The Federal Trade Commission (FTC) initiated legal action against Grand Canyon University (GCU), Grand Canyon Education (GCE), Inc., and GCE CEO Brian Mueller.
The lawsuit alleges that the Arizona-based institution, under Mueller's leadership, engaged in deceptive practices, misleading students regarding the costs of its doctoral programs over an extended period, as per Fox Business.
FTC Files Lawsuit Against GCU for Deceptive Practices
According to a press release from the FTC, the lawsuit targets GCU, its marketing arm Grand Canyon Education, Inc., and Brian Mueller individually, asserting deceptive advertising and unlawful telemarketing practices. The complaint details the alleged misconduct, including misleading prospective doctoral students about program duration, misrepresenting the institution as a nonprofit, and making unauthorized calls to individuals who explicitly requested not to be contacted.
Samuel Levine, Director of the FTC's Bureau of Consumer Protection, emphasized the seriousness of the accusations, stating, "Grand Canyon deceived students by holding itself out as a non-profit institution and misrepresenting the costs and number of courses required to earn doctoral degrees." Levine affirmed the FTC's commitment to pursuing those who take advantage of students.
The complaint, invoking the FTC Act and the Telemarketing Sale Rules, calls on the US District Court in Arizona to redress the alleged violations. The FTC seeks compensation for consumers and demands a court order to prevent further violations of the law by the university.
While GCU has not yet responded to inquiries from FOX Business regarding the lawsuit, Mueller, in late October, voiced his belief that the university was unfairly targeted by the Biden administration, suggesting a coordinated attack involving multiple federal agencies, according to New York Post.
DOE Fines GCU $37.7M for Misleading Doctoral Program Ads
The legal action follows a substantial fine imposed by the Department of Education (DOE) on October 31, amounting to $37.7 million. The DOE, in its investigation, accused GCU of providing false information about the costs of its doctoral programs to over 7,500 students. The department stated that GCU "falsely advertised" lower costs, with approximately 98% of students ultimately paying more than initially promoted.
Mueller contested the federal investigations, linking them to the DOE's denial of GCU's attempt to transition into a nonprofit institution in 2018. Despite these challenges, the university intends to appeal the DOE's unprecedented fine, maintaining its stance that it does not deceive or mislead students.
The lawsuit filed by the FTC on Wednesday further elaborates on the accusations against Grand Canyon University. It asserts that the institution misled potential doctoral students about program costs and requirements, misrepresented itself as a nonprofit, and engaged in abusive telemarketing practices, violating the National Do Not Call Registry.
In addition to GCU, the lawsuit names Grand Canyon Education Inc. and Brian Mueller as defendants. Grand Canyon Education, a for-profit entity, served as the exclusive provider of marketing services for GCU. Mueller, who is also the CEO of Grand Canyon Education, was involved in the university until 2018.
As the legal proceedings unfold, Grand Canyon University faces intensified scrutiny over its advertising practices and alleged misconduct, setting the stage for a legal battle that could have significant implications for the institution's reputation and future operations, USA Today reported.
