Lawmakers consider legislation to close diploma-mill loophole

Senate lawmakers said Wednesday that they want to pass new legislation to close a loophole that allows "diploma mills" to take advantage of federal regulations and charge the government for questionable academic degrees.

Diploma mills -- organizations that in effect sell degrees and require little or no coursework -- have been sharply criticized over the past two days during Senate Governmental Affairs Committee hearings. A General Accounting Office review of eight federal agencies revealed Tuesday that hundreds of employees are enrolled in diploma mills, and at least 28 senior federal executives list fraudulent degrees on their resumes. The government has paid about $170,000 to two diploma mills whose records were obtained by GAO investigators.

Federal agencies are prohibited from paying for degrees from nonaccredited academic institutions, but some employees circumvent the restriction by receiving reimbursement for individual courses.

"The fact is, though, we know that loophole has been exploited," said Sen. Susan Collins, R-Maine, the committee's chairwoman. "We think that a law change may well be needed," because it is "unacceptable that a single dollar [of federal money] is going to diploma mills, much less hundreds of thousands."

Sen. Joseph Lieberman, D-Conn., urged quick action and noted that several senior managers with national security responsibilities were in possession of diploma mill degrees.

"The public interest may be at risk here," he said.

Stephen Benowitz, the Office of Personnel Management's associate director for human resources products and services, told the committee he did not believe a new law was necessary. OPM recently alerted agencies to be on the lookout for bogus degrees and to make certain that they are not accepted.

"We believe that is sufficient to ensure that agencies are put on notice," Benowitz said. He told Collins, however, that OPM would work with the committee to ensure that proper action is taken.

At Wednesday's hearing, new revelations surfaced from a Coast Guard officer who enrolled in a diploma mill as part of the investigation.

Lt. Cmdr. Claudia Gelzer told lawmakers that she enrolled last year at Kennedy-Western University, which is nonaccredited and distributes a catalog that says that 20 federal agencies and organizations have paid for employees to obtain degrees from the school. According to Gelzer, former Kennedy-Western employees told the committee "it was common practice for the school to alter the bill to satisfy private and federal employers for reimbursement purposes."

Gelzer said that a Kennedy-Western counselor attempted to convince her that the federal government would pay for her coursework. Because the institution is not accredited, it is illegal for federal money to be put toward a degree at Kennedy-Western.

"I told her before I could sign up, I needed to confirm that the Coast Guard would pay for a Kennedy-Western degree," Gelzer said. "She asked if it would help to see some cancelled checks the school had received from other federal agencies … she faxed three cancelled U.S. Treasury checks payable to Kennedy-Western University. They were tuition payments for employees of the Air Force, the Army and the Defense Finance Accounting Service."

Gelzer also said that the coursework was shoddy and superficial. Jason Booth, who identified himself as a representative for Kennedy-Western after the hearing, said the information presented at the hearing was "hearsay" and was based on a few isolated incidents.

Lawmakers, experts and investigators wrestled with the question of diploma-mill students and whether they are victims or willing co-conspirators. Gelzer said she believes most Kennedy-Western students did not know they were enrolling in a diploma mill. She recounted several Internet postings from students surprised by shoddy or incomplete academic material from the school. Other experts said, however, that by the time they leave the school, even unsuspecting students should understand that their degree is not legitimate and should not be presented to potential employers.

"I'm not persuaded that most of the people who get these degrees don't know exactly what they are," said Alan Contreras of the Oregon Office of Degree Authorization. "My impression is that most of them go into it knowingly…or by the time they come out they know exactly what they are."