Federal funds of $435,000 earmarked for Alaska Christian College, as well as remaining funds from a previous federal grant, were suspended on Oct. 7, 2005, by the U.S. Department of Education, as a result of a federal lawsuit filed by the Freedom From Religion Foundation.
The Foundation challenge of public funding of the unaccredited bible college, with only 31 students and run by the Evangelical Covenant Church of Alaska, was filed on April 21, 2005, in U.S. District Court, Western District of Wisconsin. The "Christ-centered" school offers no academic classes. Students receive a bible certificate at the end of the year. After investigating, the Department of Education agreed to suspend the grant, thus saving taxpayers nearly half a million dollars.