Grand Canyon University is once again under the microscope as federal agencies continue their scrutiny with a fresh audit from the U.S. Department of Veterans Affairs (VA), as reported by ABC15. The Christian university based in Phoenix, still entangled in legal disputes, had previously been hit with a $37.7 million fine by the Department of Education's Federal Student Aid (FSA) office.
Following a string of federal probes that started after GCU sued the Department of Education (DOE) for denying its nonprofit status in 2021, this incident marks the fifth time investigators have dug into the school's affairs, according to WPTV. GCU stands firm in its belief that the actions are part of a federal backlash, with GCU President Brian Mueller stating, "This is unfortunately yet one more example of unelected bureaucrats weaponizing federal government agencies in a coordinated effort to target institutions to which they are ideologically opposed," and he called the string of audits "nothing short of harassment."
In the heart of the controversy lies GCU's transformation from a nonprofit institution in 1949 to the country's first for-profit Christian college in 2004, a financial struggle born out of necessity, a decade later the university sought to revert to its nonprofit roots—a move approved by the Higher Learning Commission (HLC) and the IRS but snubbed by the DOE. The denial sparked a lawsuit from GCU, which was later dismissed, and has resultant in a broader investigation across multiple federal agencies.
These federal inquiries peeked when the FSA levied the history-making fine against GCU after uncovering that fewer than 2% of its doctoral students finished their coursework within the expected financial threshold—with many incurring additional costs, 78% of the students taking continuation courses that put them up another $10,000 to $12,000, the DOE said. The FSA's findings fueled a lawsuit by the FTC alleging deceptive marketing practices and illegal telemarketing by GCU to portray itself as a cheaper nonprofit option, even though they were allotting 60% of its revenue to its former parent company.
GCU has denied the allegations from the FTC and the FSA, insisting on its transparency and challenging the evidence against it—a stance it has consistently maintained while criticizing the federal agencies' focus on the university. Mueller told ABC15, "The level of unwarranted scrutiny being imposed on GCU is nothing short of harassment." Meanwhile, officials from the FTC maintain their goal is to "protect students harmed by the alleged deceptive and illegal practices," although GCU counters in a statement, saying federal agencies have provided "no evidence that students were harmed" or any supporting student complaints.
