Grand Canyon University accuses federal officials of retaliation in conflict over nonprofit status

PHOENIX – Grand Canyon University is accusing federal officials of retaliating against the Phoenix school over its ongoing lawsuit against the U.S. Department of Education.

GCU detailed its allegations, which are centered around the private Christian college’s nonprofit status, in a lengthy online statement Thursday.

The university sued the Department of Education (DOE) in 2021, accusing the agency of failing to acknowledge the school’s nonprofit status for the purposes of federal student financial aid.

Thursday’s statement accuses DOE and Federal Trade Commission officials of engaging in a coordinated effort to harm GCU with frivolous accusations. The Arizona State Approving Agency, under authority of the U.S. Department of Veterans Affairs, is also implicated.

What is the history of Grand Canyon University’s nonprofit status?

GCU, now the nation’s largest Christian college, operated as a nonprofit institution from its founding in 1949 to until 2004, when it almost was forced to close because of financial difficulties.

“An investor came in and put up a lot of money to keep the university afloat” as a for-profit entity, GCU President Brian Mueller told KTAR News 92.3 FM on Thursday.

After experiencing a period of sustained growth, the school completed the process of reverting to nonprofit status in 2018.

“Basically, everybody blessed that except the Department of Education,” Mueller said. “They said they were going to keep a for-profit tag on us and treat us differently.”

Why did GCU sue the Department of Education?

GCU, which hasn’t raised its tuition in 15 years, said it tried to negotiate with the DOE and only filed its lawsuit when it became clear the agency wasn’t going to change its opinion.

“And they started opening up these investigations,” Mueller said. “They gave no reason for them, there weren’t student complaints.”

Mueller said the things that typically trigger investigations – such as low graduation rates and high student loan default rates — didn’t apply to GCU.

He said GCU decided to go on the offensive after the DOE recently said it was going to announce a fine against the school soon.

“We’re tired of this, and so what we’re coming out with today is our statement of facts around these four investigations, and how frivolous they are, and making sure people understand that this is happening in context of us producing tremendous results. … We’re kind of getting out in front of what they said they were going to announce,” Mueller said.

KTAR News 92.3 FM’s Balin Overstolz McNair contributed to this report.

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