Largest Christian university in the nation alleges it's being unjustly targeted by federal agencies

The president of Grand Canyon University (GCU), the nation's largest Christian university, told Fox News Digital in an interview that he believes the university is unfairly being targeted by the Department of Education (ED) and other federal agencies. 

GCU President Brian Mueller was asked if he believes the federal government's investigations are religiously motivated, to which he answered he hopes that is not the case. 

"Well, they haven't said it is, and I certainly haven't said it is. And I hope that it's not, but that the two largest Christian universities in the country are being investigated," Mueller told Fox News Digital, referring to an ED probe into Liberty University in Virginia. "And so is that [a] coincidence? I don't know."

Mueller's comments came in the midst of the Arizona-based university facing a number of investigations from ED and other federal agencies.

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The GCU president argued the federal investigations are tied to the Department of Education denying the academic institution's effort to convert into a nonprofit institution in 2018. The department denied GCU’s nonprofit status for purposes of federal student financial aid, which continues to classify the school as a for-profit entity.

Mueller explained that having a nonprofit status would help the university gain full access to grant-writing and research. Furthermore, GCU would also have access to federal dollars due to the institution's large Hispanic population, which it can't access due to its current for-profit classification.

Founded in 1949, GCU was a nonprofit institution until 2004. In an effort to increase capital for the university to avoid closing, they partnered with private investors in order to obtain capital and grow the university.

The university returned to being a 501(c)(3) tax-exempt Arizona nonprofit status in 2018 in which they stated was approved by the IRS, Higher Learning Commission, State of Arizona, Arizona Private Postsecondary Board, and NCAA Athletics. 

However, the Department of Education rejected its nonprofit request. After failed negotiations on the university's nonprofit status, GCU pushed back with a lawsuit arguing the department's decision was "arbitrary and capricious" in 2021.

An official from the Department of Education responded to claims made by Mueller in a statement sent to Fox News Digital, claiming the department determined under the Trump administration in 2018 that GCU does not meet the Higher Education Act’s definition of a nonprofit because the majority of GCU’s revenues were allocated to a former owner, a for-profit entity.

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"The school sued to challenge this determination, twice, and the Department prevailed, twice. The school appealed both of those cases. The Department prevailed in the first appeal, and the appeal in the second case is pending," a department spokesperson said.

A judge rejected GCU's suit last fall on grounds that the Department of Education has the authority to make such a decision under the Higher Education Act and that they proved their decision was indeed not "arbitrary and capricious." 

Another appeal to the decision will be heard on Dec. 5.

While their efforts to obtain nonprofit status are underway, GCU on October 5 released a statement that accused the Department of Education, the Federal Trade Commission, and the Department of Veteran Affairs of coordinating an effort to unjustly target the university after they filed a complaint in court about failing to obtain nonprofit status. 

"Government officials associated with the U.S. Department of Education (ED), Federal Trade Commission (FTC) and under the authority of the Department of Veterans Affairs (VA) are coordinating efforts to unjustly target GCU in what appears to be retaliation for the university filing an ongoing lawsuit against ED regarding its nonprofit status," the statement read. "While such accusations may sound extraordinary, the facts in this document make clear that this is occurring at an alarming level for government agencies to be taking against the largest Christian university in the country."

One of the investigations into the university is being conducted into whether the college was using "deceptive" advertising by claiming that "cybersecurity experts are in high demand" and "every company needs cybersecurity." 

"We said that because that's a fact," Mueller told Fox News Digital. 

The Arizona State Approving Agency (SAA) is responsible for the review of the school; however, GCU claims the state agency was "unduly influenced" by the Department of Veterans Affairs (VA).

The VA sent Fox News Digital a statement which stated GCU is undergoing a "different type of review" due to a bill former President Trump signed into law before leaving office. 

"On January 5, 2021, then-President Trump signed a law that requires VA to work with State-level agencies to conduct annual risk-based surveys on certain educational institutions that receive GI Bill benefits. This change in law is why Grand Canyon University (GCU) is undergoing a different type of review than in previous years," the statement said. "The Arizona State Approving Agency (SAA) conducts these reviews in Arizona and has full statutory authority to approve education and training programs in the state. VA pays benefits based on SAA approval and has no legal authority to override or overturn SAA determinations. In all cases, VA follows the law and acts in the best interests of the Veterans we serve." 

The SAA has yet to respond for comment. 

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The Federal Trade Commission is also investigating GCU's education services provider, Grand Canyon Education (GCE). GCE provides marketing, recruiting, and other support services to GCU. The university claims the federal agency has requested large amounts of information about whether they make cold calls to potential students. GCU denies these allegations and stated they only call potential students who have shown interest in attending GCU. 

The Biden administration in October 2021 vowed to crack down on for-profit colleges misusing Title IV funds through the FTC because a "disproportionate" number of Americans who defaulted on their student loans attended for-profit colleges, which they argued is not a good use of taxpayer money. 

Mueller argued that while GCU is a "nonprofit," which is contrary to its federal classification, the university's default rates on student loans are "very low," and being subject to an investigation into the school's use of Title IV funds "doesn't make sense."

"When the FTC said that they're going to crack down on for-profit, their big statement was because they have a greater than normal amount of defaults on student loans, so it's not a good use of taxpayer money. But number one, we're a nonprofit university. Number two, our default rates on student loans are very good – They're very low," Mueller added. "You know, we produce this campus with 118,000 students, and we've basically done it without any state subsidies at all. In fact, for a lot of those years, we were paying taxes. And so I don't, again—I don't know what it is. It just doesn't make sense."

According to a 2021 GCU press release, the default rate for student loans at the university was at 5.6%, which was nearly half the national average at the time. 

The FTC told Fox News Digital "no comment" when asked for a reaction to Mueller's statements.

In addition to the other federal reviews, the Department of Education is investigating GCU's doctoral program accusing the university of misrepresenting the cost of the program on its website. Mueller said the school was notified by the department that they may be forced to pay a massive fine.

In regard to the department's probe into GCU, it sent Fox News Digital a statement saying that GCU has had "substantial misrepresentations and other compliance issues identified by the Department."

"Moreover, through a separate investigation unrelated to those lawsuits, the Department determined that fewer than 2% of the students who graduated from GCU’s doctoral programs that require dissertations paid the amount that GCU advertised as the total cost," a department spokesperson said.

The Department of Education added that GCU has not disputed this statistic and added that most students paid thousands more than the advertised cost. 

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"In light of such substantial misrepresentations and other compliance issues identified by the Department, the Department included specific terms in the school’s Provisional Program Participation Agreement to allow it to participate in the federal student aid programs," the spokesperson continued. 

The department official said those terms are designed to protect students from substantial misrepresentations regarding the cost of their programs.

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"The U.S. Department of Education is committed to holding schools accountable for serving students’ best interests. We take our oversight obligations seriously, follow the facts where they lead, and will not be dissuaded from enforcing the law and protecting students, taxpayers, and the federal student aid programs," the department official said. "We are unapologetically challenging schools that mislead their students, whether for profit or not.  This is an example of the Department taking reasonable and prudent oversight actions as a regulator to protect students and taxpayers and has nothing to do with the school’s religious affiliation as a Christian University or history of litigation against the Department."