Two doctoral students of Grand Canyon University in Arizona have filed a class action lawsuit alleging the company that owns the college ran a scheme to swindle thousands of Ph.D students out of millions of dollars in tuition fees.
Plaintiffs Tanner Smith and Qimin Wang filed the class action lawsuit against Grand Canyon Education Inc. on June 12 in an Arizona federal court, alleging violations of the Racketeering Influenced and Corrupt Organizations Act (RICO) and state consumer laws.
According to the lawsuit, since at least Jan. 1, 2017, Grand Canyon Education (GCE) — which owns Grand Canyon University — has “orchestrated a racketeering scheme” to induce students to enroll in doctoral degree programs by lying to students about how much they would need to pay to obtain a doctorate with the university.
Smith and Wang both say they were forced to pay more than $8,000 in “additional tuition” to get their Ph.Ds at Grand Canyon Education, after they’d already paid for all 60 credits that they expected to pay to complete their doctorates.
Now, the pair are suing on behalf of both themselves, and any other students who said the same thing happened to them at Grand Canyon University.
“For thousands of students like plaintiffs… who enrolled in doctoral programs with dissertation requirements at Grand Canyon University, GCE’s fraud caused them collectively to incur tens of millions of dollars in losses as result of either having to pay more to obtain doctoral degrees or, for many of them, having to leave those programs without ever graduating due to the unexpected costs,” the lawsuit states.
Federal law requires that GCE, which had an exclusive agreement with Grand Canyon University to provide marketing and student recruitment, give prospective students accurate information about the true cost of the doctoral programs at the college, plaintiffs say.
“Yet, GCE lied about doctoral program costs—repeatedly and persistently—to students like Plaintiffs and the other Class members,” the lawsuit alleges.
Through marketing materials, GCE falsely told prospective students that they could obtain their doctoral degrees by paying a total tuition amount equal to 60 or 65 times the cost per credit, the plaintiffs say.
Both Smith and Wang say they were told the “estimated tuition” for them to each complete a Ph.D. was $39,000, i.e., 60 credits x $650 per credit. In truth, however, senior executives at GCE have known that almost none of the students at Grand Canyon University completed their doctoral degrees with just 60 credits, the lawsuit says.
The plaintiffs say that “artificial bottlenecks” in the doctoral dissertation process created by GCE’s policies required at least 70% of doctoral students to pay thousands of dollars more in tuition for “continuation courses,” it adds.
In October last year, the Office of Federal Student Aid announced a $37.7 million fine against Grand Canyon University after an investigation found it had lied to more than 7,500 former and current students about the cost of its doctoral programs over several years.
The federal office found the university had falsely advertised a lower cost than what 98% of students ended up paying to complete certain doctoral programs.
In 2018, GCE used the proceeds of its alleged fraud scheme to establish Grand Canyon University as a nominally independent, not-for-profit entity, the lawsuit says.
“Beneath the veneer of nominal independence, however, GCE continued to control Grand Canyon University and to use it as a RICO enterprise for carrying out GCE’s fraud scheme against doctoral students,” the lawsuit states. “GCE reaped millions of dollars a year in profits from this fraud scheme.”
In the Grand Canyon University tuition fraud class action lawsuit, the plaintiffs are looking to represent anyone who enrolled in one of the doctoral programs at Grand Canyon University on or after Aug. 1, 2017. They are seeking certification of the class action, tens of millions of dollars in damages, fees, costs and a jury trial.
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