Students were duped into joining a fake University of Yorkshire by a former car dealer.
Airline pilot Kevin Stevens set up the enterprise from his home in Harrogate, York Crown Court was told.
He tricked students - including a doctor with a PhD - into paying for bogus degrees.
But his con came to an end after York University Vice Chanceller Ron Cooke and others complained to North Yorkshire trading standards officers.
The real university feared its reputation would be damaged by the activities of the "University of Yorkshire", Alex Foster, prosecuting, said.
The ex-car dealer offered quickie degrees at £318, with honours costing an extra £54.
Stevens, 30, who lives at Coachman's Court, Harrogate, claimed the "university" was based at Old College Hall in the town. When applicants replied, he sent out textbooks and course notes of less than GCSE standard and awarded degrees after three or four months' study instead of the normal three or four years, said Mr Foster.
He duped one student, Dr Stanley Charlett, into writing a 6,500-word thesis.
Nine students, including an undercover trading standards officer, received fake degrees. Stevens has since refunded all their money.
He admitted four offences under the Education Reform Act, two under the Business Names Act and four under the Trades Description Act.
Recorder James Allen QC said the crimes undermined the education system.
He had decided not to jail him but order him to do 120 hours' community service and pay £885 costs.
Sitting with two magistrates, he said he would not fine him because it might put too much strain on his marriage.
The court heard that Stevens and his wife had a joint monthly income of £3,100 after tax and very high outgoings.
Mitigating, John Sleightholme said Stevens had not realised at first that what he was doing was illegal. When he had, he had stopped, but he felt obliged to continue courses already under way.
He had started giving out "degrees" because he knew at first hand the problems faced by businessmen without degrees and wanted to help them.
Today, trading standards officer Graham Venn said people thinking of taking degree courses should contact their local education authority if the college or university looked dubious in any way, to check if it was "pukka."
See COMMENT 'Dangers of a little learning'
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