Mills: A High Cost to US Tax Payers and

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Diploma mills are a world wide epidemic. States and the federal government are making efforts to curb this trend, but not verifying candidates’ claims can cost you.

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A diploma mill or degree mill is an organization that awards academic degrees or with substandard or no academic study and without recognition by an official educational accrediting body. This fraudulent practice is a worldwide epidemic and has become a billion dollar industry. According to a 2011 report released by Accredibase, there are more than 1,008 diploma mills operating, or claiming to operate, within the United States and currently the U.S. is the world leader in housing diploma mills. According to the Accredibase report, California, Hawaii, and Florida lead the United States in the number of diploma mills. Just these four states alone make up over 40% of the total diploma mills operating within the United States.

The High Cost To U.S. Tax Payers

At the expense of U.S. Tax Payers, fake diplomas are often used by federal and state job applicants to obtain a higher pay grade upon application, or even used to obtain undeserved pay raises during their employment term. For many positions, additional education credentials can equate to more dollars. Applicants/Employees can complete a quick application and pay a nominal fee to obtain a fake degree, and with little to no effort could receive a pay-raise worth thousands per year, and all at the expense of U.S. citizens. A 2004 report released by The United States General Accounting Office (GOA) titled “Diploma Mills – Federal Employees Have Obtained Degrees from Diploma Mills and Other Unaccredited Schools, Some at Government Expense” revealed that an investigation conducted from July 2003 through February 2004 uncovered 463 students under the employment of the federal government received a total of $169,470.74 towards tuition and fees associated with their education. This deceptive practice is not just used to gain monetary advantages for federal and state jobs; however, are used around the world for applicants to look more attractive on paper. Especially in a down economy when the job market is tight and employers are being flooded with applications for fewer jobs, more and more applicants use deceptive and even fraudulent education credentials to separate themselves from other desirable candidates.

Concerns of Safety and Homeland Security

This deceptive practice is not just alarming because of the cost of U.S. Tax Payers, but creates potential risks to public safety and even national security. In addition, this practice harms legitimate institutes of higher education. Think about an unqualified engineer responsible for designing airplanes or at the controls of a nuclear plant; this scenario could

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end in a complete catastrophe. In 2004, the (GAO) uncovered three National Nuclear Security Administration managers with top-level security clearances that obtained degrees from diploma mills. The managers worked for the National Nuclear Security Administration (NNSA) which is responsible for handling, maintaining and protecting the nation’s nuclear weapons stockpile. An agency spokesman later stated that “the conditions of their employment did not rest on their education.” We all must take into consideration that their knowledge of fraudulent degrees cast doubt on the employees’ technical qualifications and their integrity. A scenario like this is certainly not unthinkable in the healthcare field. John Curran, who obtained an unearned MD degree from St. Luke School of Medicine based in Liberia (a known diploma mill), is now serving a 150-month prison sentence after a 2006 conviction resulting from the death of a patient in his care.

Diploma mills can also lead to terrorism as a foreign national can obtain a visa sponsored by a fake school located in the United States and relocate here almost undetected. In May of 2011, the President of Tri-Valley University located in Pleasanton California was charged with student visa fraud, money laundering, and alien harboring, according to the Department of Homeland Security. Obtaining a student Visa, endorsed by a fraudulent institution can leave the door wide open for terrorists to gain easy access into the United States.

Certain States Have Taken The Matter Into Their Own Hands

Currently there is no federal law that directly classifies diploma mill operations or someone obtaining such a degree as illegal. Some U.S. states are fed up with the fraud, high cost, and bad press associated with diploma mills and have enacted laws, regulatory agencies and public notification lists to address the issue. In addition, only a limited number of states have taken action by requiring post-secondary schools to register yearly within the state or arm state agencies with proper resource to help crack-down on such fraudulent activity. The following link provides a state by state synopsis of State Authorization Requirements for Public Colleges and Universities published by the State University System of Florida in June 2011. In addition, the chart below provides a brief synopsis of states that have taken an even harder stance to curb this growing epidemic where many have included criminal and even civil penalties for manufacturing or even using fake degrees.

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States With Active Diploma Mill Legislation - Revised September 2011 State Legislation Date Basis of Legislation Criminal Prosecution or Active Penalty Alabama 720.01: Private October All privately licensed None provided School Licensure 2008 degree granting, post- in Alabama secondary educational institutions must be accredited by an accrediting agency recognized by the USDE or CHEA California Private October The Bureau's None provided Postsecondary 2009 paramount objective Education Act of is to protect the 2009 public through regulating private Establishes the post-secondary Bureau for educational Private institutions in Postsecondary California Education Hawaii Regulation of 1999 Unaccredited Under Hawaii law, unfair Post-Secondary institutions must acts of practices are subject Degree Granting disclose their to fines of not less than Institutions in unaccredited status, $500 nor more than $10,000 Hawaii report records to the for each violation state, must have a Chapter 446E Hawaii office and have Hawaii revised at least 25 enrolled statute students in Hawaii Idaho Title 33- March This law requires post- Any principal or agent who Education, 2011 secondary violates the provisions of Chapter 24 – and proprietary this section is also guilty of Proprietary schools that operate a misdemeanor punishable Schools in the state to register by imprisonment in the annually county jail not exceeding six (6) months, or by an fine not exceeding five thousand dollars ($5,000), or both

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States With Active Diploma Mill Legislation - Revised September 2011 State Legislation Date Basis of Legislation Criminal Prosecution or Active Penalty Deceptive Various Acts constituting A person relying upon an Consumer Sales Amendmen deceptive acts that uncured or incurable Act t Dates such subject of a deceptive act may bring an consumer transaction action for the damages IC 24-5-0.5-12 is of a particular actually suffered as a False claim of standard, quality, consumer as a result of the doctoral degree grade, if it is not and deceptive act or five if the supplier knows hundred dollars ($500), or should reasonably whichever is greater. The know that it is not court may increase damages for a willful deceptive act

It is illegal to use an invalid doctorate degree, either orally or in writing, when attempting to obtain business or perform a business related job False Academic 2005 Unlawful to issue, Considered a Class C crime Degrees or manufacture, or use Certificates false degrees Public posting of Michigan Civil Service None provided non-accredited Commission will not colleges and accept applicants with universities not degrees from the recognized by public list CHEA Mississippi Public posting of July The law allows the None provided Approved 2006 Mississippi Commission Colleges and on College Universities Accreditation to ask recognized by chancery judges to the Mississippi order schools to stop Commission on offering unapproved College post-secondary Accreditation academic degrees

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States With Active Diploma Mill Legislation - Revised September 2011 State Legislation Date Basis of Legislation Criminal Prosecution or Active Penalty Missouri SB 182 August Omnibus crime bill This act prohibits a person 2009 that includes a from using or attempting to provision making it use a false or misleading illegal to use false degree, as described in the academic documents act, in connection with to apply for a job, admission to an institution college admission or in of higher education, or in connection with any connection with any business, employment business, employment, or public office occupation, profession, trade, or public office. A violation of this act is a Class C misdemeanor. Private February It is the purpose of Institutions providing Educational 2010 this chapter to provide degrees in violation of the Institutions and for the protection, law could be penalized Establishments, education and welfare $2,500 per violation. Restrictions On of the residents of the Use Of Terms State of Nevada, its Individuals attempting to and Granting educational, use a false or misleading Degrees vocational and degree could be convicted professional of a misdemeanor and fined institutions, and its $5,000; civil penalties of students $5,000 maximum New August The statute defines Institutions providing and Jersey Statutes & 1986 deceptive diploma individuals using such Regulations practices and fraudulent degrees could be Regarding describes the violation liable of civil penalties of Academic of using fraudulent $1,000 per offense Degrees degrees Virginia HB 766 2008 Anyone who issues, Violation would be Fraudulent manufactures, or considered a Class 1 Academic knowingly uses misdemeanor, which is Credentials fraudulent degrees punishable by a sentence up violates Virginia law to 12 months jail and fines of up to $2,500

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States With Active Diploma Mill Legislation - Revised September 2011 State Legislation Date Basis of Legislation Criminal Prosecution or Active Penalty Washington HB 2507 – June The law prohibits the Any person or entity that Prohibiting 2006 offering or granting of willfully violates this false or a false or misleading prohibition is subject to a misleading or civil penalty of not more college other document that than $1,000 for each degrees claims to confer a violation degree that is false or Manufacturers of fraudulent misleading degrees could see fines of $10,000 and receive 5-years in prison Private School 2007 These rules govern the Schools are required to Registration/ operation of all maintain an office in the Licensing for private degree state, pay a $10,000 Private Degree granting post licensing fee and post a Granting Post- secondary education $100,000 performance bond Secondary institutions which Education operate or do business Institutions in the State or intend to operate and do business in the State *Note: This chart should be used for informational purposes only and does not constitute legal advice. The chart was last updated on September 19, 2011.

A History Of Proposed Federal Legislation

Congressional hearings have been going on for years regarding diploma mills. Congressman Claude Pepper, Chair of the House Subcommittee on Health and Long-Term Care, held hearings in 1985 to address the use of fraudulent degrees in the healthcare industry. Senator Susan Collins, chair of the Senate Committee on Government Affairs held Congressional hearings in 2004 which included testimony that diploma mills had worsened due to easy access and the power of the Internet. In 2006, Congresswoman Betty McCollum submitted a bill, “Diploma Integrity Protection Act,” in concern that diploma mills might allow foreign nationals to obtain easy access to U.S. visas.

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Much of the bill was incorporated into the “Higher Education Opportunity Act,” however, most diploma mill provisions were removed and only the definition of “diploma mills” remained. Congressional leaders are now getting into the fight once again.

A Current Attempt For Federal Legislation

On May 5, 2011, Representative Timothy Bishop from New York and Joe Courtney from Connecticut co-sponsored H.R. 1758 Diploma and Accreditation Integrity Protection Act. The proposed legislation was introduced to reduce and prevent the sale and use of fraudulent degrees in order to protect the integrity of valid higher education degrees that are used for Federal employment purposes. Originally H.R. 4535 was introduced in 2009 by Representative Bishop and two co-sponsors; however, never became law at the conclusion of the 111th Congressional session in 2010.

The proposed Diploma and Accreditation Integrity Protection Act - Prohibits any accreditor from being considered a reliable authority as to the quality of education or training offered by degree-granting institutions for any purpose related to immigration, federal employment, or any other federal activity, unless the accreditor is recognized by the Secretary of Education. The Act considers only a degree from a degree-granting institution that is accredited by such an accreditor to be acceptable in situations when a degree from an institution of higher education (IHE) is required or taken into consideration for the purpose of appointing, promoting, or improving the pay of a federal employee. Understand that this bill will only help solve the issue of federal applicants/employees obtaining such fraudulent degrees and will not address the overall problem in the private sector. We have a long way to go before the United States makes a small dent in this ever-growing problem.

Degree Granting Authority And Oversight

It’s not just a matter of legislation, but authority and level of controls at the agency and state levels. Currently, the United States does not have a federal law that would unambiguously prohibit diploma mills, and the term "university" is not legally protected on a national level. Currently, there are three sources of authority to issue college degrees. A college can obtain authority from an act of Congress, a state government or federally recognized sovereign Indian tribe. Congress rarely establishes degree-granting institutions like the armed service academies or community colleges established around the military. The right of federally recognized Indian tribes to charter degree-granting colleges without

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state approval is widely accepted by state authorities. There are a small number of chartered Indian tribal colleges throughout the U.S. The majority (98%) or roughly 4,000 of the U.S. degree-granting institutions operate under legal authority by an individual state and within their individual legal requirements and guidelines.

The United States Department of Education lacks the direct power to regulate schools and, consequently, the quality of an institution's degrees, and only provides awareness of the issue and resources for consumers to better tell fact from fiction. The primary federal agency investigating these matters is the Federal Trade Commission which works to prevent fraudulent, deceptive and unfair business practices including those in the field of education and provides alerts to U. S. consumers about diploma mills by providing resources and some tell-tale signs on its website.

Conclusion

Consumer notification is only a very small step in eradicating this billion dollar industry. According to diploma mill experts, this trend continues to grow and diploma mills are getting more creative to hide from government agencies and look even more legitimate to job applicants. Hiring an unqualified candidate can certainly affect a company’s overall performance and a company’s bottom-line, and in many instances places them in an extremely risky scenario if harm or liability is caused due to an unqualified or unskilled employee. Fraud is on the increase and employers need to take a proactive stance to properly vetting their workforce. Employers are urged to verify the legitimacy of an applicant’s diploma, at any job level, and not to take a candidate’s or employee’s supplied education credentials at face value. Hopefully, federal or even additional state legislation will be enacted to help overtake this fraudulent empire and save tax payers and employers millions in wasted dollars and help improve the integrity of our national security.

About the Author

Robert Capwell Chief Knowledge Officer

Mr. Robert E. Capwell is considered one of the leading experts in the background screening industry with over 22 years of experience in the field. As Chief Knowledge Officer at EBI, Mr. Capwell oversees the implementation of process improvement strategies, conducts corporate education sessions for EBI staff members as well as our clientele, and manages EBI's marketing and communication efforts.

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About EBI

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EBI is committed to providing employers with valuable education and resources to help combat employee theft and fraud. EBI is not providing legal advice or counsel and nothing provided in this publication should be deemed as legal guidance or advice. Readers should consult with their own legal counsel to determine their responsibilities or if they have questions on any information provided by EBI.

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