The U.S. Department of Education (ED) dismissed with prejudice an unprecedented $37.7 million fine against the largest Christian university, Grand Canyon University (GCU) in the United States after a prolonged legal dispute.
Based in Phoenix, Arizona, GCU was cleared of any wrongdoing by a Joint Stipulation of Dismissal order issued by ED’s Office of Hearings and Appeals, which stated “there are no findings against GCU, or any of its employees, officers, agents, or contractors, and no fine is imposed,” according to a Friday press release from the school.
Founded in 1949 as a nonprofit college by the Southern Baptist Convention, GCU transitioned to a for-profit institution in 2004 amid financial difficulties and has since grown to become the country’s largest Christian college by enrollment. Last month, the school graduated 31,104 students, including 25,435 online students and 5,669 on-campus students.
The dispute began in October 2023 when the Department of Education imposed a $37.7 million fine following an investigation by its Office of Federal Student Aid. The investigation concluded that “’GCU lied about the cost of its doctoral programs to attract students to enroll’” in more than 7,500 current and former students.
The department alleged that the school misrepresented the cost by advertising that its doctoral programs cost between $40,000 and $49,000 when fewer than 2% of graduates completed their programs within that price range.
The department also claimed that “required continuation courses often tacked an additional $10,000 to $12,000 onto the final cost,” and dismissed GCU’s disclosures about these extra costs as “inadequate notice of substantial misrepresentations regarding cost.”
In response to the fine, GCU faced lawsuits from the Federal Trade Commission and a financial audit from the Department of Veterans Affairs, which the school argued was part of a coordinated effort by government agencies to target GCU for punishment.
The U.S. District Court of Arizona dismissed the FTC’s lawsuit in March, ruling that “the FTC did not have jurisdiction over GCU.”
GCU President Brian Mueller welcomed the ruling, stating, “The facts clearly support our contention that we were wrongly accused of misleading our Doctoral students and we appreciate the recognition that those accusations were without merit,”
He also expressed optimism about future cooperation: “GCU is a leader in innovation, transparency, and best practices in higher education, and we look forward to working cooperatively with the Department in the future — just as we have with all regulatory agencies.”
A report published last year by the conservative think tank American Principles Project highlighted the conduct of the Department of Education’s Office of Enforcement.
According to the report, Christian colleges and universities, which enroll less than 10% of students in the U.S., account for approximately 70% of penalties issued by the Office of Enforcement. The average fine for Christian schools was $815,000, significantly higher than the $228,571 average penalty imposed on public and private institutions for violations related to campus crime.
