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In Georgia, the Soviet legacy and the later collapse of state institutions produced an educational system plagued by corruption, nepotism, centralization and lack of teachers and professors. In addition, during the 90's, private low-quality schools with titles like "university" and "institute" sprang up. Controversies have been raised after colleges and universities have been closed or merged, and thousands of academic and administrative positions abolished.

In spring 2004 interviews were conducted with 43 rectors, vice rectors, and administrators at five private universities. A consensus emerged that successful licensing or accreditation applications, with few exceptions, required some form of bribery. Licensing might require a bribe of US$ 200 about two months' salary for a typical academic - while accreditation might call for a 10 or 20 times greater "gratuity."

The U.S. Department of Justice may be breathing new life into a whistle-blower lawsuit that seeks to collect about $1billion from the University of Phoenix, the nation's largest private institution of higher education. The suit was dismissed in May by a federal district-court judge in California on technical grounds but the parties appealed.