The Michigan Jewish Institute was raided by FBI agents last week. The Federal government is investigating the school for fraud.
About 15 Federal agents reportedly took part in the raid of the school’s offices located in Southfield, near Detroit. The institution is affiliated with the Chabad Hasidic sect.
The Detroit News reported that the agents took about 130 boxes filled with materials with them when they left.
The school allegedly defrauded the U.S. government by taking advantage of the Pell Grant program which aids low income university students in America. According to the accusations, MJI acquired Pell Grants for students who live in Israel and took online courses. The students never completed their studies.
“The Forward” reported that over a five-year period the college’s students claimed $25 million under the Pell Grant Program.
MJI issued a statement saying, that it was “cooperating fully with the federal authorities.”
The raid comes at a time when online colleges are coming under scrutiny for being nothing more than for profit diploma mills. President Obama moved to forgive student loan debts for people who were taken advantage by such schools and many are calling for an end to extending Federally backed student loans for studies at for-profit colleges.