Lawsuit Against Grand Canyon University Over Costs Clears First Hurdle
Former doctoral students suing Grand Canyon Education over its representations about the requirements of doctoral programs prevailed against a motion to dismiss and can continue their lawsuit.
In June 2024, Tanner Smith and Qimin Wang filed a lawsuit against GCE, the for-profit marketing agency for GCU, claiming it induced students “to enroll in doctoral degree programs at Grand Canyon University, which has been controlled by GCE, by lying to students about how much they would need to pay to obtain their doctoral degrees from Grand Canyon University.” Two other plaintiffs were later added to the lawsuit.
The claims pertain to the requirement for both plaintiffs to take continuation courses that added over $8,000 to the cost of their degree programs.
According to analysis by the U.S. Department of Education cited in the lawsuit, between 2011 and 2017, about 43% of GCU doctoral students paid $10,530 in additional costs for continuation courses, while roughly another 35% paid $12,636 or more.
The Federal Trade Commission filed a lawsuit in December 2023 asserting similar claims. It is still pending.
According to the FTC lawsuit, GCU tells prospective students its doctoral programs are “accelerated” and the total cost will be equivalent to 20 courses, or 60 credit hours. However, nearly all GCU doctoral students are required to take “continuation courses” that add thousands of dollars to the cost.
The Department of Education reported that fewer than 2% of GCU doctoral program graduates complete it within the cost that GCU advertises.
The lawsuit claims that GCE engaged in racketeering activity in violation of the federal Racketeer Influenced and Corrupt Organization (RICO) Act. It also asserts deceptive or unfair practices under California and West Virginia law, where the two plaintiffs reside.
Federal District Judge Steve Logan ruled on May 6 that all but one of the plaintiffs’ claims may move forward. He has also given the plaintiffs until May 20 to amend their complaint on the RICO claim that was dismissed.
The court found an issue with one of the elements of the RICO claim. Federal law requires that the plaintiffs show that GCE’s use of income from the racketeering scheme caused the plaintiffs’ injuries, not just the racketeering activity itself.
“Plaintiffs’ allegations assert that … [their] injuries result[ed] from Defendant GCE’s alleged racketeering activity — mail and wire fraud — rather than the reinvestment of the income of such racketeering activity,” the judge wrote. “However, because additional facts could remedy Plaintiffs’ claim, Plaintiffs’ Count I will be dismissed with leave to amend.”
“This is the first step in holding Grand Canyon accountable for misleading graduate students about the cost of their education,” Chris Bryant, an attorney with the National Student Defense Network, told Higher Ed Dive about the decision. The National Student Defense Network filed the complaint together with law firm DiCello Levitt.
Grand Canyon University is the largest Christian university by revenue in the United States, with total revenue exceeding $1.6 billion. In the MinistryWatch database, GCU has the highest financial efficiency rating of 5 stars, a “C” transparency grade, and a donor confidence score of 72 out of 100.
This article has been republished with permission from Ministry Watch.
Kim Roberts is a freelance writer who holds a Juris Doctorate with honors from Baylor University and an undergraduate degree in government from Angelo State University. She has three young adult children who were home schooled and is happily married to her husband of 28 years.