GCU: Allegations in class action lawsuit against GCE are without merit

Grand Canyon University has learned that two students filed a class action lawsuit against its education services provider, Grand Canyon Education. The lawsuit is an almost verbatim regurgitation of the same claims that the U.S. Department of Education made, and the Federal Trade Commission later repeated, about GCU's doctoral programs, while coordinating their efforts to disparage GCU. Now, a class-action law firm seeks to extend those same claims against GCU's service provider.

Although the university is not named in the lawsuit, our legal team has determined it is appropriate for GCU to respond because these are GCU's students, academic programs and degree requirements. GCE has been an excellent service provider to execute the tasks that GCU asks it to perform.

First and foremost, the allegations in the lawsuit are completely without merit, rely on misleadingly cropped documents (see below), and are focused on practices that are prevalent in higher education. GCU's descriptions of its doctoral programs on its website and its disclosure documents are no different than those at countless other universities with dissertation-based doctoral programs.

In fact, the claim that GCU's doctoral disclosures are somehow misleading has already been refuted by 1) the federal court system, which ruled in GCU's favor at both the district and appellate court level in Young v GCU, 2) GCU's accreditor (Higher Learning Commission), which characterized GCU's disclosures as "robust and thorough" in its 2021 comprehensive review, and 3) the Arizona State Approving Agency of the U.S. Department of Veterans Affairs, which conducted an audit that examined GCU's disclosure practices and determined there were "no substantiated findings." The Department of Education is an outlier that disregards the findings of these objective third party entities.

Specific to the claims by the two GCU doctoral students related to continuation courses, we are not permitted to comment on their specific situations due to student privacy laws. We can say that all doctoral students during the time in question were required to sign numerous documents that included information about the likelihood of continuation courses, including a Degree Program Calculator, Doctoral Disclaimers Acknowledgement form, GCU application, enrollment agreement and academic catalog. Again, the need for such continuation courses is prevalent throughout higher education and GCE repeatedly takes steps to be transparent about the average number and cost of those courses.

Worse, the class action lawsuit misleadingly presents screenshots of GCU's Degree Program Calculator (DPC) for both students that crop out the language immediately above the disputed cost disclosure that clearly and conspicuously discloses that doctoral graduates, on average, require several continuation courses and provides the cost of those courses. This information is in full-size red font in order to bring attention to it and provides full transparency for students. Cropping it out is an egregious and unscrupulous attempt to portray the university's service provider as fraudulent by using GCU's disclosures in an unbecoming manner. To reiterate, the DPC form at issue is GCU's and the university stands by its transparency, which we believe reasonable observers, especially at the doctoral level, will understand typically require additional expenses depending on the length of the dissertation process which varies depending on the student. The information cropped out of the full DPC screenshot, depicted below, states: "Since program inception, on average, doctoral students who graduated required 5.2 continuation courses to complete their doctoral degree. Continuation Courses*: $1,950 per course (1st 5 courses); $500 per course (6th course and beyond)." Any reasonable person would conclude such language, which is repeated elsewhere, makes the likelihood of continuation courses abundantly clear.

Also, GCU is a separate and distinct organization from GCE, contrary to the lawsuit's unfounded allegations. The two entities went through a lawful process, and the transaction was approved by the appropriate regulatory agencies. As such, GCU has been successfully operating within that framework since 2018. Further, GCU's use of a services provider is not unique; hundreds of universities have similar third-party education service providers that help with various aspects such as technology, marketing, student recruitment and other student support services.

GCU's nonprofit status and its master services agreement with GCE have already been approved or acknowledged by 1) the IRS, 2) State of Arizona, 3) Higher Learning Commission, 4) Arizona Private Postsecondary Board, 5) NCAA Athletics, and 6-7) two major independent accounting/finance firms that concluded GCU's nonprofit transaction was fair market value and would benefit the university. The Department of Education/FTC is the only outlier in its opposition to GCU's operation as a lawful nonprofit institution.

In summary, we believe this class action lawsuit will be summarily dismissed and is part of a continued and coordinated effort to expand on the Department of Education's false accusations and unwarranted actions designed to bring harm to the university. Secretary of Education Miguel Cardona acknowledged as much when he recently told the House Judiciary Committee it was his goal to "shut down" GCU.

Grand Canyon University will consider all legal options to defend itself against these unwarranted and unjustified actions.