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VA Issues Final Rules for Post-9/11 GI Bill

April 9, 2009

Update (April 28, 2009) - The Department of Veteran Affairs (VA) extended the deadline for the submission of Yellow Ribbon agreements to June 15, 2009. The agency also changed the maximum tuition coverage for Califtornia to zero (0), noting that California public colleges do not charge tuition to in-state undergraduates. In addition, the VA released a 13-page Frequently Asked Questions to assist institutions who are interested in paricipating in the Yellow Ribbon program .

The Department of Veterans Affairs is making noticeable progress toward launching the Post-9/11 GI Bill. Final regulations issued March 31 provide greater detail on calculating covered tuition and fees, and make important changes to the Yellow Ribbon program. In addition, letters requesting account information needed to set up electronic payments were mailed to eligible institutions in March, and Yellow Ribbon program agreements will be in the mail in early April.

NACUBO has developed a tool to help you predict how much of your tuition and fees will be covered for eligible veterans attending your institution (see below).

Final Regulations

VA made a number of changes in the final regulations to respond to questions and concerns raised in comments filed in response to proposed rules issued last December, and to reflect decisions that have been made in the meantime. Key issues for business officers are discussed below.

Payments for Tuition and Fees

Under the new GI Bill, the VA will make payments for tuition and fees, as a lump sum for the term, directly to the institution on behalf of an eligible veteran or dependent. The amount payable varies based on a number of factors, including the months of creditable service by the veteran, his or her enrollment status, and the state in which the institution is located. By law, educational charges are capped at the highest amount charged to in-state students for full-time pursuit of an approved undergraduate program at a public institution in that state.

In the final rules, VA has decided that the statewide maximum will be applied to actual institutional charges using a two-part calculation.

  • Tuition payable equals actual amount of tuition charged, up to the maximum per-credit-hour tuition at a public institution for the state multiplied by the number of credit hours in which the student is enrolled, PLUS
  • Fees payable is the actual amount of fees charged for the term, quarter, or semester, up to the maximum fees at a public institution for the state. Fees are defined in the regulation as "any mandatory charges (other than tuition, room, and board) that are applied by the institution of higher learning for pursuit of an approved program of education. Fees include, but are not limited to, health premiums, freshman fees, graduation fees, and lab fees." (Study-abroad fees are excluded unless the course(s) is a mandatory requirement for the student’s program.)

Within each state, VA has asked its network of state approving agencies (SAAs) to canvass public institutions to determine the most expensive per-credit-hour tuition charges, and the highest term-based fees, charged for an approved undergraduate program. The resulting list of the maximum tuition and fee benefits shows two columns for each state, with wide variations among states. The tuition amounts range from less than $100 per credit hour for several states to more than $1,000 in Texas. Fees vary between $127 per term in Arizona to $43,035 in Colorado. (The surprisingly high numbers in some states are attributed to specialized undergraduate programs such as aviation, pharmacy, and nursing.) This list was recently updated and, although the Web page says the figures are final, may still be subject to change. The list is scheduled to be updated by August 1 with figures for 2009-10.

Under this scheme, veterans attending public institutions as undergraduates who are eligible for in-state rates should find all of their tuition and fees covered. The amount that is covered for out-of-state students at public institutions, graduate students with higher costs, and veterans attending independent institutions will be impacted by the interplay between the maximum set for their state for both tuition and fees and how the institution classifies charges. For instance, many independent institutions lump most charges into "tuition" and label very few as "fees." In a low tuition, high fee state such as Massachusetts (maximum charge of $71.50/credit hour for tuition, $5,939.50/term for fees), veterans attending such an institution would not fare nearly as well as they would in a state with higher tuition and lower fees such as New York ($970/credit hour for tuition, $3,457/term for fees).

To illustrate, the following table calculates the maximum amount of tuition and fees that would be covered for an eligible veteran in several different states based on different assumptions about the tuition and fee structure of three hypothetical institutions. (Note that actual amounts will also change depending on the number of credit hours the individual student takes each term and any additional lab, course, or other fees incurred.)

For example, if College A were located in Arizona, it would multiply the $490/credit tuition maximum by the number of credit hours assumed: $490 x 14 = $6,862. Since this is less than the actual tuition charge of $10,000, $6,862 is the maximum tuition payable. Then College A would compare its per-term fees of $2,000 to the maximum for Arizona of $127: the lesser of the two is the maximum fees payable. Tuition payable ($6,862) plus fees payable ($127) gives a maximum payment or $6,989, and an unfunded gap of total charges ($12,000) minus maximum payment ($6,989), or $5,011. If this institution chooses to participate in the Yellow Ribbon program, the VA will match the institution’s contributions up to $2,505.50, or half of the gap.

State

2008-09
State
Maximums

College A
Annual T&F $24,000
Per term (14 credits):
tuition $10,000
fees $ 2,000
College B
Annual T&F $24,000
Per term (14 credits):
tuition $ 8,000
fees $ 4,000
College C
Annual T&F $40,000
Per term (14 credits):
tuition $18,500
fees $ 1,500
Arizona
tuition
fees
Total/term
Gap/term

$490/credit
$127/term


$6,862
127
$6,989
($5,011)


$6,862
127
$6,989
($5,011)


$6,862
127
$6,989
($13,011)

Georgia
tuition
fees
Total/term
Gap/term

$203/credit
$15,401/term


$2,842
$2,000
$4,842
($7,158)


$2,842
$4,000
$6,842
($5,158)


$2,842
$1,500
$4,342
($15,658)

Massachusetts
tuition
fees
Total/term
Gap/term

$ 71.50/credit
$5,939.50/term


$1,001
$2,000
$3,001
($8,999)


$1,001
$4,000
$5,001
($6,999)


$1,001
$1,500
$2,501
($17,499)

New York
tuition
fees
Total/term
Gap/term

$970/credit
$3,457/term


$10,000
$2,000
$12,000
none


$8,000
$3,457
$11,457
(503)


$13,580
$1,500
$15,080
($4,920)

Texas
tuition
fees
Total/term
Gap/term

$1,330/credit
$12,130/term


$10,000
2,000
$12,000
none


$8,000
$4,000
$12,000
none


$18,500
$1,500
$20,000
none

Institutions that are considering participation in the Yellow Ribbon program, discussed in detail below, need to understand how to calculate the "gap" between the charges covered by the Post-9/11 benefits and the likely actual amount for tuition and fees charged to veterans in order to estimate their potential contributions.

Overpayments

The final regulations clarify the determination of the amount of an overpayment and whether or not the institution is liable. The only occasion when institutions will be required to refund tuition and fee payments to the VA is if a veteran never attended the term, quarter, or semester. In all other instances, the liability falls on the veteran.

In addition, the final rules indicate that if a veteran does not complete one or more courses, but does complete at least one course, that veteran will not have an overpayment equaling the total amount of all educational assistance paid, but rather only for the course or courses they did not complete. The language on this point in the proposed rules was confusing.

Also, the final regulations clarify how an "incomplete" grade designation will be treated. If the institution records an incomplete (where the veteran is given additional time to finish a course), the VA will delay creating an overpayment for that course until the earlier of (1) the last date allowed by the institution to complete the course; (2) the date the institution permanently assigns a "nonpunitive" grade (I, W, etc.); or one year from the date the incomplete was assigned.

Yellow Ribbon Program

VA also made significant modifications to the rules governing the Yellow Ribbon program. Under the Yellow Ribbon program, the VA will match institutional contributions dollar-for-dollar to cover the gap between a student’s tuition and fee charges and the amount covered by the Post-9/11 GI Bill benefits. Only veterans with sufficient creditable active duty service for 100 percent coverage of education expenses, or in some cases their dependents, are eligible for the Yellow Ribbon program.

Participation is voluntary on the part of institutions that are located in the United States or their branch campuses abroad. From the VA standpoint, this is an entitlement and not subject to annual appropriations. Independent colleges and universities and public institutions with veterans who are not eligible for in-state tuition rates can determine how many students they will cover and what level of support they will provide. Institutions must, however, submit a Yellow Ribbon Program Agreement (VA Form 22-0839), signed by an official with authority to bind the institution, in order to participate. For this first year of the program, the deadline for submitting the agreement has been extended to June 15 (in subsequent years, it will be due by February 15). These forms will be mailed along with a letter inviting institutions to participate to college and university presidents, but can also be downloaded from the VA Web site. A hard copy of the form, with an original signature, must be sent to the VA. Facsimiles, PDFs, or late submissions will not be accepted.

Under the final rules:

  • Institutional contributions must be made with "funds under the unrestricted control" of the institution. The proposed rules had specified that the institutional share had to be in the form of a "waiver." That term has been dropped, although presumably a waiver would still be acceptable. It is important to note that VA did not intend "unrestricted control" to mean coming from unrestricted funds in an accounting sense. The concern was to exclude third-party scholarships that are passed through the institution. Funds held in the institution’s endowment are acceptable contributions. The program agreement provides check boxes to indicate whether contributions will be made as direct grants, scholarships, or other. Other federal funds cannot be used as part of the institution’s share.
  • The institution must accept eligible students for the Yellow Ribbon program on a first-come, first-served basis, regardless of whether they are full-time or part-time students. Institutions will need to develop policies for how veterans should apply, whether a waiting list will be maintained, etc. Further, the institution must commit to continuing to provide Yellow Ribbon funding for a student during the current academic year and all subsequent academic years if:
    • the institution continues to participate in the Yellow Ribbon program;
    • the student maintains satisfactory progress, conduct, and attendance according to the institution’s regular standards

The proposed regulations had not mentioned subsequent years, although such a requirement was noted in a letter that was sent to college and university presidents in January.

  • The institution, in its Yellow Ribbon agreement, must state (1) the maximum number of students for whom contributions will be made in a given year (note: meeting this number is not required by the VA), and (2) the maximum dollar amount of contributions that may be provided on behalf of any particular individual. The proposed rules would have required institutions to specify a percentage of the "gap" it would fund for each student, rather than a dollar amount. In another major change from the proposed regulations, institutions will be able to specify different contributions based on student status (undergraduate, graduate, etc.) and/or for each subelement of the institution. A subelement is a division such as a college or professional school. Distinctions may not be made based on program or discipline within a subelement.

Institutions that intend to participate in the Yellow Ribbon program should note that amendments will not be allowed once the agreement is certified by VA. VA officials have said that the maximum number of students and maximum contributions listed on the agreement represent ceilings, not absolute levels of commitment, so institutions may want to consider overestimating rather than underestimating.

Estimator Available. Understanding the calculation of tuition and fees that will be covered under the basic benefit levels is important in determining the institution’s planned level of participation in the Yellow Ribbon program. NACUBO has developed a spreadsheet that will calculate an estimated per term payment for institutions in each state. The institution will need to input an estimate of its total tuition (per term), fees (per term), and assumed number of credit hours taken. NACUBO is providing this tool to assist members and will endeavor to keep the state maximums current but users should not rely on this tool alone. It is important to keep in mind that VA will provide updates to the state maximums applicable to the 2009-10 academic year on or around August 1.

Implementation Timeline

The VA has shared the following timeline for key points in getting the new program up and running by August 1. Institutions should already have received a letter from VA asking for bank account information in order to set up electronic disbursements. These letters were likely mailed to the president or chancellor, but if your institution has not received one, check with your VA certifying official.

May 1, 2009

VA will begin processing applications for Certificates of Eligibility

June 15, 2009

Yellow Ribbon Program agreement due to VA

May--July, 2009

Veteran enrolls in school and provides Certificate of Eligibility to institutions

July 6, 2009

VA begins accepting enrollment information from institutions (Institution reports enrollment and charges to VA via existing mechanism (VA-Once) including Yellow Ribbon data)
VA begins processing claims

August 3, 2009

VA pays first tuition and fees payments to institutions and books and supplies stipend to student

September 1, 2009

VA pays partial housing allowance for August attendance

October 1, 2009

VA pays first full monthly housing allowance

NACUBO will share more information about implementing the new program as it becomes available. Visit the GI Bill Resource page for useful information, including a video explaining the basics of the program and links to other resources.

NACUBO Contact: Anne Gross, vice president for regulatory affairs, 202.861.2544