The scandal surrounding the country's largest Christian college

The country's largest Christian college, Phoenix-based Grand Canyon University, has had its fair share of controversies and scandals, and is continuing to fight a record financial penalty from the federal government as a result. But while the school was fined $37.7 million by the U.S. Department of Education last year, it recently received some good news out of court on another front.

GCU was accused of misrepresenting the costs of its doctoral programs over several years. The college allegedly advertised "a lower cost than what 98% of students ended up paying to complete certain doctoral programs," the Education Department said in a press release. "We are holding GCU accountable for its actions, protecting students and taxpayers, and upholding the integrity of the federal student aid programs."

GCU's 100,000 enrolled students — the majority of whom attend online — make it the largest Christian college in the United States, according to NBC News. Officials at the university have pushed back against the federal government's allegations, but the fine could have major ramifications across the school regardless.

Subscribe to The Week

Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.

SUBSCRIBE & SAVE

Sign up for The Week's Free Newsletters

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

Sign up

What was Grand Canyon University accused of? 

The Education Department said GCU advertised its doctoral programs as costing anywhere from $40,000 to $49,000, but based on the university's own data, "less than 2% of graduates completed within the cost that GCU advertised." As a result of "continuation courses" required to complete their degrees, at least 98% of doctoral students at GCU ended up paying many times the amount advertised, the Education Department alleged. The investigation involved about 7,500 students enrolled at GCU between 2017 and 2022.

Of the 98% of students whose degrees ended up costing extra, more than three-quarters of them "had to pay $10,000 to $12,000 more in tuition costs — roughly a 25% increase, depending on the program — than GCU explicitly advertised," the Education Department said. While GCU does offer a series of fine-print disclosures about the cost of their doctoral programs, they "fail to address or correct the significant misrepresentations about the cost of the program," the feds argued, adding that the disclosures "do not cure the 'net impression' that the program will be less expensive than it actually is."

How has the school responded?

GCU has denied any wrongdoing and made a number of attempts to push back against the government's characterization of its doctoral programs. The Education Department noted, though, that the college didn't dispute the government's determination that "98% of students enrolled in certain doctoral programs had to pay more than GCU's advertised cost."

Weeks before it was slapped with its record fine, GCU released a statement claiming that the government was "coordinating efforts to unjustly target GCU." The university alleged that the investigation into its tuition was in retaliation for a 2021 lawsuit filed against the Education Department for categorizing it as a for-profit university, which GCU has pushed back against. While the IRS does consider GCU to be nonprofit for tax purposes, the Education Department still classifies it as a for-profit school in relation to financial aid. Federal officials maintain that these issues are "entirely unrelated" and that GCU's loss of its nonprofit status had nothing to do with the fine.

The school did gain a major victory in this nonprofit fight, as a federal circuit appeals court recently determined that the Education Department "acted unlawfully by applying the incorrect legal standard in determining GCU's nonprofit status," the school said in a press release. This does not absolve the school of the $37.7 million fine, but it does mean that the Education Department could end up reclassifying GCU's profit status.

The IRS "clearly has the authority to grant us nonprofit status. There's an objective set of criteria that they use to do that, and they did it. The ED has never not honored what the IRS has determined," GCU President Brian Mueller said to Fox News.

What happens next? 

It is unclear whether the Education Department will appeal the appeals court ruling on GCU's profit status.

In addition to the fine, the Education Department imposed five new conditions on GCU to ensure it abides by these federal rules. First, the college shall not make "substantial misrepresentations related to the cost of obtaining a degree in its doctoral programs." And if GCU does inform someone about the cost of its doctoral programs, it must also tell them "the average total tuition and fees paid by graduates."

Officials at GCU have said they intend to fight the Education Department's fine for as long as it takes. Officials are also "continuing to encourage staff and other affiliates to contact federal lawmakers in the university's defense," The Arizona Republic said. The Education Department may additionally be forced to end its bid entirely when President-elect Donald Trump takes office, given his prior statements about gutting the federal agency.