Alabama education officials cracking down on Internet colleges: Chancellor Byrne says targets 'not real schools'

(Above) Chancellor Bradley Bryne and Alabama education officials are cracking down on the exploding market for Internet courses and degrees and have taken action against four unaccredited Birmingham-based online colleges.

"These are not real schools and are operating in ways that are not in the best interest of their students," said Lynn Thrower, the associate general counsel assigned by Bradley Byrne, chancellor of the state Department of Postsecondary Education, to ramp up enforcement.

Last week, Chadwick University, which operates out of an office building on Magnolia Avenue near Five Points South, was notified its license to offer degrees had been revoked. The department also denied applications to operate online schools from Southern State University and Paramount University of Technology, which listed their headquarters in Birmingham but were found to have nothing but mailboxes in the city.

Madison University of Business and Technology withdrew its application after failing to meet requirements, department officials said.

Alabama had become a haven for questionable online operations, which have exploded in recent years thanks to the ease of creating virtual schools on the Web, department officials said. The online for-profit businesses offer a vast array of degrees, from hypnotherapy to doctorates in economics.

Several schools set up shop in Alabama to market degrees to consumers nationally and internationally. Until Byrne assigned full-time staff to aggressively enforce regulations, the department simply was processing applications from the schools.

"It obviously did not get much priority from the previous chancellor," Byrne said, referring to Roy Johnson. "We had not done the job we should have. Now, we are exercising much more proactive oversight."

Byrne said legitimate providers of online education fill an important role in society, but he said the so-called diploma mills can victimize consumers, businesses and legitimate schools.

People often are induced to sign up for large student loans, Byrne said, but once the money is paid to the school, the students don't receive the degree or certification promised.

Some operators offer degrees in exchange for cash, requiring little or no course work. The degrees are marketed in the United States but are also heavily marketed abroad, in Southeast Asia, China and the Middle East, where there is a premium on an American degree.

Businesses duped:
In some cases, customers sign up with the online companies, pay thousands of dollars in tuition, buy books and complete assignments, only to find out later that their degrees are worthless. In general, degrees for the unaccredited schools aren't recognized by other schools or by employers.

But governments and businesses are sometimes duped into reimbursing students for their tuition, and sometimes the phony degrees are used to get raises and promotions.

In 10 states, it is illegal to use an unaccredited degree as a credential when seeking a job or promoting yourself professionally. Alabama is not among those states.

"I think it is important to protect the consumers in Alabama," Byrne said.

A first round of enforcement actions, announced in July, closed the books on 18 private institutions, including Birmingham-based Breyer State University.

Breyer State degrees have been at the center of several controversies across the country. In August, three New Jersey educators were found to have received $10,750 in reimbursement from their employers for unaccredited degrees from Breyer, which allowed them to get $2,500-a-year raises.

Thrower, who has headed the Postsecondary Department's crackdown, said more action is on the way. New rules, effective Oct. 1, will require that schools seeking a license to issue degrees in Alabama have, or be actively pursuing, accreditation from an agency recognized by the U.S. Department of Education.

Chadwick started 18 years ago with educational programs by mail. It has never sought accreditation.
It was founded by Lloyd Clayton, who also founded Clayton College of Natural Health, another long-running unaccredited college that is on watch lists of unaccredited schools maintained by several states. Clayton College remains in business.

Chadwick University, until recently, had a virtual campus pictured on its Web site, through which students could navigate to campus buildings housing different departments. The school offered degrees in business, criminal justice and social and behavioral sciences. Now the Web site simply lists contact information.

Thrower said that among many violations the department found, Chadwick did not have the required $20,000 bond that would pay refunds to students if the school failed, and it did not provide the department with educational credentials of its faculty.

`Not a diploma mill':

In response to questions from The Birmingham News, Chadwick officials said the school is not a diploma mill. Chadwick chose not to seek accreditation and was not required to, they said.

"It is absolutely clear that Chadwick is not a diploma mill as Chadwick does not offer degrees for a fee and has always required very substantial work from its students," school officials said in an e-mailed statement.

But a 2004 investigation by the General Accounting Office, now the Government Accountability Office, raised questions about Chadwick. The GAO report found that a manager at the National Nuclear Security Administration received a bachelor's degree in 1992 from Chadwick but never attended classes and obtained his degree based on 30 credits for life experience, plus several college-level examination program tests and nine correspondence courses. The employee reported to GAO investigators that he read a book, wrote a paper and took a final exam for each of the nine courses.
In its statement, the school said that it has not accepted new students since 2002 and has 48 students who are finishing their course work. The school said it planned to end its operation by March 2009. With its license revoked, Chadwick cannot offer degrees, Thrower said, and any student promised one should be due a refund.

Can't give credentials:
On Aug. 14, a postsecondary investigator went to two listed addresses in Birmingham for Southern State University, one at Chase Corporate Center and the other a "virtual office space" - 4000 Eagle Point Corporate Drive - but neither office was staffed or had any equipment. The president's address is in West Covina, Calif.

"You get there, and it is nothing," Thrower said. "No sign of anything. It's just a maildrop."

In correspondence with the department, the school was unable to provide proper financial statements, a description of the educational backgrounds of its instructors or a curriculum that was consistent with accepted standards for universities.

Madison University of Business and Technology withdrew its application after the Alabama Commission on Higher Education declined to approve its education program plan. Though the school lists a Birmingham address, its correspondence is directed to the school president's address in Gulfport, Miss. "We have asked them to cease soliciting students," Thrower said.

An application by Paramount University, which also has no physical office, was rejected after the school failed to offer evidence it was seeking accreditation.

"They were not able to meet the most rudimentary requirements," Thrower said. "Clearly, they were just not knowledgeable about how to operate a school."

Report cards start Jan. 1:
Alan Contreras, administrator of Oregon's Office of Degree Authorization, has been a vocal critic of the practices of unaccredited colleges and degree mills. Alabama, he said, had earned a reputation as one of the "seven sorry sisters," states that had lax oversight of the industry. He is pleased with Alabama's new attitude.

"It is really good to see," Contreras said. "A lot of people around the country and around the world are watching what they do."

Tougher enforcement in several states has online operations scrambling to find a place to operate, with many fleeing to California, which let its law on licensing for-profit universities lapse, Contreras said. That's where Breyer State now claims to be based.

Thrower said the Department of Postsecondary Education has developed an annual report card system for both public two-year colleges and private colleges licensed by the department.

Beginning Jan. 1, consumers will be able to go to the department's Web site and check into a school's accreditation, costs, graduation rates and courses offered. "They will have this information that they will be able to use to make an informed decision," Thrower said.

"This is not a witch hunt," she said. "We are trying to move private, for-profit education in a positive direction and close down the diploma mills that give other schools a bad name."