Diploma mills, like gangs and credit card scams, are troublesome precisely because they’re hard to define. According to an an article at Inside Higher Ed, legislators are trying to shut down the fake schools:
The bill, sponsored by Reps. Timothy Bishop (D-N.Y.) and Michael Castle (R-Del.), would (1) cement in federal law definitions of “diploma mills” and “accreditation mills” (the unauthorized agencies from which the phony institutions claim to derive their authority to operate), (2) bar federal agencies from using degrees from diploma mills to provide jobs or promotions that depend on candidates’ educational credentials, and (3) give the Federal Trade Commission more authority to define and crack down on deceptive practices by dubious institutions.
The trouble is that diploma mills operate according to economic demand. Diploma mills, institutions that award academic degrees with little or no academic work, thrive because certain highly bureaucratic jobs require degrees for promotions and raises. It doesn’t really matter where the degrees were obtained.
According to the article, George Gollin, a physics professor at the University of Illinois and something of a diploma mill expert:
Estimated that such entities award as many as 200,000 credentials a year and that the federal government spends roughly $300 million a year on raises alone for employees who got jobs or promotions using fraudulent degrees or certificates.