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=> Diploma Mills & Pacific Western University - Part 3

Diploma Mills & Pacific Western University - Part 3
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Diploma Mills Are Easily Created, and Some Have Issued
Bogus Degrees to Federal Employees at Government Expens
e
Testimony before the Subcommittee on 21st Century Competitiveness,
Committee on Education and the Workforce, House of Representatives

Robert J. Cramer, Managing Director

GAO Office of Special Investigations

Report # GAO-04-1096T

September 23, 2004

I am pleased to be here today to discuss work performed by GAO's Office of Special Investigations (OSI) related to degrees from "diploma mills." For purposes of this overview, we defined "diploma mills" as nontraditional, unaccredited, postsecondary schools that offer degrees for a relatively low flat fee, promote the award of academic credits based on life experience, and do not require any classroom instruction. Over the past 3 years, OSI has purchased degrees from a diploma mill through the Internet, created a diploma mill in the form of a fictitious foreign school, investigated whether the federal government has paid for degrees from diploma mills for federal employees, and determined whether high-level federal employees at certain agencies have degrees from diploma mills. My testimony today summarizes our investigative findings.

Purchasing Degrees from a Diploma Mill
In response to a request from the Senate Permanent Subcommittee on Investigations of the Committee on Governmental Affairs, OSI purchased two degrees from a diploma mill through the Internet. After identifying "Degrees-R-Us" as a diploma mill, our investigator held numerous discussions in an undercover capacity with its owner. Posing as a prospective student, the investigator first contacted Degrees-R-Us to obtain information regarding the steps to follow in purchasing degrees. Following those instructions, we purchased a Bachelor of Science degree in Biology and a Master of Science degree in Medical Technology. The degrees were awarded by Lexington University, a nonexistent institution purportedly located in Middletown, New York. We provided Degrees-R-Us with references that were never contacted and paid a $1,515 fee for a "premium package." The package included the two degrees with honors and a telephone verification service that could be used by potential employers verifying the award of the degrees.

Creating a Diploma Mill
OSI also created a diploma mill to test vulnerabilities in the Federal Family Education Loan Program (FFEL). We created Y'Hica Institute for the Visual Arts, a fictitious graduate-level foreign school purportedly located in London, England. We first created a bogus consulting firm that posed as Y'Hica's U.S. representative and the principal point of contact with the Department of Education (Education). In addition, we created a Web site and set up a telephone number and a post office box address for Y'Hica. Using counterfeit documents, we obtained certification from Education for the school to participate in the FFEL program. Education has since reported that it has taken steps to guard against the vulnerabilities that were revealed by our investigation.

Investigating Whether the Federal Government Has Paid for Degrees from Diploma Mills
The Homeland Security Act amended section 4107 of title 5, U.S. Code, by allowing federal reimbursement only for degrees from accredited institutions. Specifically, section 4107 states that an agency may "pay or reimburse the costs of academic degree training … if such training … is accredited and is provided by a college or university that is accredited by a nationally recognized body." (Emphasis supplied.) For purposes of this provision, a "nationally recognized body" is a regional, national, or international accrediting organization recognized by Education [5 C.F.R. § 410.308(b)]. Because the law governs only academic degree training, it does not preclude an agency from paying for the costs of individual training courses offered by unaccredited institutions. Prior to the enactment of the Homeland Security Act, federal agencies were not authorized to pay for employee academic degree training unless the head of the agency determined that it was necessary to assist in recruitment or retention of employees in occupations in which the government had a shortage of qualified personnel.

To investigate whether the federal government has paid for degrees from diploma mills, we requested that four such schools provide information concerning (1) the number of current and former students identified in their records as federal employees and (2) the payment of fees for such employees by the federal government. In addition, posing as a prospective student who was employed by a federal agency, our investigator contacted three diploma mills to obtain information on how he might have a federal agency pay for a degree. We also requested that eight federal agencies—the Departments of Education, Energy (DOE), Health and Human Services (HHS), Homeland Security (DHS), Transportation (DOT), and Veterans Affairs (VA); the Small Business Administration (SBA), and the Office of Personnel Management (OPM)—provide us with a list of senior employees, level GS-15 (or equivalent) or higher, and the names of any postsecondary institutions from which such employees had reported receiving degrees. We compared the names of the schools on the lists provided by these agencies with those that are accredited by accrediting bodies recognized by Education. We also requested that the agencies examine their financial records to determine if they had paid for degrees from unaccredited schools.

Several factors make it extremely difficult, if not impossible, to determine the extent of unauthorized federal payments for degrees issued by diploma mills. First, the data we received from both schools and federal agencies understate the extent to which the federal government has made such payments. Additionally, the way some agencies maintain records of payments for employee education makes such information inaccessible. For example, HHS responded to our request for records of employee education payments by informing us that it could not produce them because it maintains a large volume of such records in five different accounting systems, has no way to differentiate academic degree training from other training, and does not know whether payments for training made through credit cards are captured in its training payment records.

Moreover, diploma mills and other unaccredited schools modify their billing practices so students can obtain payments for degrees by the federal government. Purporting to be a prospective student, our investigator placed telephone calls to three schools that award academic credits based on life experience and require no classroom instruction: Barrington University (Mobile, Alabama); Lacrosse University (Bay St. Louis, Mississippi); and Pacific Western University (Los Angeles, California). These schools each charge a flat fee for a degree. For example, fees for degrees for domestic students at Pacific Western University are as follows: Bachelor of Science ($2,295); Master's Degree in Business Administration ($2,395); and PhD ($2,595). School representatives emphasized to our undercover investigator that they are not in the business of providing, and do not permit students to enroll for, individual courses or training. Instead, the schools market and require payment for degrees on a flat-fee basis.



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