California lawmakers are exploring the problem of diploma mills — businesses that offer fraudulent degrees and certificates for little to no work and an often significant fee — and trying to determine how best to identify and root them out without quashing innovation.
"Substandard education robs students of their time and money, but customers of diploma mills are more likely to be complicit," said Democratic Assemblyman Roger Dickinson of Sacramento, who chairs the Committee on Accountability and Administrative Review.
"The most serious consequences occur when individuals with fake credentials are hired into positions for which they are not qualified, and in doing so, take away positions from people who have earned the degrees."
At a nearly 2.5-hour joint hearing of the Assembly's committees on Accountability and Administrative Review and Higher Education Wednesday lawmakers listened to expert testimony that seemed to lead to many more questions than answers.
Unlike California's public higher education institutions, which are largely monitored and controlled through their funding mechanisms, private postsecondary schools must apply to for approval, and therefore oversight, by the Bureau for Private and Postsecondary Education.
And the fact is, many California students attend and gain degrees from such schools. According to 2009-10 numbers, private postsecondary schools educate more than 1/4 California's undergraduate students. As public funding for higher education continues to be cut and access to these schools diminishes, providing oversight of private postsecondary schools that may help fill the gap has become even more imperative, legislators said.
"This is a really big deal, this is not mom and pop printing a few diplomas with their laser printers on the kitchen table," said John Bear, an author and expert in the field of diploma mills who has served as an FBI expert witness. He estimated that more than half the PhDs each year in California are fake.
One problem with identifying "diploma mills" is the term itself, which experts say is not clearly or often easily defined. Generally the institutions are unaccredited, operate for-profit, grant academic degrees and offer substandard or minimal teaching, with little, if any, work or evidence of competency, said Steve Boilard, managing principal analyst for education at the Legislative Analyst's Office.
Boilard said there are probably about 1,000 unaccredited private postsecondary institutions in California. But even accreditation, a nongovernmental form of peer review to ensure certain standards are met, is not generally regulated and may not always indicate academic quality. "Lots of different standards are applied," Boilard told lawmakers.
What accreditation does do is give schools an easier approval by the state's Bureau for Private Postsecondary Education, which is tasked with protecting students and providing oversight of such schools, and allows it to partake in federal and state financial aid programs.
But "these schools, by and large, if they are really absolutely fraudulent, are not going to be coming to the bureau for approval," Boilard said. "They're flying under the radar screen."
Even among those that aren't, Boilard said, it is hard to determine what exactly is a quality education and where to draw the "substandard" line.
The Internet and improving technology has made it easier for these companies to find students, present themselves as legitimate institutions, and create diplomas, transcripts, even catalogues, said Marcia Trott, a former private postsecondary education senior specialist. Trott worked for nine years at the now defunct Degree Unit of the former Bureau of Private Postsecondary and Vocational Education.
"I have to tell you, [counterfeit diplomas] are looking very real these days," Trott said. "An employer would have a hard time determining what's real and what isn't, unless they called the institute of higher education." (And most don't, she added.)
She said many of the institutions that wanted to create schools in California in her experience were foreign institutions.
"A California degree means something across the Pacific," Trott said. "If it has a California seal of approval they can sell it, and they also can become visa mills."
"Before I left the bureau, I was heavily involved with the board of acupuncture, the board of registered nursing, the board of psychology, the board of behavioral sciences," Trott said. "I will tell you, when licensure only requires a master's degree, they will intentionally sell PhDs and doctorates, so a person can call themselves doctor."
The former Bureau of Private Postsecondary and Vocational Education disbanded in 2007, after lawmakers found it ineffective in providing oversight of private postsecondary schools. A new bureau was formulated to take on this role in January 2010.
It is required to conduct inspections on the roughly 1,500 private postsecondary schools throughout the state once a year, said Laura Metune, who has served as chief of the Bureau for Private and Postsecondary Education since April. "We're looking at whether or not we can meet that."
The agency can order institutions to provide restitution for students and also issue a $50,000 fine for operating without appropriate approval of the bureau, Metune said.
But even when schools are discovered to be fakes, students aren't necessarily keen on giving up those degrees that might have scored them higher pay or a better position.
When the FBI raided one school in Louisiana and recovered roughly 15,000 alumni names and $12 million from the school's bank accounts, the U.S. Attorney wrote the students to inform them their school was fake and that they could receive a full refund, Bear said.
"Fewer than half accepted that, because they would have to turn in their diploma and give it up," Bear said. "So even knowing it's a fake, few wanted to do anything about it."
Bear said phony diplomas have been a major problem since the 1300s and will always be tough to regulate.
Each state handles enforcement differently, but being too strict can squelch innovative alternative schools from opening up, Bear said. New York has taken a hard line approach, Bear said. It is one of the toughest states in the country to start a private postsecondary school in, and the only state that is also a recognized accrediting agency, Bear said.
In contrast, states like Iowa and North Dakota are more in between, allowing schools time to operate before they must receive accreditation, Bear said. He said Oregon is one model that has been very effective and has been copied to some degree by a handful of other states such as Texas. Oregon provides a list of schools that are acceptable, and it is up to the diploma seeker to ensure their school is on the list. Hawaii, on the other hand, is less stringent, allowing most schools to open, but aggresively enforcing standards, Bear said.
"If every state had laws like Oregon and every state had enforcers like Hawaii, the problem would be greatly lessened," Bear said.
On Wednesday, Bear showed lawmakers a perfect counterfeit Harvard Medical degree he bought 20 years ago for $39 from one diploma mill before it was shut down by federal agents.
"If that back pain has gotten any worse," Bear told lawmakers at the end of his testimony, "I can have a look at it."
To read more on danger signs of a diploma mill.
Tami Abdollah can be reached via email and on Twitter (@latams).