State dominates the $200 million quick-degree industry

State dominates the $200 million quick-degree industry

List of Unaccredited Universities under Texas Higher Education Coordinating Boards

As a history and law student at unaccredited Monticello University, Todd Rebillot never had "the typical college experience." He didn't take any classes, never spoke to any professors, never read a single book, never even set foot on campus.

"I went on the Internet looking for schools and saw [Monticello's] Web site; it looked professionally prepared," he says.

Monticello's Web site, which included statements alleging licensure in Hawaii and Kansas, helped seal his decision to enroll.

"I accepted that at face value," Rebillot, 44, says. "When I originally enrolled ... I felt confident that [the school] could provide me with an education and the degree I was looking for."

It wasn't until the Wisconsin resident had paid more than $3,000, saw the school's address change three times and been given the run-around from school administrators that he finally grew suspicious.

"When I started asking questions, then they [the school] began skirting the issues. I wasn't getting straight answers," Rebillot says.

Soon after, Rebillot became convinced he'd been scammed. Others apparently had come to the same conclusion. In April, Monticello University operator Leslie Snell was found guilty in Hawaii and Kansas of issuing invalid degrees without state authority and was fined in excess of $1.7 million. The organization was ordered to refund tuition to all students.

This is one example of the far-reaching effect of Hawaii's diploma mill industry. In spite of an amended law passed last year to help curb con artists mimicking legitimate institutions, many insiders say unaccredited universities in the state are still flourishing -- posing a threat to legitimate institutions in Hawaii as well as their diplomas.

A complex issue

Rebillot was one of hundreds worldwide who sent between $2,000 and $8,000 to Monticello. Founder Snell operated universities briefly from addresses located in Kailua on Oahu, and Kailua-Kona on the Big Island that were found to be in violation of Hawaii state law.

Nontraditional schools like Monticello University were drawn to operate from Hawaii by weak state laws, experts say. Such schools may award degrees based on course work, correspondence, credit for life experience, independent study and examinations.

In Hawaii, complaints from Rebillot and others about schools issuing useless and unethical degrees have prompted several lawsuits in the past 18 months by Hawaii's own Office of Consumer Protection.

The penalty against Monticello University is the largest so far and the judge's finding that the university falsely claimed to offer "accredited doctorate, master's and bachelor's" degrees plus other misrepresentations was the harshest yet. In cases similar to that of Monticello, most other schools sued were permanently barred from claiming the state of Hawaii has accredited or approved them but were fined only $30,000 to $50,000.

While the lawsuits are one step toward curbing the problem, many unaccredited schools -- those that are unaccredited by an accrediting agency or association recognized by the U.S. Department of Education -- still operate and advertise conspicuously in and from Hawaii, including Honolulu University and the University of Northern Washington.

"Although the new law is a dramatic improvement over what it's been, it still says little about the academic quality of Hawaii institutions," says John Bear, an El Cerrito, Calif.-based expert on nontraditional education.

Two-thirds of all states either bar schools without proper accreditation or they form their own evaluation process. Hawaii has a fairly simple requirement, Bear says.

"Hawaii should evaluate the schools; it doesn't have to be as thorough as a full-fledged accreditation but enough to determine that student work is being done and at a reasonable level," he says. "Until you have that, Hawaii schools won't be taken seriously in the academic world."

For lack of resources, the Office of Consumer Protection can't tackle such issues; it can only respond when consumers complain, says acting executive director Stephen Levins.

The office would hire specialists to seek out possible offenders, but in the current fiscal climate, it can't, Levins says.

"We've decreased in size the last four or five years. From a staff of 16 attorneys, support, secretaries and investigators, we lost 10 investigators," he says. "We've had to reprioritize everything."

A $200 million industry

With little or no overhead expenses, the diploma mill industry is estimated at more than $200 million a year nationwide, with single schools earning between $10 million and $20 million annually, Bear says. Of unaccredited institutions, few are genuine start-ups or online ventures, he says.

Unaccredited schools can range from "merely dreadful to out-and-out diploma mills -- fake schools that will sell people any degree they want at prices from $3,000 to $5,000," Bear writes in the March 2000 issue of University Business.

In the past decade as states like California and Arizona tightened their laws, relatively lax Hawaii statutes have brought a flood of new diploma mills to the state, says Hawaii Pacific University's David Lohmann.

"I started noticing in the early 1990s that all these schools were being scared out of California and going to Hawaii," he says. "I don't think people know about this. They don't think this is a threat to the perceived value [by mainlanders] of their own University of Hawaii or HPU diploma."

A threat to Hawaii education

The state Office of Consumer Protection estimates the number of unaccredited degree-granting schools in Hawaii at about 100 to 150.

"Based on our analysis of the business registration database, we've tried to identify those schools that are unaccredited degree-granting schools fitting within the definition of that under our statute," says Levins. "At any given time, numbers change, schools come and go. As a generality, it's accurate to say the number ranges between 100 to 150 over the past three or four years."

Such a high number of bogus institutions has cast a shadow on a Hawaii education, Bear says. Hawaii has been "widely regarded as a laughingstock in the world of higher education," he says.

Advertisements and Web sites for diploma mills in the United States, including many with Hawaii mailing addresses, run regularly in national publications like USA Today and The Economist as well as in the Honolulu Star-Bulletin and The Honolulu Advertiser locally.

"As long as those types of ads keep appearing in major newspapers and magazines, it's going to damage schools in Hawaii," says HPU's Lohmann, who testified during the 1998 and 1999 legislative sessions in favor of stricter laws on unaccredited institutions.

"[Diploma mills] give the state a negative reputation -- that we are a place that is home to mail drops for diploma mills," says Colleen Sathre, University of Hawaii vice president for planning and policy. "Unaccredited institutions that are diploma mills ... devalue the perception of quality of degrees for students."

Targeting mainland and international students, many of the unaccredited schools are unknown to Hawaii residents.

Anthony Alonso, president of Hawaii Paralegal Services, shares the same set of office suites at Seven Waterfront Plaza with schools like University of Northern Washington, American National University, South Pacific University, Pacific Southern University and University of Sussex at Brantridge.

"I've been a tenant here for four years and I never knew there were any schools here," Alonso says. "I've never seen anyone around here from those schools before."

A visit by PBN to the Seven Waterfront Plaza site turned up a physical location for only one of the schools, American National University, which occupies a tiny 200-square-foot locked and unoccupied room. Other schools were nowhere to be found among the unmarked doors, although a receptionist was assigned to field all calls and mail for the schools.

"That's very common for these places .... obviously there is no university being run from that cubicle," Bear says.

Of the schools in Seven Waterfront Plaza that claim to be correspondence schools and therefore are part-time tenants, Bear says there still is little evidence that legitimate school activities are taking place.

"A school doesn't need to have a campus with lawns and flowers, but if they say they're a correspondence school, where are the students' records kept? Where do administrators operate?," he asks. "They could be forwarding their mail to India for all we know."

Several messages left for the University of Northern Washington were not returned.

Bear says he's not surprised by the lack of physical presence of University of Northern Washington.

"I've looked at their catalog and seen nothing that tells me there is a real school there," he says. "Any school that makes very misleading accreditation claims, and has misleading materials such as pictures in their catalog of what isn't their campus -- to me, all the signs suggest that they cannot be operating legitimately.

"I can say with near certainty that no legitimate school would accept their credits or degrees," Bear says.

Fighting an uphill battle

For years, Levins of the Office of Consumer Protection, has fielded countless complaints and inquiries about Hawaii's educational system.

Callers from as far away as Israel, Japan, Italy and even Pakistan have questioned the legitimacy of a degree from Hawaii schools such as "Harvard University for External Studies," "Hawaii University," and "Marlborough University" to name a few, which are registered in the state.

"The calls have been steady over the years. We can only tell them if the school is accredited or not," Levins says. "Ideally it would be good to be able judge the academic integrity of the school, but we're dictated by budgetary concerns. We'd need more resources to regulate the industry like that."

Even with its recently toughened state law (Hawaii Revised Statute Chapter 446E) on the issue, statute language open to creative interpretation will still make Hawaii a relatively lucrative base for diploma mill operations, Bear says.

Even Levins admits that his office is limited.
"Regarding the actual quality of education, we don't get involved in that. I'm not an expert in education. Whether a school has a strong statutory scheme, I'm not qualified to answer that," Levins says. "Whether the degrees that these schools issue are worth anything or not, I can't say."
What the Office of Consumer Protection can do with limited powers, budget and staff is investigate complaints on violations of the Unfair and Deceptive Practices Act or the Hawaii Revised Statute Chapter 446E on unaccredited degree granting institutions. It also handles law violations including those noncompliant with recently added rules such as having a physical presence in the state, having a minimum of 25 enrolled students, and including certain phrases in company print and Internet brochures.

However, it's easy to get around those rules, Bear says.

"You could walk in tomorrow and form a corporation for $100 and call it `your last name' University and nobody's going to say you can't do that," he says. "Many Hawaii schools never set foot in the state; they do it by telephone or by mail from the mainland."