Ernest Nmerukini, manager at North Warwickshire and Hinckley College for the past 18 months, was questioned by detectives last week over the alleged fraud and released on police bail until January.
A police spokesman said: "Inquiries could last several weeks. We are not looking further at any other individuals at present." No charges have been made. College spokesman Martyn Brunt told The TES: "Mr Nmerukini has been suspended from the college."