U.S. Alleges Shortcomings in Grand Canyon Financial Aid Policies

August 30, 2011

The parent company of Grand Canyon University said in a federal filing Monday that the U.S. Education Department is investigating potential violations of federal law in Grand Canyon's policies surrounding incentive compensation and its compliance with years-old regulations requiring that it ensure "gainful employment" for its graduates. Grand Canyon Education, Inc. said that it had received a notice of preliminary findings last week from an Education Department review that the for-profit college had previously disclosed. Grand Canyon said that the department had not "set forth any definitive findings" regarding its policies for compensating enrollment counselors during a portion of the 2008-2010 academic years, but had requested additional information from the institution about those policies and compensation plans. The university also said the department's preliminary review had concluded that students in Grand Canyon's Bachelor of Arts in Interdisciplinary Studies program should not have been eligible for federal financial aid "because it did not provide students with training to prepare them for gainful employment in a recognized occupation," under the government's former (as opposed to recently implemented) way of measuring gainful employment. Grand Canyon also said that the department had accused it of having an inadequate "system to determine if students with non-passing grades for a term had no documented attendance for the term or should have been treated as unofficial withdrawals for the term."

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