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Education Department Investigating Whether Illegal Student Loans Made


Federal investigators are looking into whether the Community College of Denver made loans to students who were not eligible.

The investigation began after the Colorado Community College system notified the U.S. Department of Education of possible rules’ violations.

“In some cases, it would appear that staff knowingly circumvented processes or guidelines in order to change a student’s status to ‘eligible.’ Nothing has been uncovered that would suggest staff personally benefited from these errors,” CCCS officials wrote in an Aug. 22 letter obtained by the Rocky Mountain News.

As much as $1.4 million may be involved, though auditors say they expect it will be closer to $315,000.

Rhonda Bentz, spokeswoman for CCCS, said it is not clear what the penalties might be if its confirmed illegal loans were made. “At this point, we don’t know what the next steps will be. We don’t know whether it would be criminal or civil. That is their determination.” She said she believes the money was given mistakenly, and no fraud was involved.

The alleged violations included loans to students who were not academically eligible.

Jim Bradshaw, a spokesman for the U.S. Department of Education, said the Office of Inspector General “has a policy of neither confirming nor denying investigations or commenting about the details of an inquiry.”

An audit of school finances was launched after the highly public ouster of former CCD President Christine Johnson. She is not named in the letter to federal investigators.

Her lawyer, Laura Stewart, said that Education Department investigators have not contacted her. She said she has no information indicating that Johnson is the target of a federal investigation.

“Its hard to comment because I haven’t seen any of the underlying documents,” Stewart said Friday. “Its fair to say that this whole thing has distressed her (Johnson). It has distressed me. She gave 30 years to the system. How would anybody feel?” Stewart remains confident that Johnson will be fully exonerated.

School officials said they were tipped to the funding problem by an unnamed contact. 

The Associated Press

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