The school won another major victory after the US Department of Education retracted a historic fine against Grand Canyon University (GCU), a Christian college in Phoenix, Arizona.
The FTC sued GCU in late 2023, claiming that the school had deceived students about fees associated with doctoral studies and engaged in what it viewed as illegal telemarketing practices. At the time, the FTC said, “The university, its marketers and its CEOs advertised the cost and course requirements of doctoral programs and nonprofits, making illegal appeals to consumers.”
The lawsuit comes just months after the Department of Education was subjected to its own fine and is now officially suspended.
“The Federal Trade Commission (FTC) voted unanimously (Friday) to dismiss the case against Grand Canyon Education and Brian Mueller, Grand Canyon University’s largest service provider.
All parties reportedly submitted joint provisions for dismissal with the court’s bias. FTC Chair Andrew N. Ferguson joined Commissioner Melissa Holyoak and Mark R. Meadowl in publishing a news-checking statement.
“The case, which was inherited from the previous administration, was filed almost two years ago and suffered losses from two allegations that were rejected,” the statement reads, noting that the Ministry of Education’s recent victory. “In this case, the consumers are offering it mostly upwardly, compared to the costs they pursue to complete.”
The commissioner said that with the recent GCU victory, “it is no use to continue to consume committee resources due to lost causes.” Citing its obligations to taxpayers, the FTC said it had decided to stop pursuing the case. The GCU sees this as yet another victory.
GCU President Brian Mueller also spoke about the issue in a statement, pushing back allegations imposed on his university and affirming his belief that the lawsuit is part of a “coordinated effort by former officials within the Biden administration to undermine a prosperous Christian university.”
“As I said from the beginning, these accusations were not only wrong, but the opposite is true,” he said. “We are recognized as leaders in this field beyond what is needed for disclosure.”
Mueller continued. “They threw everything they had on us for four years, and despite all the unfair accusations that were levelled against us, we not only survived, but continue to thrive as a university.
Mueller made a similar claim earlier this year, telling CBN News in May that he believes the government is unfairly targeting his school. At the time, he had told him that he had fired a massive $37.7 million fine from the education department.
At the same time, the Ministry of Education confirmed its decision to CBN News, and accused the previous administration of “promising not to persecute and prosecute universities and universities based on their religious affiliation.”
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GCU’s long-standing battle with the Ministry of Education attracted more media attention than the FTC fight due to the historic scale and scope of the fines.
“This all started six years ago and returned to nonprofit status, including the ability to be approved by everyone and have the authority to do so (Internal Revenue Service) and the expertise to do so,” he told CBN in May. “And we tried to work with the (educational) department because everyone else approved our nonprofit status, which was important for many reasons for the university.”
How did the problem begin?
The clashes with the GCU government began years ago. And when the parties were unable to deepen their understanding, they quickly headed south. Mueller said GCU filed a complaint while the school was not moving forward to the Ministry of Education.
“After we filed a complaint, they began retaliation and launched five different investigations that cost millions of dollars, literally (they have),” he said. “They looked at thousands, thousands, thousands of documents and finally centered on “I think they misunderstood doctoral students and misunderstood them to get a degree.” ”
Mueller argued that there was nothing evil or misleading surrounding the doctoral program, and that GCU refused to pay the fine.
“Obviously we’re not going to accept that,” he said. “They not only said we misled them, they also fined US$37 million, the largest fine in the Department of Education history. We said we were not in the mood to negotiate that penny.”
Mueller continued. “We don’t even pay the amount because it’s not only not true, but the opposite is true.”
A fresh look
He said the Trump administration “deemed the fines and the incident “fresh,” while the Department of Education believes “there is absolutely no substantial evidence that GCU misinterpreted the students.”
“They reversed the decision, and it was clearly a big victory for us,” Mueller said. “We’re not surprised by that. We thought it was going to happen, but we’re grateful that it happened.”
After that previous victory, Mueller said the IRS conducted an additional audit of GCU’s nonprofit status, finding everything was orderly, marking another “big victory” for the school. The FTC victory appears to have officially shut down a long chapter on the GCU clash with the federal government.
When asked whether he believed that the now alleged large education sector fines were motivated by anti-religious or political bias, Mueller replied that he “absolutely” believes it.
“There’s no other big reason for the incredible attacks they imposed,” he said.
Anyway, Mueller believes that the GCU serves God and supports the progress of truth. And he looks forward to a future in which the school can help serve God and his kingdom.
“We know that God is doing real things here to promote his kingdom, and we didn’t allow anyone to get in the way,” he said. “We are used by God to promote His purpose.”
Ministry of Education’s response
As mentioned earlier, Ministry of Education spokesman Ellen Keist confirmed that in May the fine was lowered to a statement to CBN News, pledging to halt the practice of targeting religious schools.
“Unlike previous administrations, we will not persecute or prosecute universities or universities based on their religious affiliation,” Keyst said. “The Trump administration continues to ensure that all institutions of higher education are factually responsible, but enforcement of the (educational) department is not about political bias, but rather about serving students.”
This is a spectacular reversal from actions and comments that came from the same division during the Biden era. As CBN News previously reported, former Education Secretary Miguel Cardona reportedly sworn GCU to Shutter.
Cardona commented at a House Approximately Expenditure Committee hearing on April 10, 2024 that the Biden administration “not only shutting down them, but also sending a message to not prey on students.”
The GCU, in a statement delivered to CBN News at the time, called Cardona’s statement “intrusive and slanderous.”
More on the roots of the battle
The university created headlines on the conflict in the fall of 2023. The Department of Education has fined the school a historic $37.7 million for the aforementioned claims in which students were misunderstood about the costs of their doctoral studies.
Despite the GCU denying these claims, the verdict accuses the decision of its pledge to not pay refusally. He said the fine was “the biggest in history for a school that lied about the cost and ended schools from Title IV.”
A press release from the Ministry of Education in October 2023 provided details on these claims.
The U.S. Department of Education (Department) Federal Student Aid Agency (FSA) today announced a $37.7 million fine against Grand Canyon University (GCU). A FSA investigation has revealed that over several years, GCU has lied to more than 7,500 former and current students about the cost of a doctoral program. GCU mistakenly touted the lower costs than what 98% of students ended up paying to complete a particular doctoral program.
See previous interviews where Mueller tackled these issues further.
GCU’s past struggles before they find success
Mueller shares how some of the past issues at GCU led to a slightly roller coaster before landing on the school’s current success.
“This all started 14 years ago… (when) the Grand Canyon was in a very difficult place,” he said. The school building is aging and the facility is in debt in millions of dollars, he said. “We switched from a nonprofit to for-profit status and went to the open market to access capital.”
Mueller continues, “We wanted civilian Christian higher education to be affordable for Americans of all socioeconomic classes, and this plan worked better than we thought.”
Just 10 years later, GCU is now in a “very good place” and said the campus is “growing like crazy.”
With previous issues being improved, GCU wanted to return to non-profit status.
“We thought it would be best for (we) doing it for the heritage of the facility,” he said. “We’ve been going through the process and the IRS has the authority to do the job and they do that and say, “The operations you set up are qualified as nonprofits and legally empowered to operate as nonprofits.” And Arizona strengthened it. ”
However, Mueller said the GCU has discovered that the Department of Education does not intend to recognize the restored non-commercial disease status. After being reported to have tried to work with the government for four years, he said the GCU has not made any progress. That’s when GCU filed a complaint.
Refusing to recognize GCU’s non-commercial status
One of the Ministry of Education’s reported obsession points was a university that was sold to a for-profit organization called Grand Canyon Education (GCE) during early trouble.
The school’s board reportedly created a new entity, “New GCU,” to lead the process of buying back the university and running it again as a nonprofit.
The for-profit organization, a lasting agreement between New GCU and Grand GCE, appears to have caused a surprise as 60% of the university’s revenue goes to GCE for marketing, accounting and other necessary services.
Education officials say the contract works in for-profit capacity, but school officials said this type of arrangement is common in the education sector.
There’s yet another twist. As Forbes reported, the Department of Education’s refusal to grant GCU’s nonprofit status, although now improved, was under the term of former Education Secretary Betsy DeVos, who served under the first Trump administration.
In a 2019 letter, the government wrote that the authorities believe that the main purpose of the status conversion is to “achieve shareholder value in GCE, and that GCU is potentially permanent as a prisoner’s client.”
In the end, the problem was resolved. For more information about past history, please see here.
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