US university fined $38 million for PhD cost ‘lies’

The US Department of Education has fined a university $37.7 million (£31 million) after it “lied” to 7,500 former and current students about the costs of its doctoral programmes.

Grand Canyon University (GCU), a for-profit Christian university based in Arizona, falsely advertised course costs that were lower than what 98 per cent of students on certain doctoral programmes ended up paying, an investigation by the department’s Federal Student Aid (FSA) office found.

“GCU lied about the cost of its doctoral programs to attract students to enrol,” said Richard Cordray, FSA’s chief operating officer. “FSA takes its oversight responsibilities seriously. GCU’s lies harmed students, broke their trust, and led to unexpectedly high levels of student debt.”

GCU, which has more than 100,000 students, disbursed more federal student aid than any other participating institution over the past four years, the FSA said.

Its investigation found that while GCU stated that its doctoral programmes cost between $40,000 and $49,000, these calculations did not include “continuation courses” that were required for the majority of students to complete their dissertation requirement.

Some 78 per cent of students had to pay an additional $10,000 to $12,000 in tuition fees – roughly a 25 per cent increase, depending on the programme, over and above the advertised cost.

While GCU “pointed to a series of fine print disclosures”, these were “insufficient to cure the substantial misrepresentations regarding cost”, said the FSA, which described the clarifications as being “buried in dense documents and are much less prominent than the misrepresentations”.

The FSA added new conditions to GCU’s federal student aid participation agreement, requiring it to tell prospective and current students the average total fees paid by graduates, and to engage a monitor to oversee its compliance with this demand.

In a lengthy statement, GCU said it “categorically denies every accusation in the Department of Education’s statement and will take all measures necessary to defend itself from these false accusations”, claiming that they were “further evidence of the coordinated and unjust actions the federal government is taking against the largest Christian university in the country”.

“Contrary to the department’s assertion that these are ‘fine print’ disclosures, GCU makes clear in the most prominent place it provides financial disclosures for academic programmes – its Degree Programme Calculator – that there can be continuation courses, and the costs associated with those, in doctoral programmes in order to complete the dissertation process,” the university said.

chris.havergal@timeshighereducation.com