The BBC found a lecturer from Rayat College London explaining to students how to cheat in exams and how to deceive the UK Border Agency.
The undercover investigation, to be aired in Week In Week Out on BBC One Wales tonight, found evidence of a plan to give students advanced sight of a University of Wales exam paper.
The scam would have allowed students to complete a 15-month course in under a week by cheating in exams, the BBC claimed.
The fast-track qualifications would allow students to enrol on MBA programmes with an exemption from two thirds of the work, enabling them to gain a graduate work permit before they are phased out next April.
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The college has suspended a lecturer, registrar and admissions officer, and said it dissociated itself from any wrongdoing and had referred the matter to the police.
A spokesman for Rayat College said that the registrar in question has now resigned.
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“We have got nothing to hide,” he said, and added that Rayat was only “guilty by association”. The UK Border Agency has launched an investigation.
The University of Wales said it had referred the matter to the police and the UKBA, and that it would be inappropriate to comment further.
In a statement issued in response to the allegations, the vice chancellors of Aberystwyth, Bangor, Cardiff, Glamorgan, and Swansea universities say the revelations bring a “once proud history of the University of Wales to a sad conclusion”.
“It is clearly no longer the institution of which four of us we were once proud to be members,” they say in a joint statement issued by the St David’s Day Group. The University of Glamorgan has never been part of the University of Wales.
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The group recommends a merger with Trinity St David’s and Swansea Metropolitan universities to create a regional university serving South West Wales.
“The institution now needs a new title which reflects this considerably changed role - we are no longer able to accept it as the University of Wales,” they add.
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