FTC Ends ‘Years of Coordinated Lawfare’ Against Nation’s Largest Christian University

The Federal Trade Commission (FTC) voted unanimously to drop a lawsuit against the largest Christian university in the country, Grand Canyon University (GCU).

Under the Biden administration, the FTC filed the lawsuit in late 2023, alleging that GCU engaged in deceptive business practices with its doctoral programs. The U.S. Department of Education (ED) previously removed GCU’s nonprofit status in 2019, fining the school $37 million. Although the fine was rescinded earlier this year, the ED has not yet restored its nonprofit status.

All parties filed a joint Stipulation of Dismissal with Prejudice with the court after a judge dismissed the lawsuit.

FTC Chairman Andrew N. Ferguson stated regarding the decision, “This case, which we inherited from the previous administration, was filed nearly two years ago and has suffered losses in two motions to dismiss. These losses are compounded by recent events: Grand Canyon secured a victory over the Department of Education in a related matter before the Ninth Circuit; the Department of Education rescinded a massive fine levied on related grounds; and the Internal Revenue Service confirmed that Grand Canyon University is properly claiming 501(c)(3) non-profit corporation designation.”

GCU President Brian Mueller (pictured above) said in a press release, “As we have stated from the beginning, not only were these accusations false, but the opposite is true,” Mueller said. “We go above and beyond what is required in our disclosures and are recognized as a leader in this area.”

GCU said the decision is “ending years of coordinated lawfare by government officials under the Biden Administration against the largest Christian university in the country.”

The controversy started when the ED and the FTC began prying into GCU’s doctoral disclosures and nonprofit status. Despite Democrats’ previous efforts to avoid increasing scrutiny of for-profit educational institutions, Biden’s FTC Commissioner Rohit Chopra announced in October 2021 that he would begin looking into those types of institutions, which the FTC asserted GCU really was.

Several federal agencies launched five investigations into GCU, which the university described as “fishing expeditions requesting voluminous amounts of information in hopes of uncovering wrongdoing.” They “triggered copycat lawsuits and investigations by the other agencies for the same claim, flooding GCU with duplicative allegations and forcing the university to expend thousands of employee hours and millions of dollars to defend itself.” ED officials called to shut down the school.

The FTC claimed that GCU engaged in “substantial misrepresentation” regarding its doctoral programs. However, the school asserted, “GCU provides more transparency than is legally required or that other universities typically provide.”

Two of GCU’s advertising lines that the agencies claimed were deceptive were “cybersecurity experts are in high demand” and “every company needs cybersecurity.” GCU pointed out that numerous other schools make the same claim and have not been investigated.

The VA State Approving Agency (SAA), which made the claim, later conducted two audits and concluded “no substantiated findings.”

The federal agency investigations “have now been repeatedly discredited or dismissed by multiple agencies and courts,” GCU said.

GCU pointed out four instances where authorities exonerated it. First, both a trial court and an appeals court dismissed similar accusations about its doctoral programs in a parallel case, Young v. GCU.

Second, the Higher Learning Commission, an accrediting body, found that GCU’s disclosures were “robust and thorough” in 2021. Third, the Arizona State Approving Agency for the Department of Veterans Affairs investigated in 2024 and found “no substantiated findings.”

Finally, the ED reversed the $37 million fine in March, stating, “Unlike the previous administration, we will not persecute and prosecute colleges and universities based on their religious affiliation.”

The Goldwater Institute had sued the ED over the fine last year, noting that the fine was “10 times bigger than penalties the Education Department assessed against Penn State and Michigan State for covering up the sexual crimes of Jerry Sandusky and Larry Nassar.” The fine was purportedly for “insufficiently inform[ing] PhD students that they may have to take continuing courses while completing their doctoral dissertations,” GI said. However, the courts in Young v. GCU dismissed this allegation.

GCU cited eight authorities that found it was legally operating as a nonprofit. They included the IRS, which conducted a four-year audit of the university, the State of Arizona, and independent evaluations from two nationally recognized accounting/finance firms.

The ED is currently reconsidering its previous decision to deny GCU nonprofit status. “[A] three-judge panel of the Ninth Circuit Court of Appeals ruled unanimously in November 2024 that ED lacked the authority under the Higher Education Act to apply the legal standard it used in making such a determination and remanded it back to the Department to apply the correct standard,” GCU said.

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Rachel Alexander is a reporter at The Arizona Sun Times and The Star News Network. Follow Rachel on X/Twitter. Email tips to [email protected].
Photo “Brian Mueller” by Grand Canyon University. 

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