(TERRE HAUTE) - A federal audit says St. Mary-of-the-Woods College owes millions of dollars in loans and grants.
According to the Inspector General, students should not have received Title IV federal financial aid.
Kellie Bartoli reports the issue stems from the college's distance education program.
The audit says it did not meet requirements and it should have been categorized as a correspondence course.
It goes on to say that the school's participation in the federal aid program should be terminated, and $42 million of aid granted since 2005 needs to be returned.
In a statement, college President Dottie King says, "I am deeply disappointed that the Inspector General has taken so extreme a position in its review of our programs. To now suggest that we have not met our obligations as a participant in the federal student aid programs is simply unsupportable."
The recommendation now goes to the U.S. Department of Education and the Office of Federal Student Aid.
The college has hired outside legal counsel.
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