Trump Department of Education Rescinds Nearly $38 MILLION Fine Against One of America’s Largest Christian Universities |

The Trump Administration’s Department of Education has rolled back penalties previously enacted by the Biden Administration against Grand Canyon University (GCU) in Phoenix, Arizona, over allegations of misleading students regarding tuition fees.

This action marks a significant chapter in GCU’s ongoing struggle against the federal government’s scrutiny under Biden, which has been characterized by a series of contentious encounters.

As reported by in December 2023, the Federal Trade Commission (FTC) initiated legal proceedings against the university, claiming “false advertising,” after the Department of Education slapped GCU with an unprecedented $37.7 million fine on October 31.

“This proposed fine represented the largest penalty ever imposed by the Department of Education on any university,” GCU stated in a press release.

In light of this development, GCU President Brian Mueller asserted, “The facts clearly support our belief that we were unjustly accused of misleading our Doctoral students, and we are grateful for the acknowledgment that these claims were baseless.”

Furthermore, the university announced on Tuesday that the IRS has reaffirmed its 501(c)(3) nonprofit status, thereby “further countering the legal challenges” faced by the institution. “The recent decisions from the IRS and the Department of Education starkly contrast with the unfounded claims made by officials in the Biden Administration regarding GCU’s nonprofit qualifications and doctoral disclosures,” the university emphasized.

This announcement follows a letter dated March 5, signed by Arizona’s entire congressional delegation, urging the Biden Administration to restore GCU’s nonprofit status, which had been revoked. GCU indicated it remains “cooperative with the Department of Education in that process and is optimistic about a forthcoming resolution.”

BIG

This March, Congressman Hamadeh joined the entire Arizona congressional delegation in defending Grand Canyon University against attacks from the Biden administration.

Yesterday, @POTUS and @EDSecMcMahon rescinded the egregious $37 million fine.https://t.co/qcJsR352hd pic.twitter.com/x16YkVkGoD

— Office of Congressman Abe Hamadeh (@RepAbeHamadeh) May 17, 2025

GCU, recognized as Arizona’s leading Christian university and a prominent institution nationwide, was not the only Christian institution to face scrutiny from the Biden Administration, which has been characterized by many as anti-Christian in its enforcement patterns.

Notably, 70% of enforcement actions taken by the Department of Education under Biden targeted religious and vocational schools.

70% of Biden Education Enforcement Targeted Christian and Career Colleges

In a recent press release, GCU celebrated the Department of Education’s decision:

The Department of Education unequivocally states that there are no findings against GCU

(May 16, 2025) – The U.S. Department of Education has formally rescinded the $37.7 million fine against Grand Canyon University, clearing the institution of any wrongdoing.

In a Joint Stipulation of Dismissal issued by the Department’s Office of Hearings and Appeals, the case has been dismissed without any findings, fines, liabilities, or penalties. The Department confirmed it has not established that GCU violated any Title IV requirements, specifically the claim that GCU “substantially misrepresented” the costs of its doctoral programs as alleged by officials in the previous administration. The Dismissal stated clearly that “there are no findings against GCU, or any of its employees, officers, agents, or contractors, and no fine is imposed.”

President Mueller welcomed the dismissal but noted that it was not unexpected. “The facts clearly support our position that we were unjustly accused of misleading our Doctoral students, and we appreciate the recognition of the meritless nature of those accusations,” he stated. “GCU is committed to innovation, transparency, and best practices in higher education and looks forward to a collaborative relationship with the Department moving forward, as we have consistently maintained with regulatory agencies.”

The proposed fine was historically significant, being the largest ever levied against a university by the Department of Education. GCU contested the accusations, arguing that they were grossly misrepresented based on isolated statements taken out of context from enrollment documents, asserting that students receive comprehensive information regarding time, cost, and credits for completing their doctoral degrees throughout their enrollment process. Furthermore, GCU argued that its disclosures about continuation courses—common in doctoral programs—exceeded legal requirements and surpassed what is typically provided by other institutions. Hence, GCU firmly maintained its intention to challenge any fine, even a nominal one, let alone a staggering $37.7 million.

The dismissal of the fine aligns with other regulatory bodies and courts that have also dismissed allegations against GCU regarding misrepresentation of doctoral program costs and credits.

• Two federal courts previously dismissed similar allegations in Young v GCU.
• The Higher Learning Commission deemed GCU’s disclosures “robust and thorough” during its comprehensive review in 2021.
• The Arizona State Approving Agency of the Department of Veterans Affairs found “no substantiated findings” in its audit of GCU’s disclosures and processes in March 2024.

This dismissal also follows two recent legal victories for GCU that have invalidated federal actions against the university.

• In November 2024, a three-judge panel from the Ninth Circuit Court of Appeals unanimously ruled that the Department of Education acted beyond its authority and applied an incorrect legal standard when it failed to acknowledge GCU’s lawful nonprofit status. The Ninth Circuit vacated the erroneous determination and remanded it for proper consideration. GCU is optimistic that this process will conclude favorably soon, as the IRS has already confirmed that GCU meets all legal criteria for a 501(c)(3) tax-exempt entity. Following the Ninth Circuit ruling, ten members of Arizona’s Congressional delegation sent a bipartisan letter supporting GCU’s nonprofit status to the Department of Education.
• In March 2025, the U.S. District Court of Arizona dismissed the FTC’s lawsuit against Grand Canyon University, ruling that the FTC lacked jurisdiction under the FTC Act, as GCU does not operate for profit. In reality, GCU has functioned as a 501(c)(3) tax-exempt entity for the majority of its 75-year history, most recently reverting to this status in 2018. The Court emphasized that “the mere fact that a nonprofit earns revenue and grows does not convert it into a for-profit entity. No federal court has ever adopted such a broad interpretation of the FTC Act’s definition of a corporation, which would unjustly extend FTC authority over numerous nonprofit organizations.”

Although the FTC lawsuit remains active against Grand Canyon Education, which provides services to GCU, and President Mueller, it is noteworthy that the lawsuit essentially reiterates previously discredited claims about nonprofit and doctoral disclosures. Continuation of the FTC’s allegations, particularly in light of the Ninth Circuit’s ruling and the IRS’s decision, would only serve to highlight the multifaceted legal assault initiated during the Biden Administration in an attempt to embroil GCU in protracted litigation.

It’s crucial to recognize that various agencies and courts have either directly refuted, reached contrary conclusions, or curtailed government overreach regarding false allegations related to GCU’s doctoral disclosures and its tax-exempt 501(c)(3) nonprofit status: