Grand Canyon University, the Nation’s Largest For-Profit College, Fined $37.7 Million
Grand Canyon University (GCU), the largest for-profit college in the United States with over 200,000 students, has been fined $37.7 million to resolve allegations that the school violated consumer protection laws, specifically those pertaining to ACCME advertising and promoting practices.
In a press release, the Department of Justice said that the settlement is part of a multi-agency enforcement effort to ensure colleges follow the law. The settlement arises out of alleged violations of a number of federal consumer protection laws, including those related to ACCME advertising and promoting practices.
GCU allegedly paid for access to a list of individuals who had recently enrolled at or applied to another for-profit college, and then used the list to target those students to enroll at GCU by offering them a “special enrollment bonus.”
As part of the settlement, GCU agreed to pay $37.7 million in civil penalties, restitution, and fees and has agreed to a number of corporate compliance reforms that prevent it from engaging in similar consumer protection law violations.
The grand total of the settlement for GCU comes to $37.7 million, a massive financial penalty for any school, but one that could serve as a warning to other for-profit colleges that such practices are not tolerated.
For-profit schools have long been criticized for their practices of targeting students who have previously expressed interest in attending their college in order to lure them into enrolling in their programs.
This settlement is a step towards changing that, allowing the government to act on behalf of students to ensure that their interests are being respected, and that they are not being taken advantage of in the process.
It also raises practical questions for the industry as to how they will go about marketing to prospective students in the future, too. While the settlement does not prevent schools from engaging in advertising aimed at student attraction, it puts a spotlight on any marketing that might be seen as misleading or aggressive.
In conclusion, it appears that the government is finally stepping in to protect consumers from the aggressive marketing tactics of for-profit colleges, while also putting a hefty fine to act as a deterrent. While this settlement will likely be viewed negatively by the industry, it is an important signal that the days of such tactics are coming to an end.