The real cost of America's online diploma mill nightmare Too often consumers are seen as "co-conspirators" rather than victims of fraud. It obscures a much larger problem

In September, the Federal Trade Commission shut down an online high school diploma mill that had been conferring degrees from various entities since 2006. The fraudulent diplomas required completion of a single online multiple choice “test,” with no coursework or other assessment, and a one-time fee ranging from $200 to $300. That’s 40 hours of work at minimum wage; and minimum wage workers and those unable to find employment at all are the primary target of such scams.

Diploma mills are an old problem. The advent of the Internet has made it immeasurably easier to reach likely buyers, however, and also to close down old aliases and set up shop under new ones, the stock-in-trade of a business that depends on maintaining some semblance of legitimacy. As Internet courses become the primary form of distance learning and more and more accredited institutions include digital offerings, it only grows more difficult to identify con artists. The recently shut-down mill in question made its owners over $11 million in nine years.

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Much of the reporting on the issue has raised an old argument about diploma mills: namely, that consumers should be seen as potential “co-conspirators” rather than victims of fraud. For middle-class reporters who received, at minimum, a bachelor's degree from an accredited university, it seems increasingly unlikely that a person receiving a high school diploma for $250 and an online quiz could believe the degree was in any way legitimate.

Journalists, however, are failing to recognize the role that class and cultural capital plays in education—and even if we conclude that consumers knowingly obtain fraudulent credentials, we have to ask ourselves what that says about the world in which they do so.

Tressie McMillan Cottom has written at length about for-profit colleges and universities, themselves often of questionable legality. In a piece for Slate last year, she addressed the assumption that for-profit students understand the difference between traditional four-year institutions and for-profit colleges. Many of them, she argued, do not. Unlike upper- and middle-class students whose parents expected them to attend a four-year university essentially from birth, for-profit students have not spent their childhoods and adolescences learning the distinctions between Ivy League, Big Ten, and what my aunt always referred to as “directional [state] universities.” In McMillan Cottom’s words, to these students, “college is college.”

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Online courses in particular may be difficult to sift through, even for students with some experience of them via legitimate educational institutions. While online courses can be rigorous and provide access to students whose life circumstances make participation in on-campus lectures and discussions difficult or impossible, all too often they are approached by administration as cost-saving measures.

Frequently taught by underpaid adjunct instructors who depend on student course evaluations for future work, they are institutionally structured to favor assignments that can be auto-graded by the online course software (sometimes on the basis of completion alone) and a grade distribution that doesn’t require the instructor to do a lot of explaining. The higher ed parody site Cronk News wasn’t far off the mark with their satirical story “Dead Professor Wins Top Online Teaching Awards.”

“School is school” might seem dubious to middle and upper class individuals, but it works for the consumers targeted by college and high school diploma mills. As Jonathan Kozol and other education researchers have observed, high schools that serve primarily low-income students tend to emphasize things like rote memorization and obedience to authority rather than critical thinking skills. The students most likely to pay for a high school degree, then, not only have little cultural capital to understand differences between schools in legitimacy and prestige, but have received the least training on when and how to investigate such differences. Putting a checklist up on the FTC website doesn’t help people who don’t know they need it.

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For potential employers, it’s never been easier to check on specific degree-granting institutions. The Internet has made it easier for diploma mills to switch aliases, but it’s also made the individual lifespans of those aliases much shorter. Buyers are now even less likely to see even a temporary pay-off, as the people doing the hiring can easily Google questionable institutions (though pre-Internet, employers already knew when they didn’t recognize an institution and acted accordingly).

Of course, as McMillan Cottom discusses, some for-profit students understand the image of for-profit colleges in mainstream U.S. society quite well. Many of them don’t believe that the schools offer them anything in terms of skill or intellectual development, but they do know that credentials matter in a job market that’s already stacked against you. One reason that students in the U.S. continue to take on college debt is that, as the number of people holding at least a bachelor's degree has gone up, employers increasingly require themregardless of whether they’re actually relevant. People without a college degree today face lower wages and higher unemployment than in the past.

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Many discussions of degree fraud focus on people obtaining fraudulent credentials for highly skilled work such as nursing, where an untrained practitioner is likely to do real harm. High school degrees, obviously, do not represent specialized skill sets. Despite their loss in value over time, however, they still represent a significant increase in lifetime earnings. According to 2010 Census data, a white man with a high school degree will earn about 64 percent more over a lifetime than a white man without one. Breaking down the statistics for other races reveals an even starker contrast: a black woman with a high school diploma has estimated lifetime earnings almost 4.5 times higher than a black woman without one. For a black man, the rate is more than 5.5 times higher.

Unsurprisingly, race and class play a large part in who obtains educational credentials in the first place. SAT scores steadily increase with family income up to $200,000 a year; class influences not only who goes to elite universities (mostly upper-middle-class students) but also who graduates (upper-middle-class students again). High school students whose parents can afford a $699 SAT prep class are at an advantage even if they don’t take it; there are huge differencesin schools’ per-pupil spending depending on the wealth of their student bodies. Even within individual districts, resources are often diverted away from low-income schools to those that are already resource-rich.

It’s not just the quality of secondary education, but even its completion, that is dependent on socioeconomic status. In 2012, the status dropout rate, defined by the National Center for Education Statistics as “the percentage of 16- through 24-year-olds who are not enrolled in school and have not earned a high school credential” (including a GED) was 13 percent for Hispanic youth, 8 percent for black youth, and 4 percent for white youth. Youth of all races from the top income quartile had a rate of only 2 percent, while those from the lowest had a rate of 12 percent.

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Essentially, we all pay for our high school diplomas—the transaction is simply disguised in some cases. Young people with money accumulate credentials and are rewarded for them with more money, while low-income youth lose out and are admonished that they should have tried harder.

In a job market where applicants without high school degrees are rarely even considered, we shouldn’t be surprised that some of them may knowingly purchase fraudulent credentials. The FTC will no doubt continue identifying diploma mills and prosecuting those responsible; in many cases, the people who purchased degrees will also be prosecuted, whether or not it seems likely that they actually knew the degrees were not legitimate. The real crime, however, is that our schools fail low-income youth and our society allows people without an increasing list of credentials to be denied a living wage.