The U.S. Department of Education (ED) has rescinded a $37.7 million fine, with prejudice, that was proposed against Grand Canyon University, clearing the university of any wrongdoing.
In a Joint Stipulation of Dismissal order issued by ED’s Office of Hearings and Appeals, the Department dismissed the case with no findings, fines, liabilities or penalties of any kind. ED confirmed it has not established that GCU violated any Title IV requirements, including the claim that GCU “substantially misrepresented” the cost of its doctoral programs that was alleged by ED officials under the Biden Administration. The Dismissal stated unequivocally that “there are no findings against GCU, or any of its employees, officers, agents, or contractors, and no fine is imposed.”
GCU President Brian Mueller said the fine dismissal is welcome news but he was not surprised by the decision. “The facts clearly support our contention that we were wrongly accused of misleading our Doctoral students and we appreciate the recognition that those accusations were without merit,” Mueller said. “GCU is a leader in innovation, transparency and best practices in higher education and we look forward to working cooperatively with the Department in the future – just as we have with all regulatory agencies.”
The proposed fine action was, by far, the largest the Department of Education had ever levied against a university. GCU filed an appeal to ED’s Office of Hearings and Appeals, maintaining that the unsubstantiated accusations were gross mischaracterizations based on isolated, out-of-context statements from certain enrollment documents and that, in fact, GCU students receive robust information about the time, cost and credits needed to complete a doctoral degree throughout their enrollment and onboarding process. Moreover, GCU maintains that its disclosures surrounding continuation courses, which are common in higher education doctoral programs, provide more information than is legally required or that other universities typically provide. As such, GCU has consistently insisted that it would contest any fine amount – even $1, let alone $37.7 million.
The dismissal of the fine action coincides with other regulatory bodies and courts that have also refuted allegations that GCU misrepresented the cost and credits of a doctoral program.
- Two federal courts previously rejected similar allegations related to GCU’s doctoral disclosures in Young v GCU.
- The Higher Learning Commission deemed the University’s disclosures “robust and thorough” in its 2021 comprehensive review.
- The Arizona State Approving Agency of the Department of Veterans Affairs in March 2024 found “no substantiated findings” in its audit that looked at GCU’s disclosures and processes.
The dismissal also follows two recent legal victories for GCU that have negated federal government actions taken against the university.
- In November 2024, a three-judge panel of the Ninth Circuit Court of Appeals ruled unanimously that ED acted unlawfully and exceeded its authority by applying an incorrect legal standard when it refused to acknowledge GCU’s lawful nonprofit status. The Ninth Circuit vacated ED’s erroneous determination and remanded the case back to the agency to apply the correct standard. GCU is hopeful that process will be completed soon, as the IRS has already determined that GCU meets all legal requirements as a 501(c)(3) tax-exempt entity. In light of the Ninth Circuit ruling, 10 of Arizona’s Congressional members have sent a bipartisan letter of support for GCU’s nonprofit status to ED.
- In March 2025, the U.S. District Court of Arizona dismissed the FTC’s lawsuit against Grand Canyon University, concluding the FTC does not have jurisdiction under the FTC Act because GCU is not a corporation “operating for its own profit or that of its members.” In fact, GCU has operated as a 501(c)(3) tax-exempt Arizona nonprofit corporation fulfilling charitable purposes for all but 14 years of its 75-year history and most recently since completing a transaction in 2018 to revert to that status. The District Court ruling emphasized that “the mere fact that a nonprofit is earning revenue and expanding does not transform it into a for-profit. No federal court has ever adopted such a broad reading of the FTC Act’s definition of a corporation, which would… give the FTC authority over all manner of nonprofit entities.”
The FTC lawsuit continues against Grand Canyon Education, which provides services to GCU, and Mueller despite the fact the lawsuit essentially raises the same manufactured nonprofit and doctoral disclosure claims that have been refuted, rejected and dismissed. Any FTC continuation of its nonprofit disclosure allegations following the 9th Circuit ruling and IRS decision, and the doctoral disclosure allegations following ED’s fine-action dismissal and the other court rulings, would only further underscore the multi-agency attack initiated under the Biden Administration to tie GCU up with protracted legal proceedings.
It is important to recognize that all of the following agencies and courts have now either directly refuted, come to the opposite conclusion or reigned in government overreach regarding false claims surrounding GCU’s doctoral disclosures and/or tax-exempt 501(c)(3) Arizona nonprofit status:
- U.S. Department of Education
- IRS
- State of Arizona
- Higher Learning Commission
- Arizona Private Postsecondary Board of Education
- Arizona State Approving Agency of the Department of Veterans Affairs
- Ninth Circuit Court of Appeals in Grand Canyon University v. Cardona
- 11th Circuit Court of Appeals and U.S. District Court for the Northern District of Georgia in Young v. GCU
- U.S. District Court of Arizona in FTC v. Grand Canyon Education, Inc.; Grand Canyon University; and Brian E. Mueller
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About Grand Canyon University: Grand Canyon University was founded in 1949 and is Arizona’s premier private Christian university. GCU is accredited by the Higher Learning Commission and offers 349 academic programs, emphases and certificates for both traditional undergraduate students and working professionals. The University’s curriculum emphasizes interaction with classmates, both in-person and online, and individual attention from instructors while fusing academic rigor with Christian values to help students find their purpose and become skilled, caring professionals. For more information, visit gcu.edu.