Interboro Institute, a for-profit college in New York City owned by the EVCI Career Colleges Holding Corporation, could be required to repay $2.5-million to the U.S. Department of Education and $2-million to the State of New York in student-aid funds that it may not have been entitled to, the company announced today.

Interboro caters to students who have not graduated from high school but who can qualify for federal and state financial aid if they can demonstrate an “ability to benefit” from higher education. In January 2006 the state ordered the institution to limit its enrollment because of questions about its fast growth.

The amounts to be repaid were determined by an examination of the institution’s financial-aid records by the Department of Education. The examination, known as a program review, found that most of the money involved came from a dispute over which students would be eligible for federal aid. The department disagreed with Interboro’s contention that its students were eligible for the aid because they had graduated from Interboro, even though they had not passed a test to prove that they had an “ability to benefit.”

Interboro has until September 27 to appeal the finding to the department. —Goldie Blumenstyk