  GCU stated that those doctoral programs cost between $40,000 and $49,000. GCU  made these false claims about the cost on the school’s website and net price  calculators, as well as in its enrollment agreements, catalogs, policy  handbooks, and other marketing materials. These false claims violate the Higher  Education Act and federal regulations prohibiting substantial  misrepresentations. Based upon these substantial misrepresentations, the Department  also determined that GCU failed to adhere to the fiduciary standard required of  a *Title IV* participant.

GCU’s statements about the total cost to complete these  programs were false and misleading because, based on GCU’s own data, less than  2% of graduates completed within the cost that GCU advertised. For the vast  majority of graduates, “continuation courses”—which added extra costs—were  necessary to complete the dissertation requirement in these doctoral programs.  GCU’s data further shows that 78% of the graduates in those programs had to pay  $10,000 to $12,000 more in tuition costs—roughly a 25% increase, depending on  the program—than GCU explicitly advertised.

When given an opportunity to respond to the Department’s  evidence, GCU pointed to a series of fine print disclosures included in some of  its enrollment agreements and other documents distributed to students. These  disclosures are insufficient to cure the substantial misrepresentations  regarding cost. The new disclosures fail to address or correct the significant  misrepresentations about the cost of the program. Furthermore, the disclosures  are also buried in dense documents and are much less prominent than the  misrepresentations. As a result, they do not cure the “net impression” that the  program will be less expensive than it actually is. GCU did not contest FSA’s  determination that 98% of students enrolled in certain doctoral programs had to  pay more than GCU’s advertised cost.

In Award Year  2020–21, GCU enrolled more than 100,000 students. GCU offers certificate,  undergraduate, and graduate degree programs through in-person and online  instruction.

**Holding  GCU accountable and protecting students and taxpayers**

Last month, FSA added five specific conditions to GCU’s Provisional Program  Participation Agreement (PPPA):
- Condition A: GCU shall       not make substantial misrepresentations related to the cost of obtaining a       degree in its doctoral programs, and if GCU informs prospective or current       doctoral students about the cost of completing its doctoral programs, it       must tell students the average total tuition and fees paid by graduates       and the maximum number of credits that a student can take that are       eligible for Title IV funds.
- Condition B: GCU must       engage a monitor to oversee its compliance with Condition A.
- Condition C: GCU must       report quarterly to the Department about investigations, actions, or other       legal proceedings by its accrediting agency or any government agency and       must report pending litigation in which a plaintiff seeks class       certification.
- Condition D: GCU must       send a notice to all currently enrolled doctoral students informing them       how to use the Department’s feedback center to submit a complaint to the       Department.
- Condition E: GCU must       send a notice to all current employees who provide recruiting, admissions,       and other services to doctoral students about how to use the FSA Tips line       to submit information about misconduct or violations.

The PPPA governs GCU’s participation in federal student  aid programs for the next three years.

Today’s action demonstrates the Department’s ongoing  commitment to enforcing higher education laws and regulations and protecting  students, taxpayers, and the integrity of the federal student aid programs.
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