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Business Officer Magazine

Federal File

Coverage of legislation and regulatory activity that affects higher education

By Liz Clark

Veterans' and Service Members' Education Programs Draw Scrutiny

Federal policy makers, including President Obama, have been taking a close look at the educational benefits provided to veterans through the Post-9/11 GI Bill and to active duty service members through the Department of Defense (DOD) Military Tuition Assistance (TA) program.

In 2009, the first year of the new program, the Post-9/11 GI Bill provided educational benefits to 34,393 veterans; in just two years, that number swelled to 555,329. The DOD TA program provided $517 million in tuition assistance to approximately 377,000 service members in FY09, and also is experiencing steady growth, although not at the same rate as the Post-9/11 GI Bill program.

Washington legislators and White House officials have been fully cognizant of the growing federal budgets for these two programs and have concerns about oversight and accountability. The desire to protect veterans, service members, and other beneficiaries is compounded by overarching questions about costs, quality, and completion in the higher education sector. Among recent efforts to address these concerns are legislation introduced by several members of Congress; congressional hearings; a DOD memorandum of understanding expected to be finalized in the near future; and, on April 27, an executive order from President Obama "to stop deceptive and misleading practices by educational institutions that target veterans, service members, and their families."

Details of the Executive Order

The executive order, which the president unveiled before troops during a speech at Fort Stewart in Georgia, was designed to:

  • Help ensure that military and veteran students have the information they need.
  • Crack down on aggressive recruiting practices.
  • Keep bad actors off military installations.
  • Provide veterans with a complaint system.
  • Improve support services for service members and veterans.
  • Provide students with better data on educational institutions.
  • Strengthen enforcement of student protections.

The order lays out new policy guidelines for institutions that enroll students who receive benefits from either the Post-9/11 GI Bill program or the DOD TA program. Among other requirements, colleges and universities would need to adhere to the following:

  • Prior to enrollment, provide prospective students who are eligible to receive federal military and veterans' educational benefits with a personalized and standardized form to help them understand the educational program's total cost; the financial aid they may qualify for; their estimated student loan debt upon graduation; information about student outcomes; and other information to help them compare aid packages offered by different educational institutions.
  • End fraudulent and unduly aggressive recruiting techniques on and off military installations, as well as misrepresentation, payment of incentive compensation, and failure to meet state authorization requirements consistent with Department of Education (ED) regulations.
  • Agree to an institutional refund policy that is aligned with the ED's policy on return of Title IV funds (pro rata refunds through 60 percent of the term).
  • Provide educational plans that detail how the students will fulfill all the requirements necessary to graduate and that designate the expected completion timeline.
  • Designate a point of contact for academic and financial advising (including access to disability counseling) to assist service member and veteran students and their families with successful completion of their studies and with job searches.

The executive order requires the secretaries of defense, veterans affairs, and education to take immediate action to implement the new policies by incorporating the principles in agreements to participate in the TA and Yellow Ribbon programs. The order implies that adherence to some or all of the standards may be voluntary for participation in the general Post-9/11 GI Bill program. The agencies are to provide a report on their progress within 90 days. 

Members of both the House and Senate have introduced several pieces of legislation in the 112th Congress to address many of the concerns President Obama addressed in the executive order. Some have criticized the president for using executive privilege and circumventing the legislative process, which could have addressed bipartisan concerns with these educational benefits programs.

On Wednesday, May 16, 2012, the House Veterans' Affairs Subcommittee on Economic Opportunity called a hearing to examine the executive order and its impact on institutions and veterans. Judith Flink, executive director of university student financial services and cashier operations at the University of Illinois, testified at the hearing on behalf of NACUBO. She raised a number of concerns, particularly noting the impact a federally defined refund policy will have on institutional enrollment planning and budgeting. Flink also urged for the establishment of an official advisory group to address the challenges inherent in the Post-9/11 GI Bill and TA programs.

Legislative Fixes

As veteran and service member enrollment at colleges and universities has grown, so too have complaints and concerns with the Department of Veterans Affairs (VA) and DOD benefit programs as well as with institutions. Some for-profit institutions in particular have been under fire because of complaints about fraud and abuse. Legis-lators are eager to stem any fraudulent practices and are exceptionally hasty in responding to reports of exploitation.

While members of Congress are ardent in their efforts to root out bad actors, once implemented, federal legislation and regulations ultimately affect all higher education institutions that enroll students who benefit from the Post-9/11 GI Bill and the DOD TA programs-not just the malefactors. 

Here are just a few examples of legislation introduced by concerned lawmakers in the current Congress:

  • Military and Veterans Educational Reform Act of 2012 (S. 2179), sponsored by Sen. Jim Webb (D-VA), would establish requirements for VA approval of courses; direct an educational institution with 20 or more VA program participants enrolled to provide adequate academic and student support services, including remediation, tutoring, and job placement counseling; require annual audits of institutions with VA program participants; and require the VA and DOD secretaries each to establish a complaint process.
  • GI Bill Consumer Aware-ness Act of 2012 (S. 2241), sponsored by Sen. Patty Murray (D-WA), would require colleges and universities to disclose specified information about their institutions and programs of education, a general overview of federal student aid programs, implications of incurring student loan debt, and educational program results.
  • Protecting Our Students and Taxpayers Act (S. 2032), sponsored by Sen. Richard Durbin (D-IL), would require proprietary institutions of higher education to derive at least 15 percent of their revenue from sources other than federal funds or become ineligible for Title IV funding. Currently, the 90/10 rule requires these schools to derive at least 10 percent of their revenue from sources other than Title IV or become ineligible for Title IV funding.
  • Veterans Education Equity Act of 2011 (H.R. 3483), sponsored by Rep. George Butterfield (D-NC), would revise the payment formula under the Post-9/11 Educa-tional Assistance Program to cover out-of-state tuition at public colleges.
  • Improving Transparency of Education Opportunities for Veterans Act of 2012 (H.R. 4057), sponsored by Rep. Gus Bilirakis (R-FL), would direct the Secretary of Veterans Affairs to develop a comprehensive policy to improve both outreach to veterans and transparency of information about higher education institutions.

New Memorandum of Understanding Expected

In March 2011, DOD proposed a memorandum of understanding (MOU) for colleges and universities participating in the DOD TA program. The document's overarching goal was to improve oversight of service members' educational needs, but many institutions were unwilling to sign the MOU as originally drafted because of various provisions they find objectionable. Other colleges and universities signed the original MOU. 

NACUBO joined the American Council on Education and several other associations in a Nov. 21, 2011, letter urging Secretary of Defense Leon Panetta to delay implementation so that provisions that appeared to be inconsistent and incompatible with established academic policies and administrative practices could be addressed.

On March 30, 2012, DOD posted an official update regarding the MOU, reporting that the agency has worked with stakeholders to address some of the major concerns and is currently coordinating an amended MOU. The statement asserts that once the MOU is finalized within the Pentagon, the agreement will be made public with "ample opportunity to review." The implementation date is expected to be during summer 2012; institutions that did not sign the original MOU can continue operating until the new version goes into effect, while those that have already signed the memorandum will not be required to sign it again. The revised MOU will be made available here. It is not clear whether this process will be further delayed by the additional requirements outlined in the recent executive order. 

Post-9/11 GI Bill Tuition Offsets

NACUBO, in a working group it convenes regularly to address administrative concerns with Post-9/11 GI Bill tuition and fee payments, learned earlier this year that the VA was considering reinstatement of a policy to offset veteran debts against Post-9/11 GI Bill tuition and fee payments. VA has exempted tuition and fee payments from offsets since 2009.

On April 9, 2012, on behalf of NACUBO and 13 other higher education associations, NACUBO President John Walda wrote to U.S. Secretary of Veterans Affairs Erik Shinseki to ask him to maintain the tuition and fee offset exemption. In addition, the letter urged the secretary to consider establishing a system whereby college and university officials could access benefit information, including eligibility, that can potentially affect students' abilities to register and pursue their academic programs.

Subsequently, a number of other organizations also expressed their concern with the proposal, as well as Sens. Jon Tester (D-MT) and Mark Begich (D-AK). In a letter they sent to Secretary Shinseki on April 20, they said, "While we understand VA policy must recognize the reality that a veteran's debts must be repaid, it cannot be done in an unnecessarily onerous manner. Withholding tuition benefits to recoup these debts would place veterans at undue risk of financial hardship and jeopardize their ability to gain the skills and education they need to compete in an increasingly competitive job market. In addition, it would place further strain on schools already stretched thin by efforts to administer and advise veterans on the Post-9/11 GI Bill. Our veterans and our schools deserve better."

At press time, NACUBO was still awaiting a response from the secretary.

NACUBO CONTACT Liz Clark, director, congressional relations, 202.861.2553

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