GCU facing lawsuit from FTC over deceptive advertising, illegal telemarketing

Dec 28, 2023, 8:16 AM | Updated: 8:18 am

Grand Canyon University was sued by the Federal Trade Commission on Dec. 27, 2023, over deceptive m...

Grand Canyon University was sued by the Federal Trade Commission on Dec. 27, 2023, over deceptive marketing, illegal telemarketing. (GCU Photo)

(GCU Photo)

PHOENIX — The Federal Trade Commission filed a lawsuit Wednesday accusing Grand Canyon University of deceptive advertising and illegal telemarketing.

The suit targets GCU’s doctoral programs, accusing the Phoenix-based private Christian university of telling prospective students that the programs were equal to the cost of 20 courses.

The programs, in reality, required that almost all students take “continuation courses” that added thousands in costs, according to the suit filed in the U.S. District Court for the District of Arizona.

The U.S. Department of Education, which handed GCU a $37.7 million fine in October for misleading students about doctoral program costs, said that fewer than 2% of doctoral students finished a program within the advertised cost.

The FTC also went after GCU’s claim of being a nonprofit, saying the university has been operating for the benefit of Grand Canyon Education, a for-profit company that provides marketing for the university.

Brian Mueller, GCU’s president and CEO of GCE, is accused of benefitting in the form of bonuses tied to GCE’s performance.

“Grand Canyon deceived students by holding itself out as a nonprofit institution and misrepresenting the costs and number of courses required to earn doctoral degrees,” Samuel Levine, director of the FTC’s Bureau of Consumer Protection, said in a press release.

“We will continue to aggressively pursue those who seek to take advantage of students.”

GCU said it is being targeted.

“The FTC’s allegations related to GCU and GCE are unfortunately yet another example of the Biden administration weaponizing federal government agencies in a coordinated effort to target institutions to which they are ideologically opposed,” the university said Thursday in a statement.

What else is in the FTC’s lawsuit against GCU?

The agency additionally accused GCE, on behalf of GCU, of using illegal telemarketing calls to attempt to boost enrollment.

Grand Canyon University has more than 100,000 students, mostly in online programs. Roughly 20,000 students are enrolled at its west Phoenix campus on Camelback Road between 31st and 35th avenues.

The university allegedly used submitted information to contact people who specifically requested to not be called or were on the national Do Not Call Registry.

What’s the latest on GCU’s $37.7 million fine?

GCU filed an appeal to the DOE fine in mid-November.

If it fails, GCU has said it’s prepared to file a federal lawsuit.

Mueller, in a speech, called the fine “ridiculous” and questioned whether the school is being targeted because of its faith affiliation.

He noted that the nation’s second-largest Christian university, Liberty University, is reportedly being threatened with a $37 million fine over alleged underreporting of crimes.

“It’s interesting, isn’t it, that the two largest Christian universities in the country, this one and Liberty University, are both being fined almost the identical amount at almost the identical time?” he said. “Now is there a cause and effect there? I don’t know. But it’s a fact.”

The Associated Press contributed to this report.

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GCU facing lawsuit from FTC over deceptive advertising, illegal telemarketing