Dive Brief:
- The Goldwater Institute, a conservative think tank, is suing the U.S. Department of Education to release emails and records related to its decision to fine Grand Canyon University $37.7 million.
- The Education Department accused the Christian university in October of lying to thousands of students about the cost of its doctoral programs, leading to the largest fine of its kind.
- The Goldwater Institute alleges in the complaint that it requested the records from the department under the Freedom of Information Act, but that the agency has not complied.
Dive Insight:
Grand Canyon has previously accused Education Department officials of collaborating with those at the Federal Trade Commission and U.S. Department of Veterans Affairs to retaliate against the university over an ongoing legal matter.
The Goldwater Institute made similar accusations when announcing its lawsuit.
“The records may help inform the public about this extraordinary fine, as well as coordination between various federal agencies in what appears to be the intentionally targeting of a successful university — one that’s no stranger to run-ins with the feds — based on extraordinarily thin allegations,” the think tank said in a Wednesday release.
The IRS greenlit Grand Canyon’s conversion from a for-profit to nonprofit in 2018. But the next year, the Education Department declined to treat the university as a nonprofit for the purposes of federal financial aid, citing an agreement under which the institution pays a substantial share of revenue to a for-profit company, its former owner.
The Education Department holds for-profit colleges to different and tighter regulations than their nonprofit counterparts.
Grand Canyon sued the department in 2021 over the decision, noting that its accreditor had signed off on the nonprofit conversion. That lawsuit was dismissed in court, but Grand Canyon has since appealed. Oral arguments over the case were heard in January.
The institution is one of the largest in the country, with around 117,000 students, and has been the biggest recipient of federal student loan dollars over several years. In the 2020-21 academic year, it disbursed nearly $1.2 billion in federal financial aid.
The $37.7 million fine stems from an Education Department investigation that found Grand Canyon had misrepresented doctoral program costs to more than 7,500 students, according to agency officials. All but roughly 2% of students ended up paying more than the advertised $40,000 to $49,000 cost for their programs because they had to take “continuation courses” to graduate, the Education Department said.
Grand Canyon said in November that it notified the Education Department that it was appealing the record-breaking fine.
The Goldwater Institute cast doubt on the department’s investigation.
“Though the government makes broad claims against the university, the federal government did not cite any student’s complaints, nor did Education Department personnel even visit GCU as part of their purported ‘investigation,’” the institute said in its news release.
The Freedom of Information Act requires federal agencies to disclose unreleased documents upon request, including correspondence, unless they qualify for exemptions to the law.
The Goldwater Institute requested emails between specific officials at the Office of Federal Student Aid and certain current and former officials at the Federal Trade Commission discussing the investigation, as well as records that would show the number of complaints the Education Department received about Grand Canyon’s doctoral programs since the start of 2020.
According to the complaint, the Education Department told the think tank its average processing time for records requests is 185 business days and that it would not be able to respond within the 20 business days required by law because of the size of its request.
A spokesperson for Grand Canyon University said via email Thursday that the institution fully supported the Goldwater Institute’s lawsuit and maintained that the Education Department’s actions and fine are “unwarranted and frivolous.”
The Education Department did not immediately respond to a request for comment Thursday.
