Six were charged with conspiracy to defraud Bournville College of Further Education and will appear before Birmingham magistrates on February 28. A seventh faces forgery charges.
Four men and three women, all from the city, were arrested after a lengthy investigation into courses run by community groups for ethnic minorities in the city.
Bournville College principal Patricia Twyman called in police after checks found nine out of 10 classes set up in partnership with four Muslim groups were not running.
Just six classes were running at 47 venues, including mosques and a Muslim girls' school. The college had already paid Pounds 140,000 to four franchise holders, but cancelled further payments of almost Pounds 1 million after concluding an internal investigation.