FTC drops Biden-era lawsuit over Grand Canyon University nonprofit claims

(CN) — The Federal Trade Commission voted unanimously on Friday to drop its lawsuit against a service provider for Grand Canyon University, a Christian university in Phoenix.

In a suit filed in 2023 under the Biden administration, the FTC accused Grand Canyon University and Grand Canyon Education — which provides marketing, accounting and support services for the school — of illegal telemarketing and deceptive advertising, saying the school advertises itself as a nonprofit even though it operates as a for-profit university, paying 60% of those profits to Grand Canyon Education.

A federal judge had already dismissed the claims against Grand Canyon University on procedural grounds.

“This case, which we inherited from the previous administration, was filed nearly two years ago and has suffered losses in two motions to dismiss,” said FTC Chairman Andrew Ferguson in a written statement. “In its reduced form, this case presents consumers very little upside relative to the cost of pursuing it to completion.”

Ferguson cited a string of recent victories by Grand Canyon University. In November 2024, the Ninth Circuit Court of Appeals overturned a ruling that the Department of Education had lawfully rejected the university’s application for nonprofit status.

Then, in May, the Department of Education, under President Donald Trump, rescinded a Biden-era $37.7 million fine against Grand Canyon University for misleading students about the costs of certain degrees. The Internal Revenue Service later affirmed the university’s 501(c)(3) nonprofit status.

Grand Canyon University President Brian Mueller, also named as a defendant in the FTC lawsuit, trumpeted the commission’s decision as yet another win.

“As we have stated from the beginning, not only were these accusations false, but the opposite is true,” Mueller said in a statement. “We go above and beyond what is required in our disclosures and are recognized as a leader in this area.”

He added: “They threw everything they had at us for four years, and yet, despite every unjust accusation leveled against us, we have not only survived but have continued to thrive as a university."

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