College fights audit that says it owes $42M

TERRE HAUTE, Ind. (AP) - St. Mary-of-the-Woods College in western Indiana is fighting a federal audit that says the school should return $42 million in loans and grants made to students.

The U.S. Department of Education audit says the college's students weren't eligible for Pell Grants, Federal Work-Study programs and other assistance because its distance-learning classes don't meet the standards to be classified telecommunications courses.

College President Dottie King tells the Tribune-Star of Terre Haute ( http://bit.ly/HcLsXT ) that she knows the school hasn't done anything wrong.

School attorney Michael Goldstein says the audit takes a narrow view by classifying the classes as correspondence courses.

St. Mary-of-the-Woods says it has about 300 students in its women-only undergraduate campus programs, with some 950 women and men in distance-learning classes.