Payments have been stopped to the West London Vocational Training College and its students in the Welsh capital.
Education Minister Huw Lewis said there were concerns over "unusual student recruitment trends".
The college said as far as it is concerned, all of its students are genuine.
The Cardiff branch runs various IT and business courses and has been designated as suitable to offer HND business courses, which attract tuition fees of Â£6,000 per student, funded by the Welsh government.
Students on those courses can also apply for Student Finance Wales loans and grants.
Week In Week Out has been investigating offers made by a local agent recruiting for the college.
Some students have been told by him they can use faked documents to access those loans and grants and they do not have to attend regularly to get the cash.
He also said if they do not go on to earn more than Â£21,000, they will not have to repay the money - which is true.
The college has denied any knowledge of that scam.
In a statement to AMs on Friday, Mr Lewis said: "Allegations have since come to light to suggest that one or more individuals within the college may have colluded with prospective students deliberately to defraud the student finance system by falsifying academic records and records of attendance at the college.
"I would expect any allegations of criminal activity to be referred to the police so that they may be investigated fully."
Pearson UK - which validates colleges - carried out a review of the Cardiff campus, visiting the site on 21 October.
The education minister said that "no substantive concerns came to light at that time".

Ogwen Valley Mountain Rescue team was called to Yr Elen, in the Carneddau range, at about 14:00 GMT on Saturday.
The man, who had rib and back injuries, was flown to hospital in a rescue helicopter.

De Roon moved to Teesside in June 2016 for an initial £8.8m fee and played 33 Premier League games last term.
The Netherlands international, 26, scored five goals in 36 league and cup games during his spell at Boro.
Meanwhile, manager Garry Monk confirmed the Championship club's interest in signing Chelsea midfielder Lewis Baker.
"He's a target and one of many that we've had throughout the summer months," said Monk.
Find all the latest football transfers on our dedicated page.

Inspired by fond memories of his childhood caravanning holidays in Southwold, Suffolk, photographer Gareth Iwan Jones turned his attention to this subject, the very British world of Caravanning.
"I've always thought of caravanning as a wonderfully eccentric, colourful world of quirky characters and interesting regalia that would make for a great photography project," says Iwan Jones. "It didn't disappoint."
Together with his wife, Iwan Jones stayed at more than 30 sites across the UK, from beauty spots to those not so picturesque spots near motorways, covering more than 2,000 miles.
"There is a unique union of canopy, awning and torrential rain that one can only experience in caravan and camping parks," he says.
"For me, the most endearing caravanning moments came with the worst weather - this is when your neighbours and fellow campers brave the elements to help you find your guy ropes and hammer in your pegs."
Iwan Jones found there was a daily routine to the caravanning life and would wander the site looking for good pictures as well as arranging to meet the campers later to take their portrait.
"Everyone was so enthusiastic and eager to be in the pictures, not a single person I approached declined to be photographed," he says.
"In my experience of photographing people in their environments, this is pretty much unheard of and a real reflection of the culture of caravanning - very open and friendly.
"The portraits were all shot with the same camera and lens combination, a Pentax 645 and 55mm lens and the same artificial lighting."
"I was deliberately looking to bring continuity to the posed portraits, as I knew the documentary side would be quite loose in its appearance.
"I'm always interested in finding the humour in my images, and the world of caravanning made for a great fit.
"From a man who takes his budgies caravanning to the varied attempts to bring a bit of glamour to one's caravan, there was plenty for me to photograph."
Caravan, A Great British Love Story by Gareth Iwan Jones will be published in early June by Frances Lincoln. You can see more of Gareth Iwan Jones's work on his website.
All photographs © Gareth Iwan Jones/Institute
Payments to a college's Cardiff campus have been suspended after a BBC Wales' Week in Week Out investigation into fraud allegations.
[NEXT_CONCEPT]
A man in his 60s has been airlifted to hospital after falling while walking in Snowdonia.
[NEXT_CONCEPT]
Italian Serie A side Atalanta have re-signed midfielder Marten De Roon from Middlesbrough for an undisclosed fee, 14 months after selling him to Boro.
[NEXT_CONCEPT]
In the UK, the May Day bank holiday offers a chance to take a short break away from the daily grind, and for some people that means hitching up the caravan to the back of the car and heading into the countryside.