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GetEducated.com, an online degree clearinghouse founded by Phillips in 1989, tracks more than 200 fake online colleges in the USA alone, twice that many abroad. The sale of fake degrees, which at an average cost less than 500 dollars per diploma, has become a multi-million dollar business. A fake degree is a fast, cheap way to quality for high paying employment. Search engines accept listing from colleges without screening for accreditation.

The question of who in Government that gave the so-called "fake" St. Luke Medical School the permission to operate as a medical school in Liberia is now a puzzle. The Ministry of Health, the Social Welfare and the Medical Board that should have some ideas about the function of this school, have all backed-off and threatening to prosecute the founder. The reported illegal operation of the school was discovered two months ago when it was raised alarm concerning awarding degrees on the internet.

Web-based bogus UK universities appear to be thriving despite the efforts of the authorities to shut them down. UK and US trading standards officials last year closed down 14 websites offering fake British degrees for up £1,000 each. The certificates, from 14 made-up institutions, were said to have been used by hundreds of unqualified people, mainly in North America, to gain jobs in areas such as teaching, computing and childcare.

A report released by the department says a project called the Distance Education Demonstration Program has shown that waiving financial-aid restrictions on distance-education providers did not lead to any problems. The rules were designed to prevent fraudulent correspondence programs from gaining access to federal student-aid money. But the report leaves out details about one instance in which an institution closed down after it took advantage of a rule waiver and was then found to be riddled with fraud.