“So, there is a culture of corruption in US university management, to take money knowing there is likely to be a problem with the underlying application.”
For most national universities, this is not the case. Let me give you an example. These was a consortium created about 8 years ago called USPP that has Chinese students doing their freshman year in China and the remaining 3 years in the US. It was led by Northeastern U and a Chinese education company. Northeastern has been VERY active in recruiting Chinese students and wanted to take in all students from this consortium, but the Chinese company wanted to have more legitimacy and insisted the consortium to include another 6 or 7 universities, including Baylor, U of Utah, etc.
The problem was that the average student quality was bad (Chinese education company did not do a good job screening and Northeastern was responsible for the first year’s instruction in China but did not enhance student ability enough there). So Baylor, Utah and many others quickly fed up and left the consortium. This show you that “most” national universities do take student quality and whether they can do the work into consideration.
There are also economic and academic freedom factors to be noted for these quick exits. At Baylor and Utah, instruction is on average highly rigorous. An ill-prepared Chinese student can be put into probation in just 1 semester. Note there is a fixed cost of student acquisition fee that Baylor and Utah need to pay to the Chinese education company (not quite sure whether Northeastern gets a cut). If my memory serves correct, the fee per student is not far away from $10,000. So if the faculty cannot tolerate these students and they have a high degree of freedom in failing them, a university will not make money on these students. This is one of the reasons why Baylor and Utah left and did not want these students.
According to Northeastern’s website: http://www.northeastern.edu/uspp/, I believe Northeastern is still doing the USPP thing (but the odd thing is that they still list Baylor (I believe UVM also exited) as their partner although Baylor left at least 5 years ago!). Who can blame Northeastern? I think they figured out by having these “transfer” students, their stats would not enter and affect its’ US News and World Report ranking. For a school that publicly acknowledges its intention in gaming the ranking, this is probably the most comfortable way to have Chinese students and money.