US FTC sues Grand Canyon University for deceptive advertising, illegal telemarketing

WASHINGTON (Reuters) -The U.S. Federal Trade Commission said on Wednesday it has filed a lawsuit against Grand Canyon University for deceptive advertising, illegal telemarketing and misrepresenting the school as a nonprofit.

The FTC filed a complaint against Grand Canyon Education Inc (GCE), its CEO and the university in the U.S. District Court for the District of Arizona.

The FTC accuses them of “deceiving prospective doctoral students about the cost and course requirements of its doctoral programs and about being a nonprofit, while also engaging in deceptive and abusive telemarketing practices,” according to a statement.

The university “has been operated for the profit of GCE and its stockholders, and pays 60% of its revenue to GCE,” the commission alleges.

GCE describes the university as a “partner” in regulatory filings.

The Arizona-based university denied what it said were “unsubstantiated allegations” and said it would take all measures necessary to refute them.

“Given the major problems that exist in higher education … it is baffling that the federal government has chosen to target a Christian university that is addressing those issues in very positive ways,” the university said in a statement.

The lawsuit follows a $37.7 million fine on the university by the U.S. Education Department for misrepresenting the costs of its doctoral programs, according to CNBC.

Fewer than 2% of the school’s doctoral program graduates completed their program within the advertised cost, and almost 78% of these students take five or more continuation courses, according to the Education Department.

(Reporting by Caitlin Webber in Washington and Ismail Shakil in OttawaEditing by Dan Whitcomb, Matthew Lewis and Frances Kerry)