Shutting Down the Diploma Mills

Chancellor Bradley Byrne
Chancellor Bradley Byrne

Montgomery, Al. (WSFA) -- Chancellor of Alabama's two year college system, Bradley Byrne, took a hard line on dealing with non-traditional, private schools Monday.

Chancellor Byrne announced new initiatives to shut down so called "diploma mills" and better regulate legitimate "for profit" schools adding, "...fraudulent institutions do not belong in this state - period."

Alabama is labeled as one of the Seven Sorry Sisters - states that do not provide adequate oversight of private institutions. Those states: Hawaii, Idaho, Mississippi, Missouri, New Mexico, Wyoming and Alabama became havens for diploma mills and "substandard degree providers" said Alan Contreras, administrator for the Oregon Office of Degree Authorization and outspoken critic of diploma mills.

In a news conference Monday afternoon, Chancellor Byrne said Alabama is no longer going to be a sorry sister. He announced new guidelines like requiring the institutions to provide audited financial statements.

Revisions to the guidlines for private school licensure include:

  • License fees restructured. ½ of 1 % of gross revenue or $2500,whichever is greater
  • Institute fines for failure to provide DPE with requested information/data up to $1000 per year. Repeated fines or failure to pay fine may result in revocation of license.
  • Require schools to identify other affiliated schools and provide articles of incorporation, by-laws, partnership agreements, franchise or sales agreements.
  • Increase surety bonds to $50,000 for degree granting schools and $20,000 for non-degree granting schools.
  • Accept only audited financial statements and require latest federal and state income tax returns.
  • Require all owners and directors to be persons possessed of a good reputation. DPE defines "good reputation" has no felony convictions related to the operation of the school and been rehabilitated from any other felony convictions; never having been convicted of a crime involving moral turpitude; not successfully sued for fraud or deceptive trade practices within the last 10 years; not involved in litigation that carries a significant risk to the ability to operate the school, is not currently associated with a school violating legal requirements in another state or a school closed for violations including refusal to pay refunds.
  • Incorporate a definition of Academic Fraud meaning, in part, that courses offered are insufficient in quality, content, or administration to achieve the stated or implied educational objective.
  • Require all schools to include tuition and fees the initial and renewal application. In doing so, the Department of Postsecondary Education reserves the right to publish the tuition and fees on an as needed basis.

The chancellor also said the system will increase fees to help pay for additional staff.

If you don't have the staff in place, the guidelines mean nothing," Byrne said. "So, we [Alabama Community College System] believe having the fee structure in about the most important thing we are announcing today."

At least one private institution supports the department's initiatives.  South University in Montgomery said the move protects citizens from illegitimate diploma mills.

There are currently 258 licensed private institutions in Alabama, and only three full-time staff members in the Department of Postsecondary Education's Private School Licensure Division.

Dispite being understaffed, the division has recently shut down 18 private institutions, through either rejection of applications or license revocation/non-renewal.

The new guidelines go into effect October 1st.