Government Audit Hits Grand Canyon Education

The axe has fallen upon Grand Canyon Education (NASDAQ:LOPE) as the Veterans Administration (VA) has initiated yet another risk-based audit, causing the company’s shares to tumble in Friday morning trading – a decline of 1.67% by 11:20 a.m. This comes just eight months after a previous audit was refuted and is the 5^th investigation against the university since it sought legal action against the Department of Education.

GCU President Brian Mueller expressed his dismay at the relentless scrutiny, condemning the actions as “nothing short of harassment” and highlighting the unwarranted level of scrutiny being imposed on GCU, the largest Christian university in the nation. Mueller accused the agencies of weaponizing federal government agencies in a coordinated effort to target institutions to which they are ideologically opposed.

In a parallel move, the Federal Trade Commission filed a lawsuit against Grand Canyon University in federal court in December. The lawsuit alleges that the institution and its parent company deceived prospective doctoral students about the price and requirements of its programs and its tax status. Samuel Levine, director of the trade commission’s Bureau of Consumer Protection, accused Grand Canyon of deceiving students by misrepresenting the costs and program requirements for earning doctoral degrees while holding itself out as a nonprofit institution.

This latest blow has added to Grand Canyon Education’s recent woes, with the education stock down more than 10% over the last six weeks.