Buyer Beware: The Most Common Problems With Online Universities

From blatant fraud to overaggressive marketing, there are some common problems and frustrations with online universities. Read on to learn more.


One of the principle concerns about online degrees is whether they are as credible as degrees from traditional schools. A key selling point of earning an online degree is that it is an efficient way to work toward getting the job you want. There is currently a debate over this issue. A study of 270 companies published in the journal Communication Education found that 96 percent of businesses favored a traditional degree over an online one. However, a 2005 study of 500 businesses conducted by Eduventures, an education market research firm, found that about half of the companies surveyed would treat an online diploma the same as a regular one. Eduventures also learned that employers were more likely to accept online degrees in business, certain parts of healthcare, and information technology, than they were in other areas of study. While a degree from a properly accredited online university should be treated the same as a traditional degree, many are not. This is something that might change with time, as more qualified people with online degrees enter the workforce every year.

Diploma Mills

“Get your degree for just $249!” If you spend any time researching online universities, you're bound to come across an advertisement like this. In layman's terms, an online school that offers a degree for next to nothing is usually referred to as a diploma mill. According to some estimates, there are at least 300 counterfeit degree websites, and they pull in $500 million every year. Diploma mills are just one of the most common problems online university students may encounter. Fortunately, there are several easy ways to spot such fraudulent schools.

If you're thinking about attending an online school, the Better Business Bureau recommends you first look for these red flags:

  • Degrees awarded based on “life experience.”
  • Prices are by degree rather than by credit hour.
  • The school's address is a P.O. Box or apartment building.

Diploma mills are not accredited institutions, but they often claim to be accredited. Since accreditation can be faked, you should check the United States Department of Education's online database of accredited universities. For the most part, it is easy to detect the most obvious cases of fraud with a simple search of this database.

Major Complaints

Almost all online universities are private, for-profit institutions. This has led many detractors to question the commitment to quality education at these schools. Many people also complain about unethical cost-cutting practices, overaggressive recruiting, and a lack of transparency. In 2003, the University of Phoenix, the largest online university, was sued by two of its enrollment counselors who claimed they were paid based on how many students they enrolled. A subsequent investigation by the Department of Education found that the University of Phoenix “systematically operates in a duplicitous manner” and fined the school $9.8 million.

Students and prospective students also have reported problems with enrollment officers and financial aid advisors who provided incorrect or misleading information, or were slow to provide financial refunds. Plus, if you give an online university your email address, there is a good chance you will be bombarded with emails. One of the reasons for this type of aggressive marketing is that online universities often make most of their revenue from Title IV federally funded student-loan programs. Because of this, the more students they enroll, the more money they receive.

A quick Internet search for the larger online universities, such as Kaplan, the University of Phoenix, and DeVry University, will turn up many student complaints. These criticisms range from disinterested or unqualified faculty to unethical billing practices to shoddy equipment at physical locations and poorly designed online classes.

Graduation Rates

It should be noted that many people have reported decent experiences with online education. However, quality can vary widely even within an institution. Since many schools do not provide graduation or employment statistics, it is hard to judge how effective a particular university may be. The available information is not very promising.

The University of Phoenix, one of the few online schools to provide graduation statistics, reported a graduation rate of 16 percent. The school's graduation rates were extremely low for online-only students, at just 4 percent. The average graduation rate for all American universities is 55 percent.

In their defense, online universities claim that it takes students longer to graduate because they typically are working and going to school at the same time. The low graduation rates can also be tied to the difficulty many students face with balancing work and school, or with learning primarily through online courses.


There are several conclusions that can be drawn from the criticism and problems with online universities:

  • The importance of researching a school beyond just looking at its website. Potential students should try to find out as much as they can about a school through news articles or consumer websites before they contact a university representative.
  • Potential students should weigh the benefits of different types of education, such as hybrid learning and programs offered online by public universities.
  • People considering online education should learn about how online classes work before they commit large sums of money to a university.
  • Finally, it is best to decide that an online university is the best (or only) option for you before contacting a possibly overaggressive or duplicitous enrollment officer.


Article Resources:

“Research to find reputable programs for online degrees,” The Augusta Chronicle, Aug. 20, 2007
Better Business Bureau: Your Online Diploma Could be a Worthless Piece of Paper
“Online Degrees: Schools Scam Aspiring Students,” ABC News, Aug. 17, 2009
“Degrees of Acceptance,” The New York Times, July 30, 2006
“Troubles Grow for a University Built on Profits,” The New York Times, Feb. 11, 2007
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