grand canyon university scam: reviews and complaints

 

Is Grand Canyon University a Scam? Federal Investigations and Allegations Explained

Grand Canyon University (GCU) is a large private Christian university located in Phoenix, Arizona. In recent years, it has faced numerous allegations and federal investigations related to deceptive business practices. This blog post will explore the details of these investigations and allegations to help explain what has been uncovered.

Background on GCU’s Business Model Changes

GCU was founded in 1949 as a nonprofit Christian institution. For over 50 years, it operated successfully as a nonprofit. However, in 2002 the university began facing financial difficulties. To address this, in 2004 GCU transitioned to become a publicly traded corporation on the Nasdaq stock exchange.

This change in status from nonprofit to for-profit raised some eyebrows in the education community. Critics argued the move was primarily financially motivated rather than educationally motivated. Supporters countered that the change allowed GCU to grow its programs and impact in new ways.

However, this business model change may have led GCU to start engaging in some questionable advertising and billing practices. Multiple state and federal agencies have since launched investigations into allegations against the university.

Allegations of Deceptive Advertising Regarding Cost and Program Length

One of the major allegations against GCU relates to misleading claims made in their advertising and communications regarding program costs and length.

Specifically, the Federal Trade Commission (FTC) alleges that between 2012-2018, GCU advertised the costs of several doctoral programs as being much lower than their actual costs. For example, they claimed some programs would cost around $15,000 but their investigation found the real cost was over $100,000 when all required courses and fees were accounted for.

They also allegedly misrepresented the length of programs, suggesting some doctorates could be completed in just 3 years when the normal time frame was 5-7 years. Both of these misleading claims were likely intended to entice more students to enroll thinking the costs and time commitment were much lower.

GCU has denied these allegations, arguing their published program information was transparent and accurate. However, the FTC’s investigation uncovered evidence of internal trainings where admissions staff were coached on ways to obscure real program costs.

If proven, the deceptive advertising practices could represent significant violations of both consumer protection laws as well as the policy requirements for universities receiving federal student aid funds. This is a serious issue that rightfully drew regulatory scrutiny.

Alleged Abusive Telemarketing and High-Pressure Sales Tactics

In addition to misleading advertising, GCU also faced allegations around their telemarketing and student recruitment practices.

The FTC complaint specifically targets the way GCU pursued and enrolled prospective students via phone calls from third-party marketing firms. It alleges these calls involved high-pressure sales tactics, misleading statements about programs, and enrolling students before they had time to adequately review all program details and costs.

Some concerning claims included obscuring the university’s for-profit status during calls, implying programs could be completed faster or at a lower cost than reality, and using aggressive rebuttals when students asked clarifying questions or expressed doubts.

If proven, these alleged telemarketing practices could represent serious violations of both consumer protection laws regarding deceptive sales practices as well as related regulations for postsecondary institutions. Undue pressure or deception in the student recruitment process damages consumer trust in higher education.

GCU has denied this aspect of the allegations as well. However, the detailed evidence uncovered again suggested a problematic pattern rather than isolated incidents. The potential harm to misled students makes this a major compliance issue.

Initial Settlement and Ongoing Investigations

In December 2023, GCU agreed to settle the FTC’s allegations for $191 million. While not an admission of wrongdoing, the large financial penalty demonstrates the seriousness of the purported violations.

However, this was not the only investigation facing the university. The Department of Education also launched its own probe focusing on whether GCU’s actions violated the terms of its eligibility to receive federal student aid dollars.

In October 2023, this second investigation concluded with even more severe findings. The DOE determined GCU had in fact deceived over 7,500 current and former students regarding doctoral program costs. It also found the university continued making misleading claims even after being contacted by regulators about the issues.

As a result, the DOE imposed a record-setting $37.7 million fine against GCU. The university disputes these findings as well and may appeal the fine. But for now, it represents another major blow to GCU’s credibility amid the allegations of prior deceptive practices.

Reputational Impacts and Lingering Questions

Whether the investigations are fully proven or not, the multiple high-profile allegations and large financial penalties have undoubtedly tarnished GCU’s reputation in the higher education world. Prospective students and employers may now view degrees from the university with more skepticism.

The regulatory actions have also reopened the longtime debate about the appropriateness of the for-profit university business model and whether prioritizing profits can incentivize misconduct. While not unique to GCU, it is a case study reinforcing those long-standing concerns for some.

Additionally, doubts remain about whether cultural and policy changes have fully been implemented to prevent future issues. Have they moved past a “sales-first” approach, or will credible oversight be needed long-term? Only time will tell if this was an aberration or a temporary deterrent.

In Summary

In summary, Grand Canyon University has faced serious allegations of deceptive advertising, misleading claims to prospective students, and problematic telemarketing/sales practices from multiple state and federal agencies over the past several years.

While GCU disputes many of the specific findings, they have also paid financial penalties totaling over $228 million. This suggests at minimum some substantiation of unlawful actions, even if full culpability is debated.

The investigations have understandably damaged public perception of GCU and reignited concerns about for-profit education models. It serves as an example of alleged misconduct that can occur when the academic mission clashes with business and profit priorities. Ultimately, only continued transparency and compliance will help restore trust over time.