Even as the Department of Education was closely monitoring Corinthian Colleges, the for-profit education company apparently mishandled federal funds earlier this year, lawyers for the U.S. government said in a court filing last week.
Corinthian's campuses "appear to have violated" federal rules governing how colleges must manage the money they receive from federal student loans and grants, according to a document filed by Justice Department lawyers who are representing the Education Department in Corinthian’s bankruptcy case.
The Education Department is "concerned," they wrote, that some of the money in Corinthian’s bank accounts contains loan balances that never made it to students. That money belongs to the federal government and shouldn’t go to Corinthian’s creditors, the filing says.
Read more at Inside Higher Ed: https://www.insidehighered.com/news/2015/08/20/under-close-us-scrutiny-corinthian-apparently-mishandled-federal-funds-justice