SALT LAKE CITY (AP) — U.S. government inspectors say the online nonprofit Western Governors University should repay more than $700 million in federal loans and grants from 2014 through 2016 because it was not eligible for the money.

U.S. Education Department's Office of Inspector General said in a report Thursday that faculty at the Salt Lake City-based university did not have "regular and substantive" interaction with students and its courses should be classified as "correspondence courses."

The school says in a statement it "vehemently disagrees" and will resolve the issue with the Education Department, which will decide whether to follow the report's recommendations and recover the money.

Education Department spokeswoman Liz Hill said in a statement that the department is reviewing the report and says the university has an innovative model that's earned bipartisan support.

The school was founded by 19 governors in 1997.