FTC sues Grand Canyon University, alleging misleading advertising, illegal telemarketing

The Federal Trade Commission is suing Grand Canyon University and its president over what it says were deceptive advertising practices. 

In the lawsuit filed Wednesday, the FTC accused Grand Canyon University of misleading potential doctoral students about the cost and course requirements. In addition, the commission contends the school misrepresented itself as a nonprofit organization and misused telemarketing calls to increase enrollment. 

“Marketing activities have also resulted in millions of abusive telemarketing calls to consumers who have specifically requested that Defendants not solicit them, and to individuals on the National Do Not Call Registry,” the lawsuit reads.

In addition to the university, the lawsuit names Grand Canyon Education Inc. and GCU President Brian Mueller as defendants. GCE is a for-profit company and the exclusive provider of marketing services for GCU, according to the lawsuit.

Grand Canyon Education owned GCU until 2018. Mueller also serves as CEO of Grand Canyon Education.

'Government overreach': GCU to appeal fine from feds over marketing of doctoral degrees

Yearslong dispute with largest Christian university

The latest development is part of a yearslong dispute between the university and Biden administration. The lawsuit follows a $37.7 million fine levied in October by the U.S. Department of Education on the university over similar claims.

Mueller has previously disputed the fine, describing the dispute as “government overreach," and said the school, the largest private Christian university in the country, was being targeted. This stance was maintained in a university statement Wednesday saying the claims were "unsubstantiated," and that the university denies all of the FTC's allegations.

Read the full statement: GCU's response, specific to the FTC’s four allegations

"This is unfortunately yet another example of the Biden Administration weaponizing federal government agencies in a coordinated effort to target institutions to which they are ideologically opposed," the statement said.

Grand Canyon University's statement disputed the FTC's accusations that the university is operating for the profit and benefit of Grand Canyon Education and that it has deceptively marketed itself as a nonprofit. The Internal Revenue Service has given the GCU nonprofit status, but the Department of Education classifies the institution as a for-profit for purposes of federal funding, which has been a sore spot for years.

The Education Department fine, which the university plans to appeal, focused on how the university advertised its doctoral program.

The FTC, in a news release on Wednesday, cited the Education Department investigation leading to the fine. It concluded that fewer than 2% of graduates from the doctoral program finished their program within the costs advertised.

Mueller has previously disputed the fine, describing the dispute as “government overreach," and said the school, the largest private Christian university in the country, was being targeted.

"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," said Samuel Levine, director of the FTC’s Bureau of Consumer Protection, in the news release. "We will continue to aggressively pursue those who seek to take advantage of students."

Fighting back: Grand Canyon University, to combat advertising investigation, appeals to staff

Helen Rummel covers higher education for The Arizona Republic. Reach her at hrummel@azcentral.com. Follow her on X, formerly Twitter: @helenrummel.