"Fraudsters are like cockroaches"--Anonymous higher education businessman
Fraudsters are like cockroaches: persistent, hard to eliminate, and always scurrying just beneath the surface. And like cockroaches, when you see one, you can assume many more are hidden from view. In the vast, sprawling ecosystem of US higher education—a multi-trillion-dollar industry built on trust, hope, and credentials—fraud has been a lurking presence for more than a century. From diploma mills to for-profit scams, grade inflation to financial aid abuse, deceit has found fertile ground wherever oversight is weak and incentives are perverse.
The Gilded Roots of Fraud
Fraud in American higher education didn’t begin with Trump University or Corinthian Colleges. The roots go back to the 19th century, when the proliferation of unregulated “colleges” allowed opportunists to sell degrees to anyone willing to pay. These early diploma mills, often run by religious organizations or independent operators, flourished in an era before accreditation, issuing worthless credentials that nevertheless offered the illusion of legitimacy.
By the early 20th century, regional accreditation and federal involvement began to tame the worst actors, but fraud adapted. Unethical schools learned how to mimic the symbols of respectability, while federal dollars—including GI Bill money and later Pell Grants and federal student loans—provided irresistible bait.
For-Profit Colleges and the Federal ATM
The rise of for-profit higher education in the post-WWII era, especially from the 1970s onward, signaled a new chapter in educational fraud. Companies like ITT Technical Institute, Corinthian Colleges, and Education Management Corporation were publicly traded entities or private equity darlings that mastered the art of siphoning billions in taxpayer dollars while leaving students with worthless credentials and mountains of debt.
The fraud wasn’t always overt—it often came wrapped in slick marketing, predatory recruiting, falsified job placement statistics, and pressure to enroll students regardless of academic readiness. These institutions gamed federal financial aid systems, manipulating default rates and exploiting regulatory loopholes.
Even when regulators like the GAO or the Department of Education uncovered misconduct, enforcement was sporadic and too often came after the damage was done. In many cases, executives walked away with millions, while students—often from low-income, Black, Latino, and veteran communities—were left in financial ruin.
Accreditation as a Shield
One of the most confounding aspects of US higher ed fraud is the role of accreditors. Supposed to act as gatekeepers, many regional and national accreditors have served more as enablers—either asleep at the wheel or financially incentivized to look the other way. When accreditors are funded by the very institutions they review, conflict of interest becomes systemic.
This has allowed weak or outright fraudulent institutions to hide behind the veneer of legitimacy. Some accreditors, like ACICS (Accrediting Council for Independent Colleges and Schools), became infamous for rubber-stamping schools that should have been shuttered. ACICS accredited both ITT Tech and Corinthian before its federal recognition was finally revoked in 2022.
The New Wave: Online and AI-Enabled Scams
The digital age has added new dimensions to academic fraud. Online colleges like University of Phoenix, Ashford University (now University of Arizona Global Campus), and Western Governors University have raised concerns about low faculty oversight, cookie-cutter instruction, and questions about academic rigor. While not all online institutions are fraudulent, the modality makes it easier to scale shady practices and reduce accountability.
Now, with generative AI entering the classroom and enrollment systems, new questions emerge: How do we ensure academic honesty in an age of algorithmic ghostwriting? How will fraud evolve as institutions increasingly rely on automated admissions, grading, and content delivery?
And it's not just schools. Consultants, influencers, and shady loan servicers feed off the system like parasites—promising student loan relief, admissions guarantees, or academic success for a fee. In this ecosystem, fraud doesn't just survive—it thrives.
When the Roaches Scatter
Occasionally, the light shines in. Whistleblowers, investigative journalists, and government agencies have at times forced fraudsters into the open. Lawsuits have led to settlements. Schools have closed. Presidents have resigned. But like cockroaches, the fraud rarely disappears—it relocates, rebrands, and reinvents itself.
Even with borrower defense to repayment, loan forgiveness programs, and federal oversight mechanisms, restitution often comes too late. And public memory is short. Fraudulent operators have learned how to outlast administrations, court cases, and media cycles.
A Call to Radical Transparency
The Higher Education Inquirer has long called for radical transparency in US higher education. That means open data on outcomes, federal aid, loan default rates, salaries of top administrators, and accreditor performance. It means holding college leaders and board members accountable for failures—not rewarding them with golden parachutes or public pensions.
Fraud may be a permanent feature of capitalist education systems, but its impact can be minimized with independent media scrutiny, better whistleblower protections, and public investment that prioritizes students—not shareholders.
Because fraudsters are like cockroaches. You may never kill them all, but you can make the kitchen a whole lot harder to live in.
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