U.S. Trade Commission Accuses Grand Canyon of Deceptive Advertising

Inside Higher Ed

Doug Lederman

December 27, 2023

The Federal Trade Commission on Wednesday sued Grand Canyon University in federal court, alleging that the institution, its parent company and its CEO deceived prospective doctoral students about the price and requirements of its programs and its tax status.

“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,” Samuel Levine, director of the trade commission’s Bureau of Consumer Protection, said in a news release about the lawsuit.

Grand Canyon and the Biden administration have been locked in a years-long battle over the Christian university’s tax status, including the university’s 2021 lawsuit challenging the Education Department’s rejection of its conversion to nonprofit status. Grand Canyon has been recognized as a nonprofit by the Internal Revenue Service, but it can’t market itself that way until the Education Department approves the conversion. The university has asserted that the department, along with the FTC and the Department of Veterans Affairs, have been coordinating their efforts to “unjustly target GCU in what appears to be retaliation for the university filing an ongoing lawsuit against ED regarding its nonprofit status.”

In the lawsuit, the FTC states that Grand Canyon University “deceptively marketed the school as a nonprofit,” even though, the agency alleges, it “has been operated for the profit” of Grand Canyon Education, the for-profit company that provides marketing and other services to the university.

The university pays 60 percent of its revenue to Grand Canyon Education, and Brian Mueller, president of Grand Canyon University, is also CEO and a stockholder of Grand Canyon Education, the trade commission’s lawsuit asserts. Per the lawsuit, Grand Canyon University is the most significant source of revenue for Grand Canyon Education.

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