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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.