Public records show the VA recently threatened to curtail its programs at PCC after a federal review found widespread discrepancies in the files of student veterans, according to the Arizona Daily Star.
PCC officials said the problem is mostly fixed and the VA now is trying to get the money back from veterans who continued to receive student aid after cutting ties with the college.
"These funds will be recovered through VA's debt-collection procedures," said Terry Jemison, a VA spokesman in Washington, D.C.
College officials have never publicly mentioned the problem nor the warning PCC received from the VA as a result.
In a November 2012 letter to PCC registrar Terra Benson, VA officials said the department would proceed with suspension and-or withdrawal of approved programs if the college continued to fail to comply with federal rules.
The Star said it received a tip about the VA's review and obtained a copy through a records request to the school.
PCC spokesman C.J. Karamargin said the college has mostly corrected the problems but plans to do more, such as adding more workers to the area responsible for VA record-keeping.
The problems came to light internally late last year during the VA's most recent compliance test at the college.
The federal agency routinely checks in on schools to make sure they are following the laws on payments to student veterans. When VA officials checked the files of 50 PCC student veterans, they found 29 mistakes.
That prompted PCC to do its own review, which uncovered several hundred more errors in the records on which VA aid is based.
The college's review showed nearly 27 percent of veterans' files contained mistakes, such as incorrect tuition or failure to notify the VA when students left.
Of the 2,875 veterans enrolled between fall 2010 and fall 2012, at least 767 had errors in their files, PCC said in its written response to the VA.
Jemison said agency officials are keeping an eye on PCC to make sure the problem is under control.
Another review will be done this year to test the effectiveness of the college's fixes, he said.
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