GCU statement on Department of Education settlement

(July 1, 2022) − Grand Canyon University takes no position on the U.S. Department of Education’s decision last week to settle a class action lawsuit, Sweet v. Cardona, by forgiving $6 billion in loan debt for students who claim to have been defrauded at more than 150 schools across the country.

As it relates specifically to GCU, we are in the process of investigating all claims related to students from GCU who are class members in that lawsuit. Based on our work to date, GCU strongly opposes the notion that there is any merit to the overwhelming majority of such claims. Those claims, some dating back to 1998, represent fewer than 0.1% of the students who have attended GCU during that time. We have spent several hundred hours and considerable resources in our effort to evaluate the claims we have received from the Department of Education. Based on the applications we have reviewed thus far, only a handful describe what amount to procedural errors that do not involve any overtly deceptive act, and even those unsubstantiated allegations do not rise to the level of wrongdoing to justify complete loan forgiveness.

GCU students are included in the settlement because the Department of Education, rather than evaluating underlying factual claims or analyzing the merits of applications, simply presumed students attending approximately 150 for-profit institutions were entitled to relief — purportedly based on some generalized “strong indicia” of misconduct that is unsupported, unverified and not particularized to any institution. In other words, the sort of banal statement the Department invokes to take the position it wants while deflecting blame for not reviewing the claims in a timely manner. What’s more, GCU is recognized as a nonprofit entity by both the State of Arizona and the Internal Revenue Service, despite the Department not treating it as one.

The applications we have reviewed hardly constitute “strong indicia” of misconduct. Indeed, many applications are so weak that even a cursory review would have forced the Department to deny them. While GCU takes no position on the settlement itself, we reject any inference of misconduct or wrongdoing stemming from the settlement, particularly given the absence of any opportunity for GCU to be heard or to challenge the allegations against it.

Among the University’s findings thus far which were identified and reported to the Department of Education in a letter dated February 18, 2022:

  • Most of the applications are directly contradicted by GCU’s and the students’ academic records, others are incomprehensible or lack sufficient detail to enable a response, and many raise issues that do not justify recovery under the applicable regulations.
  • One application was addressed to a different institution altogether. Another application alleged in its entirety that with respect to transferring credits, “The school did explain and go through transfer credit and I agreed to it.” A third claimant’s application provided only, “I am trying to go back to school and cannot because if thisjggjkcd ji.” These are all by way of example and far from an exhaustive list of the frivolous applications submitted.
  • Other claims were simply copy-and-paste allegations from third-party resources available online, raising questions about the veracity of and motive behind the allegations.
  • Significantly, over 50% of claimants graduated from GCU, and almost 20% of those who graduated are currently enrolled or have a completed a second degree or non-degree program at GCU after graduation. Students who feel they were “defrauded” don’t typically continue with that university.
  • A significant portion of the debt that claimants are asking to be forgiven was used by the students for living expenses and was not paid to the University (federal law allows students to borrow money over and above the cost of tuition in order to pay for living expenses).

In that February 2022 letter to the Department of Education, GCU informed the Department that the substantial resources GCU was forced to devote to reviewing and responding to claims that clearly lacked merit on even a cursory review is a great disservice to the University’s current students. GCU also informed the Department of its process for addressing each claim and asked for confirmation on the number of claims and guidance on timelines for delivering individual responses as well as other information the University needed in order to complete the process. GCU has yet to receive a response from the Department.

At GCU, our student admission and counseling services are extremely thorough. Students are advised on responsible borrowing practices. The process provides students with the information they need to know the complete cost of their degree upfront. And it includes an agreement between GCU and the student that spells out in great detail the requirements of their program.

This has led to remarkable accomplishments for our students.

  • GCU works to keep tuition levels low and minimize the amount of debt that students take out, which has resulted in a loan default rate of just 5% − well below the national average of 7.3%.
  • GCU has not raised tuition on its ground campus in 14 years, with only nominal 1% increases in online tuition rates.
  • Average room and board rates at GCU ($8,628) are considerably less than the average at four-year public colleges ($11,950, according to the College Board), which are heavily subsidized by state taxpayers and four-year private universities ($13,620).
  • GCU graduates take out less debt (an average of $21,073) than the reported national average at public and private nonprofit colleges ($28,950, according to 2019 data from the Institute for College Access and Success).
  • During that 14-year tuition freeze, GCU has invested $1.7 billion into new academic programs, technologies, classrooms, laboratories, research spaces, residence halls and other student amenities without passing those costs on to students through tuition increases. GCU’s campus is rated the 18th best in the country according to niche.com when 14 years ago the University was nearly bankrupt.

Such metrics are clear examples that GCU is making its students’ interests an utmost priority.

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GCU Magazine

Bible Verse

“And we know that in all things God works for the good of those who love him, who have been called according to his purpose.” 
Romans 8:28