Saint Mary-of-the-Woods College Told to Return $42-Million in Federal Student Aid

A federal audit has found that Saint Mary-of-the-Woods College, a small Roman Catholic institution in Indiana, improperly received $42-million in Title IV student-aid funds from 2005 to 2010, and should return all of it. The audit, conducted by the Education Department’s Office of Inspector General, concluded the college should not have received the grants and loans because 50 percent of its students were enrolled in correspondence courses.

According to the Higher Education Act, colleges are ineligible for Title IV funds if 50 percent or more of their students are enrolled in correspondence courses during the award year. While the college considered its online courses to be telecommunications courses, the audit concluded they were correspondence courses. The audit also found that the college gave Title IV funds to students who should not have received them during the 2009-10 academic year.

“I am deeply disappointed that the inspector general has taken so extreme a position in its review of our programs,” Dottie King, the college’s president, said in a statement. “We are confident that a reasoned review of the inspector general’s conclusions and the college’s response will result in a finding that the college has always operated in full compliance with applicable law.” The college plans to challenge the audit, whose findings are only a recommendation for action to the department.