The U.S. Education Department discovered that $608,766 in federally subsidized loans and grant funds was improperly given to New Jersey City University students who never attended class or who failed out, records show. The discovery was made during an audit of federal money being used by the university, a review that began after a former employee's embezzlement. Other schools found to have improperly awarded loans and grants include Kean University and Rutgers University, records show. "Most schools do not get cited and have to pay back funds," an Education Department spokeswoman said.

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