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Largest Christian university in US defiant after feds slap school with $37M fine: 'Not paying a dime'

Grand Canyon University Arena in Phoenix, Arizona
Grand Canyon University Arena in Phoenix, Arizona | Wikimedia Commons/GrandCanyonU https://commons.wikimedia.org/wiki/File:Grand_Canyon_University_Arena_-_Dusk.jpg

The president of the largest Christian university in the United States said that his school has no intention of paying the unprecedented $37.7 million fine levied this week by the U.S. Department of Education for alleged deceptive practices.

"The amount of the fine is absolutely ridiculous, but the point is, whether it was $1 or $38 million, we're not paying a dime," Phoenix, Arizona-based Grand Canyon University President Brian Mueller told The Christian Post. "We are the most transparent institution in the country."

The Education Department slapped GCU with the largest fine in the department's history on Tuesday for allegedly misleading students about the cost of its doctoral program, according to a statement.

An investigation by the department's Office of Federal Student Aid found that "GCU lied about the cost of its doctoral programs to attract students to enroll" to more than 7,500 current and former students, according to the statement.

"FSA takes its oversight responsibilities seriously," FSA Chief Operating Officer Richard Cordray said in a statement. "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."

The Education Department claims GCU, which has approximately 120,000 students, misrepresented the cost of its doctoral programs on its website by advertising that they cost $40,000 to $49,000 when less than 2% of graduates completed their course of study within that price range.

Required "continuation courses" often tacked an additional $10,000 to $12,000 onto the final cost, the department said.

The investigators also say GCU pointed to fine-print disclosures that the program could require additional costs, which the department dismissed as inadequate notice of "substantial misrepresentations regarding cost."

To participate in federal financial aid programs, the department is also requiring the school to notify potential students of the average cost of a degree, ensure such action is monitored, as well as instruct students on how they can file a complaint.

Speaking to CP, Mueller echoed an extensive Oct. 31 statement from GCU characterizing the allegations as "further evidence of the coordinated and unjust actions the federal government is taking against the largest Christian university in the country."

Mueller asserted that the department's actions are illogical and potentially retaliatory.

"We've presented at seven major conferences because of our level of transparency," he said. "We give the cost of the entire program to students up front at all three levels — bachelor's, master's and doctoral — when all you're required to do is provide the first year for first-year freshmen."

"And so to come in and fine any amount to a university that is recognized within the industry as setting the gold standard for transparency, there's no logic to that," he added.

Mueller said the school's battle with the department extends beyond the recent fine, which he suspects is a continuation of the conflict GCU has had with the federal government since 2018 over its nonprofit status.

GCU was founded in 1949 as a nonprofit college by the Southern Baptist Convention but became a for-profit institution in 2004 amid financial struggles. Its enrollment subsequently expanded exponentially, with many students partaking in its online program. Mueller told CP that it now boasts approximately 92,000 online students.

When it sought to revert to a 501(c)(3) tax-exempt Arizona nonprofit status in 2018, the move was approved by the IRS, Higher Learning Commission, State of Arizona, Arizona Private Postsecondary Board and NCAA Athletics.

The Education Department rejected the nonprofit status, claiming GCU had not separated enough from its publicly traded former owner, Grand Canyon Education, which still provides services to GCU and where Mueller still serves as CEO, according to Forbes.

GCU fought back with a lawsuit in 2021, alleging the department's actions were "arbitrary and capricious." A judge ruled against GCU in December 2022, but the school plans to mount an appeal next month.

After the lawsuit, GCU officials claimed they were inundated with "broad requests for voluminous amounts of information and records about our operations" from federal bureaucrats, according to Inside Higher Ed.

Regarding suspicions that the federal government might be targeting GCU for ideological reasons, Mueller said, "We don't know because they won't say, but a lot of people are assuming it is in part because we're teaching from a Christian worldview perspective, and in part because we use the public markets to get assets to capital to build this thing out, and it's worked way better than we thought it would."

Mueller noted that an almost identical astronomical fine has been threatened against Lynchburg, Virginia-based Liberty University, an institution founded by the late Pastor Jerry Falwell Sr. 

In October, the department threatened Liberty with a $37.5 million fine for alleged failure to report sexual assaults and other crimes on campus, a violation of the Clery Act. 

An Education Department spokesperson told CP that "the Department's decision on Grand Canyon's attempted conversion from for-profit to non-profit — which we agree with, but which the school has raised as part of its evidence of religious targeting — was made under former U.S. Secretary of Education Betsy DeVos."

"With this week's action, the Department is performing its oversight duties required by the Higher Education Act. The Department will not be deterred by false accusations or public relations campaigns from protecting students, taxpayers, and the Title IV program from the kind of misconduct identified here wherever it's found," the spokesperson added.

Mueller told CP that he attributes the efforts against GCU to "the unelected career bureaucrats in the department who are making all these decisions."

"The irony is they're saying they're protecting our students from the university," Mueller said. "The reality is that we are having to protect our students now from the federal government because it's going to cost us a lot of money to defend ourselves. And if at some point those costs are exorbitant, we're going to have to raise tuition."

Jon Brown is a reporter for The Christian Post. Send news tips to jon.brown@christianpost.com

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