The U.S. Education Department said Tuesday that it is investigating the role of an investment firm, Compass Point, in a controversial fund set up to help students with college tuition bills.
The department said it has opened an investigation into the role Compass Point played in the College Fund of the Future, which was set up by the College Board in 2016.
Compass Point is a Chicago-based investment company that specializes in college investments.
The fund is owned by Compass Point’s parent company, CAC Group, which has been under investigation for more than two years by federal prosecutors in Philadelphia.
The College Fund was created by the college admissions and financial aid offices of the University of Southern California and Stanford University.
It aims to help the wealthiest students at private universities pay for college and pay for it by charging fees that are lower than those charged by their local school district.
The fund was designed to provide students with lower tuition rates while also providing financial aid for families to offset the costs of attending private colleges.
The college fund was created with $100 million in funds from the College of Southern Idaho.
CompassPoint did not immediately respond to a request for comment.
The investigation comes as a new wave of financial aid and scholarships has exploded in recent years.
About $1.3 trillion was given to more than 2.6 million students in the first five years of this school year, according to the U.K. Higher Education Statistics Agency.
The new wave, called the College Grant Program, has attracted more than $20 billion in federal aid over the last two decades, according the U-S Department of Education.
In 2018, CompassPoint’s cofounder, Kevin Schafer, was tapped to lead the College Aid Advisory Board, an advisory committee of college leaders.
The College Aid Board has since been removed from CompassPoint.
Compasspoint’s chief executive, Richard Haskins, is also on the board.