[Senate Hearing 108-553]
[From the U.S. Government Publishing Office]
S. Hrg. 108-553
BOGUS DEGREES AND UNMET EXPECTATIONS:
ARE TAXPAYER DOLLARS SUBSIDIZING
DIPLOMA MILLS?
=======================================================================
HEARINGS
before the
COMMITTEE ON
GOVERNMENTAL AFFAIRS
UNITED STATES SENATE
ONE HUNDRED EIGHTH CONGRESS
SECOND SESSION
__________
MAY 11 AND 12, 2004
__________
Printed for the use of the Committee on Governmental Affairs
U.S. GOVERNMENT PRINTING OFFICE
94-487 WASHINGTON : 2004
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Washington, DC 20402-0001
COMMITTEE ON GOVERNMENTAL AFFAIRS
SUSAN M. COLLINS, Maine, Chairman
TED STEVENS, Alaska JOSEPH I. LIEBERMAN, Connecticut
GEORGE V. VOINOVICH, Ohio CARL LEVIN, Michigan
NORM COLEMAN, Minnesota DANIEL K. AKAKA, Hawaii
ARLEN SPECTER, Pennsylvania RICHARD J. DURBIN, Illinois
ROBERT F. BENNETT, Utah THOMAS R. CARPER, Delaware
PETER G. FITZGERALD, Illinois MARK DAYTON, Minnesota
JOHN E. SUNUNU, New Hampshire FRANK LAUTENBERG, New Jersey
RICHARD C. SHELBY, Alabama MARK PRYOR, Arkansas
Michael D. Bopp, Staff Director and Chief Counsel
David A. Kass, Chief Investigative Counsel
James R. McKay, Counsel
Eileen H. Fisher, Professional Staff Member
Claudia C. Gelzer, U.S. Coast Guard Detailee
Sarah V. Taylor, Legislative Aide
Joyce A. Rechtschaffen, Minority Staff Director and Counsel
Mary Beth Schultz, Minority Counsel
Amy B. Newhouse, Chief Clerk
C O N T E N T S
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Opening statements:
Page
Senator Collins.............................................. 1, 31
Senator Akaka................................................ 4, 65
Senator Lautenberg........................................... 5
Senator Carper............................................... 13
Senator Durbin............................................... 23
Senator Lieberman............................................ 33
Senator Pryor................................................ 53
WITNESSES
Tuesday, May 11, 2004
Hon. Tom Davis, a Representative in Congress from the State of
Virginia....................................................... 7
Robert J. Cramer, Managing Director, Office of Special
Investigations, U.S. General Accounting Office, accompanied by
Paul DeSaulniers, Senior Special Agent, Office of Special
Investigations, U.S. General Accounting Office................. 10
Lauri Gerald, Former Employee, Columbia State University......... 16
Alan Contreras, Administrator, Office of Degree Authorization,
Oregon Student Assistance Commission........................... 26
Wednesday, May 12, 2004
Alan Contreras, Administrator, Office of Degree Authorization,
Oregon Student Assistance Commission........................... 34
Lieutenant Commander Claudia Gelzer, U.S. Coast Guard Detailee,
Committee on Governmental Affairs, U.S. Senate................. 38
Andrew Coulombe, Former Employee, Kennedy-Western University..... 43
Sally L. Stroup, Assistant Secretary for Postsecondary Education,
U.S. Department of Education................................... 57
Stephen C. Benowitz, Associate Director, Human Resources Products
and Services, U.S. Office of Personnel Management.............. 60
Alphabetical List of Witnesses
Benowitz, Stephen C.:
Testimony.................................................... 60
Prepared Statement........................................... 141
Contreras, Alan:
Testimony....................................................26, 34
Prepared Statement with attachments.......................... 106
Coulombe, Andrew:
Testimony.................................................... 43
Prepared Statement........................................... 132
Cramer, Robert J.:
Testimony.................................................... 10
Prepared Statement with attachments.......................... 79
Davis, Hon. Tom:
Testimony.................................................... 7
Prepared Statement........................................... 75
DeSaulniers, Paul:
Testimony.................................................... 10
Gelzer, Lieutenant Commander Claudia:
Testimony.................................................... 38
Prepared Statement........................................... 125
Gerald, Lauri:
Testimony.................................................... 16
Prepared Statement........................................... 100
Stroup, Sally L.:
Testimony.................................................... 57
Prepared Statement........................................... 135
APPENDIX
Memorandum dated April 15, 2004.................................. 47
Questions and responses for the Record from:
Mr. Cramer................................................... 148
Ms. Gerald................................................... 151
Mr. Contreras................................................ 152
Mr. Benowitz................................................. 155
EXHIBITS
1. Lexington University diploma for Susan M. Collins' Bachelor
of Science in Biology.......................................... 161
2. Lexington University diploma for Susan M. Collins' Master of
Science in Medical Technology.................................. 162
3. Chart entitled ``5 Diploma Mills Generated $111 Million in
Revenue (1995-2003)''.......................................... 163
4. ``Federal Government Checks''--made out to diploma mills.... 164
5. ``Head Start Checks''--displays checks from Head Start
grantees made out to Kennedy-Western University on behalf of
students....................................................... 165
6. Poster: ``The Legendary Entertainer Dr. Dante''............. 166
7. Poster: ``Dr. Dante and Friends . . . Hypnotist to the
Stars''........................................................ 167
8. Poster: ``Zimmer Motor Cars''............................... 168
9. ``Columbia State University's Accreditation,'' Columbia
State University Catalog, page 5............................... 169
10. ``Columbia State University's Acceptance Letter'' (from
CSU's catalog). This letter notes that honorary Ph.D.'s have
been awarded to Jonas Salk, M.D., among others. It also states
in the seal ``Columbia State University--Since 1953''.......... 170
11. ``Testimonial by a former Columbia State University
`Student' '', by Thomas Rothchild, B.S., M.S., Ph.D. (from
CSU's catalog)................................................. 171
12. ``U.S. Government Checks Toward Federal Employees' Tuition
at Columbia State University,'' (four checks).................. 172
13. Chart of list of ``Degrees Available from Columbia State
University'' (from CSU's catalog). This chart highlights
engineering, psychology and health fields...................... 173
14. Chart of Columbia State Photos: one fake, one real. One
photo is from CSU's catalog, and actually depicts Lyndhurst, a
historic home in Tarrytown, NY (Hudson River Valley)........... 174
15. Sample of ``Columbia State University Official Transcript,''
(from CSU's catalog)........................................... 175
16. ``How to Earn Academic Credit at Columbia State
University,'' (from CSU's catalog). This chart lists activities
worth academic credit such as playing tennis, buying a Persian
carpet, pressing flowers, etc.................................. 176
17. ``Luxury Yachts International''............................. 177
18. Chart of ``Columbia State University on the Academic
Process'' (from CSU's catalog)................................. 178
19. Chart of letter from Oregon's Department of Justice to
Kennedy-Western University. This letter threatens enforcement
action against Kennedy-Western University...................... 179
20. ``List of Organizations that have reimbursed their
employees' Kennedy Western University Tuition,'' from the
Kennedy-Western University catalog, pages 10-11. This chart
highlights government and military agencies that have paid
employee tuition at Kennedy-Western University................. 180
21. Chart of ``Kennedy-Western Students on Exam Quality,''
Excerpts from ``The Pub''...................................... 181
22. Chart of ``Kennedy-Western Students on Taking Tests,''
Columbia State University...................................... 182
23. ``CAEL* Standard I: Credit should be awarded only for
learning, not for experience,'' * Council for Adult and
Experiential Learning (CAEL) assessment of Kennedy-Western
University's experiential award process........................ 183
24. ``CAEL Standard IV: The determination of competence levels
and of credit awards must be made by appropriate subject matter
and academic experts''......................................... 184
25. ``CAEL Standard IV: The determination of competence levels
and of credit awards must be made by appropriate subject matter
and academic experts'' (2 charts).............................. 185
26. ``Kennedy-Western Students on the Program,'' Excerpts from
``The Pub''.................................................... 187
27. Kennedy-Western Students on Degree Recognition,'' Excerpts
from ``The Pub''............................................... 188
28. Kennedy-Western Students on Tuition Reimbursement.''
Excerpts from ``The Pub''...................................... 189
29. Kennedy-Western University ``Tuition Reimbursement
Statement''--altered bill to make it look like students are
being charged per class........................................ 190
30. Chart of ``Kennedy-Western's Catalog's Claims of `Careful
Consideration' Given to Work Experience and Granting of
Academic Credit.'' Their catalog claims of ``Careful
consideration is given to your work experience and the granting
of academic credit''........................................... 191
31. Kennedy-Western University's List of Employees.............. 192
BOGUS DEGREES AND UNMET
EXPECTATIONS: ARE TAXPAYER DOLLARS
SUBSIDIZING DIPLOMA MILLS?
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TUESDAY, MAY 11, 2004
U.S. Senate,
Committee on Governmental Affairs,
Washington, DC.
The Committee met, pursuant to notice, at 10:35 a.m., in
room 216, Hart Senate Office Building, Hon. Susan M. Collins,
Chairman of the Committee, presiding.
Present: Senators Collins, Akaka, Carper, Lautenberg, and
Durbin.
OPENING STATEMENT OF CHAIRMAN COLLINS
Chairman Collins. The Committee will come to order.
Good morning. In hearings today and tomorrow the Committee
on Governmental Affairs will explore the problems that
unaccredited, substandard colleges and universities, often
referred to as diploma mills, pose to the Federal Government
and to private-sector employers.
Three years ago I became concerned by what appeared to be a
proliferation of schools advertising degrees either for no work
whatsoever or for only a nominal or token effort. At that time
I served as Chairman of the Permanent Subcommittee on
Investigations, and I asked the General Accounting Office to
look into this problem. The GAO queried a government-sponsored
database that included approximately 450,000 resumes to
determine how many individuals listed degrees from diploma
mills.
The results were disturbing. GAO found more than 1,200
resumes that included degrees from 14 different diploma mills.
The GAO used a list of diploma mills compiled by the Oregon
State Office of Degree Authorization which at that time
included 43 schools. Now that list has grown to 137.
The GAO also purchased two degrees in my name from a
service called Degrees-R-Us. The degrees were for a Master's of
Science and Medical Technology. Here is my nice Degree in
Medical Technology.\1\ And also a Bachelor's of Science in
Biology from a fictitious school called Lexington
University.\2\
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\1\ The chart appears as Exhibit No. 1 in the Appendix on page 161.
\2\ The chart appears as Exhibit No. 2 in the Appendix on page 162.
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Degrees-R-Us also provided the GAO with an official-looking
transcript in my name. It shows my grades for 4 years' worth of
course work. I did not do that well in Spanish but I aced
finite mathematics. And there was even a number provided that I
could have prospective employers call to verify my so-called
academic credentials.
The GAO paid $1,515 for the package. I would note that I
have not taken a course in biology since my sophomore year in
high school and yet here I have a degree in biology.
Degrees-R-Us is a fitting jumping off point for our current
hearings. Degrees-R-Us is what most people probably think of
when they hear the term diploma mill, because cranking out
bogus diplomas is all that it does. It does not offer classes,
it has no professors, and it does not require any work. It is
essentially a printing press or a vending machine that takes in
$1,000 bills and pops out phony diplomas.
The General Accounting Office has defined diploma mills as
businesses that sell bogus academic degrees based upon life or
other experience, or substandard or negligible academic work. I
would add that diploma mills are generally unaccredited
schools, though people should not make the mistake of
automatically assuming that all unaccredited schools are
diploma mills because some of them are not.
Similarly, many colleges and universities offer excellent,
fully legitimate distance-learning programs that provide
invaluable course work, particularly for working students.
Degrees-R-Us is obviously not one of those. It is an example of
a rather blatant type of diploma mill.
But others are not so obvious. The schools that we will
examine today and tomorrow practice a more sophisticated form
of deception and they charge students accordingly. All of the
schools we investigated gave credit for prior work or life
experience, even for advanced degrees, which is very rare among
accredited institutions. One institution's list of life
experiences that could qualify for academic credit included
horseback riding, playing golf, pressing flowers, serving on a
jury, and planning a trip. The schools we examined also
required their students to do some modicum of work, either
tests or papers or both, and they at least give the impression
that the school includes professors with suitable academic
credentials who actually play a role in the school's academic
programs.
Yet for all their pretense, the diplomas that these
businesses offer may not be worth much more than the ones that
GAO purchased in my name. The danger of these more
sophisticated diploma mills is that they can attract a far
broader range of students. I think it is safe to say that very
few Degrees-R-Us diploma holders believe that they have earned
their degrees. Indeed, the GAO interviewed a sampling of
individuals who purchased their degrees from Degrees-R-Us and
found that they were not candid in discussing why they
purchased their degrees or how they used them.
In contrast, the schools that we investigated take pains to
try to convince prospective students that they are legitimate
and that students have to earn their degrees. That is why a
healthy dose of credit for work and life experience becomes
such a critical component of their business model. That is what
permits these more sophisticated diploma mills to assume an air
of legitimacy while minimizing the actual amount of work
required.
The financial results can be impressive. According to the
GAO, Degrees-R-Us grossed only about $150,000 in a 2-year
period. In contrast, as the chart now displayed indicates,\1\
the five unaccredited schools that we examined have taken in
more than $110 million. One diploma mill that we will hear more
about today, Columbia State University, took in roughly $18
million in an 18-month period. According to the FBI,
approximately $12 million of that amount was pure profit.
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\1\ The chart appears as Exhibit No. 3 in the Appendix on page 163.
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Today and tomorrow we will focus on the challenges posed by
diploma mills to the Federal Government. I am very pleased and
honored that Congressman Tom Davis, the Chairman of the House
Government Reform Committee, will lead off our witnesses today.
Ten months ago, Chairman Davis and I asked the General
Accounting Office to examine two issues. First, whether some
Federal employees are using taxpayer dollars to enroll in
diploma mills. And second, whether high-level Federal officials
have listed diploma mill degrees on official employment or
security clearance application forms or resumes in their
personnel files.
We also asked GAO to examine whether any such high-level
officials have attempted to use these degrees for advancement.
We will hear the results of the GAO's investigation this
morning.
Later in this hearing we will hear from Lauri Gerald, who
helped run a successful diploma mill and who has been convicted
for doing so. Ms. Gerald will provide us with an insider's
perspective on how remarkably simple it is to set up a diploma
mill, provided one finds that winning marketing formula.
Finally, we will hear testimony today from Alan Contreras,
the Administrator of Oregon's Office of Degree Authorization.
He established his State's list of diploma mills, which in the
absence of action by the Federal Department of Education, has
become the most widely cited and respected list of its kind.
I began this investigation because I suspected that the
Federal Government was not doing enough to combat the problem
of diploma mills which posed problems on many levels. First,
they devalue education by deliberately making it difficult to
distinguish between a legitimate and a sham degree. Many
diploma mills, for example, use names that are close to those
of well-known institutions. Thus, Columbia State University
attempts to approximate the excellent reputation of Columbia
University, and Hamilton College becomes Hamilton University.
Second, diploma mills are unfair to those who work long and
hard for legitimate degrees and who might get passed over for a
hiring, a raise, or a promotion based on an employer's
misunderstanding of what a diploma mill degree truly
represents.
Third, they are unfair to their students who enroll and
only later realize that the academic program that they have
paid thousands of dollars for is little more than smoke and
mirrors, and that their degree is not accepted by many
prospective employers.
Fourth, they are unfair to potential employers whether in
the public or private sector who might assume that a bogus
degree actually reflects mastery of materials needed to perform
a particular job.
Fifth, if a job is critical to public safety or involves
significant responsibility, then a bogus degree can do tangible
and substantial harm.
And finally, if taxpayers are paying for such degrees then
all of these problems are compounded by inexcusable waste.
The laws, regulations, and guidelines regulating payment
for training for Federal employees and employment in the
Federal Government at first glance appear to reject diploma
mills outright. Yet after looking at only five schools we found
that agencies have paid for more than 70 Federal employees to
enroll in degree programs at diploma mills and other
unaccredited institutions. I believe that this is just the tip
of the iceberg because we only looked at five such schools. But
you could see the number of Federal checks that we found, and
this is just a partial list.\1\
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\1\ The chart appears as Exhibit No. 4 in the Appendix on page 164.
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As we will discuss some today and more tomorrow, the
problem is a loophole in the law. While agencies cannot pay for
an employee to get a degree from a diploma mill, there is no
prohibition against them paying for individual courses at such
an institution. In the course of our investigation we found
evidence that recipients of funds from at least one Federal
program have used Federal dollars to pay for diploma mill
degrees. As the chart shows,\2\ while looking for agency
payments to diploma mills we happened across three checks from
Federal Head Start program grantees in three different States
made out to Kennedy-Western University.
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\2\ The chart appears as Exhibit No. 5 in the Appendix on page 165.
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The issues that we have encountered while investigating
diploma mills, particularly during the past year, are many and
varied. I look forward to hearing from our witnesses today.
Their testimony will be very helpful, not only to Congress but
to Federal agency heads, human resources coordinators, and to
prospective students across the country whom diploma mills seek
to attract through promises they fail to keep.
Senator Akaka.
OPENING STATEMENT OF SENATOR AKAKA
Senator Akaka. Thank you very much, Madam Chairman. I wish
to thank you for holding this hearing today and for bringing to
our attention the use of diploma mills by Federal agencies and
their employees. I also want to add my welcome to Congressman
Tom Davis, as well as thank our witnesses. Be assured that your
testimony will aid this Committee tremendously.
As our Chairman noted, our witnesses will confirm the
Internet is allowing diploma mills to use highly sophisticated
and creative ways to reel in prospective clients. Their
activities have helped to propel diploma mills into a $500
million a year industry. As a former educator I am alarmed
because I understand the threat diploma mills pose to the
integrity of our educational system. I have witnessed how
education opens doors, and I know that when sound instruction
takes place students experience the joys of newfound knowledge
and the ability to excel. Diploma mills fail to provide the
rewards and returns of a true education.
Up until 5 years ago, my State of Hawaii was a haven for
these businesses. Faced with an influx of unaccredited degree-
granting schools, the Hawaii State legislature passed a bill
that tightened requirements on diploma mills. The new law
requires a school to have a physical presence in the State,
employ at least one person who resides in the State, and have
25 students enrolled within the State.
Although these steps alone will not eliminate such schools,
the numbers have dropped significantly. More importantly,
Hawaii now has the legal means to close down schools and file
lawsuits against those who claim they are operating under State
law.
As one who has long championed making sure that the Federal
Government has the resources to recruit, retain, and train
employees, I do not condone agencies funding training courses
offered by diploma mills. I am disheartened to learn that these
businesses may be providing the very training that I have
worked so hard to promote. Although current rules prohibit
agencies from funding non-accredited degrees, loopholes exist
which enable employees to obtain a degree by applying for
reimbursement of individual classes at non-accredited
institutions. The use of taxpayer money to fund diploma mill
programs is the essence of government waste.
Again, I commend our Chairman for holding these hearings
which I believe will guarantee that Federal employees have the
academic qualifications and training that enable them to bring
value to their agencies and the Nation. I look forward to
hearing from our panels today.
Thank you very much, Madam Chairman.
Chairman Collins. Thank you, Senator. Our first witness
today is the Hon. Tom Davis, who is Chairman of the House
Committee on Government Reform.
Senator Lautenberg. Madam Chairman, may I make a quick
statement?
Chairman Collins. If it would be very brief, Senator,
because Congressman Davis needs to get back to the House.
OPENING STATEMENT OF SENATOR LAUTENBERG
Senator Lautenberg. We are glad to see Congressman Davis,
and I will try to--just to say that I apologize for my
tardiness here because I think this is a very important
hearing. I understand that you, Madam Chairman, have been able
to purchase a couple of graduate degrees. I do not know whether
we call you Doctor or Dr. Chair or whatever, but the fact is,
the title goes, maybe the knowledge does not.
Unfortunately, the so-called diploma mills are not a
laughing matter. They represent an important and increasingly
serious problem. The problem attracted attention last year when
a high-ranking official at the Department of Homeland Security
was discovered to have purchased degrees from Hamilton
University. I know several young people whose families have
sent them to Hamilton College, which is a distinguished
educational institution in New York State. So Hamilton
University looks like a pure cop out. They said that this is an
institution that grants degrees based on life experiences. Some
people knowingly buy these pseudo-credentials so they can trick
an employer. Many others, however, are simply being scammed
themselves and they do not realize that what they are getting
is not worth the paper it is printed on.
Diploma mill operators often portray themselves as
legitimate institutions and are accredited. The problem is that
the accrediting organizations are often bogus as well. Diploma
mill degrees also represent a significant waste, fraud, and
abuse problem for all of us, for the entire Federal Government
which may be offering tuition assistance for individuals to get
degrees from these bogus institutions. Madam Chairman, again I
salute you for doing this. The individuals getting these
degrees are taking advantage of the public and the Federal
Government and they both lose.
While some States, including my State of New Jersey, have
passed tough laws against unaccredited academic institutions,
the Interstate Commerce Clause makes it difficult to enforce
these laws. That is why it is important for the Federal
Government to seek remedies to this problem.
So Madam Chairman, I will conclude with that and ask
permission that my full statement be included in the record. I
am called to other places and will submit questions if the
record stays open. I thank you very much.
Sorry, Congressman Davis. Good to see you here.
Chairman Collins. Thank you, Senator. Your full statement
will be entered into the record.
[The prepared statement of Senator Lautenberg follows:]
PREPARED STATEMENT OF SENATOR LAUTENBERG
Madam Chairman: Thank you for holding this important hearing.
I understand that you have been able to purchase a couple of
graduate degrees. Should we be calling you ``Doctor'' instead of
``Madam Chairman''?
Unfortunately, so-called ``diploma mills'' are no laughing matter.
Rather, they represent an increasingly serious problem.
The problem attracted attention last year when a high-ranking
official at the Department of Homeland Security was discovered to have
purchased degrees from Hamilton University, an institution that grants
such degrees based on ``life experiences.''
Some people knowingly buy these pseudo-credentials so they can
trick an employer. Many other people, however, are being ``scammed.''
They don't realize that what they're getting isn't worth the paper
it's printed on.
Diploma mill operators often portray themselves as legitimate
institutions and claim they're accredited.
The problem is that the accrediting organizations are often bogus,
too.
Diploma mill degrees also represent a significant waste, fraud, and
abuse problem for the Federal Government, which may be offering the
tuition assistance necessary for individuals to get the degrees from
these bogus institutions.
In my view, the individuals getting the degrees and the Federal
Government both lose.
While some States--including New Jersey--have passed tough laws
against unaccredited academic institutions, the Interstate Commerce
Clause makes it difficult to enforce these laws. That's why it is
important for the Federal Government to seek remedies to this problem.
The unemployment rate for people with college degrees is at an all-
time high. More and more employers want job applicants with graduate
degrees. So the pressure to have academic credentials is growing.
Some people want to cut corners to meet the criteria needed to get
a job or be promoted. Others are well-meaning in their pursuit of a
degree, but they get duped.
Either way, we need to crack down on diploma mills to protect
consumers and tax-payers.
Thank you, Madam Chairman.
Chairman Collins. Chairman Davis is the House leader in
investigating diploma mills. He has a strong commitment to the
integrity and quality of the Federal workforce. We jointly
requested the GAO investigation, the report of which is being
released today. I am delighted to have him be our lead-off
witness.
Chairman Davis.
TESTIMONY OF HON. TOM DAVIS,\1\ A REPRESENTATIVE IN CONGRESS
FROM THE STATE OF VIRGINIA
Mr. Davis. Thank you very much. Let me thank Senator Susan
Collins for inviting me to join this hearing today and for her
groundbreaking work on this very important issue.
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\1\ The prepared statement of Mr. Davis appears in the Appendix on
page 75.
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In a world where citizens increasingly need reassurances
that they can trust their Federal Government to competently do
the job of protecting and securing this Nation and its
families, it is more important than ever that we ensure that we
are hiring, properly training, and appropriately rewarding and
advancing the Federal workforce.
Last year, as Senator Lautenberg alluded to, the Department
of Homeland Security launched an investigation of allegations
that Laura Callahan, a senior official in the Chief Information
Officer's office had used, in connection with her Federal
employment, a bogus degree from Hamilton University in Wyoming.
Any claim that such a degree represents legitimate educational
achievement is at a minimum fundamentally dishonest and cannot
be tolerated within the Federal service. In some cases, such a
claim could also be a prosecutable crime.
As the Internet and new methods of communications make it
easier and easier to create and market bogus diplomas, along
with legitimate education, the time has come for Congress and
the Administration to develop a coherent policy to permit
Federal managers to know whether a degree represents completion
of a legitimate course of study.
The Committee on Government Reform has focused its efforts
on studying the use of diploma mills in the Federal civil
service to help develop a coherent government-wide policy that
will enable Federal employers to more easily identify and
discourage the use of these degrees.
Last summer we joined with Senator Collins and the Senate
Committee on Governmental Affairs in commencing a GAO study
into the purchase and use of degrees from diploma mills by
Federal employees in selected Federal agencies. At the same
time, we asked the DHS IG's office to keep us apprised of its
progress in looking at the Laura Callahan matter. We also asked
the Office of Personnel Management to provide us with any
policies that instruct agencies on how to address the use of
diploma mill degrees by Federal officials.
At that time, OPM responded that there were no specific
policies that required all agencies to screen current employees
to discover whether the degrees claimed came from legitimate
institutions. As a result, last fall I opened a dialogue with
the Department of Education seeking to discover whether it had
any resources that OPM could use for this screening process. My
staff also participated in a meeting of the Department of
Education, OPM, the FBI, the FTC, and several States to discuss
methods of identifying diploma mills and making that
information widely available within the Federal Government and
among the general public. Most recently, we have exchanged
letters with OPM regarding the definitions of legitimate
educational achievement that can be used for Federal employment
purposes.
To date, the Department of Education and OPM have been very
responsive to our concerns and we have worked well together to
begin developing a solution. OPM has recently announced that it
will hire additional staff to verify educational backgrounds.
OPM is also reviewing government-wide forms to ensure that
responses to questions about academic backgrounds will enable
Federal managers to root out phony degrees more easily.
Finally, OPM will also hold a second seminar to educate all
Federal human capital officers, especially with respect to
rules for reimbursement.
Essentially, Congress and the Administration must define a
diploma mill for the purposes of Federal employment. The
quintessential diploma mill presents itself as a valid
institution of higher learning that offers advanced degrees for
a fee while requiring no legitimate academic work. The problem
is that in the commercial world, institutions are not so kind
as to group themselves according to neat paradigms. Some
diploma mills require an exhaustive listing of all job training
activity, some require testing, and some have limited written
requirements.
Moreover, the purchasers of these degrees are often willing
to participate in the fraud. They want the degree and they are
not going to report that it is not legitimate. Federal criminal
prosecutions of diploma mill operators usually involve mail and
wire fraud charges arising from false representations that a
school was accredited or approved in some way by a State.
Ronald Pellar, the operator of Columbia State University was
recently sentenced to 8 months in jail for just such a scheme.
As an example of how complex it can be to categorize a
school, one of today's witnesses, Alan Contreras of the Oregon
Office of Degree Authorization refers in his written statement
to the Berne University fiasco. Yet on the ODA web site, Berne
University is not listed as either substandard or a diploma
mill. ODA classifies Berne as simply an unaccredited
institution that appears to supply degrees that cannot be
classified by ODA owing to insufficient information. The
official categorization clearly does not justify the term
``fiasco.''
I believe the solution to the use of bogus degrees involves
fundamentally changing government classification of
institutions of higher education. Currently, the Department of
Education only makes determinations regarding eligibility for
certain government aid or reimbursement, such as federally
guaranteed student loans. This determination relies on whether
an institution has been accredited by a recognized accrediting
agency.
But other schools provide legitimate education as well. We
have many excellent community colleges and many more excellent
commercial and vocational training schools that may not be
accredited. There are also foreign universities and legitimate
distance-learning institutions that are not accredited that may
provide legitimate educational opportunities. We have to be
sure not to confuse these forms of education with diploma
mills.
We need to look at how we track accreditation over time.
Occasionally, a college may lose accreditation for one program
while retaining overall accreditation, and some schools simply
go out of business altogether. At this time, no one
organization tracks and organizes this information into a
usable format.
So who is responsible? Congress, the Department of
Education, and OPM all have important roles to play in
preventing the use of diploma mills in Federal employment. I
understand that the Department of Education is studying the
feasibility of developing and publishing a list of accredited
schools. But that list should also include any school which is
offering a legitimate course of study toward a degree.
OPM has to use this resource to establish an effective
policy for human capital officers to use in enforcing a zero-
tolerance policy on the use of diploma mill degrees in Federal
service. Reformatting government-wide forms and holding
seminars will also help to suppress the use of these degrees.
But OPM needs to do at least two more things in my opinion.
It must provide regular training and provide the resources to
allow agency verification of educational achievements, even
when a job does not specifically require a degree for
employment. OPM has stated that the knowing use of a bogus
degree can give cause for removal since the employee has
attempted to violate the merit system. It is, therefore,
logical that OPM should actively encourage agencies to verify
all employee records and provide the resource agencies need to
complete this job.
Finally, Congress may need to consider granting additional
authority to both the Department of Education and OPM to ensure
that this sort of work can be effectively conducted. Congress
may also need to consider whether new criminal laws are needed
to allow Federal law enforcement to investigate and prosecute
diploma mill activity. Or perhaps the Federal Trade Commission
should do more to stop false claims by diploma mills.
Diploma mills are not merely a problem for the Federal
Government. State and local governments are also struggling
with how to handle this problem. Recently one of the top DMV
officials in California resigned after it was discovered that
he used degrees from a school considered by some to be a
diploma mill. In Georgia it was recently discovered that 11
educators were found to have degrees from a foreign school in
Liberia that may be a diploma mill. And in northern Virginia,
where I come from, an elementary school principal has been
found to hold a bogus degree. Clearly, this nationwide problem
merits a Federal response.
The Federal Government also needs to set the tone for the
corporate community. It is unthinkable that while the
government is sending people to jail for other forms of
corporate dishonesty, we would allow this practice to fester in
our own ranks.
This problem can be solved. Congress' job is to provide the
oversight, and if necessary, the authority to solve it. Diploma
mills will not go away. It is time to make an unequivocal
statement that fake degrees have no place or value in the
Federal workforce.
Thank you very much.
Chairman Collins. Thank you very much for your excellent
statement. I know that you are on a tight schedule so I am
going to submit any questions that I might have for the record,
but I just want to give my colleagues an opportunity, if they
have something that they are just burning to ask you. When
Senator Carper comes in it is usually because he has a burning
question to ask the witness.
Mr. Davis. Thank you all very much for your interest in
this. We look forward to working with you on this issue.
Chairman Collins. Thank you.
Our second witness today is Robert Cramer, the Managing
Director of the GAO's Office of Special Investigations. He is
accompanied by Special Agent Paul DeSaulniers, of GAO's Office
of Special Investigations. Mr. Cramer will discuss the GAO
report that Congressman Davis and I commissioned. We are very
interested to hear the results of that investigation. I want to
thank you for your work and for being with us this morning.
Mr. Cramer.
TESTIMONY OF ROBERT J. CRAMER,\1\ MANAGING DIRECTOR, OFFICE OF
SPECIAL INVESTIGATIONS, ACCOMPANIED BY PAUL DeSAULNIERS, SENIOR
SPECIAL AGENT, OFFICE OF SPECIAL INVESTIGATIONS, OF THE U.S.
GENERAL ACCOUNTING OFFICE
Mr. Cramer. Good morning, Madam Chairman, Members of the
Committee. I am pleased to be here today to talk about the most
recent work performed by the Office of Special Investigations
at GAO relating to diploma mill issues and other unaccredited
secondary schools. As you mentioned, Special Agent Paul
DeSaulniers who performed this investigation is with me here.
---------------------------------------------------------------------------
\1\ The prepared statement of Mr. Cramer with attachments appears
in the Appendix on page 79.
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As you requested, we conducted an investigation to
determine whether the Federal Government has paid for degrees
from diploma mills and other unaccredited schools. You also
asked us to determine whether senior level Federal employees
have degrees from such schools. My testimony here will
summarize our findings.
We searched the Internet for non-traditional, unaccredited
post-secondary 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 training. We
requested that four such schools provide information on the
number of current and former students in their records who were
identified there as Federal employees, and payment of fees for
those students by Federal agencies. We also requested that some
Federal agencies examine their records to determine whether
they had made payments to diploma mills and other unaccredited
schools.
In summary, on the Federal payments question, only two
schools gave us the records that we asked for. Those records,
together with records that we obtained from two Federal
agencies, the Departments of Energy and Transportation, showed
total Federal payments of nearly $170,000 to just two
unaccredited schools by Federal agencies. The chart to the
right here summarizes the information that we obtained.\1\
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\1\ The chart appears in the Appendix on page 82.
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As I said, we asked four schools, California Coast,
Hamilton, Pacific Western, and Kennedy-Western Universities, to
provide information on the number of their current and former
students who were Federal employees and any Federal payments
for those students. The first column gives you the information
that three schools gave us. One school, Hamilton, gave us no
records. The other three schools did give us records of the
number of students. You have the agencies for which they work
as well as the number of students at each agency.
Only two schools gave us the financial information. They
were California Coast and Kennedy-Western. Column three on the
chart \1\ shows the number of Federal employees at each agency
for whom Federal agencies made tuition payments. There were 64
such employees. Column four shows the total tuition payments
for those 64 employees, which was more than $150,000.
However, the records provided by the schools understate the
extent of Federal payments. It is very difficult to get an
accurate snapshot of the true extent of Federal payments to the
schools.
First, our investigation showed that some diploma mills and
other unaccredited schools modified billing practices so
students can obtain payments for degrees by the Federal
Government. Purporting to be a prospective student who works
for a Federal agency, Agent DeSaulniers placed telephone calls
to three schools that award academic credits based on life
experience and require no classroom instruction. These were
Barrington, LaCrosse, and Pacific Western Universities. Each of
these schools charge a flat fee for a degree.
For example, Pacific Western for its Hawaii degree charges
$2,295 for a bachelor of science, $2,395 for a master's degree,
and $2,595 for a Ph.D. Representatives of these three schools
emphasized in their conversations with Agent DeSaulniers that
they are not in the business of providing course training. They
are not in the business of charging fees for individual
courses. They are in the business, they market degrees for a
flat fee.
However, representatives of each of these schools told
Agent DeSaulniers that they would structure their charges to
facilitate reimbursement or payment by the Federal Government.
Each agreed to divide the degree fee by the number of required
courses, thereby creating a series of payments as if a per-
course fee were actually being charged. All of the
representatives he spoke to said that they had had students at
their schools who obtained reimbursement for their degrees or
payments for their degrees by the Federal Government.
Further, the Departments of Energy and Transportation
provided data that identified payments of about $19,000, in
addition to those listed in this chart to the two schools that
gave us information. Thus, we found that Federal payments to
just these two schools of nearly $150,000.
Additionally, a comparison of the data that we got from the
schools with the information that we got from the two agencies,
shows that both the schools and the agencies have likely
understated Federal payments. For example, Kennedy-Western
reported total payments of $13,500 from the Energy Department
for three students, while Energy reported total payments of
$14,500 to Kennedy-Western for three different students. Thus,
Energy made payments of at least $28,000 to Kennedy-Western.
Additionally, the Department of Transportation reported
payments of $4,550 to Kennedy-Western for one student, but
Kennedy-Western did not report any receipt of money for that
particular student.
The second question you asked was whether senior level
Federal employees have degrees from diploma mills and other
unaccredited schools. The answer is that some do. We requested
that eight Federal agencies provide us with a list of senior
employees and the names of any post-secondary institutions from
which those institutions reported receiving degrees. The eight
agencies we contacted informed us that their examination of
personnel records revealed 28 employees who listed degrees from
unaccredited schools. However, we believe that this number
understates the number of Federal employees at these agencies
who have such degrees.
The agencies' present ability to identify degrees from
unaccredited schools is limited by a number of factors. As you
have heard and as you have said, diploma mills frequently use
the names of accredited schools, which often allows the diploma
mills to be mistaken for accredited schools. For example,
Hamilton University of Evanston, Wyoming, which is not
accredited by any accrediting body recognized by the Department
of Education, has a name which is quite similar to and could
well be confused with that of Hamilton College, a fully
accredited institution.
Additionally, Federal agencies told us that employee
records may contain incomplete and misspelled school names
without addresses. Thus, an employee's records may reflect a
bachelor's degree from Hamilton but it will not reflect whether
it is Hamilton University, the unaccredited school, or Hamilton
College, the fully accredited school.
We interviewed six Federal employees who reported receiving
degrees from unaccredited schools. These included three
management level Department of Energy employees who have
security clearances and emergency operations responsibilities
at the National Nuclear Security Administration. One of these
employees referred to his master's degree from LaSalle
University as a joke. We also found one employee in the senior
executive service at Transportation and another at the
Department of Homeland Security who received degrees from
unaccredited schools for negligible work.
In conclusion, the records that we obtained from schools
and agencies likely understate both the extent to which the
Federal Government has paid for degrees from diploma mills and
other unaccredited schools, as well as the true extent to which
senior level Federal employees have diploma mill degrees.
At this time, with your permission, Agent DeSaulniers will
play for you excerpts of his conversations with three
representatives of schools that charge flat fees for degrees,
are not in the business of providing individual training
courses, but who sell degrees. In these excerpts, school
representatives talked to Agent DeSaulniers about assisting him
to obtain payment for his degree from the Federal agency that
he said he worked for.
OPENING STATEMENT OF SENATOR CARPER
Senator Carper. Madam Chairman, before these recordings are
played, I would just like for the record to show, our
Congressman Mike Castle, former Governor Mike Castle, is a
graduate of Hamilton, and I would like for the record to show
he is a graduate of Hamilton College. [Laughter.]
Chairman Collins. I am sure he will appreciate that you
made that very clear for the record.
Senator Carper. I just gave the Chairman a note, I am
supposed to be in a meeting on asbestos. We are trying to find
a path forward on asbestos litigation reform legislation and it
is important to me. I apologize for slipping out.
Thank you for the good work that you are doing. Madam
Chairman, I know that this is going on because of your efforts
and interest. I think you are on to something and we are
interested in being part of cleaning this up. Thank you.
Chairman Collins. Thank you, Senator.
[Audio tape played.]
Mr. Cramer. That completes our presentation. At this time
we would be happy to take any questions you might have.
Chairman Collins. Thank you very much, and thank you for
that excellent presentation.
Mr. DeSaulniers, I just want to clarify what we just saw.
It looked to me that the officials at these various schools
with whom you talked were working to structure the billing so
that you could get reimbursed by a Federal agency for the
course work; is that correct?
Mr. DeSaulniers. Yes, that is absolutely correct. They were
trying to structure the billing to facilitate Federal
reimbursement.
Chairman Collins. Yet since these are unaccredited
institutions, is the Federal Government supposed to be
reimbursed at all for this so-called educational course work?
Mr. DeSaulniers. For these unaccredited schools, for a
degree, which is all they grant is a degree, from an
unaccredited school, no, not at all.
Chairman Collins. Did you find any indication that some of
these schools actually market to Federal employees? That was a
long list of agencies in the last example that you gave us.
Mr. DeSaulniers. Yes. They list Federal agencies on their
websites, so they are trying to show that if you are an
employee of these different agencies that it is acceptable. So
in that sense, absolutely, they would be marketing to them.
Chairman Collins. Mr. Cramer, I understand that the Federal
Government has some 330,000 jobs that require some sort of
degree or a minimum amount of completed course work. Is it your
conclusion that despite the restrictions on the Federal
Government not paying for degrees from unaccredited
institutions that in fact we are paying for those degrees?
Mr. Cramer. Clearly, the evidence shows that the Federal
Government has paid towards degrees for people from
unaccredited schools. I think you would characterize what we
have gathered to date, the information we have to date, as a
window on this problem. What has emerged is there is a problem.
The extent of the problem is not altogether clear at this
point.
We know for a certainty, for example, that what we have is
only part of the picture. We did not, for example, get any
records of reimbursement to employees. All of the money that we
have talked about are direct payments to the schools. The
Department of Health and Human Services, for example, told us
that they have employees who charge on credit cards payments
for education expenses and they did not have access to the kind
of information we were trying to get from those sources. So we
know it is a much larger problem than the evidence we have to
date shows.
Chairman Collins. Mr. DeSaulniers, I am very interested in
whether or not the Federal employees whom you interviewed
understood that they were paying for bogus degrees. Could you
report to us on what your experience was when you interviewed
Federal employees holding diploma mill degrees?
Mr. DeSaulniers. I think clearly one of the employees I
spoke with called the degree a joke so obviously was aware that
it was bogus. And certainly, the other employees that I spoke
with, whether they would acknowledge it or not, had to have
known that the degree was not good. Some somewhat admitted it
but tried to give the impression of legitimacy because they
were trying to defend the degree.
Chairman Collins. Mr. Cramer, what was the motivation of
the Federal employees who sought out diploma mills and got
degrees that in many cases they knew were bogus?
Mr. Cramer. It is difficult for us to describe other
people's motivation. We do through our conversations with
people, however, and Agent DeSaulniers can pitch in here to the
extent that he has additional information to offer on this, but
they told us of motivations including advancement as well as
ego satisfaction.
Chairman Collins. Mr. DeSaulniers, do you have anything to
add?
Mr. DeSaulniers. Certainly those would be the two,
advancement is an obvious one, but ego would probably be a very
big part of it, to be able to call yourself a doctor.
Chairman Collins. Could you describe for the Committee some
of the positions that are held by individuals in your survey
who have these bogus degrees and are working for the Federal
Government?
Mr. DeSaulniers. Sure. There were people that were
responsible for classifying and declassifying documents in the
Federal Government, people with emergency response
responsibilities, to make decisions on emergency responses. I
do not want to get too specific because it would somewhat
identify the person, but they certainly had people that had
security clearances and were in very sensitive positions and
that had significant responsibility.
Chairman Collins. Could you give us some idea of the level
of these employees?
Mr. DeSaulniers. Program managers. People that were also
perhaps at a director level where they were running a program
or running an information technology area perhaps, SES level
positions.
Chairman Collins. So weren't these GS-15's and above that
you were looking at?
Mr. DeSaulniers. That is correct. They were all, at a
minimum, GS-15's.
Chairman Collins. So these are responsible positions of
authority or program managers or individuals who have
significant jobs?
Mr. DeSaulniers. That is absolutely correct.
Chairman Collins. Based on your review of these individuals
and their diploma mill degrees, do either of you have any
concerns about whether there could be a possible compromising
of public safety or national security? Do we have people in
these jobs who might represent a threat to our national
security or their ability to carry out these jobs?
Mr. DeSaulniers. Certainly if someone has listed a degree
that they have not done the work for and do not have the
knowledge and they are working in a position where that
knowledge might be critical, I think it would definitely have
an impact. We were looking at positions--we tried to look at
positions in the Federal Government that impacted safety and
health. So the people that we identified, since they were
people with fake degrees, absolutely, without the knowledge it
might have a negative impact on their performance.
Chairman Collins. So we really have two issues here, it
seems to me. One is whether these individuals with bogus
degrees are qualified for the positions that they are holding.
But the second is an issue that goes to the trustworthiness of
the employee. If the employee is willing to cite a bogus degree
on a security clearance form or a resume, that raises concerns
in my mind of whether they have the level of character that we
look for before granting a security clearance. Do you share
those concerns, Mr. Cramer?
Mr. Cramer. Yes, there is clearly a concern there,
particularly someone who is handling classified information.
One could envision a situation in which they have degrees which
another person knows are bogus and they might be subject to
blackmail as a result of it. So there are certainly some
possibilities for some problems out there if people who get
security clearances in fact have bogus degrees. It is something
to look at.
Chairman Collins. Now obviously, in some cases these
individuals may be well-qualified for the jobs despite the
presence of a bogus degree, but it certainly is a red flag.
Could you inform the Committee what you intend to do with the
information that you collected that identified these Federal
employees?
Mr. Cramer. We have alerted each of the agencies which are
involved with respect to our findings and referred specifically
each case in which we have uncovered a problem to the inspector
general or other appropriate authority.
Chairman Collins. Thank you. Finally, I want to go back to
an issue, Mr. Cramer, you raised in your opening statement. You
said that in looking at just two institutions, two diploma
mills, that you uncovered nearly $170,000 worth of Federal
checks. Is it your belief that were you able to go to the 137
diploma mills that is the commonly used number, that you would
find many more examples? Did you find some cases where you
asked for the checks from a diploma mill, did not receive them
from the institution but found them in the agencies' files?
Mr. Cramer. Actually, we had more luck going to the schools
than we did going to the agencies.
Chairman Collins. Which is a comment as well.
Mr. Cramer. This was a very difficult investigation getting
information. It was very difficult. The agencies really do not
have their information organized in such a way that what we
were asking for was readily accessible.
But that being said, we went to four schools and asked for
the records. Only two produced them. So clearly one has
questions about why the other two did not, why they would not
cooperate with us. I think it is fair to say that there is
something there that we ought to be able to uncover and if we
can pursue it some day perhaps we will.
Chairman Collins. I think you have brought up another very
important issue which is, it seems that Federal agencies are
not keeping the data necessary to make sure that they are
paying for only appropriate course work. Would you agree with
that?
Mr. Cramer. It is true. In fairness to the agencies, the
law which now permits payments only to accredited schools is a
relatively recent one. Prior to that, although payment for
academic degree training was permissible, it was only
permissible if the head of the agency determined that it was
necessary in order to recruit or retain an employee for a
position for which the government had a shortage of qualified
people. It happened very rarely is our understanding. So this
was not something that agencies did on a regular basis, and
they just do not seem to have geared up their record-keeping
systems in order to keep track of this.
With the passage of the new law, the agencies perhaps will
now recognize the importance of this issue and the need for
them to adapt their practices.
Chairman Collins. Thank you very much. I very much
appreciate your work. The Committee looks forward to continuing
to work with you on this issue. We appreciate your testimony.
Mr. Cramer. Thank you.
Chairman Collins. I would now like to call forward our
third witness today. It is Lauri Gerald. She is a former
employee of Columbia State University and of Columbia State
University's founder Ron Pellar, who has been sentenced for his
role in establishing this diploma mill. Ms. Gerald recently
pleaded guilty to one count of mail fraud in connection with
her activities at CSU. She will be able to give us a firsthand
look at the inside of a highly successful diploma mill.
Ms. Gerald, we appreciate your cooperation with the
Committee's investigation and your willingness to testify
today. I would ask that you proceed with your statement.
TESTIMONY OF LAURI GERALD,\1\ FORMER EMPLOYEE, COLUMBIA STATE
UNIVERSITY
Ms. Gerald. Madam Chairman, Members of the Committee, my
name is Lauri Gerald. I recently plead guilty in the U.S.
District Court for the Central District of California to one
count of mail fraud in connection with my involvement with
Columbia State University. Together with Ron Pellar I am
charged with executing a scheme to defraud individuals through
the operation of a diploma mill. I am currently awaiting
sentence.
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\1\ The prepared statement of Ms. Gerald appears in the Appendix on
page 100.
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In its charging documents the government defines the term
diploma mill to mean a business that pretends to be a
university or other educational institution with qualified
faculty, curriculum, classes, educational facilities, academic
accreditation, and that solicits money from various individuals
in the form of enrollment and tuition fees in return for the
issuance of degrees with purported career advancement value,
but which in truth hires no qualified faculty, has no
established curriculum, classes, campus or educational
facilities, and has no legitimate academic accreditation, and
merely distributes purported degrees that do not have
legitimate career advancement value. According to this
definition, Columbia State University was a diploma mill before
it was shut down by the authorities in 1998.
Columbia State University had no faculty, qualified or
otherwise, no curriculum, no classes, no courses, no tests, no
one to grade tests, no educational facilities, no library, no
academic accreditation. In short, Columbia State University was
a business conceived and set up by Ron Pellar, not to educate
students but to make money, and it made plenty of it.
I think it might be helpful if I give you a little
background on Ron Pellar. He was a successful and professional
hypnotist by trade and his career literally spanned five
decades. The two boards on display depict the front and back of
a glossy poster Ron put together to promote himself.\2\ The
poster shows Ron photographed with the likes of Johnny Carson,
the Beatles, Bob Hope, and Ron said that he was listed in the
Guinness Book of World Records as the highest paid hypnotist
and indicates that he played before two U.S. Presidents and the
Queen of England. I do not know whether all of this is true,
though I strongly suspect that some of it is not.
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\2\ The charts appear as Exhibit Nos. 6 and 7 in the Appendix on
pages 166 and 167.
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But what you need to know about Ron Pellar is that he is
charismatic, very well read and researched, fascinating to talk
to, and a world class self-promoter. He was also narcissistic,
egotistical, and a user of people. He was motivated by one
thing: Money.
In fact, the money and material wealth were so important to
Ronald Pellar that he kept them close at hand. He wore
expensive clothes and bought a fancy car called a Zimmer with
gold inlay.\3\ There is an example of it there. I have a
picture of one on the board, as I said. He regularly carried
around a briefcase containing $100,000 or more at a time. He
even buried his gold coins in his backyard.
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\3\ The chart appears as Exhibit No. 8 in the Appendix on page 168.
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I came to know Ronald Pellar because he was married to my
cousin. In 1992, I took a leave from my job as a program
manager with BellSouth Telecommunications and moved to
California to live with Ron and my cousin and work for Ron. At
that time, Columbia State University was already in existence
and had been since the mid-1980's. It was run along with two
other of Ron's education related ventures by five or six
employees in a small office. I worked at that office until some
time in 1996 for one of the other education ventures, though
from time to time I did work for Columbia State.
The three schools made money, but none of them made enough
to satisfy Ron. Each school had its own scam. One of the
schools was for paralegals. Ron took out advertisements, one
depicting himself in a wheelchair with an open book on his lap,
that featured false testimonials indicating that graduates from
his school could make hundreds of thousands of dollars per year
as a paralegal. Another school called American Nursing
Tutorial, charged $1,000 to $1,500 for study materials that Ron
plagiarized in their entirety from a legitimate school or
company called Moore Educational Services. Columbia State
University, for its part, offered bachelor's, master's, and
doctorate programs in a variety of fields, all requiring little
work but a lot of money to complete.
In 1996, Ron moved his offices and charted a new course for
Columbia State University, a course that caused the school to
take off financially. Ron hit upon a formula that worked, a
formula that was deceptively simple and remarkably effective.
It was basically a marketing strategy that targeted people who
never finished college or graduate school but who could be led
to believe that through their life and work and academic
experience they had more or less earned their bachelor's degree
or master's or doctorate degree already. All they had to do was
complete a minimal amount of work, pay the tuition, and
Columbia State University would award them the degree that they
deserved.
The cornerstone of the new marketing effort was a promise
that a student could obtain a degree in 27 days. Ron called
this Columbia State University's shortcut, internationally
known and respected, adult degree program. He claimed that the
school had the same government approval as Harvard, Yale, and
the University of Illinois, and other accredited and respected
schools. I am not certain what he meant by that, but I recall
that Ron told me at one time he managed to license Columbia
State University as a corporation with the State of Louisiana
and may have been granted a tax-exempt status by the IRS.
Columbia State was never actually accredited, though Ron
falsely claimed it was. This board shows here a page from
Columbia State University's catalog.\1\ It depicts a bogus
accreditation certificate that Ron simply made up. Ron often
disparaged accreditation in general but was smart enough to
know that tricking people into thinking Columbia State
University was properly accredited was to his benefit.
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\1\ The chart appears as Exhibit No. 9 in the Appendix on page 169.
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Ron took a number of other steps to make it seem as though
Columbia State University was a legitimate school. For example,
you made up a school logo and letterhead which falsely stated
that the school had been about since 1953. The board shows a
blown-up version of this form acceptance letter Ron put
together.\1\ As you can see, the stationery shows a 10-member
board of advisers, all of which had advanced degrees. In fact
there was no board of advisers and Ron Pellar was Columbia
State University. He simply made up the names and titles for
the so-called board.
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\1\ The chart appears as Exhibit No. 10 in the Appendix on page
170.
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The stationery also lists honorary Ph.D. recipients. You
will note that the man who discovered the polio vaccine, Jonas
Salk, is listed among them. When Dr. Salk discovered that his
name was being used on Columbia State University's letterhead
he wrote a letter to Ron demanding that it be removed, which
Ron did.
As I mentioned earlier, Ron sought to prey upon people who
could be convinced that they deserved a college or graduate
degree. This acceptance letter is a good example of Ron's
technique. It reads: Many individuals with superior talent,
ability and training are being denied raises, promotions, new
jobs or the prestige they deserved just because they have not
obtained the appropriate degree. Your intelligent decision,
however, will not permit this travesty to happen to you.
At the same time, Ron would criticize traditional
accredited schools in the hopes of making Columbia State's
method look more sensible and therefore more legitimate by
comparison. For example, another piece of promotional material
reads as follows, how insulting can it be to anyone's
intelligent to have your tax money pay for students taking
subjects like wine-tasting, windsailing, how to make love,
Western line dancing, etc., as an elective add to their credits
for any degree? This is all for greed to keep you in school
longer
Ron liked to advertise through testimonials and he used
this technique to promote Columbia State University. The
problem was that the testimonials were not real. Ron obtained
stock photos from random people and simply made up the success
stories. The board shows an example of a Thomas Rothchild.\2\
Mr. Rothchild notes that he was a computer programmer for 13
years, got a Ph.D. from Columbia State University, and 1 year
later became president of the company pulling down a salary of
$484,000 per year. Ron made it up. All of it.
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\2\ The chart appears as Exhibit No. 11 in the Appendix on page
171.
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People were taken in by Ron's scheme. Lots of them. They
each paid roughly $1,500 to $3,600 for a degree. I say they
paid for the degrees because in truth they had little else to
do. Generally, a student would be sent a book and told to read
it and prepare a summary. I am not talking about one book per
class, but one book per degree. One of the workers at Columbia
State University would give the summary a cursory review and
that is it, and a bachelor's degree complete with a made-up
transcript, would be awarded. If a student wanted a master's
degree he would have to do a book summary and a six-page
thesis. A doctorate meant a book summary and a 12-page
dissertation.
I think you get the idea. There was nothing that could pass
for academic rigor, however, at Columbia State University. Ron
saw the school as a cash cow and it was. During its 2-year
heyday from 1996 to 1998 I understand that Columbia State
University grossed roughly $20 million. I personally saw it
pull in over $6 million in a 6-month period in 1998.
I understand from my deposition with your staff of this
Committee that some Federal Government employees went to
Columbia State University, at least in part at taxpayers'
expense. Your staff showed me checks from the Department of
Justice and the Bureau of Prisons which are now on display.\1\
They also showed me a graduate survey that Ron put together
indicating that a long list of Fortune 500 companies and
Federal agencies had paid for their employees' schooling at
Columbia State University. I was not personally aware of
Federal agencies that were paying for their employees to attend
Columbia State University, but that does not surprise me. Ron
advertised Columbia State University very aggressively. As I
recall, at one point he ran ads designed to attract potential
students from the U.S. Army.
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\1\ The chart appears as Exhibit No. 12 in the Appendix on page
172.
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I learned a lot from my association with Ron Pellar and
Columbia State University and I deeply regret that I had any
role in those schools' lies and deceptions. That is the end of
my prepared testimony and I am willing to answer any questions
that you may have.
Chairman Collins. Thank you, Ms. Gerald. We appreciate your
testimony and giving us the view from the inside.
Shortly there will be a poster put up that lists all of the
various degrees available from Columbia State University. It is
Exhibit No. 13 \2\ in your exhibit book. Let me ask you a
couple of questions about that.
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\2\ The chart appears as Exhibit No. 13 in the Appendix on page
173.
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First of all, there is a wide range of degrees that could
be purchased from Columbia State University. It offered
diplomas not only in subjects like business administration,
sociology, and classics but also in subjects like mechanical
and chemical engineering. Are you testifying that a student
could receive a degree in any one of these subjects, many of
which are extremely complicated such as aeronautical
engineering, in just 27 days; is that correct?
Ms. Gerald. That is what he advertised, yes, ma'am.
Chairman Collins. Putting outside how unfair this process
could be for a potential employer who thinks that he or she is
hiring someone with a degree in mechanical engineering, for
example, do you think that offering a degree in 27 days could
also pose a threat to public safety in some of these areas?
Ms. Gerald. Absolutely. I think that Mr. Pellar was
intending to appeal to the individual on the basis that they
had previous experience in that particular field and thus their
life and work experience and whatever education that they had
prior to that would be to their benefit. But the truth of it
is, in 27 days, 6 months, or a year, one needs to go through a
series of processes in a class like a typical university would
do in having internships, test methods and all kinds of
schooling that would back that up as opposed to just reading a
book.
Chairman Collins. Do you think your students knew that they
were getting bogus degrees, or do you think that some of them
were hopelessly naive about what a college degree entails?
Ms. Gerald. I think both is probably the situation. There
were probably more than the majority that were quite sure that
what they were getting was what they needed to promote
themselves just by simply paying $1,500 for a bachelor's
degree. There were those, however, that sent in vast amounts of
homework, summaries, dissertations that were quite lengthy and
I would assume that they felt like that was being judged,
graded, assessed to their benefit.
Chairman Collins. Did anyone actually read that work, grade
it, assess it, provide feedback to the students, to your
knowledge?
Ms. Gerald. Not that I am aware of. If it was, it was only
cursory.
Chairman Collins. Yet these students actually received
transcripts showing grades, showing a completion of courses; is
that correct?
Ms. Gerald. Yes, ma'am.
Chairman Collins. I would like to put up the exhibit that
purports to be an official transcript for a bachelor's degree
in aviation.\1\ This is just one of dozens of similar
transcripts that have been provided to the Committee. Now this
appears to me to be preprinted. It lists a number of grades and
classes including advanced airline performance, rules of the
air, security and accidents, and it awards usually the grade of
A for the work completed in each of those classes.
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\1\ The chart appears as Exhibit No. 15 in the Appendix on page
175.
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In fact did the students actually take such classes for an
aviation degree and receive these grades, or were these
transcripts preprinted with the grades and the courses just
made up?
Ms. Gerald. Obviously, that one is preprinted, it has got
the grades on it already but there is no student name. I never
saw any one in particular based on aviation. However, to give
you an example of what that represents, business
administration, for example, the titles of the courses were
versions of titles of the chapters of the book. So it would
probably be fair to state that that particular transcript right
there, those course titles are the chapters of the book that
the student was given.
Chairman Collins. Your point is well taken. How can it be
all filled out with the courses and the grades when there is no
student name? So these are printed up in advance.
I would like to turn to some of the marketing materials for
Columbia State University, in particular the cover of CSU's
catalog.\2\ As you can see, on my left there is a black-and-
white photograph of a rather elegant building. It looks very
impressive, maybe it is Gothic in style. Does that building
have anything to do at all with Columbia State University?
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\2\ The chart appears as Exhibit No. 14 in the Appendix on page
174.
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Ms. Gerald. No, ma'am.
Chairman Collins. So that is not the headquarters or a
classroom?
Ms. Gerald. No, ma'am, it is a residence, a mansion I
believe in New York State.
Chairman Collins. Now the other photograph, the one in
color, it is my understanding is a San Clemente, California
storefront office and it has a sign identifying it as the
American Consumer Protection League. Now there is quite a
difference between those two locations. It is my understanding
that Mr. Pellar also registered to receive mail for Columbia
State University at the San Clemente address using a false
name. Can you explain any of this to us, what it is that we are
seeing on my right?
Ms. Gerald. Actually 930 Calle Negocio in San Clemente was
a complex of industrial business locations, meaning that they
had a storefront, an office front, in the rear had a shipping
type arrangement with a garage door. All of the offices there
were the same way.
The receiving of mail was this: He had an arrangement with
a secretarial service in Metairie, Louisiana that would go in
and pick up his mail on Mondays and Thursdays, ship that mail
overnight to that address, and it would be received on Tuesdays
and Fridays. So it was packaged, bulk mail scenario sent from
Metairie to that address. In other words, students when they
enrolled, they did not know anything about the San Clemente
address. They sent their mail to New Orleans or Metairie.
Chairman Collins. I want to ask you one final question
before turning to Senator Durbin. It is my understanding that
Columbia State University provided generous credit for life
experience and I would like to turn your attention to the
posterboard that is now being displayed.\1\ Are you familiar
with the kinds of experience that would qualify for credit?
Have you seen this list before?
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\1\ The chart appears as Exhibit No. 16 in the Appendix on page
176.
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Ms. Gerald. Yes, ma'am.
Chairman Collins. It is my understanding that some of the
activities listed for which CSU would grant college credit or
graduate-level credit, included playing tennis, eating in
exotic restaurants, pressing flowers, buying a Persian rug,
watching public television, and playing the game Dungeons and
Dragons. Did this actually happen? Did CSU actually give
college credit for activities like that?
Ms. Gerald. If I can give you a broad answer, I think that
was born out of--one of the examples I gave in my earlier
testimony was that Ron had a school called American Nursing
Tutorial. The premise of that school was that one would get a
bachelor's degree and go to work as an LVN and spend maybe 10
years working in that particular field. And then maybe by that
time have gotten married, had a couple of children in the home
to take care of and not have the time to go to school. So you
could enroll with your former credits accrued from your
bachelor's degree and your life-work experience, meaning the 10
years that you worked as an LVN as a technical employee.
Now from that he drew this up which gave the prospective
student the idea that any life-work experience that they had,
be it technical or otherwise--and I would not call dining out
in a restaurant necessarily technical--but that you could get
credit for that. However, going back to a previous poster up
there, the pre-prepared transcript showed no indication that I
saw of life and work history because it did not have the
student's name on there, and how would one know prior to
completing the degree what they asked to have credit for? I do
not recall having ever seen that done, but it may very well
have been done.
Chairman Collins. Thank you. Senator Durbin.
OPENING STATEMENT OF SENATOR DURBIN
Senator Durbin. Thank you very much, Madam Chairman, and
thank you for this hearing. You have done an extraordinarily
good job of investigating this issue and I am particularly
proud to be a Member of the Committee when I consider the
effort that you put into this and the fine witnesses that we
brought forward today. If watching public television can earn
you a degree, I suppose watching C-SPAN could get you an
advanced degree in something, but I am not sure what it might
be.
Aside from the humor that might be associated with it,
there are some serious aspects. A few years ago a technician at
the Clinton nuclear power plant in my home State of Illinois
was interviewed for a story about the problem. He had received
a bachelor's and master's degree from Columbia State
University. According to the news story, both the individual
interviewed and another person involved indicated they did not
realize they were receiving fraudulent credentials and ended up
working at a nuclear power facility.
We have ample evidence that there was at least one person
working at a very high level job in the Department of Homeland
Security fighting terrorism who turns out to have a bogus
degree. I think what you found, Madam Chairman, is that there
are people purporting to have medical training who have made
some rather disastrous decisions on behalf of patients, and it
turns out they had little or no training for their credentials.
I guess, Ms. Gerald, the thing that strikes me as well is
the fact that as terrible as this fraud may be, the taxpayers
are subsidizing it. We are providing hard-earned tax dollars by
way of grants and loans to students at these bogus
institutions. And the money involved is absolutely stunning in
terms of how much the Federal Government may have financed the
process. I do not know if I have all of that right at my
fingertips here but I think the information that has been
provided to us by GAO suggests that it could be substantial.
I note that five diploma mills the Committee surveyed
brought in a combined revenue of $112 million over a 4-year
period, the most profitable Kennedy-Western, revenues of $73
million between 2000 and 2003; another institution $20 million.
The one that was bringing in $20 million had 30 people working
for it. Talk about a gold mine that they have discovered.
I guess the question I have to ask is, and maybe you could
tell us your own personal experience on this relating to Mr.
Pellar and others involved in the institution, what did law
enforcement do about this ultimately? Were there efforts such
as criminal or fraud charges brought to try to recover some of
this money that went from taxpayers to these institutions?
Ms. Gerald. I can tell you from personal experience the
answer to that is absolutely yes. The FBI came in, I think it
was July 3, 1998, to Ron's offices, confiscating files,
computers, and other materials there at that business location
that was shown on the board. They also came to my home, they
came to the home of the manager at the time, and took
information from those premises and then ultimately took other
possessions and so forth.
Possessions meaning that, there were items, for example, in
our case where Mr. Pellar had purchased automobiles directly
with a CSU or Columbia State University checks for his
daughters, so those automobiles were taken. So there were
efforts. I understand that were made to get a yacht that Ron
had purchased after he had fled the country. So there were many
items of personal possession of his and ours that were taken,
yes.
Senator Durbin. Do you have any idea how much money was
recovered from Mr. Pellar?
Ms. Gerald. I have absolutely no idea. I can tell you
exactly how much was taken from us.
Senator Durbin. Would you tell us?
Ms. Gerald. I think overall the value of things that were
taken from us and----
Senator Durbin. Meaning your family?
Ms. Gerald. Meaning our family. There was myself, his wife,
and his two daughters. Also we were defined as being part of
the eligibility for seized items that were actually none of
ours, like Ron's Columbia State University business account.
None of that belonged to any of us but our names were on those
documents. So if you look at all of that information there was
a total of approximately $842,000.
Senator Durbin. What marketing ploys did he use that were
most successful in bringing students in?
Ms. Gerald. I would say the actual aesthetics of the
materials that were sent out was one. He made them look fairly
professional. Also, the appeal to the individual that their
previous accrued credits, whether they had actually gotten a
degree or not but had earned credit, would be accepted across
the board.
For example, in today's university environment in the State
of California, for example, if you go to school in Sacramento,
University of California but you transfer to a city in Southern
California you may lose some of your credits. This was not the
case with Ron's school. He advertised that he would accept the
credits that you had earned, and that was very appealing to the
potential student. Then, of course, anything related to work
and life history, that potential student felt like they would
get credit for whatever school of hard knocks education that
they had earned.
Senator Durbin. I will tell you what is interesting, too,
is that he also spawned a new generation of those involved in
this fraudulent practice. Loyola State, which is offensive to
those of us who have such respect for Loyola University in my
home State, was a diploma mill that was uncovered by Illinois
Attorney General Lisa Madigan and her predecessors. According
to one of the news stories, the proprietor of Loyola State had
a diploma from Columbia State. So they used their academic
credentials from Columbia State to found a new university,
which turned out to be totally fraudulent. Mr. Pellar himself
plagiarized to launch one of his new schools, starting his
nurse's tutorial by borrowing from another program. Do you know
to what extent Mr. Pellar's operation may have led to others
instigating copycat schemes?
Ms. Gerald. No, I am not familiar with any that spun off of
that other than what you have just mentioned. I have no idea. I
am sure there were many, but I could not define anything in
particular.
Senator Durbin. I have just been notified that it was
former Attorney General Jim Ryan who was involved in that. I
thought it was Lisa Madigan but it was Jim Ryan who did it in
our State.
Thank you very much for your testimony.
[The prepared statement of Senator Durbin follows:
PREPARED STATEMENT OF SENATOR DURBIN
Madam Chairman, when you ably chaired the Permanent Subcommittee on
Investigations in previous Congresses, your leadership helped expose to
public scrutiny an array of serious consumer protection lapses
including medicare fraud, safety of food imports, telephone service
slamming and cramming, and sweepstakes fraud.
This week's hearings on the extent to which taxpayer funds are
being expended for bogus degrees from diploma mills continue that noble
quest to investigate and combat another situation vulnerable to waste,
fraud, abuse, and mismanagement. I commend your initiative to confront
this problem.
Diploma mills unabashedly exploit fraud on society by cleverly
adopting institutional monikers that mimic legitimate and esteemed
educational establishments. Some of the operators of these outfits even
create their own bogus credentialing entities with lofty-sounding
titles that appear perfectly reputable. Diploma mills also pose
problems for the expanding arena of distance learning and credentialed
on-line courses.
According to John Bear, who spent a dozen years as the FBI's
principal consultant and expert witness on diploma mills and fake
degrees, ``it's not uncommon for a large fake school to `award' as many
as 500 Ph.D.'s every month.'' [Source: ``Diploma Mills: The $200
Million A Year Competitor That You Didn't Know You Had'' University
Business (March 2000)]
My home State of Illinois is among the few, but growing number of
jurisdictions which have addressed the problem of fraudulent use of
academic credentials by enacting specific legislation prohibiting the
conduct.
The Academic Degree Act (Illinois Public Act 86-1324), enacted in
1989, makes it unlawful for a person to knowingly manufacture or
produce for profit or for sale a false academic degree, unless the
degree explicitly states ``for novelty purposes only.'' It is also
unlawful under this act for a person to knowingly use a false academic
degree for the purpose of obtaining employment or admission to an
institution of higher learning or admission to an advanced degree
program at an institution of higher learning or for the purpose of
obtaining a promotion or higher compensation in employment.
This law established as a matter of public policy that deception of
the public resulting from the offering, conferring and use of
fraudulent or substandard degrees must be prevented.
In 1997, the Illinois Attorney General filed a lawsuit against
``Loyola State University,'' which had been offering bachelor's,
master's, and doctoral degrees based on ``life-learning experiences.''
These experiences could include eating in an exotic restaurant, hooking
a rug, visiting a museum and watching public TV, and would be matched
with course names and numbers and listed on a transcript.
A Chicago Sun-Times story in March 1997 reported that Loyola State
University's chancellory building was a private mail drop in Itasca,
Illinois, a community of about 8,300 residents just outside of Chicago.
Mail and phone calls were forwarded to California. The Executive
Director of ``Loyola State'' was accused of violating the State's
consumer fraud and deceptive practices acts and the Illinois Academic
Degree Act, which requires regional accreditation for colleges and
universities.
Furthermore, as our inquiry continues, I think we should also
seriously question whether any individuals performing Federal sector
work under contract are being bid for and selected for jobs based on
credentials procured from fly-by-night schemes.
Moreover, there should be zero tolerance for the use of phony
degrees for anyone seeking or holding a Federal security clearance,
whether the applicant be an employee, a Federal contractor, or other
requestor.
As competition for Federal jobs becomes more fierce, and as we
tackle the heightened challenge of attracting the best and brightest to
public service, I think we need to ask how we can do a better job of
safeguarding the integrity of the hiring and promotional processes.
When individual educational achievement is so often a material
element in selecting top candidates to fill coveted high-level civil
service posts--and when a failure to scrutinize and validate claimed
credentials appears to be a material deficiency across agencies--it's
time for urgent and effective corrective action.
GAO's conclusions that the extent of this problem may be even worse
than the data reflect should be a stark eye-opener. If agencies lack
systems to properly verify academic degrees or detect fees spent for
degrees but masked as fees for training courses, if there are no
routine and standard verification protocols to check out academic
references, and if there are no uniform government-wide practices to
conduct queries on particular schools and their accreditation status,
then it's high time that this situation changes.
With GAO's assessment that the Federal Government is itself a
victim of these scams, I hope we will act with dispatch to close any
statutory loopholes, require heightened vigilance by human resources
officials across all agencies, and invoke remedial action to recover
any misspent funds.
U.S. statesman, inventor, and founding father Benjamin Franklin
observed that ``there is no kind of dishonesty into which otherwise
good people more easily and frequently fall than that of defrauding the
government.'' Franklin also quipped that ``an ounce of prevention is
worth a pound of cure.''
Madam Chairman, I find these two enduring adages particularly
apropos for the topic we are exploring in these hearings.
I appreciate your initiative to shed light on the scope of damage
to the Federal Government by the deceptive practices of diploma mills.
I trust that public exposure of this problem will accomplish several
things: Help officials recover financial losses and prosecute fraud;
strengthen and augment available enforcement tools; spur agencies to
become more vigilant in reviewing credentials of applicants for
employment, promotions, and security clearances; educate the workforce
about how to avoid becoming unwitting victims of schemes; discourage
the proliferation of deceptive ripoffs; and stem the tide of
misappropriating taxpayer resources for illegitimate academic
credentials.
Thank you for holding these hearings. I look forward to
participating.
Chairman Collins. Thank you, Senator.
Thank you for your testimony. We may have a few additional
questions for the record to clarify some issues, but we very
much appreciate your coming forward and sharing your assessment
with the Committee.
Ms. Gerald. Thank you for the opportunity.
Chairman Collins. Our final witness this morning is Alan
Contreras. He is the Administrator of the Office of Degree
Authorization at the State of Oregon's Student Assistance
Commission. He has long lead the charge at the State level to
curb the proliferation of diploma mills and he will discuss the
various forms that diploma mills can take. We are really
delighted to have one of the country's foremost experts on
diploma mills with us this morning.
Mr. Contreras.
TESTIMONY OF ALAN CONTRERAS,\1\ ADMINISTRATOR, OFFICE OF DEGREE
AUTHORIZATION, OREGON STUDENT ASSISTANCE COMMISSION
Mr. Contreras. Thank you, Senator. I appreciate the chance
to be here today and I hope that some of my comments will be of
some use to the Committee.
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\1\ The prepared statement of Mr. Contreras with attachments
appears in the Appendix on page 106.
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I think some of the basic issues about diploma mills have
already been brought out by the earlier witnesses and I am
going to just hit some of the high points in my testimony and
then talk about what the State of Oregon is trying to do about
this problem at a local level.
I think the key driving force behind the modern expansion
of diploma mills, which after all have been around for a long
time, is certainly the Internet, the ease of advertising via E-
mail, combined with the ease of putting up a web site that
makes you look like a legitimate institution that has some of
these nice pictures that we just looked at, most of which are
stolen from real institutions or from things that are not
colleges at all. So it is very easy now to make yourself look
like you are a college when in fact you are not.
We often get asked, as has come up earlier, why do people
care about these degrees and what are some of the issues that
come up because people use them? Certainly, the public safety
and national security issues that have been mentioned earlier
would be in that category. But I want to add something to the
national security item, which was mentioned earlier by the
gentleman from the GAO, and that is the problem of potential
blackmail.
One aspect that was not really discussed is what happens
when a Federal employee based in Virginia or somewhere else,
ends up moving to New Jersey, North Dakota, Oregon, Indiana, a
State that has a law saying that these degrees are not valid?
If you get transferred to Minot Air Force Base in North Dakota
and you are an Air Force officer or a civilian employee and you
have a degree from one of these bogus suppliers and that is
your credential, that is a felony in the State of North Dakota.
There is no exception for Federal employees, obviously,
committing felonies in the State of North Dakota. So you are
instantly subject to blackmail in a very sensitive institution.
Or for example, if you were in a border situation, a Coast
Guard situation, things of which you are very familiar. So that
is one additional item I wanted to add to the national security
discussion.
I think we have already covered the questions of the
problem of the waste of resources, both public and private, of
people who buy and use these degrees. There is also the
question of the devaluation of legitimate degrees, especially
those from non-traditional providers that are legitimate; the
University of Phoenix, Thomas Edison, Charter Oak, Capella in
Minnesota. There are lots of places that are accredited, non-
traditional degree providers. They are the ones that are really
harmed by these bogus operators out there who are using similar
techniques to offer a bad product.
Finally, I think you get down to the question of equity. If
you are a Federal employee and you have worked there for 10
years and you earned your degrees the old-fashioned way, by
actually taking the classes, and all of a sudden somebody gets
promoted into a position that you would have been qualified
for, because they bought their degree last week for $900 over
the Internet, I think there is a very fundamental equity issue
there that has nothing to do so much with the expenditure of
public funds but with the nature of public policy. I hope that
is an issue that the Committee will spend some time and energy
on.
The question came up earlier of whether all unaccredited
colleges are diploma mills. The answer is clearly no, and I
will go over the Oregon procedure for evaluating these things a
little bit later. But there are a number of unaccredited
schools that are perfectly legitimate post-secondary providers.
There are ways that you can determine what they are, and that
they are not a pure mail-order house such as the previous
witness described.
But right now in the United States, the only meaningful,
transportable, national interstate standard to decide whether a
post-secondary provider is legitimate or not, is accreditation.
That is what we use in the United States. Not every country
does that, but that is what we do.
So as you may have noticed with things like Pacific
Western, if you have a State-approved school somewhere else and
somebody moves from one State to another and wants to use that
degree, if it is not accredited, we have no idea what it is
really, if they have not gone through our own evaluation
process.
I have been asked to comment on what some of the most
common professions are in which we in our office have found
people using these bogus credentials. Certainly, K-12
education, both teachers and administrators, police,
corrections and other public safety, counselors, public
administrators, medical administrators would be in that
category. We get a fair number of cases of referrals or
comments coming up about people who serve as expert witnesses
who want to be able to call themselves doctor in order to make
a better impression, and so on, that sort of thing. And quite a
few in business, although most of the complaints we actually
get are from the public sector.
I will talk briefly about what the Oregon legislature has
decided to do about this problem. Most people seem to think
that we are the only State that has, and that is actually not
true. New Jersey, North Dakota, and Indiana have done a fair
amount. Illinois has recently passed a partial bill, and the
Nevada legislature is considering it. It is a more popular item
for discussion than it was 10 years ago.
What the Oregon legislature decided to do was adopt a very
straightforward mechanism dealing with these things. In the
State of Oregon today it is illegal, both a violation of
criminal and civil law, to use an accredited degree as a
credential for anything, employment, starting your business,
whatever it is that you would require the credential for. That
is both a crime and civil fraud, you cannot do it. The same is
true in a couple of the other States I mentioned.
What that means as a practical matter is that if an
unaccredited entity wants its degrees to be validated for use
in the State of Oregon it has to go through our office and we
have to do a screening. We have to do an evaluation of the
provider to make sure that it meets certain minimum basic
standards to be usable in Oregon. I wanted to just briefly let
you know what those standards are and then I will go back to
make a couple of comments about the Federal issues.
In order to be legitimate for use in Oregon, a degree has
to be from an institution that has adequate faculty
qualifications, adequate program length. That is, in terms of
the student having to do a certain amount of work to get the
degree and not get it in 27 days, or in 27 hours, because we
all know how that happens. The content of the curriculum has to
be something that is recognizable as belonging to a post-
secondary offering and not simply something that looks more
like a high school term paper.
Requirements on the award of credit. You cannot have people
getting a full year's credit for work that they do on a Friday
night. There has to be some indication that credit is awarded
in an organized method over time.
There also has to be some evidence that the entity has
admission standards that you and I would recognize as
legitimate. For example, you do not start giving out Ph.D.'s to
people who have never completed high school. There needs to be
some kind of linkage there as you go through the process.
Now in the case of foreign degree suppliers we also look at
whether the entity has legitimate approval within the Nation it
comes from, whether that Nation has an adequate process in
place, some related issues like that.
Finally, I think there are some basic things the Federal
Government could do that would be very helpful in this process.
The States, we can really take care of our own up to a point.
Each State can make a decision about how to regulate these
things. But I think if the Federal Government does not have a
law on the books about qualifications necessary, you really
need to move toward something that has these standards in it.
You need to look at whether degrees used by Federal employees
are from federally-recognized accreditors, whether you paid for
them or not. The question you are looking at is partly whether
my tax dollars and your tax dollars were used to buy these
things. But the fact that we bought them or the individual
bought them, they are still sitting there with a bogus
credential in a sensitive position. That is really the basic
problem: Whether these people are capable of performing.
Then I think you need to look at--if you are going to look
at unaccredited institutions as being legitimate institutions,
which a few of them are, you need some mechanism in place,
through the Department of Education or possibly OPM, to
determine whether the unaccredited entity is capable of meeting
certain basic standards that an accredited entity normally
would, or that an entity approved by an attentive State unit
like ours really would.
So that is basically what the Oregon legislature has done
when faced with this situation. North Dakota, New Jersey,
Indiana have done similar things.
I would be glad to answer any questions you might have.
Chairman Collins. Thank you so much. Your testimony is
excellent. It really gives us a fuller understanding of the
issues involved.
Unfortunately, we are in the midst of two roll call votes
on the Senate floor. There is only one minute remaining in the
first one so I am going to have to spring away. I would like to
ask, if possible, if you were planning to stay overnight here
in Washington, that we could start our hearing tomorrow morning
and allow the opportunity for myself and other Members to
engage you in questions at that time.
Mr. Contreras. I plan to attend the entire hearing
tomorrow.
Chairman Collins. Wonderful. That would be great.
In that case, we will see you tomorrow and this hearing is
now recessed until 10 a.m. tomorrow morning when we will
reconvene in room 342 of the Dirksen Senate Office Building.
[Whereupon, at 12:16 p.m., the Committee was adjourned.]
BOGUS DEGREES AND UNMET
EXPECTATIONS: ARE TAXPAYER DOLLARS
SUBSIDIZING DIPLOMA MILLS?
----------
WEDNESDAY, MAY 12, 2004
U.S. Senate,
Committee on Governmental Affairs,
Washington, DC.
The Committee met, pursuant to notice, at 10:05 a.m., in
room SD-342, Dirksen Senate Office Building, Hon. Susan M.
Collins, Chairman of the Committee, presiding.
Present: Senators Collins, Lieberman, Akaka, and Pryor.
OPENING STATEMENT OF CHAIRMAN COLLINS
Chairman Collins. The Committee will come to order.
Good morning. This is the second of two hearings that the
Committee on Governmental Affairs is holding this week to
examine the problems that substandard, unaccredited schools,
often referred to as diploma mills, pose to the Federal
Government.
Yesterday, we heard testimony from the General Accounting
Office's representatives, from a person who has been convicted
for helping to run a successful diploma mill, and from an
Oregon official who enforces one of the Nation's toughest anti-
diploma mills laws.
Throughout this investigation, I have been struck by how a
simple marketing strategy has propelled some diploma mills to
financial success to the tune of millions of dollars. By hiding
behind a mask of legitimacy, diploma mills can be used by the
unethical and can fool the unwary student or employer into
believing that their degrees are as legitimate as a degree from
an accredited university that provides a quality education and
plays by the rules.
Today, we will hear from three witness panels. On the first
is Alan Contreras, the Administrator of Oregon's Office of
Degree Authorization. He gave his statement yesterday, but the
Committee did not have an opportunity to engage him in
questions due to a series of votes. He has been gracious enough
to join us again today so that the Committee can ask him
questions about his extensive experience in combatting diploma
mills, and I very much appreciate his willingness to stay over
and join us again today.
The second panel will focus on Kennedy-Western University,
an unaccredited school with academic requirements that fail to
meet the standards of legitimate institutions. The Committee
became interested in Kennedy-Western because its catalog
boasted that a number of Federal agencies had paid for their
employees' education at the school.
The poster now on display is a page from the Kennedy-
Western catalog.\1\ Highlighted in yellow are more than a dozen
different Federal agencies, including the Departments of
Defense, Justice, Energy, Agriculture, Transportation, and
Health and Human Services, that purportedly paid for their
employees' course work at Kennedy-Western.
---------------------------------------------------------------------------
\1\ The chart appears as Exhibit No. 20 in the Appendix on page
180.
---------------------------------------------------------------------------
The General Accounting Office found that Federal agencies
had paid for 50 employees to enroll at Kennedy-Western. The GAO
did not find payments from all of the agencies listed in the
business's brochure. But it is important to remember that the
GAO was only able to capture direct payments from agencies to
unaccredited schools. It has no way of looking at the payments
that agencies make directly to reimburse employees who
initially paid for diploma mill tuition themselves.
The witnesses on the second panel will offer an insider's
perspective on Kennedy-Western's academic program, as well as
on its aggressive marketing and sales methods. I want to note
for the record that one of the reasons we have been able to
examine Kennedy-Western in such detail is its cooperation with
the Committee, which we do appreciate. Too often, individuals
or organizations under investigation by a Congressional
Committee adopt a bunker mentality, refusing to provide
information unless and until they feel they have no choice but
to do so. I would also note that we have looked at other
diploma mills, some of which, for example, Columbia State
University, were discussed at yesterday's hearing.
The third panel consists of representatives of the
Department of Education and the Office of Personnel Management.
We will learn what initiatives these agencies are undertaking
to prevent taxpayer dollars from subsidizing diploma mill
degrees and to make it clear to prospective and current
employees that such credentials are not accepted in the Federal
Government.
I want to thank both agencies for working closely with the
Committee to help address these issues, and in particular, I
want to recognize the leadership of OPM Director Kay Coles
James and the Secretary of Education, Rod Paige.
The question on the minds of many individuals watching
these hearings must be. ``How is it possible that Federal
agencies spend our tax dollars on these worthless degrees?''
The answer is far from simple when what at first glance appears
to be a clear rule and policy prohibiting agencies from paying
for diploma mill degrees are in reality subject to a loophole
that can be easily exploited. And as the numerous Federal
checks that we have found that have been written to diploma
mills clearly indicate, that loophole is frequently and
successfully exploited.
This loophole, which we will discuss in detail this
morning, allows agencies to pay for classes, individual
courses, at diploma mills. It must be closed. We owe students,
taxpayers, and employers no less, and working together with the
agencies represented here this morning, I am certain that
whether through new legislation or new regulations, we will be
successful in closing that loophole once and for all.
Senator Lieberman.
OPENING STATEMENT OF SENATOR LIEBERMAN
Senator Lieberman. Thank you very much, Madam Chairman. Let
me start by thanking you and your staff for the excellent work
that you have done on this investigation and for your
initiative in calling these hearings. I appreciate your
leadership in focusing our Committee on the topic of these
substandard, unaccredited schools.
The Committee's investigation has left no doubt that
diploma mills deserve a failing grade. Sham degrees undermine
the public's confidence in our educational institutions, in
employee qualifications, and in the quality of the workforce.
The Federal Government, as you have said, simply cannot afford
to waste precious taxpayer dollars to subsidize employees who
wish to obtain degrees that are worth less than the paper they
are printed on.
Of course, the public interest may be at risk here, as
well, when public employees are on the job without the
educational credentials needed to do their jobs. Phony degrees
from phony schools are unfair to honest people who work hard
for their degrees and on their jobs, and they also can be
unfair to those who seek them and are deceived by their value.
No job applicant should be denied a position, no employee
denied a promotion because a competitor has presented false
qualifications.
As I followed this investigation, Madam Chairman, I would
say that each of these diploma mills seems to work somewhat
differently, but they all mock hard work and traditional
intellectual pursuit. Many provide substantial credits for life
experience, which led me to conclude that you and I are both
probably Ph.D.'s right now. [Laughter.]
In some cases, students didn't have to complete much, if
any, coursework to obtain a degree because their life
experience was study enough. One diploma mill didn't have
professors or teachers on staff, didn't bother to grade student
assignments and suggested to potential students that they could
get credit toward their degrees for such life experiences as
playing tennis or eating in exotic restaurants.
This same school advertised that students could earn a
Bachelor's degree, Master's degree, or Ph.D. in just 27 days
without attending any classes. I mean, this is unbelievable. If
it wasn't produced by the investigation that the staff has
done, it would be hard for me to believe.
The tactics of some of these outfits in soliciting
prospective students are really unbelievable. At one
unaccredited school, according to the staff's investigation,
so-called admissions counselors were actually telemarketers who
used pressure tactics and misleading statements to lure
students. These self-described admissions counselors were
actually paid commissions based on the number of students they
enrolled, and in some instances were fired for not meeting
their sales goals. Yet even though these diploma mills offer
next to nothing in terms of the education they provide, they,
of course, are often quite profitable.
I believe that you have done a great service in uncovering
and drawing these shameful practices out into the sunshine. We
have a very good group of witnesses this morning. I look
forward to hearing particularly about the Office of Personnel
Management's stepped-up efforts to address issues concerning
educational credentials of current and prospective government
employees, including the amendment of Federal personnel forms
to more readily identify unaccredited and substandard schools.
So again, Madam Chairman, I thank you for your leadership
here. I congratulate you and your staff for what you have
uncovered and I look forward to working with you either to pass
legislation that would close the loopholes which you have
described or to encourage the Executive Branch to take
regulatory action that will do so. Thank you very much.
Chairman Collins. Thank you, Senator.
Our first witness today is Alan Contreras. As I mentioned
in my opening statement, he delivered his statement to the
Committee yesterday, but due to a series of votes, we were
unable to question him at that time. He is the Administrator of
the Office of Degree Authorization at the State of Oregon's
Student Assistance Commission and is one of the Nation's
foremost experts on diploma mills.
We very much appreciate your flexibility in joining us
today and we will go straight to questions unless you have some
comments that you felt you didn't get to make yesterday before
we had to adjourn.
TESTIMONY OF ALAN CONTRERAS, ADMINISTRATOR, OFFICE OF DEGREE
AUTHORIZATION, OREGON STUDENT ASSISTANCE COMMISSION
Mr. Contreras. I am done with my formal presentation and
would be glad to take questions.
Chairman Collins. Thank you. It is my understanding that
your State's law prohibits schools from awarding degrees unless
they are approved by the State Office of Degree Authorization.
Could you explain more about the Oregon State law, what brought
it about and how it affects employers in your State?
Mr. Contreras. Well, Oregon has had some kind of law on the
books for well over 20 years, but the current version was
passed in 1997 by the legislature, prior to my arrival in this
position. What it does is it says that in order to be valid for
use as a credential for any purpose in the State of Oregon, a
degree has to be from a school that is accredited by a
federally-recognized accreditor or that is evaluated and
approved by our office using the standards adopted by the
commission for which I work.
So what that means is that for any employment situation,
public or private, in the State of Oregon, there is a built-in
screening situation. It doesn't mean that occasionally somebody
doesn't get through, but when we catch up with them, we can
enforce the law in that situation.
Chairman Collins. Are there fines or other penalties if
unaccredited schools operate in your State? How does that work?
Mr. Contreras. There are fines or penalties both for an
unaccredited school operating in the State or for an individual
who uses a degree from an unaccredited school in the State. It
is a Class B misdemeanor under the criminal law. It is also
considered civil fraud on the part of an individual and would
be an unlawful trade practice on the part of a commercial
entity. And their fines range up to $1,000 per incident, and
under the Class B misdemeanor, there is a potential of 1 year
in jail.
Chairman Collins. When the Committee first began its
investigation, which was actually 3 years ago, and we looked at
your website and the list of diploma mills, at that time, I
believe there were about 40 that were listed. Could you tell us
how that list has grown, how many schools--``schools'' I put in
quotes--you list as diploma mills and how you determine--what
standards do you apply to determine whether an institution is a
legitimate school or simply a diploma mill?
Mr. Contreras. I do appreciate you putting the word
``school'' in quotes. We use the term ``supplier''----
Chairman Collins. That is a better term.
Mr. Contreras [continuing]. Which I think covers it pretty
well. [Laughter.]
The list that Oregon has right now has maybe 170 or 180
names on it. The State of Michigan maintains a similar list,
the State Human Resources Office there. These are by no means
complete lists. Some estimates are that there are up to 2,000
of these suppliers out there.
Really, the list is intended as a guideline, as a way of
letting consumers, employers, anybody else know that we know
that these suppliers do not provide a degree that is legal for
use in the State of Oregon. What that means is we know they are
not accredited and they have never gone through any of the
evaluation processes that we would require in order to make
those degrees legal for use in the State. There are a very
small number of unaccredited schools that have gone through
that process. It is fewer than ten. But that is basically what
the list is for.
Chairman Collins. Our investigation has revealed that there
seem to be two kinds of diploma mills. One is simply a printing
press. That is how I got some very fancy degrees, Senator
Lieberman. All I had to do was send a check and I received very
nice looking degrees, complete with transcripts. It was just a
matter of paying the money and out popped the degree.
Others, such as Columbia State University, Kennedy-Western,
and some of the others we have looked at, are more
sophisticated. They require a modicum of work, but nothing
close to what should be required for a legitimate degree.
Obviously, you shouldn't be able to earn a degree in 27 days,
the example we discussed yesterday and Senator Lieberman cited.
Do you find that diploma mills are becoming more
sophisticated? Is it becoming more difficult for a student who
perhaps does not have any experience with higher education to
distinguish between a diploma mill and a legitimate
institution?
Mr. Contreras. Well, in our experience, the great majority
of people who buy these degrees are people who already have a
legitimate Bachelor's degree, not all, but most. What that
suggests to me is that we have people who already know what
post-secondary education is supposed to be. These aren't people
who just came in off the bog, as my Irish ancestors might have
said. They have been to college. They have earned a degree.
And I think Senator Lieberman is right on. What we are
talking about here is the notion that working for something
doesn't mean anything anymore. I don't know where we lost the
idea of that. I don't know where we got the idea that a degree
ought to be something fast and easy. But I am not persuaded
that most of the people who get these degrees don't know
exactly what they are.
Chairman Collins. One final question from me. You have
provided the Committee with a letter that is dated September
15, 1997, from your predecessor as Administrator of the State
Office of Degree Authorization and it is to a Ph.D. recipient
from Kennedy-Western University. The letter discusses the
recipient's doctoral dissertation, but it also comments on
Kennedy-Western. It says, for example, ``Your dissertation also
confirms that Kennedy-Western University is not truly a
university and does not engender or require any doctoral-level
research for the Ph.D., which is the ultimate research
degree.''
Is there anything that you have learned about Kennedy-
Western's academic program since that time that would lead you
to conclude that it is now a legitimate university? Is it
still--does it meet your State's standards for a legitimate
institution?
Mr. Contreras. It does not. It was on our list very early
on and the Oregon Attorney General has an agreement in place
with Kennedy-Western from about 4 years ago under which they
are no longer allowed to offer degrees to residents of the
State of Oregon. Since that time, of course, we haven't had any
reason to look at them because that agreement has been in
place, but we certainly have not seen any new information.
Chairman Collins. Thank you. Senator Lieberman.
Senator Lieberman. Thanks, and thanks so much for your
testimony. In your work on this, I am curious whether you have
reached any conclusions about the kind of people who are
organizing these diploma mills. Are they, if we can put it this
way, educators who have gone bad, or are they just out-and-out
sham artists, con artists who just have found this to be the
latest way to make a quick buck?
Mr. Contreras. My impression is that there are some of
each. The ones that you might call a pure mail order house, the
St. Moritz's and the Harrington's and all that sort of thing,
appear to have no connection with anybody, as far as I can
tell, who used to be a professor or was in higher education in
some way.
But a number of the other unaccredited suppliers do have
people working for them in some cases that did come out of a
higher education background, or at least who have graduate--
seem to have graduate degrees from a legitimate institution. Of
course, without investigating that, we don't really know. So I
would say there are some of both.
Senator Lieberman. A mixture. Let me ask you, I am
impressed by the program you have and wonder if you have had
any way to measure the deterrent effect of what you are doing
either on prospective students or on employers? Has the
existence of your program made each of them more vigilant,
particularly, I suppose, the employers, because to some
extent--you have said to us your judgment on the students is
that most of them are going into this knowingly?
Mr. Contreras. My impression is that most of them go into
it knowingly, or by the time they get out of it, they certainly
know what they have.
Senator Lieberman. Right.
Mr. Contreras. The deterrent effect is probably the most
important aspect of what we do. Our law is designed so that
when we find someone who is using one of these degrees, they
have one chance to stop using it within 30 days with no penalty
at all. We aren't really interested in penalizing people. We
are interested in getting bogus credentials out of the market.
Senator Lieberman. Right.
Mr. Contreras. So our whole system is set up that way. Our
website, I think serves a great purpose that way and we get
many comments on it. Certainly, it has had a big effect among
public employers in the State. I have less idea about its
effect on private employers because we don't connect with them
as often, but we do hear from them occasionally.
Senator Lieberman. A final question--in your testimony I
was interested that you mentioned that several occupations seem
to have more common involvement with diploma mill degrees.
Could you just mention those and tell us whether you have any
explanation as to why you think those occupations tend to use
these degrees more.
Mr. Contreras. Well, the ones that I have seen a lot of,
and I have confirmed this with my colleagues in seven or eight
other States before coming here, are K-12 education; police,
corrections, and other emergency services; professional
counselors; public administrators; administrators of medical
facilities; providers of alternative medicine; mid-managers in
business; and persons who work as expert witnesses, for which
that is their main profession.
As to why these particular professions attract the diploma
mill market, I think it has to do with our expectations as a
society that people constantly gather paper credentials or they
aren't worth anything, they can't advance, they can't get
promoted. I think we tend to over-emphasize paper credentials
and that is especially true in certain professions. My
impression is that it is more true in the public sector than it
is in the private sector, and that is my gut feeling, I guess,
about why these professions might attract them more.
Senator Lieberman. Am I right that in some cases, such as
K-12 education and maybe in some of the other civil service
professions, the holding of a graduate--I presume, obviously,
most of the people have an undergraduate degree--but the
holding of a graduate degree automatically gives you an
increase in compensation?
Mr. Contreras. It does in most K-12 education situations--
--
Senator Lieberman. Right.
Mr. Contreras [continuing]. And that actually is where
there is--of course, a major case in Georgia right now where
there are 11 teachers, I think, that are going to have to
resign or give back their raises because they went through the
St. Regis scam.
In some of these other professions, I don't work with the
managers often enough to know whether they give raises or not.
Certainly in police and public safety, I am aware that there,
that kind of situation is true.
Senator Lieberman. Thanks very much, Mr. Contreras. You are
doing a really good job and you point the way for the rest of
the country. Thank you.
Mr. Contreras. Thank you, sir.
Chairman Collins. Thank you very much, and thank you so
much for coming back today so that we could get the benefit of
your expertise.
Our second panel today includes Claudia Gelzer, a
Lieutenant Commander in the U.S. Coast Guard who is currently
detailed to the Governmental Affairs Committee, and Andrew
Coulombe, a former employee at Kennedy-Western University.
I would note that Ms. Gelzer will describe her experience.
She went undercover and actually enrolled in Kennedy-Western,
so she can tell us what her experience was like, both as a
prospective student and as one who actually enrolled.
Mr. Coulombe graduated from the University of California at
Berkeley with a bachelor's degree in historical archeology and
geology. Because he was interested in working in higher
education, he answered a job posting as an admissions counselor
at Kennedy-Western University. Today, he will describe his
experiences recruiting students to Kennedy-Western and the
tactics he employed in doing so.
I would like to welcome you both to the Committee today.
Your testimony is very important to our investigation and we
appreciate your being here. Lieutenant Commander, we are going
to start with you.
TESTIMONY OF LIEUTENANT COMMANDER CLAUDIA GELZER,\1\ U.S. COAST
GUARD DETAILEE, COMMITTEE ON GOVERNMENTAL AFFAIRS, U.S. SENATE
Lieutenant Commander Gelzer. Good morning, Madam Chairman,
Senator Lieberman. My name is Claudia Gelzer. I am a Lieutenant
Commander in the U.S. Coast Guard. I joined the staff of the
Committee on Governmental Affairs a year ago as a detailee.
---------------------------------------------------------------------------
\1\ The prepared statement of Lieutenant Commander Gelzer appears
in the Appendix on page 125.
---------------------------------------------------------------------------
As part of the Committee's team investigating diploma
mills, I enrolled at a non-accredited school and took classes.
Our goal was to conduct a first-hand evaluation of the quality
of education provided by an institution in this category.
The school that I attended, Kennedy-Western University, is
successfully attracting thousands of students each year. The
school earned almost $25 million in 2003. It has nearly 10,000
students currently enrolled in its programs.
I would like to point out that Kennedy-Western is just one
of many like institutions operating in the Nation today. It is
not our intention to single them out as the only example of a
non-accredited school. The reason, as you mentioned in your
opening, Madam Chairman, the school became a focus of our
investigation is because of the claims in its catalog that some
20 Federal agencies and entities have paid for employees to get
degrees from the school.
Kennedy-Western has been operating for 20 years. It has a
professional-looking website, a glossy brochure, and offers 19
areas of study, including business, engineering, and health
administration. The school operates strictly online and through
the mail. It has no physical campus, only office buildings in
California and Wyoming. Kennedy-Western offers Bachelor's,
Master's, and Doctorate degrees. The school is not currently,
nor has it ever been, accredited.
I first called Kennedy-Western in July 2003. I introduced
myself as a Coast Guard officer looking to earn a Master's
degree in environmental engineering. I was connected to an
admissions counselor who told me I was in good company. The
engineering programs were among the school's most popular.
Given my military background, she said I was probably well on
my way to earning a Master's degree already. She told me
Kennedy-Western believes students should get credit for what
they have already learned. An admissions board would evaluate
my experiences and determine how much credit I should receive
and how many classes I would actually have to take to get my
Master's.
In the weeks following my initial contact with the school,
I received and submitted an application to Kennedy-Western
which asked about my life and work experience. I provided a
current resume, which listed my Bachelor's degree in journalism
and my 12 years of work experience in the Coast Guard. I only
removed reference to a Master's degree I hold in environmental
public policy.
The application also asked for any seminars, workshops, or
on-the-job training I completed. I listed six seminars and four
training courses I had attended in the Coast Guard related to
oil spill response and boat accident investigation. This
information was accepted at face value by Kennedy-Western. They
asked for no proof or documentation. As a note, I have no
formal engineering training.
Not long after I was admitted into the program. My
counselor was effusive about how well my qualifications had
rated with the school admissions board. In fact, she said, my
rating was one of the highest she had ever seen. As a result,
the school was immediately prepared to grant me credit for 43
percent of the degree requirements. To drive this point home,
my counselor paused and said, ``Claudia, you are only five
classes away from your Master's.'' I would also have to write a
final paper worth 12 credits. In other words, Kennedy-Western
was prepared to waive six Master's level classes in engineering
based solely on my claims of professional experience.
As part of the investigation, the Committee on Governmental
Affairs staff wanted to compare Kennedy-Western's policy for
granting life experience with those of accredited schools. We
surveyed 20 accredited schools that offer a Master's degree in
environmental engineering. None of them offer credit for life
experience. A more expansive survey of 1,100 accredited
institutions and their life experience policy conducted by the
Council for Adult and Experiential Learning revealed that only
6 percent of these schools offer credit for life experience at
the Master's level.
In response to a formal query from the Committee, Kennedy-
Western told us they only admit students who can demonstrate
applicable work experience. We were told that every student in
the Master's program is awarded between 33 and 60 percent
credit toward a degree for their experience. In fact, documents
produced by Kennedy-Western indicated that nearly half of all
students in the Master's programs have received more than 55
percent credit for their experience. Again, I received roughly
43 percent toward an engineering Master's degree.
After discussing the results of my evaluation, my
admissions counselor told me she had good news for me about the
tuition. My degree would fall at the lower end of the school's
tuition scale because of all my experience. That amount was
$6,525, payable all at once or in installments, but with no
less than 25 percent down to start.
I asked why the school charged for its degrees in a lump
sum. As you know, the Federal Government can only reimburse
students or employees for courses, not for a degree. So I told
my counselor the Coast Guard would only reimburse me by the
class. She said not to worry. Kennedy-Western could make it
look like they were charging me per class by drawing up a bill
reflecting a course-by-course breakdown. She said they had just
done this for a student from NASA.
This is a chart that shows what they drew up for me to
accommodate the Coast Guard's tuition reimbursement policy for
my first class.\1\ In our interviews with former Kennedy-
Western employees, we were told that it was common practice for
the school to alter the bill to satisfy private and Federal
employers for reimbursement purposes.
---------------------------------------------------------------------------
\1\ The chart appears as Exhibit No. 29 in the Appendix on page
190.
---------------------------------------------------------------------------
My counselor wanted me to get started right away. I needed
only to select a payment option. I told her, before I could
sign up, I needed to make sure the Coast Guard would pay for a
Kennedy-Western degree. At that point, she asked if it would
help to see some canceled checks the school had received from
other Federal agencies. I could show them to my boss to prove
to him that other agencies had paid for the program.
The next day, she faxed me three canceled U.S. Treasury
checks payable to Kennedy-Western. They were tuition payments
for employees of the Air Force, the Army, and the Defense
Finance Accounting Service in amounts ranging from $3,400 to
$4,800. Upon receipt of the checks, I paid my first installment
of 25 percent down using a GAO credit card used for undercover
work.
I chose two classes, ``Hazardous Waste Management'' and
``Environmental Law and Regulatory Compliance.'' I got the
textbooks for about $100 each from a book distributor
affiliated with Kennedy-Western. The course guidelines arrived
by E-mail and contained no actual syllabus. Instead, the
guidelines included three basic instructions: Read your
textbook cover to cover at least twice; take the enclosed
sample exam; and take the final exam. No papers, homework
assignments, online discussions, or interaction with the
professor was required.
Kennedy-Western courses are not what most of us have
experienced at the university level. Instead of structured
interaction between professors and fellow students in the
classroom, including homework, papers, and a series of exams,
Kennedy-Western requires students to pass one open-book
multiple-choice test for each class. A student can retake the
exam if they don't pass the first time.
Once enrolled in my classes, I was assigned a student
advisor. I called her to ask how long I had to wait before I
requested my final exams. There was no time restriction, she
said. If I felt prepared to take the tests the day after
tomorrow, that would be fine.
I ordered the Hazardous Waste Management test first. I had
neither read nor reviewed the textbook. My objective was to
determine whether the test was, in fact, legitimate. If so,
having not prepared, I assumed I would not be able to pass it.
I had 3 hours to complete 100 questions, and I was able to
answer most of them by simply looking up a key word in the
index, turning to that section of the text, and finding the
answer. However, I got stuck on several questions, some that
were worded unclearly and several for which there appeared to
be no correct answer provided on the test. Ultimately, I ran
out of time.
After submitting the test, the school notified me that I
had not passed. In that same letter, I was offered a make-up
exam for $50. I began to think perhaps Kennedy-Western's
program might be more rigorous than we had heard. But then I
took a closer look at my test. While reviewing my answers, I
noticed that a number of questions had been graded incorrectly.
I had given the right answer, but the questions were still
marked wrong. I also confirmed that several questions had no
possible correct answer provided in the choices.
The school has an active online chat room for students
called ``The Pub.'' I had seen a lot of complaints from other
students about the quality of Kennedy-Western exams when I was
reading ``The Pub.'' In this chart,\1\ you can see one student
who said, ``I do not know about yours, but some of my exams
were terrible. One referred to a diagram that was not on the
test, and others you can barely read because of very poor
English.'' Another student said, ``My advice to those who are
studying hard is to recheck their exam results and challenge
the score if you believe you have the right answers. I was
surprised to find out that all my exams contained some errors,
which I had to challenge and correct. I guess a lot of us are
experiencing similar issues across different majors.''
---------------------------------------------------------------------------
\1\ The chart appears as Exhibit No. 21 in the Appendix on page
181.
---------------------------------------------------------------------------
So I filed a grade challenge. Ultimately, the school
declared the test invalid, acknowledging, ``significant
errors.'' I received several calls from the class instructor,
who apologized for the poor quality of the test and
acknowledged that in addition to making administrative
corrections, she would also reword several of the questions to
make them clear.
The school also sent a letter of apology and I was told
that my grade would be expunged and I could order a retake exam
at no charge. Before ordering a new test, I reviewed the
textbook layout and I took a practice exam. I spent just under
8 hours on these activities.
I assumed the school would send a different version of the
exam the second time. The retake, however, was identical to the
first with the exception of the corrections the instructor had
made. I had no trouble passing it.
I then focused on my second course, ``Environmental Law and
Regulatory Compliance.'' The textbook for the course was not a
textbook at all, but rather a lawyer's desk reference entitled,
Environmental Law Deskbook. This presented a problem. This is a
988-page reference guide containing 22 environmental statutes
written in ten-point typeface. It contains no legal summaries,
annotations, or any type of analysis of environmental law, in
short, no context for the class whatsoever.
Again, the course guidelines recommended that I read the
book twice in its entirety and then review questions at the end
of each chapter. But this book had no study questions. It
consisted of nothing more than the text of each statute. I
wasn't sure how to study a book like this, so to prepare for
the exam, I found on my own an environmental law treatise and I
studied it for about 8 hours.
Again, the test was open-book, multiple-choice, 100
questions, and largely with the help of the alternative text I
had found, I was able to pass it without a problem.
Nevertheless, the class was a disappointment. The textbook
prescribed by Kennedy-Western was essentially useless as a tool
to increase a student's understanding of environmental law or
to help to analyze environmental statutes and their genesis.
After passing the test, I E-mailed the professor through my
student advisor asking why he had selected such an ineffective
book. I never heard back.
Not long after, I withdrew from the school, as by then we
had a good sense of Kennedy-Western's academic program. With
just 16 hours of study, I had completed 40 percent of the
course requirements for my Master's degree.
In reviewing student dialogue in the school's online chat
room, I found numerous postings about the quality of Kennedy-
Western's program and its lack of accreditation. I sensed
genuine disappointment and even desperation from some students,
questioning whether they had made a mistake. Many admitted they
hadn't understood the importance of accreditation when they
enrolled. Some students spoke of feeling duped by the school.
Several questioned why it seemed like so many students at
Kennedy-Western had to take only four or five classes.
On the other hand, there were students who seemed
completely at ease with the lack of program exams. The chat
room included regular exchanges about how to prepare for
Kennedy-Western exams. It was openly acknowledged that test
answers could often be found in the textbook glossaries.
This is a chart that shows some actual quotes from the chat
room on the issue.\1\ One student said, ``I would like to share
general advice that helped me score an A on four of my courses.
I highly recommend that you be familiar with the glossary and
the index of the textbook. Some of the questions were copied
from the glossary.'' Another student echoed that sentiment. ``I
took the test this morning and got a 91 percent. I was
surprised myself on how many answers were straight from the
glossary.'' There were multiple postings like this.
---------------------------------------------------------------------------
\1\ The chart appears as Exhibit No. 22 in the Appendix on page
182.
---------------------------------------------------------------------------
As for my first-hand experience with Kennedy-Western
courses and passing the tests, I found that basic familiarity
with the textbook was all that I needed. I was able to find
answers without having read a single chapter of the text. As
for what I learned, the answer is very little. The coursework
provided only a cursory insight into the management of
hazardous waste or environmental regulations and law, certainly
not at the level one would expect from an environmental
engineer.
Aside from a multiple-choice exam and someone to grade it,
based on my experience, a student at Kennedy-Western receives
little value for their roughly $6,000 in tuition. I think that
is why I found so many who expressed disillusionment on the
school's chat room. Having stood in their shoes for a few
months, I can understand why they feel betrayed.
I can also understand the feelings of a number of Kennedy-
Western employees who we interviewed during our investigation.
A former admissions manager stated that there was no value to a
Kennedy-Western education and that he was embarrassed to have
ever been a part of the school. A former faculty member said
Kennedy-Western's curriculum development system is broken. A
former employee of the student services department said the
work at Kennedy-Western simply does not qualify a student for a
Bachelor's degree.
This concludes my written testimony. I would be happy to
answer any questions that Members might have.
Chairman Collins. Thank you very much. Mr. Coulombe.
TESTIMONY OF ANDREW COULOMBE,\1\ FORMER EMPLOYEE, KENNEDY-
WESTERN UNIVERSITY
Mr. Coulombe. Good morning. Madam Chairman, thank you for
inviting me to testify about my experience at Kennedy-Western
as an admissions counselor at Kennedy-Western University. I
worked at Kennedy-Western for 3 months before quitting in
February 2003.
---------------------------------------------------------------------------
\1\ The prepared statement of Mr. Coulombe appears in the Appendix
on page 132.
---------------------------------------------------------------------------
First, let me provide my personal background. I received a
Bachelor's degree from the University of California at Berkeley
in 1997 in historical archaeology and geology. After graduating
from college, I was looking to work in the field of higher
education and I saw a listing on the employment website
Monster.com for a position as an admissions counselor at
Kennedy-Western University. I had not heard of Kennedy-Western,
but was eager to work in academia and to advise students.
Therefore, I applied for the job.
Shortly after being hired, I started training at Kennedy-
Western. I soon discovered this was like no other school I had
ever seen. I saw immediately that I had been mislead by
Kennedy-Western's recruiter. I was not going to be counseling
anyone. I had been hired to be a telemarketer, using a script
to sell Kennedy-Western just like any other product.
As an admissions counselor, I was required to call between
120 and 125 prospective students per day, trying to convince
them that they should apply to Kennedy-Western. If I convinced
a student to apply, he was then handed over to a senior
admissions specialist, who tried to get the student to enroll
and pay for his degree. These senior admissions specialists
were generally regarded as the experienced hard-core closers
who would close the sale and bring in the money. Once the
student paid, he was then turned over to the student services
department to select his classes.
I generally called between 400 and 500 potential students
per week, and of these, only a small number would usually
submit an application. Admissions counselors like me were
taught to use a negative-sell approach with prospective
students. Generally, we would tell them that they were not very
qualified, they did not have a strong academic background, and
they did not have a good chance of getting into a prestigious
school like Kennedy-Western. We told prospective students that
we would do him a favor and submit his name to the admissions
board and see what the board decided. Then once he was
accepted, we would tell him the unbelievable news that he has
been accepted.
The problem is, much of our sales pitch was not true. There
is no admissions board. Applications were reviewed by one
person. Of course, the applicant had excellent chances of
getting in. In fact, I had never heard of an applicant being
rejected.
We were also instructed to tell applicants that at Kennedy-
Western, they would be taking the same classes that students
took at real schools, like Harvard or Princeton. I went to a
real school. Kennedy-Western is not a real school.
Admissions counselors work in a boiler room atmosphere,
where we were under significant pressure to meet lofty sales
goals. We were paid a low base salary and made over half of our
pay in commissions. We were paid a commission of $15 per head
on every application we brought in. If a student actually
enrolled, we would get roughly $100 per student.
Admissions counselors' names were also listed on a large
white board in our sales room, indicating how many sales we had
made and whether or not we had met our sales goals. There was
enormous turnover in Kennedy-Western's sales force. Many
counselors quit once they discovered they were going to be
telemarketers, not admissions counselors. Others could not meet
the sales goals set by Kennedy-Western. Others simply could not
stomach what they were being asked to do.
When a person gave their 2 weeks' notice, they were usually
fired on the spot and locked out of the building's controlled
access. These conditions alone sent up numerous red flags in my
mind. No real school I had ever heard of operated like Kennedy-
Western. At Kennedy-Western, everything was about the pursuit
of cash.
I don't know where Kennedy-Western got all of the names
that I was calling on a daily basis. The school's management
told us that everyone we called had requested information on
Kennedy-Western. However, my experience suggests that this was
not true. Once, I called a name provided to me by Kennedy-
Western and the person I called said that he worked for what he
called the lead company and that his name had been included as
a test lead. He explained that his company sold names to
Kennedy-Western.
Because I had been told that everyone we called had
expressed interest in Kennedy-Western and requested
information, I was alarmed to hear that a company was selling
names to the school. When I asked the school's management what
was going on, they denied that they had us cold-calling
applicants, but did not explain what had happened.
However, it did not require great detective work to figure
out that we were cold-calling people to ask them to apply to
Kennedy-Western. Most of the people we called had never heard
of Kennedy-Western. I often joked with my fellow admissions
counselors that people kept referring to the school as
``Kennedy Who?'' and ``Kennedy What?'' I know that the
management denies that we cold-called potential students, but
that simply is not my experience.
Many of the people I called were down on their luck. Many
lacked a college education and held dead-end jobs. Many had
families and full-time jobs and did not want to take a lot of
time to get a degree from an accredited school, and those were
the buttons we pushed when trying to get them to apply to
Kennedy-Western. We used negative-sell tactics to convince them
that they did not have many options in life and that Kennedy-
Western was their best chance to improve their lot.
The problem is, the school did not deliver what it
advertised and I believe that these students could have done
much better than to spend their money on Kennedy-Western. In
the end, I felt that what I was being asked to do as an
admissions counselor was unethical.
One issue I understand is of particular interest to the
Committee is whether the Federal Government made payments for
Federal employees to obtain degrees from Kennedy-Western. I
know that prospective Kennedy-Western students were usually
interested in trying to get their employers, whether private
company or Federal Government, to cover the costs of the
degree. Kennedy-Western did everything it could to help
students get reimbursed. We would provide employers with
letters explaining that other large companies and government
agencies had paid for Kennedy-Western degrees in the past.
Sometimes we were successful and sometimes we were not. Having
worked at Kennedy-Western, I can say that as a Federal
taxpayer, I am upset that tax dollars have been spent there.
I would like to make a couple of additional observations
about the severe shortcomings of a Kennedy-Western education.
Part of my job was to have applicants fill out applications and
list their prior work experiences. I know that Kennedy-Western
made no efforts to verify the work experience claimed by the
applicant. I also know that Kennedy-Western gives applicants a
substantial amount of credit for the prior work experience,
even if they are inconsequential. I saw this happen numerous
times.
Second, based on my observations during the time I worked
at Kennedy-Western, I can tell you that there is no value to a
Kennedy-Western education. Anything you learn there can be
learned by buying a book and reading it on your own.
Madam Chairman, thank you for inviting me to discuss my
experiences at Kennedy-Western. That concludes my prepared
statement and I will be happy to answer any questions that you
may have.
Chairman Collins. Thank you very much for your testimony.
Lieutenant Commander, you were applying for a Master's degree,
is that correct?
Lieutenant Commander Gelzer. Yes, ma'am.
Chairman Collins. Did Kennedy-Western ever require you or
suggest to you that you needed to take the Graduate Record
Exam, the GREs that are typically required for graduate school
work?
Lieutenant Commander Gelzer. No, ma'am. There was no
mention of any kind of entrance or qualification exam
requirement.
Chairman Collins. Were you asked to provide a transcript or
some proof of your undergraduate degrees?
Lieutenant Commander Gelzer. The school admitted me before
ever seeing any evidence of my undergraduate degree. Their
policy was that you had to send it in within 30 days, and I was
able to start my classes long before they ever saw it.
Chairman Collins. Did you have to verify or submit examples
of the work experience for which you were receiving graduate-
level credit?
Lieutenant Commander Gelzer. No. I had certificates,
graduate certificates from Coast Guard classes and different
seminars I had attended, but they said it wasn't necessary to
send any of that in. I just listed the names and the dates on
the application.
Chairman Collins. So there was no evaluation of the so-
called life experience for which you were receiving graduate-
level academic credit?
Lieutenant Commander Gelzer. No one ever asked me about the
claims I made.
Chairman Collins. Now, it is legitimate in some cases for a
school to give credit for life experience. According to the
Council for Adult and Experiential Learning, which is known as
CAEL, establishing equivalents between work experience and
academic credit requires two things, and I think we have a
chart on this.\1\ First, the experience has resulted in
specific learning, and second, the learning must correspond or
at least be similar to the learning that is expected in the
more traditional academic courses for which credit is being
awarded.
---------------------------------------------------------------------------
\1\ The chart appears as Exhibit No. 23 in the Appendix on page
183.
---------------------------------------------------------------------------
We asked CAEL to review Kennedy-Western's process for
assessing credit for experience and I am going to ask unanimous
consent that the full text of the April 15, 2004, memorndum be
entered as part of the official hearing record.
[The information of Chairman Collins follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Senator Collins. What we found and what the posterboard
shows \1\ is a CAEL representative wrote to the Committee, ``My
reading of the Kennedy-Western material that you forwarded to
CAEL leads me to conclude that Kennedy-Western does not observe
this standard.''
---------------------------------------------------------------------------
\1\ The chart appears as Exhibit No. 23 in the Appendix on page
183.
---------------------------------------------------------------------------
Based on your investigation, do you believe that Kennedy-
Western's policies in awarding credit for prior work experience
differ from those that are more commonly accepted and from the
standard established by CAEL?
Lieutenant Commander Gelzer. I do. As mentioned in my
testimony, we know that only a very small percentage of schools
even allow for the award of credit for experience and that
those schools make sure to verify that the student has actually
had the experience that they are claiming. We also interviewed
a former Kennedy-Western employee who had actually worked at
several accredited distance-learning schools and he said the
way accredited schools do business is entirely different.
If they give credit for experience, they make sure that a
student can test out using something like the Educational
Testing Service's CLEP test, and also if they do pass those
tests, they will only allow them a certain percentage of credit
over their entire degree, and we know that Kennedy-Western will
waive as much as 60 percent of a student's degree requirements
based on experience credit.
Chairman Collins. You paid careful attention to the website
on which other students enrolled at Kennedy-Western posted
comments about their experience. Did you ever find postings on
the chat room website from other Federal employees who were
attending Kennedy-Western, and, if so, what sense did you get
of their experience?
Lieutenant Commander Gelzer. I did see a couple of postings
that made me believe these people were working for the Federal
Government or they said they were in the military or something,
and I pulled a couple quotes that are on this chart.
One student wrote, ``I work for the Federal Government and
recently read an article in the Government Computer News
magazine that stated the Federal Government required accredited
degrees. I verified this information and it's true. I'm
crushed. I'm almost finished with the program and I don't know
if I want to go to the trouble of writing my dissertation.''
Another posting went like this. ``I'm in the military and I
read the claims from Kennedy-Western of how many Federal
employees were reimbursed. I found out quickly that the
military or Federal Government will not even consider a school
that is not accredited. I did complete the degree since I had
already paid for it. I guess that was money lost.''
In general, they were of this kind of tone. These students
sounded really despondent, disappointed, disillusioned. They
were really surprised to have found out after the fact, after
they put their money down, that their degree couldn't be used.
Chairman Collins. And this is an important point, because
yesterday, we talked about individuals who knew very well when
they were enrolling in diploma mills that they were buying a
bogus degree. But in some of the cases that you have cited,
students in good faith enrolled in Kennedy-Western, only to
discover after they had paid their tuition that it did not meet
the standards of a legitimate academic institution, is that
correct?
Lieutenant Commander Gelzer. That is right, both private
and public sector people.
Chairman Collins. Senator Lieberman.
Senator Lieberman. Thanks, Madam Chairman. Commander,
thanks for your service to the Committee. Chairman Collins has
covered most of my questions----
Chairman Collins. Sorry.
Senator Lieberman. No, they are good. They are naturally
very brilliant questions. [Laughter.]
I wanted to ask you whether there was any way in which the
so-called professors at Kennedy-Western made themselves
available to you over the Internet. For instance, was there
ever a way given to you that you could contact anybody that
seemed to be a professor if you had a question about a course?
Lieutenant Commander Gelzer. You were supposed to be able
to contact your professor for what they called tutorial advice.
You weren't allowed to contact your professor directly. You had
to make a request to your student advisor and then they would
forward it on to the professor, and the only time I reached out
to a professor, I never got a response.
Senator Lieberman. OK. And again, my inference from some of
the testimony that you have given and other parts of the
investigation I have read about, is that in this case a lot of
the students who signed up knew that the program was
unaccredited, is that right?
Lieutenant Commander Gelzer. They did, because Kennedy-
Western is really careful about that. They never claim that the
school is accredited. They come out and say, we are not
accredited, but in the very same breath, my admissions
counselor ran through all the reasons why that didn't really
matter. She said that accreditation does not have much to do
with the quality of a school, but it has more to do with
whether a school has things like a certain number of tenured
professors or has a certain number of hours a student has to
spend in an on-campus classroom or whether they are dependent
on Federal loans. And I think if you didn't know better, you
would be convinced that accreditation was more of an
administrative designation.
Senator Lieberman. Do you think most of the students were
willing, I don't want to say co-conspirators, but willing
participants in what was essentially a fraud, or were they
deceived?
Lieutenant Commander Gelzer. I would say I saw more
evidence of students who were surprised and seemed a little
deceived that all of a sudden, they realized their company
wouldn't reimburse them, or they put their degree on a resume
and they went to apply for a job and they were questioned about
it and they had to ultimately take it off their resume.
Senator Lieberman. A final question for you, Commander. Did
Kennedy-Western do any follow-up with you after you dropped
out?
Lieutenant Commander Gelzer. Well, I called them to say I
was going to disenroll and they did call me to try to talk me
into staying and see if they could adjust my payments and that
kind of thing. But once I told them the Coast Guard wouldn't
accept an unaccredited degree or pay for it, they said, if you
want to, you can be reinstated for a fee later down the line if
you would like to come back.
Senator Lieberman. Thanks. Mr. Coulombe, you mention in
your testimony that Kennedy-Western paid commissions based on
the number of students someone in your position enrolled. I am
just curious whether there were any other incentives or
pressures placed on you, whether you had sales goals or
anything of that kind internally.
Mr. Coulombe. Yes, there were incentives. Obviously, it was
the mainstay of our income as employees that was not
necessarily a salary but success-based initiatives.
Senator Lieberman. Right.
Mr. Coulombe. We did----
Senator Lieberman. Were you salaried at all?
Mr. Coulombe. We did have a very small base salary. The
bulk, 50, 60, maybe even 70 percent if you stayed for a longer
tenure than I did, would be based strictly on commission. I did
see during our Christmas party that gifts and vacations and
awards and certificates to shopping malls were handed out to
successful employees. As well, to answer one part of your
question about the goals, sales goals there were very lofty and
there was only a handful of long-term successful, ``admissions
counselors'' that were able to meet these sales goals.
Senator Lieberman. I take it that you never, or did you
visit the offices at any time?
Mr. Coulombe. Before I applied, no. After I applied, yes, I
did work in their offices. They are just as they represent
themselves in the catalogs and their paperwork. They come off
as being very structured and very professional to the outside
eye.
Senator Lieberman. Right. Was it a large facility that you
worked in?
Mr. Coulombe. It was three suites of a bigger office
building. I believe they had the whole upstairs and a piece of
the downstairs.
Senator Lieberman. Right.
Mr. Coulombe. There was a central conference area that was
kind of the centerpiece with the hardwood and the nice
furniture, and then there were the other office buildings in
there that were more just boiler room type situations.
Senator Lieberman. Some of your testimony touched on the
manipulative tactics that were used on prospective students. Is
there anything else beyond what you mentioned that you were
asked to do that you concluded was unfair?
Mr. Coulombe. A lot of it was unfair. I think I touched
upon the major aspects of it. There were other things that were
said along the lines of once we got their attention and
convinced them that they were interested, to get them to apply,
we were told to mention that tuition was going to be increased
real shortly, so it was in their best interest to apply as soon
as possible, hopefully today. It was just--it was an emotional
play on people.
Senator Lieberman. Sure.
Mr. Coulombe. It was people who were not having a very good
run with life and we played on the fact that this was their
solution.
Senator Lieberman. You mentioned this before and I was
really interested--in terms of the list of names that you were
given to call and your discovery that, at least in some cases,
Kennedy-Western was buying lists--could you reach any
conclusions from the people you were calling about what kind of
lists they were buying?
Mr. Coulombe. The one commonality that I found was the
names, more so than anything. It was people in transitional
phases in their life. They had recently either been fired or
divorced or had a death in the family. It was a very traumatic
list to say the least. People were not having a--we weren't
calling successful business people, even though some people
were the mid-level management type of person. But if there was
one thread of commonality through it, it was the fact that
people really needed something in their lives to get them over
a hump of some sort, be it career or personal or financial.
Senator Lieberman. So this pattern you have described leads
us to, I think, not to alter our conclusion that most of the
students involved are willing participants, but on the other
hand, there is obviously an extent to which there was a
solicitation, a kind of not quite entrapment, but tempting to
participate in this fraud. That is what comes out of your
testimony. I appreciate it.
Senator Pryor is here and I was thinking, both of us having
been former State Attorneys General, I don't know the extent to
which--I know there was some testimony that at least one AG has
focused on this. These things really ought to be closed down,
or life ought to be made difficult enough for them in terms of,
cost enough, for them that they can no longer afford to go
forward. And I am sure if you and I were still AGs, that is
exactly what we would be doing.
Senator Pryor. We would be right on top of it. [Laughter.]
Senator Lieberman. Thank you, Madam Chairman.
Chairman Collins. Thank you. Senator Pryor.
OPENING STATEMENT OF SENATOR PRYOR
Senator Pryor. Thank you, Madam Chairman.
Yes, in the world of attorneys general, we look at
deceptive trade practices, so the question is how deceptive is
this and what sort of techniques are being used. It would be
interesting to pursue that on the State level, as well.
I have a couple of questions for you.
Mr. Coulombe. Yes, sir.
Senator Pryor. We know that this school, Kennedy-Western,
was not accredited. How would you handle that on the phone when
your prospective students would ask about that?
Mr. Coulombe. Like most everything at Kennedy-Western, we
were held to a strict script. We had no liberty to deviate from
a prepared statement. The statements are, like we had heard
from the Lieutenant Commander here, strictly in the same voice.
They always mentioned up front that they were a non-accredited
university. However, in the same breath of air, they gave a
list of reasons as to why they were not accredited.
I completely agree with her that the script read out in a
way that if you didn't know better, you would leave thinking
that accreditation basically meant that you had to have a
brick-and-mortar building with actual professors in it and
actual student classes and it had nothing to do with the fact
that there was a difference in the education.
Senator Pryor. Do you know if Kennedy-Western ever tried to
become accredited?
Mr. Coulombe. I don't know specifically. What I do know is
that they were vocal about being in a niche market and they
didn't pursue being accredited while I was there, nor did they
show any interest in the past, as far as I could tell.
Senator Pryor. Do you know, do you remember off the top of
your head, how much it costs to be a student at Kennedy-
Western? I assume the cost was by the credit hour?
Mr. Coulombe. Yes.
Senator Pryor. But how did that work?
Mr. Coulombe. I believe that it was a sliding scale
depending on the quantity of classes you needed to take. It has
been a while, but I believe that it could range anywhere from
$6,000 to $9,000, or $10,000.
Senator Pryor. Would that be to get a degree from there?
Mr. Coulombe. As far as I can recall, yes, that would be
enough to pay for the tuition.
Senator Pryor. You said you could not deviate from the
script at all?
Mr. Coulombe. No. There was no counseling that was going
on. It was strictly a sales script like you would sell any
other product that relied heavily on a proven sales tactic. We
were told many times that if you called this number of people
and you don't deviate from this script, you will have this type
of success.
Senator Pryor. Do you remember what type of success you had
in trying to get people to sign up?
Mr. Coulombe. I personally was very successful. One of the
things I did before I left so that I didn't leave defeated was
to show them that I was leaving out of an ethical, moral ground
and not out of a defeated sales position. So I had success. The
first couple months of working there, I didn't really realize
what was going on until the last part of the month there, where
I finally had a conversation with the gentleman who sold us the
leads, and that was really kind of the straw that broke the
camel's back as far as me believing in what was happening.
Senator Pryor. Did you receive any training at the school?
Mr. Coulombe. We did receive training. To my surprise,
there was a week-long training period. The training was sales
training. It was not academic or admissions training.
Senator Pryor. It was basically like telemarketer-type
training?
Mr. Coulombe. It was very sophisticated. It was more than
just, here are some numbers and here is a script. They
explained why the reverse take-away sale works, how to install
it in an emotional manner, and not only telling us why not to
deviate from the script, they explained how it worked and the
success they have had from it. So it was a week-long sales
training.
Senator Pryor. Do you know about how large the sales force
was there?
Mr. Coulombe. If I recall correctly, the sales force was 60
to 70 percent of the actual total employed people at the
university.
Senator Pryor. So what would that number be?
Mr. Coulombe. Sixty or 70 people.
Senator Pryor. OK. Do you know how many students they would
have at any given time at Kennedy-Western University?
Mr. Coulombe. I do not. It was a significant number. I know
that just from watching the success of the company while I was
there. But I do not have a number on that.
Senator Pryor. How would the time frame work from the time
you would contact someone and you would walk them through the
process. I guess they would send in whatever material--did they
send a check at that point, or----
Mr. Coulombe. They do for the application. My job as an
admissions counselor was to get them to apply to the
university. I needed to get them, and I believe it was a $50
check and send them the actual brochures, which had the
application in it. Once they sent back the application, my job
was to get back in touch with them and explain to them that
they did actually get into the university, and then I handed
them off to what was referred to as a senior admissions
specialist, which was in charge of setting up, I believe, the
tuition and getting them in line, ready for the student
services people.
Senator Pryor. So as soon as you received their payment,
then you fairly immediately----
Mr. Coulombe. Yes. I called them and said, thank you, we
got you in, and explained to them, not that I was giving them
to a closer--but that I was giving them to someone who is going
to be able to walk them through financial aid.
Senator Pryor. OK. Do you recall anyone ever being turned
down?
Mr. Coulombe. I don't personally recall anybody being
turned down. It may have happened. I am not really in a
position, just due to tenureship there and my entry-level
position, to know if that ever happened. But in my experience,
no, everybody got in.
Senator Pryor. That is all I have, Madam Chairman. Thank
you.
Chairman Collins. Thank you, Senator Pryor.
As Senator Lieberman said, the only basis that he could
think of where someone would be turned down is if the check
bounced----
Senator Pryor. That is exactly what I thought, too.
[Laughter.]
Chairman Collins [continuing]. And I think that is probably
accurate.
Senator Pryor. Exactly.
Chairman Collins. And you would note I gave credit where
credit is due for that.
Senator Lieberman. It is very unusual.
Chairman Collins. It is very unusual. [Laughter.]
I want to just quickly follow up on two very important
points that Senator Pryor made. Kennedy-Western provided the
Committee with a listing of its current employees and the list
indicated that they have 119 employees. Sixty-nine of them,
almost 60 percent, work in admissions. I can't imagine a
legitimate college having 60 percent of its employees working
in admissions.
Mr. Coulombe, do you think that those numbers and that
ratio are indicative of the fact that Kennedy-Western's
emphasis was on sales rather than on teaching?
Mr. Coulombe. Without question.
Chairman Collins. And one other point. You talked about
your training and the training sounds much more like the
training for someone working in a boiler room, someone who is
trying to sell fraudulent stocks or investment scams, than a
college degree. Could you talk a little bit more about the
training, and in particular, do you consider it to have been
high-pressure techniques? Were you ever instructed to call
people repeatedly, even if they expressed no interest when you
first solicited them?
Mr. Coulombe. I would say the answer to your question is
yes, and specifically the reason is that the reverse take-away
sale on a superficial level does not look like a high-pressure
sale. It looks as if it is a very touchy-feely emotional type
of sales practice. However, if you are on the receiving end of
it, especially if you are in a point of transition or in a
desperate situation, I would say it is extremely high pressure.
Things being said as far as, ``Oh, I guess you are not
serious about bettering yourself,'' or ``You are obviously not
ready to continue your education and get that advancement,''
were things that were said that are just statements. They are
not knocking on your door or anything like that. But if you are
on the receiving end, I believe that I would consider it high
pressure. There was a lot of things that we were asked to say
and a lot of things that were on the script that I felt that if
someone was calling my home and talking to me like that, that I
would have a personal issue with it, not necessarily just a
telemarketing issue with it.
As far as repetitive calling goes, they called them touches
on the students. We were told to have at least three touches on
them before we let them go, regardless pretty much of what
their interest in the school was.
Chairman Collins. So if the first time you called, the
student said, or the potential student says, ``I am just not
interested,'' that wasn't the end of it. You might call two
more times?
Mr. Coulombe. Oh, we would call two more times.
Chairman Collins. You would?
Mr. Coulombe. Personally, for me, if they were violently
mad at the fact that we were calling, we were still supposed to
call them a couple more times. I never did. But yes, if they
didn't show any interest, we would call them a few more times,
and we also would try to reach them at different times of the
day, the morning, afternoon, and evening, just in case their
response was driven by a situation they were in either with
kids or work or something of that nature.
Chairman Collins. I am fascinated by the calling lists that
you worked from. I certainly would understand if a college were
buying lists of people about to graduate from high school, for
example, and send them materials or perhaps even call them. But
you have suggested something much more ominous, that these were
lists of people in difficulty. They may have been laid off from
their jobs or getting a divorce. It almost sounds like a list
of people who were primed for exploitation. Is that fair?
Mr. Coulombe. I never looked at it like that while I was
there, but with hindsight, I would say yes. I am not sure how a
list like that would be generated due to the fact that there
were so many life situations and personal situations.
Obviously, there is a complex equation to get a list like that.
But what I do know is that they were not people who had
requested information from Kennedy-Western.
Chairman Collins. Thank you. Senator Lieberman, do you have
anything further?
Senator Lieberman. I don't have any further questions.
Thank you.
Chairman Collins. Senator Pryor.
Senator Pryor. No, thank you.
Chairman Collins. Thank you very much. I want to thank you
both for your excellent testimony and for giving us an inside
look at one diploma mill. Thank you.
Our final panel today includes Stephen Benowitz, who is the
Associate Director of Human Resources Products and Services at
the Office of Personnel Management, and Sally Stroup, who is
the Assistant Secretary for Postsecondary Education at the U.S.
Department of Education.
Welcome to you both. We appreciate very much your being
here and how closely you have worked with our Committee over
the past months as we have conducted this investigation.
Actually, this investigation goes back 3 years and it has
involved a lot of work by the staff.
Ms. Stroup, we will start with your testimony. Thank you.
TESTIMONY OF SALLY L. STROUP,\1\ ASSISTANT SECRETARY FOR
POSTSECONDARY EDUCATION, U.S. DEPARTMENT OF EDUCATION
Ms. Stroup. Thank you. Good morning. I am pleased to be
here this morning to talk about this issue of diploma mills and
the role of the Department of Education. It is not necessarily
something we think of at the Department because we deal with
accredited institutions, so you have taken us to think about
some other things that need to be on our list.
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\1\ The prepared statement of Ms. Stroup appears in the Appendix on
page 135.
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My testimony has been submitted for the record and I am
going to try to briefly summarize it. I will try not to repeat
things you have already heard.
Just by way of background, though, for institutions that
participate in our programs, we rely on several different
methods to ensure quality in the normal higher education system
that we all think of. That is the institutions themselves,
States that do the licensing, and the credentialing features of
higher education. Our role is sort of the overseers of the
accreditation process that is set forth in the Higher Education
Act, and then, of course, our accrediting agencies themselves.
We recognize about 70 of them right now that are regional,
national, specialized, and cross all sectors of education.
Between all of these parties, we feel like we do a fairly
good job of ensuring quality because we have this group who is
working on those issues and are making sure that gets done.
Obviously, that is missing in what we are talking about today
when we talk about diploma mills.
Although we have always tended to focus our efforts at the
Department of Education on worrying about students who are
victims, having the meeting we recently had sort of brought a
new light to us that, gee, there are people who are buying
these and who do know they are buying them and are
intentionally doing it. I mean, we all just have to accept that
is the way it goes.
We got our own ad the other day from a diploma mill that we
found intriguing that was sent to the Department of Education
since it said, ``Get your diploma within 30 days, no classes to
attend, no books to read, simply pay and receive your
diploma.'' My assistant got it on her computer and we said,
clearly, someone who got that E-mail should know that is a
diploma mill. It is hard to convince us that you don't know
that is not.
For the most part, diploma mills don't jeopardize the
things we do at the Department related to student aid, which is
our primary responsibility, ensuring the integrity of the
student aid programs and the institutions that participate.
Between accreditation and our student aid process, we can cover
those things.
When it comes to diploma mills, though, that is just
outside of our stream of consciousness when you get right down
to it. It is not the people we are looking at, talking to, or
even thinking about.
You raised these issues to us in your letter to Secretary
Paige, which got us thinking about this and sort of moved us
down a series of events that occurred after that, which started
with a meeting that included my colleague from OPM, Mr.
Contreras from Oregon, we had North Dakota, New Jersey,
Illinois, the FBI, the FTC, the GAO, your staff, House staff,
all come together and sit down and talk about this issue. The
premise of the meeting really was to say, what are we all
individually doing? What should we be doing collectively? What
can we do? How can we be helpful to each other? How can we
share information?
I think the result of that meeting and sort of hearing
about the different things that were going on certainly led us
to the idea of talking about lists, and that got to be an
interesting conversation for us because everybody said, we
should have a list of diploma mills. And then we all went,
well, gee, how are we going to make a list of diploma mills?
Who knows who is a diploma mill and how do we define a diploma
mill and who has that information and how do we put this all
together? Of course, we all know they change daily. It is
Internet-based. They can morph into different names every other
day.
We kept sitting there going, how are we going to compile
such a list, and I really think at the end of the day we all
said, OK, maybe we should talk about a positive list and change
our approach to this whole thing, at least for purposes of what
we can be helpful about at the Department of Education.
That caused the Secretary and I to have some conversations
saying, what can we do to be helpful, particularly when we
heard our colleagues from the States say to us at this meeting,
we really need you guys to put a positive list together because
that will take care of 99 percent of our problems. We need a
quick place we can go, look up the information, OK, we know
that they are fine, and then we will figure out ways to deal
with that other one percent that cause us problems.
We have concerns about putting together a diploma mill list
at the Department of Education mainly because we don't evaluate
institutional quality. I mean, the Department of Education
doesn't really do that. The accrediting process does that. We
oversee it, no question about it, but we are not the ones who
decide that somebody is or is not a quality institution. The
Federal Government historically has never made those kinds of
decisions. We have always relied on this accrediting process.
So when we talk about a positive list, that is something we
think we can do in a very sort of simple, reliable, easily
usable fashion. We can get that information by going out to the
accrediting bodies we already recognize and ask them to submit
all the names. We will put it in a database that people can
search and we can help address that first part of the step. It
won't be perfect from the beginning.
We need historical data. I mean, we all know that we have
people on our own staffs that have gone to institutions that
have merged with other institutions and have changed names.
They have gone to institutions that have closed. But they were
accredited at the time they got their credential, so the
credential itself was awarded during a perfectly valid period
of time. It is perfectly legal and recognizable, but they won't
show up on our list because they are not currently recognized
by an accrediting agency recognized by the Secretary.
So we are going to have to do some work to make this list
be really good, as far as I am concerned, for people to use,
mainly because of the historical data that we are going to have
to go back out and collect. It is just something we have never
done in the past, so that will be a little adventure for us.
The basic list, though, that people could use today to do a
search, to say, did somebody get their degree from a valid,
recognized institution, we should be able to do that pretty
fast, and we already have the wheels in motion. The Secretary
has signed off on our doing it. We are talking to contractors
about the database. We will get that up and running as fast as
we possibly can.
One thing I do want to raise, though, is that, again, the
list isn't going to be perfect. I know one of the problems we
have all talked about, and certainly you have heard it in the
last 2 days, is how do we define a diploma mill for purposes of
what we are talking about, which is determining jobs and
credentials for employment and promotions.
We don't have a definition. We don't have a way to put on
our list those institutions that we know are actually doing a
good job but have chosen not to be accredited, because
accreditation is tied to student aid for our purposes in higher
education. If you are not interested in getting money from the
government for your students, you don't have to be accredited.
I mean, you have that option. And certainly, we know of
institutions, and particularly small religious institutions are
going to be the ones that have chosen not to be accredited and
they have their own reasons for doing it. They are offering
very valid degrees. I am sure they are doing a good job.
But they are not going to be part of our system. They will
not be on our database, and they are going to be sort of the
missing piece that I think we all at least need to worry about
and think about when we talk about making lists. That would be
the one caution I raise to people.
And we will do our part in putting a list out there. We
want to be very clear to people that it is not the perfect list
so that people do maybe take that second step. If you get an
application from someone and it has an institution listed that
is not on our list, it doesn't necessarily mean it is a diploma
mill and I don't think we should make those kinds of
assumptions. People are going to have to take the next step and
do a little investigation to see what is the status of that
institution that that application came from.
So with that, one thing I think we learned from having this
meeting is that there is a lot we don't know. Between all of us
talking together and you raising this sort of to our level of
consciousness, we all now are working together to try to figure
out how we can better help each other, the public generally,
students certainly who might be victimized, and employers who
are looking for access to information that will help them make
hiring decisions, in some sort of easily usable, recognizable
fashion that we all agree, anyway, is the right way to do it.
We will help do whatever we can. The Secretary has
basically said, do what you have got to do to try to make this
work. So we will start with the positive list first as our
first effort into it, and then as more, I think, of these
discussions and meetings go on, we will see what other things
we can do to be helpful in the process.
We have always told people, if you don't know, call us
because we don't have a list out there yet. We will look it up
for you. I mean, we will tell you where to go. We will tell you
who the accrediting body is. We will give you that kind of
information. We already link to websites. Alan's website, we
love it, too. We think it is great. More States having laws
like Alan does and having someone like him managing it would be
great for all of us. But we already link to all of those on our
websites in several places to make that information available,
to make sure.
Again, we always think of it from the student perspective
and we want students to have that information so they don't end
up enrolling somewhere and find out they have paid a lot of
money for a degree that is not worth anything to them.
So to the extent we can be helpful and provide more
information and do more to make people aware of the issue, we
are ready, willing, and able to help do that anytime we can.
Thank you.
Chairman Collins. Thank you. Mr. Benowitz.
TESTIMONY OF STEPHEN C. BENOWITZ,\1\ ASSOCIATE DIRECTOR, HUMAN
RESOURCES PRODUCTS AND SERVICES, U.S. OFFICE OF PERSONNEL
MANAGEMENT
Mr. Benowitz. Madam Chairman and Members of the Committee,
I am pleased to testify today on behalf of the Office of
Personnel Management. OPM has been engaged in addressing the
issue of bogus degrees and diploma mills since the mid-1980's,
when we teamed with the Federal Bureau of Investigation to
combat the fraudulent use of these so-called degrees by
individuals under consideration for Federal employment.
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\1\ The prepared statement of Mr. Benowitz appears in the Appendix
on page 141.
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OPM Director Kay Coles James has said that these degrees
deceive the public, pose a potential threat to national
security, constitute a fraud if Federal funds are used to pay
for them, and can give the public the impression that Federal
employees have expertise and credentials when they do not.
Degrees or other credentials from these schools are never
acceptable for any purpose related to Federal employment. It is
vital that members of the Federal workforce be well-trained and
qualified and that Federal employees in no way misrepresent the
experience and education they bring to their positions.
Every Federal employee must earn the utmost confidence of
the American people no matter what job the employee fills. The
way to maintain this confidence is by ensuring that the
training and education of the Federal workforce are done by
legitimate institutions that have a proven track record.
We have significantly increased our vigilance surrounding
this issue in the past year. Director James has written to the
heads of executive branch departments and agencies on three
occasions, and I might point out that, in August 2003, her
statement clearly told these agencies that diploma mills cannot
be used for any purpose in Federal employment. She has also
increased resources in our Center for Federal Investigative
Services, where we do background investigations, including
those that sometimes turn up information about diploma mills.
The use of fraudulent degrees in the Federal Government
could substantially affect national security and the health and
safety of Americans. In conducting background investigations on
applicants, employees, and contractors, we have found examples
where these degrees were cited by individuals in their
applications and other official documents.
When we conduct a background investigation, we do that on
behalf of our client agencies who use the information to
determine if employees are suitable for Federal employment or
should be granted security clearances. If we identify
information related to diploma mills during the course of these
investigations, we send it immediately to the agency that has
requested the background investigation.
Use of a bogus degree may disqualify an individual from
Federal employment. First, that individual may not meet the
qualification requirements for the position. That is, to
qualify for some positions, applicants need specific degrees or
required credit hours, but these must be from institutions
accredited or well in the process of being accredited by an
organization recognized by the U.S. Department of Education.
In addition, and strongly in the view of Director James,
the individual's deception in claiming a degree he or she knew
to be invalid may constitute fraud in examination or
appointment. In this case, the agency or OPM may determine that
the individual is unsuitable for Federal employment because of
the use of the bogus degree. The agency or OPM may find the
person ineligible and disqualify him or her from consideration.
If the person is already a Federal employee, they can be
removed from their position. If an agency or OPM takes a
suitability action, there is due process involved and the
individual can appeal to the Merit System Protection Board. If
OPM takes that action, we also have the authority to debar an
individual from employment in the Federal Government for up to
3 years.
We have recently completed a review of all of the laws,
regulations, policy statements, public information, and forms
to determine what changes might be necessary to clarify what
education will satisfy requirements for qualifications and
training. Our review included consultations with our teammates
at the Department of Education.
For purposes of Federal employment, we actually decided
that there are four categories of schools that we have to deal
with. The first we are calling conventional or accredited, or
those that are accredited by organizations recognized by the
Department of Education. Education from these institutions is
acceptable for meeting the requirements set forth in law,
regulation, and policy for all Federal personnel purposes--
qualifying for positions, academic degree training, student
loan repayment, employee training, and tuition reimbursement.
Schools in the second group, which OPM is calling non-
accredited/pending accreditation, offer a curriculum for
advanced learning similar to a conventional accredited school
and are well in the process of seeking accreditation from an
appropriate organization and have received what is called pre-
accreditation or candidate for accreditation status. We believe
that education from these schools is acceptable for all
categories mentioned above, except academic degree training and
student loan repayment, where statutes limit applicability to
fully accredited schools.
Schools in the third category, which we are calling non-
accredited/other and which Ms. Stroup referenced, generally
have a traditional curriculum but have chosen not to seek
accreditation and thus do not qualify under the first two
categories. Because OPM and Federal agency human resource
offices cannot evaluate the programs of these schools, we
cannot determine whether training or education from these
schools meets the requirements set forth in law, regulation,
and policy. We are working with interested parties to address
this problem and will be able to share information with you
soon on this, I think.
We refer to the fourth category of schools as non-
qualifying schools. These are the diploma mills, as well as
firms that simply sell counterfeit degrees. Coursework or a
degree from these institutions is never acceptable for any
purpose in the Federal Government. Any individual claiming a
degree from this type of institution is misrepresenting his or
her background and may be found unsuitable for Federal
employment.
To ensure that executive departments and agencies, members
of the public interested in Federal employment, and current
Federal employees have a better understanding of what types of
education are qualifying for purposes of employment, training,
and tuition reimbursement, OPM has completed the review I
discussed earlier.
While no current statutes or regulations will require
revision, Director James has told us to revise many other
documents, including those found on OPM's website and on our
USAJOBS site, the online job information system for Federal
positions.
These changes will clarify for users what education is
acceptable for qualifying for Federal positions and for
purposes of other personnel policies, like academic degree
training, student loan repayment, and training and tuition
reimbursement. As I noted previously, we will be consulting
with interested parties as we develop these clarifications.
We believe this effort, taken in conjunction with the
Department of Education's efforts, will clarify for the public
in general and for all Federal employees, including the human
resources and personnel security staffs of Federal agencies,
the distinctions that must be made in evaluating educational
achievements of applicants and employees.
I would also like to correct for the record a statement in
the written testimony of the General Accounting Office
delivered to this Committee yesterday. On page six of that
testimony, GAO addresses senior-level Federal employees who
have degrees from unaccredited schools. GAO defined senior-
level position as Grades 15 and above. There is an implication
that one of the 28 senior-level Federal employees identified as
having obtained a degree from a diploma mill was an OPM
employee. That is not correct.
While OPM was one of the agencies reviewed by GAO, no OPM
senior-level employee was found by GAO to have received a bogus
degree from a diploma mill. There was one employee, Grade 11,
who claimed a degree from a diploma mill, but OPM did not pay
for this training. The individual is no longer employed at OPM.
I want to thank the Committee for their time and I would be
happy to answer any questions that you may have.
Chairman Collins. Thank you.
Secretary Stroup, in your written testimony, you
distinguish between consumers who are unsuspecting victims of
diploma mills and those who are well aware that they are
obtaining false academic credentials. We found from our
investigation that many of those individuals who are the true
victims of diploma mills feel that they don't have an easy way
to check on whether an institution like Columbia State
University or Kennedy-Western is a legitimate academic
institution. You have told our staff that the Department of
Education receives many questions from the public, including
potential employers who are trying to figure out whether
various institutions are legitimate.
I am very pleased, that the Department is going to compile
what you refer to as a positive list of accredited
institutions, but shouldn't the Department be doing more to
alert people to the signs of a diploma mill? I am happy to hear
that you have a link on your website to the Oregon list, but do
you have a section that is entitled, ``Diploma Mills'' where
you could put warning signs that would help consumers?
Ms. Stroup. Actually, I looked this up myself and said, I
am not that happy with the way the website looks. We actually
have it out there, the warning signs of diploma mills, on our
student aid website. I just don't think it is very prominent.
So we need to go back and fix that internally and try to do
something about it. I am not sure--I used to think it was much
more prominent, but when I am looking at it today, I went,
well, this isn't all that prominent after all.
But we do have on our own website a whole listing of things
about diploma mills. Again, it is on the student aid portal for
students to look at when they are thinking about colleges, and
it links to the FTC. It references contacting the Better
Business Bureau, all the places we could think of that people
should go to if an institution is not accredited and it doesn't
show up on this positive list that we will eventually create.
Chairman Collins. That is helpful, but the problem is that
a lot of individuals who are furthering their education at
their employer's expense aren't going to look at a student aid
site because they are not dependent on student aid. They are
getting either reimbursed or their employer is paying directly.
Ms. Stroup. And that is true and I am not sure how we are
going to be able to help solve that if people don't use our
website. I mean, we can put it on, obviously, on all of the
government websites and get everybody doing the same thing so
that we all have a prominent section that deals with the issue
of diploma mills government-wide. It might be the best way to
reach the people you are talking about, because you are right.
They will not necessarily be looking at our website to figure
out--you are right. Ours is mainly for kids who are thinking
about going to college, not for the people who are out there.
I mean, there are other things we can do, though. I don't
want to just say that there is nothing can do because we are in
touch with lots of people. I mean, we use the statistic all the
time that one in six people, one in six working Americans have
student loans insured or guaranteed or paid for by the
government. So we communicate with people every day who are
part of the system, and certainly making sure that information
is included in mailings we do and information we put out would
actually get into the hands of even the people you are talking
about, who are out working and are thinking about getting
another degree, and yet they are probably paying a student loan
back to us already.
So it is more about how we make the public more aware and
how we get more information out, and that is something we can
do.
Chairman Collins. I think that would be very helpful. That
is another reason I wanted to hold these hearings. I think it
will help educate the public and to make those distinctions and
also put on notice not only Federal employees but other people
that we are looking at these phony degrees for those who are
unethical and deliberately paying for a degree of no value.
We focused heavily on the problem of taxpayer dollars
reimbursing Federal education tuition at diploma mills, but in
the course of our investigation, we uncovered another issue.
The Committee discovered three checks from Federal Head Start
program grantees in three different States made out to one
diploma mill.\1\ What more can the Department of Education do
to inform program grant managers and other agencies which
institutions are legitimate and which are diploma mills?
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\1\ The chart appears as Exhibit No. 5 in the Appendix on page 165.
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We didn't expect to find this. We were looking for Federal
checks going directly from Federal agencies to diploma mills.
In the course of our looking at checks of one particular
diploma mill, we came across these three Head Start grant
checks. So I think--and that is why I am convinced this is just
the tip of the iceberg.
Ms. Stroup. Yes. We clearly have more work to do. Again, to
me, I look at this and think this is a government-wide issue
for everybody to look at. I mean, we can give information to
every government agency and make sure they know what
information we already have available. We wouldn't necessarily
know who the Head Start grantees are. Obviously, we are the
Department of Education. They are HHS. But certainly our
colleagues in other agencies need to be telling their grantees,
just like we would tell ours, that they can't be using any
money they get from the government to pay for these kinds of
things.
And again, for the most part, Senator Collins, I think your
having these hearings and all the news coverage that you have
gotten for this is probably the best thing that anybody has
done on the issue in years because nobody has really been
talking a whole lot about diploma mills or thinking about the
fact that we are spending taxpayer money on these kinds of
programs and nobody is doing anything about it.
Again, I will go back to the Department and we certainly
will do everything we can to get information out to our
colleagues at all the other agencies and encourage them to do
the same thing that we are going to do.
Chairman Collins. Thank you. Mr. Benowitz, I have lots of
questions for you, but I am going to yield to my colleague,
Senator Akaka, at this point.
OPENING STATEMENT OF SENATOR AKAKA
Senator Akaka. Thank you very much, Madam Chairman.
Yesterday, we learned from GAO's investigation that several
Federal managers with degrees from diploma mills had high-level
security clearances, including Q clearances. This is one of the
highest security clearances possible and allows access to
nuclear weapons technology. It is my understanding that a Q
clearance requires a full background investigation.
I also understand that you are the point person at OPM, Mr.
Benowitz, for the probable merger of the OPM and Department of
Defense units that conduct security clearance reviews. Your
testimony details OPM's current role in the background
investigation process and its responsibility in referring
information to the requesting agency.
Although I was pleased to learn from your testimony that
OPM is increasing its oversight of personnel background
investigations, given the exceptional demand for security
clearances, it seems to me that greater diligence is needed. My
question to you is, is OPM considering other changes to the
current process?
Mr. Benowitz. Senator, I would agree with you that with
respect to the use of diploma mills, and I don't know the
specifics of the Department of Energy cases other than from the
GAO testimony yesterday, that agencies across government have
to be much more alert to this issue and have to ensure that
they understand the laws and regulations and government-wide
policies and apply them properly.
OPM conducts background investigations and, if we identify
a situation where an individual has claimed a bogus degree, we
tell the agency. It is the agency itself, in this case the
Department of Energy, that grants a security clearance, and,
more fundamentally, decides if an individual is suitable for
Federal employment.
As I said, I don't know the specifics of those cases at
Department of Energy. Until recently, the Department of Energy
did not have authority to ask OPM to conduct those background
investigations for it. They were done by the FBI. But
basically, there is an issue you have to resolve, in my view,
of whether somebody is trustworthy if they are citing that kind
of degree, whatever their position is in government, whether it
is the lowest or the highest level of clearance.
Senator Akaka. Mr. Benowitz, you testified that there are
four categories of colleges and universities. One of these
categories, called non-accredited, covers institutions that
have traditional curriculum but have chosen not to seek
accreditation. This category also includes foreign institutions
that may be accredited in their own country, but not in the
United States. You further testified that OPM and Federal human
resources offices cannot evaluate the programs of schools in
this category and are working with interested parties to
address the problem.
My concern is that, according to Director James of OPM,
much of the training purchased by Federal agencies is from
private non-accredited vendors which, I believe, falls in this
category. My question is, why do Federal agencies rely so
heavily on these vendors to train employees given that these
providers cannot be evaluated?
Mr. Benowitz. Let me perhaps clarify my statement for you,
Senator. We don't have the expertise to evaluate these schools.
Secretary Stroup's statement addressed briefly what the
accreditation process is.
When I say we can't evaluate them for purposes of whether
the academic training is sufficient to be used for job
qualifications and determine whether you have, for example, 24
credit hours to be an accountant or whether you are eligible
for an entry-level professional position if you have a
Bachelor's degree at Grade 5 and a Master's at Grade 7.
But I do want to say that there are many of these
organizations, including private companies, that provide
absolutely superb training to the government, to individuals
that meet the government's needs, and it is perfectly
appropriate in our mind to send employees to these schools for
training in particular courses, for example if an employee
needs a course in learning a new computer language or a course
in statistics or something like this. It is an inherent part of
the Federal manager's responsibility to ensure that the
training provided is what it says it is, that the government
and the taxpayers are getting their money's worth and that the
individuals are getting the training that they require. This is
applicable to the kind of training that we send people to
courses for on a case-by-case basis.
Senator Akaka. As you allude, OPM seems to lack the
expertise to evaluate whether training is sufficient. My
follow-up question to that is, who should be charged with doing
that?
Mr. Benowitz. Excellent question, sir. We are not sure that
we know the answer yet and we are consulting with other
agencies on that issue. We have considered for purposes of
Federal employment purposes, which the Office of Personnel
Management is responsible for, whether it would be useful to
have an advisory group to the Director of OPM that might advise
her on particular schools' capabilities. The advisory committee
might include members who are familiar with the accreditation
process, that have a full understanding and appreciation both
of the Federal Government and the needs of their employees and
the taxpayers, and also representatives of the views of these
schools, whether they are colleges and universities who choose
not to seek accreditation or private companies that provide
training.
Senator Akaka. Thank you. Madam Chairman, my time has
expired, but I have one more question.
Chairman Collins. Please proceed. Take as much time as you
need.
Senator Akaka. Ms. Stroup, I am interested in learning more
about the differences between diploma mills and non-accredited
institutions, especially since a significant portion of Federal
workforce training is provided by non-accredited institutions.
Why would an institution choose to be non-accredited?
Ms. Stroup. You get different answers depending who you
ask. The ones that we are most familiar with and certainly that
I think a lot of people would say, we, hands down, offer a
quality education, have made the decision based on religious
grounds, where they really don't want to have a relationship
with the Federal Government. We certainly know several of
those.
There are others that are very small institutions in a
local community that might enroll 75 students, for example,
something that is very small, that don't want to go through the
expense of the accreditation process because it is not cheap.
It does consider quite a financial investment on the part of
institutions who think they are already doing a good job and
they don't want money from the Department of Education or the
other Federal programs that require accreditation, so they
don't need to invest that kind of resource into the
accreditation process.
Those are the two clear-cut ones we know about. Some of the
kinds of institutions we have talked about today would never
get through the accreditation process and they know it, so they
won't ever bother to apply. They would never meet the faculty
requirements and the curriculum requirements that are part of
the normal accreditation process.
But for most institutions, it is really the question of are
they interested in getting Federal aid from the Department of
Education or not, and if the answer is no, they don't need to
invest in the accreditation process, they don't bother to do
it.
And again, don't forget, we have 6,500, give or take,
institutions that are accredited that are part of our system
nationwide, ranging from 4-year doctoral institutions like UC-
Berkeley down to short-term training programs. They are all
eligible to get in if they choose to participate in the
program.
Senator Akaka. Thank you for your responses.
I also want to note, Madam Chairman, that the development
of a database of accredited institutions by the Department of
Education is very important to States like Hawaii, which had
the reputation as being a haven for diploma mills. I stress
this because my State is home to many fine accredited schools.
In order to make that point, the May/June issue of
Consumer's Digest unveiled its top 75 best values in public and
private colleges and universities. I am especially proud that
Brigham Young University-Hawaii was rated as the top rated
private university in the Nation and that my alma mater, the
University of Hawaii at Manoa, was ranked fifth highest among
public institutions. We must do everything we can to ensure
that Federal agencies and their employees are never confused as
to which schools are legitimate.
Again, Madam Chairman, I want to thank you for holding
these hearings which will certainly help our Nation know more
about diploma mills. I want to ask that my full statement be
placed in the record.
Chairman Collins. Thank you, Senator, for your insights,
and your full statement will be placed in the hearing record.
[The prepared statement of Senator Akaka follows:]
PREPARED STATEMENT OF SENATOR AKAKA
Madam Chairman, although it is customary for us to thank you for
holding a hearing, I want you to know how much I appreciate the work
you and your staff have done to expose the use of diploma mills by
Federal job applicants, current employees, and agencies.
As a teacher, I was disturbed that individuals who turn to diploma
mills are cheated out of a real education. As a leading supporter of
employee training, I was dismayed that the Federal Government is
wasting taxpayer dollars on worthless programs. The use of taxpayer
money to fund diploma mill programs is the very essence of government
waste.
At yesterday's hearing, special investigators at the General
Accounting Office detailed the extent to which Federal agencies and
senior employees had used diploma mills. A number of questions were
raised by the disturbing results of their investigation which I hope we
can pursue today.
I was deeply troubled by GAO's revelation that three Federal
managers with high level security clearances, holding sensitive
positions, received degrees from diploma mills. At a time when our
Nation depends on a strong and credible Federal workforce, we must do
all we can to ensure that Federal employees have the right skills and
educational background to carry out their responsibilities.
As such, I am particularly interested in learning from the Office
of Personnel Management what steps OPM is taking to establish policies
and procedures to address fraudulent academic credentials. I am also
interested to know how OPM plans to ensure that Federal funds are not
spent on training at diploma mills. We cannot allow these limited funds
to be diverted from Federal employees pursuing legitimate degrees to
those receiving questionable ones. Neglecting to establish personnel
policies that counter the impact of diploma mills threatens the
effectiveness of the Federal Government and affects the safety of
Americans.
In addition, the absence of a reliable accreditation verification
process threatens the credibility of the government. I am pleased that
the Department of Education has agreed to develop a database for
agencies and managers to use when approving training programs and
verifying academic credentials.
Without this information and firm policies and procedures in place,
the government is ill-equipped to verify whether an applicant or
employee has a degree from an accredited institution. We cannot let
such policy and information gaps undermine our Nation's security or the
integrity of Federal programs.
Once again, I wish to commend our Chairman for highlighting the
problems posed by diploma mills. I also want to thank the GAO, OPM, and
DOE for collaborating on how to best attack the proliferation of
diploma mills. With this partnership, I believe we are moving in the
right direction to alleviate the use of diploma mills by Federal
employees and their agencies.
Chairman Collins. Secretary Stroup, just to follow up on a
question that Senator Akaka just asked you, it is certainly
true that some schools choose not to become accredited because
of religious or other legitimate reasons. But I suspect that
the vast majority of diploma mills don't seek accreditation
because they wouldn't get accreditation. They couldn't possibly
qualify. Do you agree with that?
Ms. Stroup. Absolutely. There is no way. They would never
meet the standards. I mean, the tests of accreditation these
days are very stringent, and we have gotten more stringent, I
believe, as years have gone on about outcomes and measurements,
making sure we have good measurements related to jobs and
degrees and passing tests and licensing and stuff, and a lot of
them would never, ever make it through the system to even get
there--there is just no way they could do it.
Chairman Collins. I just wanted to make that clear for the
record.
I would note, also, I was interested to hear of your
assistant getting the computer notice from a diploma mill,
because that is exactly how we got involved. Three years ago,
one of my staffers received E-mails promising degrees virtually
overnight and that is what opened our eyes to the world of
diploma mills. Of course, with the Internet, the reach of
diploma mills has been expanded exponentially. They can reach
so many more students than they ever would have prior to the
Internet, so that is a challenge, as well.
Mr. Benowitz, it seems to me that one of the factors
contributing to the use of diploma mills in the executive
branch is that some employees simply may not understand that
these degrees are not acceptable, that they do not meet the
qualifications for educational experience that is listed for
specific jobs. Shouldn't OPM consider revising its application
and background investigation forms so it would be crystal clear
to employees and prospective employees that diploma mill
degrees are simply unacceptable?
Mr. Benowitz. Absolutely. We have reviewed all of those
forms as part of our internal review on this topic. We have
identified every form where that is an issue, starting with
Federal job application forms through background investigation
forms. Each of these forms also has accompanying it information
on how to fill out the form. So our proposal will be to include
information both in the instructions to these forms and on the
forms themselves, and we will propose that these forms
distinguish education from accredited schools from those that
are not accredited and instruct individuals never to list
education received at diploma mills or through counterfeit
diploma companies.
We will be working with our colleagues at the Department of
Education and throughout the government. There is a
notification process when one changes a government-wide form
and we will be going through that, as well. But I think this is
a very important point. It is the point where individuals in
the public first perhaps see this issue presented to them.
In addition, as I said in the testimony, we have
information on our website, OPM.gov, or USAJOBS, for example,
where we will include this so that individuals who are looking
at the website, will also understand this, as well.
Chairman Collins. I think that would be very helpful.
As you know, since January 2003, Federal agencies have been
restricted to paying for education for their employees only if
it is from accredited colleges or universities. However, there
is still a loophole in the law that can allow an agency to pay
on a course-by-course basis for education from unaccredited
institutions, including diploma mills, and the result of that,
as we have seen from our investigation, is that Federal tax
dollars are going to diploma mills. I clearly don't think that
was what was intended by Congress in passing the restriction
limiting payment to those colleges and universities that are
accredited only.
Last July, I sent a letter to OPM calling the loophole to
the agency's attention and urging you to issue new regulations.
In August, OPM acknowledged the loophole and noted that much of
the training that the Federal Government purchases is from non-
accredited vendors, and that makes it more difficult.
The fact is, though, we know that loophole has been
exploited. Our investigation showed that we were able to
identify payments that had occurred after January 2003 to
diploma mills. We found them from the Department of Labor, for
example.
In your testimony, you expressed confidence that no law
changes or regulation changes are needed to address the
problems that diploma mills pose. How are you going to close
this loophole if you are not going to revise the underlying, or
call for a revision of the underlying law or rules?
Mr. Benowitz. The law you reference, Madam Chairman, refers
to sending Federal employees for degrees rather than just a
course, and the law itself is very clear. The school must be
accredited by an organization recognized by the Department of
Education. Our interim regulations implementing this parrot the
law.
The issue, as you point out and as you found in the
investigation, is that at certain points in time, Federal
employees, perhaps in collusion with diploma mills, perhaps
not, submitted bills for a course at a time, and I think there
was, in the Lieutenant Commander's testimony today, a copy of
an invoice that she could have submitted for reimbursement that
really spoke to this issue.
In August 2003, Director James sent a memo to heads of
executive departments and agencies informing them that they had
to be particularly aware of this issue and that they could not,
if you will, do business with diploma mills. As a result of our
internal review, we are also positioned to send a memo, another
memo to agency heads parroting what I said today, that there is
absolutely no circumstance under which Federal agencies should
accept credentials from or do business with diploma mills. We
believe that is sufficient to ensure that agencies are put on
notice. We also have authority in our oversight process at OPM
to examine these issues when we conduct our reviews of
agencies' human resources programs.
Chairman Collins. Will that guidance leave in place the old
rules that govern training and thus allow agencies to pay for
courses at diploma mills?
Mr. Benowitz. No. We do intend to change that as part of
our review and changes of our policies that we have identified.
I am sorry if I didn't include that.
Chairman Collins. That is helpful to know.
Finally, I note that you have testified that you don't
think a law change is needed. We think that a law change may
well be needed to clarify this and I am hoping that you will
pledge today to work with the Committee, and I would ask
Secretary Stroup also to see if legislation would be desirable
to eliminate any confusion. It is just unacceptable at a time
when we have high deficits that a single dollar is going to
diploma mills, much less the hundreds of thousands of dollars
that we believe are going from the Federal Treasury to these
phony schools.
Mr. Benowitz. You have our absolute commitment to work with
you on that.
Chairman Collins. Secretary Stroup.
Ms. Stroup. We make the same commitment from the Department
of Education.
Chairman Collins. Thank you. Senator Akaka, do you have
anything else?
Senator Akaka. Madam Chairman, if you would permit me two
questions, and these are questions of curiosity. Ms. Stroup,
yesterday, we heard testimony detailing that many diploma mills
offer academic credit for so-called life experience. In your
opinion, is life experience a sound basis for academic credit,
and if so, how should life experience be evaluated?
Ms. Stroup. Probably the way the diploma mills are doing
it, that is not the way to do it. I think we know that. The
accrediting agencies that the Secretary recognizes as part of
our process have standards within their own rules that they use
to evaluate life experience for institutions that want to give
people credit for that as part of their institutional process.
It is normally, though, very limited. You don't see a lot of
it. It is likely less than ten credits that anybody would ever
get that I have ever seen, in a legitimate setting that would
go through one of the accrediting agencies that we recognize.
It is not banned or anything, and certainly there are times
when they do it in certain instances. But it is under a very
rigorous review process that is in part of the accreditation
structure that is already in place that our agencies use.
Chairman Collins. Senator, I would hope that we could get
credit for a course in Congress, for example. [Laughter.]
That might be legitimate.
Senator Akaka. We should work on that.
Mr. Benowitz, you were Director of Human Resources at the
National Institutes of Health, which I consider to be the
world's premier biomedical research organization. Given the
stature of NIH, what policies and procedures are used to verify
the credentials of its workforce and what are the best
practices used by NIH that could be implemented government-
wide?
Mr. Benowitz. I was there for 14 years or so and was
Director of Human Resources for probably almost 13 of those
years, sir. For scientific positions, which were the core of
that organization, whether these were bench scientists
conducting research in NIH laboratories or scientists who were
reviewing grant applications from the universities around the
country, we required that they provided us a copy of their
degree, a certified copy from the university. We relied, for
example, for physicians' degrees on publications that listed
accredited medical schools.
And in order to hold a position as a physician in the
Federal Government, you have to be licensed by a State if you
are going to be practicing with patients and interacting with
patients, and NIH has the world's largest research-based
hospital on the campus in Bethesda.
It is a practice, I think, that is emulated in some
agencies, but in perhaps not all agencies. I don't know that I
can answer that for you. It is a distinction I would make
between positions which require academic degrees to qualify for
them and those that don't. The position I held, quite frankly,
didn't require an academic degree. I qualified for that job
based on having a Bachelor's degree and a Master's, and I have
some additional education, but I am a historian by training. I
don't have a degree in human resources. So you can evaluate
people's qualifications for jobs based on experience, as well.
During the background investigation process, depending on
the level of the person's clearance and the level of the
background investigation, for the higher-level ones, OPM
actually sends field investigators to colleges and
universities, their registrars' office and obtains copies of
documents and separately confirms the education. For lower-
level clearances, which are often done in a very automated way,
we send letters to the college or university where the highest
degree was obtained to get confirmation of that. And these are
procedures which typically apply to all Federal employees.
Senator Akaka. Thank you very much, Madam Chairman.
Chairman Collins. Thank you, Senator, and thank you for
your participation in these hearings.
I would like to thank each of our witnesses today, as well
as the witnesses that we heard from yesterday. I hope that
these hearings will not only cause the payment of tax dollars
to diploma mills to be ceased immediately, but it will also
help to educate both potential students and employers to the
dangers of dealing with diploma mills.
We also will be pursuing, by working with the GAO, the
referral of information to the Inspectors General of the
various agencies who appear to be employing high-level
individuals with diploma mill degrees. In some cases, as
Senator Akaka mentioned, these individuals have very high-level
security clearances, which raises questions about their
trustworthiness as well as their qualifications for the post
that they hold.
We very much appreciate the insights of all of our
witnesses. The record for these hearings will be kept open for
an additional 15 days.
I want to thank all of the Committee staff, which worked
very hard on these hearings. This is a hearing investigation
that has stretched over 3 years, and I believe these hearings
have been very valuable.
This hearing is now adjourned.
[Whereupon, at 12:13 p.m., the Committee was adjourned.]
A P P E N D I X
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