[Senate Hearing 112-446]
[From the U.S. Government Printing Office]
S. Hrg. 112-446
IMPROVING EDUCATIONAL OUTCOMES FOR OUR MILITARY AND VETERANS
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HEARING
before the
FEDERAL FINANCIAL MANAGEMENT, GOVERNMENT
INFORMATION, FEDERAL SERVICES, AND
INTERNATIONAL SECURITY SUBCOMMITTEE
of the
COMMITTEE ON
HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS
UNITED STATES SENATE
ONE HUNDRED TWELFTH CONGRESS
FIRST SESSION
__________
SEPTEMBER 22, 2011
__________
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COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS
JOSEPH I. LIEBERMAN, Connecticut, Chairman
CARL LEVIN, Michigan SUSAN M. COLLINS, Maine
DANIEL K. AKAKA, Hawaii TOM COBURN, Oklahoma
THOMAS R. CARPER, Delaware SCOTT P. BROWN, Massachusetts
MARK L. PRYOR, Arkansas JOHN McCAIN, Arizona
MARY L. LANDRIEU, Louisiana RON JOHNSON, Wisconsin
CLAIRE McCASKILL, Missouri ROB PORTMAN, Ohio
JON TESTER, Montana RAND PAUL, Kentucky
MARK BEGICH, Alaska JERRY MORAN, Kansas
Michael L. Alexander, Staff Director
Nicholas A. Rossi, Minority Staff Director
Trina Driessnack Tyrer, Chief Clerk
Joyce Ward, Publications Clerk and GPO Detailee
------
SUBCOMMITTEE ON FEDERAL FINANCIAL MANAGEMENT, GOVERNMENT INFORMATION,
FEDERAL SERVICES, AND INTERNATIONAL SECURITY
THOMAS R. CARPER, Delaware, Chairman
CARL LEVIN, Michigan SCOTT P. BROWN, Massachusetts
DANIEL K. AKAKA, Hawaii TOM COBURN, Oklahoma
MARK L. PRYOR, Arkansas JOHN McCAIN, Arizona
CLAIRE McCASKILL, Missouri RON JOHNSON, Wisconsin
MARK BEGICH, Alaska ROB PORTMAN, Ohio
John Kilvington, Staff Director
William Wright, Minority Staff Director
Deirdre G. Armstrong, Chief Clerk
C O N T E N T S
------
Opening statements:
Page
Senator Carper............................................... 3
Senator Brown................................................ 6
Prepared statements:
Senator Carper............................................... 47
Senator Brown................................................ 49
WITNESSES
THURSDAY, SEPTEMBER 22, 2011
Hon. Jim Webb, A U.S. Senator from the State of Virginia......... 1
Curtis L. Coy, Deputy Under Secretary for Economic Opportunity,
Veterans Benefits Administration, U.S. Department of Veterans
Affairs; accompanied by Keith Wilson, Director of the Education
Service, Veterans Benefits Administration, U.S. Department of
Veterans Affairs............................................... 6
Theodore L. Daywalt, President, VetJobs.......................... 23
Ryan M. Gallucci, Deputy Director, National Legislative Service,
Veterans of Foreign Wars of the United States.................. 25
Russell S. Kitchner, Vice President for Regulatory and
Governmental Relations, American Public University System...... 27
Greg Von Lehmen, Provost and Chief Academic Officer, University
of Maryland University College................................. 29
Alphabetical List of Witnesses
Coy, Curtis L.:
Testimony.................................................... 6
Prepared statement........................................... 51
Daywalt, Theodore L.:
Testimony.................................................... 23
Prepared statement........................................... 56
Gallucci, Ryan M.:
Testimony.................................................... 25
Prepared statement........................................... 67
Kitchner, Russell S.:
Testimony.................................................... 27
Prepared statement........................................... 72
Von Lehmen, Greg:
Testimony.................................................... 29
Prepared statement........................................... 83
Webb, Hon. Jim:
Testimony.................................................... 1
APPENDIX
Questions and responses for the Record from:
Mr. Coy...................................................... 89
Mr. Daywalt.................................................. 95
Mr. Gallucci................................................. 97
Mr. Kitchner................................................. 100
Mr. Lehmen................................................... 106
Statement of Hollister K. Petraeus, Assistant Director, Office of
Servicemember Affairs, Consumer Financial Protection Board..... 110
Letters referenced by Senator Carper............................. 115
Chart referenced by Mr. Kitchner................................. 129
IMPROVING EDUCATIONAL OUTCOMES FOR OUR MILITARY AND VETERANS
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THURSDAY, SEPTEMBER 22, 2011
U.S. Senate,
Subcommittee on Federal Financial Management,
Government Information, Federal Services,
and International Security,
of the Committee on Homeland Security
and Governmental Affairs,
Washington, DC.
The Subcommittee met, pursuant to notice, at 1:34 p.m., in
Room SD-342, Dirksen Senate Office Building, Hon. Thomas R.
Carper, Chairman of the Subcommittee, presiding.
Present: Senators Carper and Brown.
Senator Carper. I was going to say this hearing should come
to order, but this is about the quietest crowd I have seen,
Senator Webb, in quite a while. I think we are just going to
lead off here and we will forego our opening statements and
just come right to you.
Thank you so much for being here with us today. Thanks a
lot for your service to our country all those years, and for
your service today. It is just an honor to be your colleague.
Thank you for coming today.
TESTIMONY OF HON. JIM WEBB, A UNITED STATES SENATOR FROM THE
STATE OF VIRGINIA
Senator Webb. Thank you very much, Mr. Chairman, and I want
to say I appreciate your taking the time to hold this hearing.
I think you and I both, as military veterans, got a good bit of
our own education taken care of by Uncle Sam and we know how
valuable that can be in terms of building the rest of
somebody's professional life.
We are here today to try to make sure that the GI Bill that
we passed can continue in the form that we passed it and still
address some of these issues that are now challenging the
program.
I understand one of the primary purposes of this hearing is
to examine the 90/10 rule in place for for-profit schools and
how it would be modified or could be modified to better serve
veterans and active duty military students. I would like to
commend you and Senator Harkin for your focus on that issue and
look forward to the outcome of this hearing.
This year marked the second anniversary of the
implementation of the Post-9/11 GI Bill. I introduced this
legislation on my first day in office, starting with a simple
concept, having spent 4 years of my earlier life as committee
counsel in the House Veterans Committee, and that was that we
owe those people who have served since September 11, 2001 the
same type of quality educational benefits that those who served
in World War II received, which was to have their tuition paid
for, their books bought, and to receive a monthly stipend which
is a much more generous benefit than those who served in
Vietnam had received.
I am very proud to say that we were able to do that and it
continues to be a great investment in the future of our country
through the people who have served, and as of August the 1, our
GI Bill had helped to educate 587,000 beneficiaries. I am very
proud of that statistic.
And as the Chairman will remember, the passage of this
legislation was not a simple process, but I think it has turned
out to be a very, very good thing for the country and for our
veterans. When we look at World War II, for every dollar that
was spent on the World War II GI Bill, $7 were generated for
our economy because of the successful careers that people were
able to have after they had gone through more schooling.
I am here today to ensure that we continue that concept.
For-profit schools, by statistics that have been given to me by
my staff, have collected more than one-third of all of these
Post-9/11 GI Bill benefits over the 2009 to 2010 school year.
But they train one-quarter of our veterans.
We have all received letters from Veterans of Foreign Wars
(VFW), Amvets, Paralyzed Veterans, Student Veterans of America,
Blue Star Families, VetFirst, Military Association of America,
all stating their concern about this trend line, and if they
have not been entered in the record, I would ask that they be
entered into the record during this hearing.
Senator Carper. They will be.
Senator Webb. The World War II GI Bill, history shows, had
a similar problem. In 1951, a Government Accountability Office
(GAO) report found that a 1,700,000 veterans had enrolled in
courses offered by for-profit schools, 5,000 of which sprang up
after the creation of the GI Bill, and about 20 percent of the
people who had gone to those schools had completed their
course. There was, to quote from that report, no information
available as to the number of graduates who actually were able
to be placed in jobs for which they had been trained.
Congress, at that time, responded to concerns of waste,
fraud, and abuse by establishing specific standards for on-the-
job training programs and made them subject to State education
approving agencies.
But the abuses of the World War II program, especially
among for-profit vocational schools, led to follow-on
restrictions of that program and to even stricter restrictions
under the program established after the Korean Conflict, and
then eventually to the somewhat parsimonious GI Bill given to
those who served during the Vietnam War, which began with a $50
a month straight stipend, at its height reached $340 a month
just straight stipend, no tuition paid for, no books, none of
the things that the people who came back from World War II had
and none of the things that people in our Post-9/11 GI Bill now
have.
Data we have been given shows that eight out of the top 10
recipients of Post-9/11 GI Bill benefits in 2010-2011 were for-
profit education companies. These eight for-profit education
companies, out of a larger pool of for-profits, collected a
billion dollars, 24 percent of all the benefits.
For-profits at large collected 37 percent of GI Bill funds,
according to the data given to my office, and they trained only
19 percent of the veterans.
I would like to point out that this problem is not
necessarily the growth of the for-profit sector. There are for-
profit institutions that are providing our non-traditional
population a great service, but with this amount of Federal
dollars being spent in this sector, we owe it to the taxpayers
and to our veterans to carefully monitor and provide adequate
oversight.
Money that goes to a for-profit for tuition does not really
go to the veteran. It enables the veteran to get an education.
So fixing this problem is not taking anything away from the
veteran. In fact, it is ensuring the continuation of the
program.
My goals are first to ensure that we are providing a high
quality education to our veterans, and giving them access to
critical information that will help them make their own
informed decisions. Total cost of program, transferability of
credits, default rates, graduation rates, job placement rates
upon graduation are a few ways to ensure transparency.
Second and most important, I hope we can look more closely
at the role that our State Approving Agencies (SAA) play in
approving educational programs in order to ensure that the
Department of Veterans Affairs (VA) is being aggressive in
their own executive capacity to further strengthen these
requirements.
I believe this is, at bottom, a leadership issue that can
be best addressed through the structure of the Department of
Veterans Affairs and I hope you will encourage that process
during your hearing.
I know you will be receiving testimony today from many who
are knowledgeable about the 90/10 rule and these other issues,
and I again thank you for holding this hearing and for allowing
me to testify. Thank you, Mr. Chairman.
Senator Carper. Not at all. Thank you for being the author
of the Post-9/11 GI Bill and for working with us and providing
really great leadership to try to make sure that the promise,
the potential of that GI Bill and preparing folks when they
come back from Iraq and Afghanistan or some other place----
Senator Webb. Thank you very much.
Senator Carper [continuing]. Have the opportunity to
actually complete their education, get a job, become productive
members of our society. So thank you so much.
With that, I am going to invite the next panel to come
forward, and as you come forward, I am going to go ahead and
begin an opening statement.
OPENING STATEMENT OF SENATOR CARPER
Senator Carper. As we hold this hearing, our Nation's debt
stands at over $14.6 trillion. Ten years ago, it stood at less
than half that amount, around $5.7 trillion. If we remain on
our current course, our debt may double again by the end of
this decade.
Currently, the Joint Select Committee on Deficit Reduction
is working to provide us with a roadmap to reduce our
cumulative Federal deficits over the next decade by more than
$1.2 trillion. I believe that it's imperative that we do better
than that, and we have had, as recently as last year, a couple
of different deficit commissions, including one led by Erskine
Bowles and Alan Simpson who provided what I thought was a
pretty good roadmap to get us on the right path out of this
fiscal morass. In the end, I hope that it is the roadmap that
we will still end up using.
With that goal in mind, the Subcommittee repeatedly has
asked the question. Is it possible to get a better result for
less money in almost every Federal program, or at least a
better result for the same amount of money.
Oftentimes I have said in this hearing room that Americans
believe that we operate under a culture of spendthrift here in
Washington, and those people are not entirely wrong. We need to
establish a different kind of culture--a culture of thrift. We
need to look in every nook and cranny of Federal spending:
defense program, domestic spending, tax expenditures, and find
places where we can do more with less or more with the same
amount of money. This Subcommittee has spent the last 6 years
under Democrat and under Republican leadership, to explain this
mission.
Most of us in this room today, however, understand that we
simply cannot cut our way out of debt, tax our way out of debt,
or save our way out of debt. We must also grow our way out of
debt, and we can do so, in part, by making investments, smart
investments in research and development, in infrastructure, and
also in education, investments in education that will enable
Americans to become more productive workers so we can compete
with the rest of the world.
For years, the GI Bill helped us to achieve this goal by
raising the skill levels of hundreds of thousands of Americans
who have served in our military and were returning to civilian
life. Senator Webb alluded to the fact that he has received
help from taxpayers to get an education.
I went to Ohio State University as a Navy ROTC Midshipman
to get my undergraduate education after the Vietnam War. Came
back to the United States and moved from California to
Delaware, got an M.B.A. at the University of Delaware on the GI
Bill, and as he suggested, it was not a lot of money. I was
happy to have every dime of it. But I think we received about
200 bucks a month at that point in time.
And when you compare that with the GI Bill benefits that
are enured to those coming home from Iraq or Afghanistan today,
it is a whole lot different, and I think it is a change for the
better.
But for years, the GI Bill helped us to achieve this goal
by raising the skill levels of hundreds of thousands of
Americans who are coming home from serving abroad and returning
to civilian life. However, in 2008, it became clear to Congress
that after years of multiple tours of duty in Iraq and
Afghanistan, the modern day military needed a modern day GI
Bill to ease our troops' transition into civilian life.
That is where Jim Webb, newly elected Senator, came in and
that is why we passed the Post-9/11 GI Bill that he authored,
which pays for the tuition and housing costs of any member of
the military who served more than 90 continuous days on active
duty since September 10, 2001, and who has accrued some 36
total months of active duty service.
Since passing this bill, $11.5 billion have been spent to
send veterans back to school under this program. However,
recent reports show that too many veterans have been subjected
to highly questionable recruiting practices by some schools,
subjected to deceptive marketing and substandard education
instruction. Not in all, but in some of the schools that they
attend, including some for-profit schools. And, I might add,
some public schools and some private schools.
These problems highlight a key flaw in our higher education
system. Currently, the incentives that some schools, for-
profits, non-profits, privates, but especially the for-profits,
I think are just misaligned.
These institutions are rewarded for enrolling more
students--especially veterans with a fully paid for education--
but these schools have too little incentive to make sure that
their graduates are prepared to join the workforce and begin
productive careers and productive lives.
Having said that, let me say as clearly as I can, that this
is not an issue solely at for-profit schools. There are many
public schools and some private colleges and universities that
experience similar issues with extremely low degree completion
rates, high default rates, and a poor record of serving our
veterans. And to be fair, there are also a number of for-profit
institutions that offer a quality education and schools that
have a history of success with placing students in well-paying
jobs.
We are here today because I believe that we have a moral
imperative to ensure that these abusive practices, where they
do occur, wherever they occur, are stopped so that those who
have sacrificed for our country can obtain an education that
will equip them with the skills that will enable them to find a
good job, repay any college loans that they have incurred, and
go on to live productive lives as productive citizens, both in
the workforce and in their communities.
Today's hearing will focus on how we can fix this problem
by better incentivizing schools to deliver a high quality
education to our military and to our veteran population. We
will examine what efforts have improved educational outcomes
and enhanced the ability of veterans and our military to
receive good-paying jobs upon the completion of their
education. We will also examine what has not worked and why
flawed Federal policies might encourage schools to continue
with practices that do not serve students well. We have, I
think, a terrific line-up of witnesses here today who I will
introduce shortly. We look forward to a productive hearing, to
a hearing more about this issue, and to learning more about
this issue.
First I want to turn to a fellow who has just joined us at
my right and that is Senator Scott Brown for any comments that
he would like to add. Thank you.
OPENING STATEMENT OF SENATOR BROWN
Senator Brown. Thank you, Mr. Chairman. I apologize for
being late. We have been running around dealing with some
issues back in the home district. I do have a statement. I will
just offer it for the record due to my being tardy. I want to
hear what the witnesses have to say. So I would submit my
opening statement for the record.
Senator Carper. OK, thanks so much.
Our first witness is Curtis Coy and he is the Deputy Under
Secretary for Economic Opportunity in the Department of
Veterans Affairs. In this role, Mr. Coy oversees all education
benefits, loan guarantee services, and vocational
rehabilitation and employment services for America's veterans.
Prior to his current position, Mr. Coy served, I believe,
as Acting Deputy Commissioner, Chief Financial Officer (CFO) of
the Food and Drug Administration (FDA). Another great job.
Additionally, from 2002 to 2009, Mr. Coy held the position
of Deputy Assistant Secretary for Administration at the
Department of Health and Human Services (HHS). Mr. Coy also
served as an officer in the United States Navy, and before
that, I believe he was an enlisted member of the U.S. Air
Force.
He retired from the Navy in 1994 with the rank of
Commander, and as a retired Navy Captain, my favorite rank in
the Navy was Commander, Commander Coy, Commander Carper. Those
were good days.
We have asked Mr. Coy to discuss how the Department of
Veterans Affairs prevents against abuse of the Post-9/11 GI
Bill and how we can better incentivize the provision of high
quality education to our Nation's students.
Mr. Coy, we thank you for being here. And I believe
accompanying you today is Keith Wilson. Mr. Wilson, are you
also going to testify?
Mr. Wilson: I will.
Senator Carper. Oh, good. Well, then once Mr. Coy has
completed his comments, I will come to you and I will give an
introduction for you as well. But, Mr. Coy, please proceed.
Your entire testimony will be made part of the record and you
are welcome to summarize if you wish.
TESIMONY OF CURTIS L. COY,\1\ DEPUTY UNDER SECRETARY FOR
ECONOMIC OPPORTUNITY, VETERANS BENEFITS ADMINISTRATION, U.S.
DEPARTMENT OF VETERANS AFFAIRS ACCOMPANIED BY KEITH WILSON,
DIRECTOR OF THE EDUCATION SERVICE, VETERANS BENEFITS
ADMINISTRATION, U.S. DEPARTMENT OF VETERANS AFFAIRS
Mr. Coy. Yes, sir, thank you. Good afternoon, Chairman
Carper, Ranking Member Brown. I appreciate the opportunity to
appear before you today to discuss the Post-9/11 GI Bill and
educational outcomes for Veterans and military students. I am
accompanied today by Mr. Keith Wilson, as you indicated, who is
the Director of the Department of Veterans Affairs Education
Service. My full written statement has been submitted for the
record.
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\1\ The prepared statement of Mr. Coy appears in the appendix on
page 51.
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From August 1, 2009 to June 15, 2011, the VA paid
approximately $4.4 billion in tuition and fees and Yellow
Ribbon program payments under the Post-9/11 GI Bill to
institutions of higher learning. This amount does not include
the monthly housing allowances and the books and supplies
stipends paid directly to Post-9/11 GI Bill
beneficiaries.During this period, approximately $1.6 billion
was paid to private, for-profit schools on behalf of more than
145,000 students. Students attending private, for-profit
schools made up approximately 23.8 percent of the
beneficiaries, while 36.4 percent of the tuition and fee
dollars are paid on their behalf.
Under the 90/10 rule, proprietary institutions may not
receive more than 90 percent of their revenue from funds under
Title IV of the Higher Education Act (HEA) of 1965. While VA
defers to the Department of Education (ED) on the 90/10
calculation, there is an argument for including the Post-9/11
GI Bill in the 90 percent limit on Federal funding or related
proposals. Under the present structure, some institutions may
be targeting Veterans because of the Federal education benefits
they received and are treated the same way as private funds in
the 90/10 calculation. VA believes Veterans should not be
aggressively recruited by institutions, principally because of
financial motives, and that Federal and State statutes and VA's
oversight activities provide a strong monitoring in this area.
Modifications to the 90/10 rule could, however, provide
additional tools to assist in this area. However, such a change
could cause some schools to exceed the 90 percent threshold and
be at risk of losing eligibility to receive Federal student
aid. To ensure that Veterans are not adversely affected, the
manner in which such a change would be implemented is
important. VA would welcome the opportunity to work
collaboratively with the Department of Education and the
Subcommittee as it consider changes in this area. VA is aware
of concerns raised regarding for-profit institutions and
fraudulent activities.
Under existing VA statutes, for-profit institutions are
held to the same standards and criteria as non-profit
institutions for the purpose of approval for use of VA
education benefits. VA believes veterans and their eligible
dependents should be able to use and choose to use their
education benefits at the academic institution--public,
private, non-profit, or private for-profit--that best meets
their specific needs and is approved by the State Approving
Agency of jurisdiction.
As of August 1, 2011, standard degree programs offered at
accredited public and private not-for-profit schools are deemed
approved for VA educational benefits without separate SAA
approval per Public Law (PL) 111-377. In other cases, SAAs
evaluate programs offered by each academic institution to
determine whether their quality and offerings are similar to
other programs offered in the State. If they are not, the SAA
will not approve the program. This takes into account
compliance with State and VA statutes, including those
pertaining to misrepresentation or deceptive marketing.
Additionally, Public Law 111-377 expanded VA's authority to
utilize SAAs for oversight of programs and institutions. VA
will begin to use the SAAs for compliance reviews for this
authority in fiscal year 2012. A primary focus of these SAA
reviews will be to conduct compliance reviews and increased
oversight for for-profit schools. It is important for vets and
their eligible dependents to make informed decisions concerning
their VA benefits. VA provides free consulting services and
assists veterans in determining their aptitudes, interests, and
abilities in locating an appropriate educational program.
Mr. Chairman, this concludes my statement. We look forward
to working with the Subcommittee to provide the very best
support possible to our veterans and beneficiaries as they
pursue their educational goals. I would be pleased to answer
any questions you or Senator Brown may have. Thank you, sir.
Senator Carper. Not at all. Thank you very much for that
testimony. Mr. Wilson, I understand that you are not here to
testify, but you are here to respond to any questions?
Mr. Wilson. That is correct and I apologize for any
confusion. I will not be providing testimony.
Senator Carper. That is OK. We are glad that you are here.
Mr. Wilson, just a real quick, little bio on you. I understand
you are the Director of Education Service at the Department of
Veterans Affairs. Is that correct?
Mr. Wilson. That is correct, Mr. Chairman.
Senator Carper. And as Director there, I understand that
you provide executive level oversight in development of policy,
of planning, and integration of educational programs that are
administered by the Veterans Benefit Administration.
And there are approximately half a million veterans,
servicemembers, and other dependents pursue educational
opportunities annually under the programs that Mr. Wilson
administers. And I think you have been at the VA for about,
what, 20 years and worked all over, actually, in a number of
places around the country.
And also a Navy veteran and served 8 years, I am told, as
an operational specialist. We thank you for that service and
for being here today and your willingness to answer questions
for us.
Since Senator Brown was good enough to not give a statement
and to go right to the witnesses, I am going to give him the
opportunity, if he would like to, to just lead off with the
questions. Senator Brown.
Senator Brown. Thank you, Mr. Chairman. So probably for
both of you, I would think, as the lead agency on the GI Bill,
it is the VA's special responsibility to ensure that post-
service military benefits are used effectively. Obviously we
would not be here today if these programs were serving all of
our servicemembers and veterans effectively as they should be.
In previous hearings, and obviously today, we have had
veterans groups, and we have some in our next panel, and they
will highlight some of the concerns regarding the poor
oversight and lack of counseling services, et cetera.
In your opinion--I will start with you, Mr. Coy--what do
think the VA could do better, No. 1? And how long would it take
to implement the changes you would suggest? And then, what type
of support do you need from us?
Mr. Coy. Thank you, Senator Brown. We take any of these
allegations that our student vets are somehow being
misrepresented or being charged inappropriately or any abuse
that is there. I think one of the things that we are most proud
of is, we have revamped our compliance and survey program for
our State Approving Agencies.
Keith has some very specific details on the length and
breadth and scope of that program, but we look--you had asked
what we can do and how long it would take. We would very much
look forward to working with the Subcommittee, the Department
of Education, Department of Defense (DOD) for their tuition
assistance program to implement any of these changes that the
Committee may deem appropriate.
Senator Brown. Mr. Wilson, do you have anything to add?
Mr. Wilson. A few comments, yes. Thank you. We have had a
long-standing relationship with our State Approving Agencies
since 1948, actually. It has been a very effective
relationship. The State Approving Agencies, on many fronts, are
essentially the boots on the ground when it comes to the GI
Bill at the State level.
As occurs over time, we would like more. We would like more
flexibility, additional resources, et cetera. And we were able
to achieve additional efficiencies and more flexibility in
terms of how we can use those State Approving Agencies under
Public Law 111-377.
We are now able to use those State Approving Agencies for
full-blown compliance surveys, much as we currently have been
doing with our VA employees. And what that does is give us more
resources to actually go into areas that we have concerns or
want to provide additional oversight and take some good deep
dives into these areas.
Our goal, beginning fiscal year 2012, is to provide a
compliance survey at every for-profit institution every year.
We have completed a large part of the training with the State
Approving Agencies to do that, and come October 1, they will
begin doing those compliance surveys in conjunction with our
own staff, and then begin doing their work on their own.
Senator Brown. According to some, and in Mr. Ryan
Gallucci's testimony, the VFW has found that many of the SAAs
are undermanned and under-trained. In one State, there is only
one employee to carry out this function. They do it as
collateral duty, not as a primary mission. And other States
only have a handful of staff.
What I have heard from veteran students is that there seems
to be a disconnect from the time that they actually apply and
then get the funding, making sure the funding is properly
credited, and they get the other benefits they are entitled to.
Why does there seem to be kind of a disproportionate amount
of oversight from one State to another and one system to
another? How do you resolve that? How do you do it better?
Mr. Coy. I will let Keith elaborate, but our budget for the
SAA contracts that we do every year is about $19 million and
that is in statute. There is a formula that is used to allocate
those funds across the States and territories. Keith is more
than willing to talk about how we go about doing that
allocation. He is certainly the expert there.
Mr. Wilson. The funding amount available for the SAAs is
set by statute. Over the last several years, it has gone up
from about $12 million to the current level of about $19
million. We have about 62 State Approving Agencies we contract
with. Some States organizationally are split up separate so we
will have more than one contract in some of the States.
The allocation of that money is divided up by active
institutions essentially within the State. So basically, the
number of schools that have active GI Bill participants will
govern the amount of funding that they receive under those
benefits.
If I could loop back and just touch on your comment about
delays and benefits, et cetera, we are very proud of what we
have been able to accomplish over the last couple of years in
terms of standing up the Post-9/11 GI Bill. We are very current
right now on processing claims. Largely processing of claims is
unrelated to work in the SAA area.
We are processing enrollments in about 10 days right now
for the fall enrollment. We have received about 350,000
enrollments for students, about 320,000 of those are already
paid. So, but of course, that is one step. In order to make
sure that our veterans are succeeding, the first thing we
focused on is the necessity to make sure they are in school,
they are being paid dependably, accurately, timely.
We believe they are there. We want to continue to increase
our work on making sure that the outcomes, as a result of those
enrollments, do occur.
Senator Brown. So if somebody actually has problems that
maybe you are not aware of, what is the best way for the
individual student, veteran, to deal with it?
Mr. Coy. Problems academically or problems from----
Senator Brown. No, just the things we were talking about,
the flow of the registration, the pay, the benefits, just
implementation thereof.
Mr. Coy. There is a variety of different areas. We have an
800 number that students can call.
Senator Brown. Do you have it handy? Maybe at some point
you can get it and we can just announce it because some people
watch this, do they not?
Mr. Wilson. I would be happy to announce it.
Senator Brown. OK.
Mr. Wilson. 1-888-GIBILL1.
Senator Brown. OK, good.
Mr. Wilson. And individuals can also e-mail us directly
from our Web site which is gibill.va.gov.
Senator Brown. Great. Well, I have another round, but I
will just defer to you, Mr. Chairman.
Senator Carper. Before I ask my question, I am just going
to try to make real clear what I am trying to do here, what I
think we are trying to do here. We have a huge budget deficit,
as we know, $1.3 trillion this year, huge increase--a decade
ago we had a balanced budget and a surplus. And here we are
with these huge deficits and deficits as far as the eye can
see.
And we know if want to be competitive with the rest of the
world, which is getting tougher, they are different competitors
these days. And it sort of like at the end of World War II or
the end of the Vietnam War. But if we want to be competitive,
we have to specialize, that is to say we have to out-educate,
out-innovate, out-compete everybody else.
And part of doing that is making sure we do a better job in
research and development that can be commercialized and turned
into products we can sell around the world. Part of that is
making sure we have an infrastructure, not just roads, highways
and bridges, but rails, port, water, sewer, all kinds of
infrastructure including broadband.
And the third is to make sure we have a workforce. Students
coming out of our schools not just colleges and universities,
but out of our high schools who can read, write, think, do
math, familiar with technology. We have to do all those things.
And we don't have a lot of money to spare given the size of our
budget deficit, so we want to get a better result, a better
result for the same amount of money, and hopefully maybe a
better result for less money in terms of our workforce
preparedness.
I think one of our next witnesses for our next panel, Ted
Daywalt, who is the President of VetJobs, a fellow you know,
stated in his testimony that veterans need to have better
information available to them in order to make more informed
decisions about which schools to attend.
I think you may have mentioned in your testimony, Mr. Coy,
that the Department of Veterans Affairs offers counseling and
guidance on your Web site about the options available to
veterans. Let me just ask you, any idea, is this somehow
required reading for all veterans seeking to use their GI Bill
benefits? And to your knowledge you have exit counseling that
the Department of Defense requires military personnel to
participate in while transitioning to veteran status.
I remember when my squadron came home at the end of the
Vietnam War to come back to California, and then when I
separated in the middle part of 1973, as I am sure somebody,
somebody said something to me about veterans benefits because I
knew I was eligible for some financial aid through the GI Bill
and I knew that we were eligible for like dental benefits of
some kind for the first year or two.
But I do not recall really a kind of structured debriefing
or a structured briefing with materials that we should take
with us and commit to memory. I do not know. Maybe it is
different today. Give us some idea of how does it work today
and the stuff that is on your Web site on counseling and
guidance, obviously it is available to veterans. Do we have any
idea if they actually look at it and understand it?
Mr. Coy. Yes, sir. We are very concerned about making sure
that our veterans choose the right school. Keith and his
organization send out letters at least twice a year, I believe,
to veterans and they reference choosing the right school. In
fact, Mr. Wilson here is the author of Choosing the Right
School that is on the Web site and has received quite a bit of
acclaim for doing just that.
With respect to sort of monitoring and watching students as
they progress through, we do that through a number of different
ways. Most certainly the schools' certifying officers and
officials have a feel for that. This past June we started
having schools report to us graduations and success rates and
students that are on academic probation. We have a program that
we can get counseling as soon as we know a student is having
any difficulties or problems, whether it be in payments,
whether it be in academics, and we can offer them that
counseling through some of our Chapter 36 counseling.
In addition to that, we have started a pilot program at
eight schools. We plan on expanding to another nine this coming
year. That is called VetSuccess on Campus. In the program, we
have put a full-time counselor on campus to provide any sort of
counseling or help with respect to those vets that are on
there. It is been very successful and very, very well-received
at the schools and by our veteran students.
Senator Carper. So those are schools like brick-and-mortar
schools as opposed to those that are available maybe over the
Internet?
Mr. Coy. Yes, sir. There are eight pilot schools right now.
Senator Carper. How many schools in the whole universe of
schools where GI's can go?
Mr. Coy. For Post-9/11 Bill, the latest numbers I have seen
is about 6,000 schools. Is that correct, Keith?
Mr. Wilson. Yes.
Senator Carper. So in terms of the meaningfulness of 8 or
17, that is just a drop in the bucket, isn't it?
Mr. Wilson. Absolutely, yes, sir. And it is a pilot program
and we are putting it out there and we are looking at ways to,
in fact, expand that program across-the-board.
Mr. Coy. I guess finally to answer your other question
directly, as you probably know, the President has called for a
joint DOD and VA task force to take a look at the entire
transition process and employment issues across the board. Both
Keith and I have been asked to serve on that and, in fact, we
left the task force meeting at an offsite to come here to
testify. So there are a number of different things that are
being worked right now. We are looking at a number of things in
the future with respect to providing that sort of support to
our vets on campus.
Senator Carper. Good. Mr. Wilson, do you want to add
anything?
Mr. Wilson. Just a couple points. We could not agree with
you more concerning the veterans, servicemembers also, needing
the right information to make decisions on schools. Our
approach is early intervention and redundancy. We do direct
mailings to individuals beginning one year into active service.
We direct mail to every individual once they have been on
active duty. We do that again at 2 years, we do that at the 6-
month mark prior to graduation, and then we do that again at
separation, in addition to providing them the specifics on how
to choose schools, questions that they should ask during the
transition assistance briefing.
So we want to reach the individuals while they are still
servicemembers because a lot of times, that is really when they
are making the decisions on where they could potentially go to
school. Just from a personal level, I have an interest in that.
My son, Noah, is with the 82d Airborne.
Senator Carper. What is his name?
Mr. Wilson. Noah Wilson.
Senator Carper. Noah?
Mr. Wilson. Yes, sir.
Senator Carper. Like, Noah, I think it is starting to rain?
Mr. Wilson. Absolutely, yes. He has heard that once or
twice.
The important thing, though, is reaching those individuals
while they are on active duty because that is where they are
forming their opinions on where they want to go to school. So
we want to get that information to them early and often.
Senator Carper. Good, all right. Senator Brown.
Senator Brown. Thank you, Mr. Chairman. So I want to turn
for a minute to the consumer education piece of what we are
doing to ensure that veterans and servicemembers are, in fact,
informed consumers. In your statement, you state that the VA is
significantly expanding their engagement with students
throughout their educational experiences, but I did not here
any specific examples.
What are you doing in terms of expanding the services and
how you are doing it and what has the response from the
students been? If you could just walk us through that, I will
start with you, Mr. Coy.
Mr. Coy. Absolutely. We are very concerned about----
Senator Brown. If somebody walks in, Hi, I just completed a
tour of duty, I am eligible for benefits, what do you tell them
on the way in?
Mr. Coy. In the transition phase or on campus?
Senator Brown. Transition and on campus.
Mr. Coy. In the transition phase, as I indicated earlier,
Senator, we are in the process of editing the entire transition
process.
Senator Brown. What happens now, though? Because during the
during the transition you are doing something.
Mr. Coy. Right now during the transition, we do a 4-hour
presentation for departing servicemembers with respect to all
of their benefits that they are eligible for within the VA. And
so, that is a 4-hour presentation. We have another 2 hours of
what we call DTAP, or transition assistance, for our disabled
veterans so that adds on another 2 hours. And it lays out all
of their educational benefits for each of the departing
servicemembers.
Senator Brown. Do they get a handout? Do they get a
breakdown, a physical breakdown or is this just an in-class
presentation, they have to take notes?
Mr. Coy. Well, they get a copy of the presentation. There
are a number of brochures that are given. Keith, can you be
specific about the exact brochures?
Senator Brown. Well, let me just kind of tell you what I am
getting at. So I am in the Guard, and we have a pretty good
educational program in Massachusetts for State schools and the
like. And when our soldiers come home from doing their duty,
they actually go through an out-processing or a demobilization
where it is A to Z, mental health, physical, financial, et
cetera, educational benefits and the like.
We not only give them that type of presentation, but we
give them a packet with the actual hardcore numbers and a
breakdown, because with all due respect, when the soldier has
done his duty, his or her duty, they just want to get home.
They want to take off the uniform, they want to have some
relaxation time, however they do that, and they are not
focused.
Then all of a sudden it is coming August and they say, Oh,
my gosh, honey, you have to go to school, you have these great
opportunities. And like, Oh, I got a nice briefing, but I do
not remember a thing. So is there a packet, a presentation that
is professionally done and easy to understand that they get?
Mr. Coy. I would suggest that we are very much interested
in making sure that our vets that are coming back have that
information. With respect to the specific packet of
information, there is a number of different brochures, as well
as on the Web site. But in terms of a specific package that we
hand out, I am not so sure that we provide that.
Senator Brown. Yes, I would be curious to see whether, in
fact, a handout--because I think it is important to know. I
mean, the Web site is great, certainly, but how do they even
ultimately know to go to the Web site to get that information?
So I have noticed that there seems to be a little bit of a
disconnect. So once they get on campus, then what?
Mr. Coy. Once they get on campus, it depends on which
campus they are at, certainly.
Senator Brown. Well, the average campus.
Mr. Coy. The average campus does not have a VetSuccess on-
campus counselor. They have the school certifying official and
we have--and the school certifying official is required to sort
of keep track of those students. There is also counseling
benefits that students are eligible for and we get them in
touch with counselors in one of the 57 regional offices the VA
has, as well as other counselors that are out-stationed across
the board.
Keith, do you want to elaborate a little bit more?
Mr. Wilson. Just to amplify on a couple points. We
mentioned earlier the redundancy in the information we provide
veterans. We agree, when they are ready to separate, they want
to go home. That is why we try to reach out earlier during the
lifetime of their career to provide them GI Bill information
earlier.
Just to touch on a couple of the things that Mr. Coy
mentioned earlier in his testimony, what we have done with the
schools is create more of a proactive relationship by having
them provide us information that we previously did not have.
For instance, we provide information on how to apply for
benefits, et cetera, to veterans.
What we began requiring schools to report to us this fall
are situations where the veteran may be under some type of
challenge. Academically, they do not seem to be succeeding.
Schools are required now to report to us when a student is
placed on academic probation or when they are terminated for
academic reasons.
What we do with that information is circle back to them
once again and make them aware of the Chapter 36 counseling
that Mr. Coy talked about earlier. We have the resources to sit
down with these veterans, if they choose, and help them
determine aptitudes, interests, and abilities, and perhaps
recommendations on some type of programs that fit.
So if a person chooses a school or a program, they are
struggling, we want to try to redirect them into a program that
may be a better fit so they can succeed.
Senator Brown. And in extension of what the Chairman said
about trying to get the best value for our dollar and find out
how we can do it better, some of the figures about college loan
debt and default rates are pretty alarming. What kind of
counseling is the VA doing with veterans about the financial
implications of their educational choices, specifically about
the amount of in-kind debt that they are taking on? Either one
of you.
Mr. Wilson. For debt, I am not aware of anything we
specifically refer to concerning debt.
Senator Brown. The educational choices you just noted, do
you have the post--when they are at a point where they are--do
you have a pre-enrollment that you, say, sit down with that
soldier and say--that veteran, and say, Hey, you really cannot
be a cook, but boy, you would be a great engineer? I mean, do
you have that?
Mr. Wilson. It is not a requirement when one goes through
the process. It is a mechanism that is made available to the
individuals. Last year we had about 12,000 individuals that we
provided this type of what we refer to as Chapter 36
counseling.
Senator Brown. I am all set, Mr. Chairman. Thanks.
Senator Carper. If I could, I want to go back to one of my
earlier questions where we were talking about the guidance or
support that is offered to GIs, particularly those that are
coming home to return to civilian life. Has any of this
guidance or support, is it required for all vets using the GI
Bill? Do they have to participate? Do they have to attend? Do
they have to acknowledge that they have gone through certain
transitioning before they are allowed to participate in the
program?
Mr. Coy. I will answer that, I guess, a couple different
ways. The information that Mr. Wilson talked about in terms of
sending the information to those servicemembers while they are
still on active duty, so all of them get that information.
With respect to the Transition Assistance Program, which is
the counseling session that is sponsored by the Department of
Labor (DOL), it is a 2\1/2\ to 3-day session with respect to
the entire gamut of servicemembers getting out. That is
currently not really a mandatory attendance required. The
Marines make it mandatory, but the rest of the services do not
make it mandatory.
Senator Carper. Well, why do you suppose the Marines do and
the others do not?
Mr. Coy. That would be a subjective judgment, but I think
that is how Marines are structured. They want all their troops
to go to the Transition Assistance Program and they make it so.
Senator Carper. And another part of what we are doing here
in this Subcommittee is trying to make sure the Department of
Defense actually is able to produce auditable and audited
financials, and they do not and they do not even expect to be
auditable until like maybe 2017.
We always like to say, what you cannot measure, you cannot
manage. So we are working on it real hard. Secretary Panetta is
providing great leadership there to put a fire under their
people. The Marines are actually trying to be first on the
beach in that regard as well, and they are trying to lead the
way and show the other services how it is done. I hope they are
going to be successful because we need that.
I am very much encouraged to hear what you say they are
doing, and maybe we can look to them to provide a model to the
Army, the Air Force, and the rest of their Navy brothers and
sisters. A question for Mr. Coy. Maybe for Mr. Wilson. I am
going to come back to the issue of the State Approving
Agencies.
As I understand it, these agencies for each State are the
only entity that make firm decisions about whether a veteran
can use GI Bill benefits to pay for their tuition for specific
school programs, and as I understand, the State Approving
Agencies are formed and staffed by State governments, not by
the Federal Government, by State governments.
Any idea how many programs currently are approved by a
State Approving Agency, but are not part of an accredited
institution? Any idea there?
Mr. Coy. I do not have that information in front of me.
Senator Carper. I am going to just ask you to answer that for
the record, if you will. How many programs currently are
approved by State Approving Agencies, but are not part of
accredited institutions, if you would. You may not be able to
answer this one either, but I will ask it again. How do State
Approving Agencies' certification requirements change from
State to State? Can you just help me with that?
Mr. Coy. We have recently put out a guide for State
approving officials. We also have a VA State Approving Agencies
joint peer review process that we meet with them once a year to
provide that consistency. Keith, do you want to give a little
bit more meat on that?
Mr. Wilson. The compliance surveys and the approval
criteria that State Approving Agencies apply are actually
codified in Federal statute. So in terms of the things that
they are looking at from a Federal perspective, it is exactly
the same in every State. Now, that would be supplemented by
anything the States individually would have codified within
State statutes, which the State Approving Agencies, of course,
also could enforce.
Senator Carper. And do you have a situation where some of
these State Approving Agencies are probably doing a pretty good
job, well-staffed, people who know what they are doing that are
religiously executing their responsibilities and some of them
are not? Do we have any idea if that is case?
Mr. Wilson. We do. I would say the vast majority of State
Approving Agencies are very well-trained, highly motivated
individuals that do a superb job. As with any group of
individuals, we have those that we really consider our go-to
people and people we work with to improve their performance.
We conduct an annual performance review on every one of
them.
Senator Carper. This is a question for both of you, if I
could. If I am a veteran coming home using the Post-9/11 GI
Bill and I have a complaint about the school, with whom do I
address this concern? Is it my regional VA office? Is it the
State Approving Agency? How does the VA track these complaints
and how do you share them with the Department of Defense and
the Department of Education? Any idea of how many complaints
you have shared with the DOD and the Department of Ed since the
creation of the Post-9/11 Bill? Can you just help me with that
outline of questioning, please?
Mr. Wilson. Sure. If students have concerns about their
school, there are several ways they can reach us. No. 1, they
can call us on our 888-GIBILL1 number. No. 2, they can e-mail
us. No. 3, when we go out and do compliance surveys at these
schools, the schools are required to tell the students, The VA
is going to be there, and they can meet face to face with our
compliance survey people that go out to the schools.
Additionally, beginning in fiscal year 12 our customer
satisfaction survey that goes out to every one of our 800,000
students has had additional information in it where they report
to us specific responses concerning their experience with their
school.
Previously, that survey was more on how well we were
meeting their needs in terms of timely payment. We have
expanded that to begin diving down into their experiences with
their school.
Senator Carper. Thank you for that. Senator Harkin and I
were joined at a press conference earlier this morning on the
subject that relates very much to what we are looking at today.
A fellow named John Elliott, an Army veteran, an Iraq veteran,
he told us about applying for benefits, in this case, at a
proprietary school.
It ended up the school claimed that they were signed up
with the VA and that he could get his education through the
school using the GI Bill. It turned out to be not true. And
then they ultimately sent him a bill for $9,600 for tuition to
pay back for the benefits. But yet, the school said clearly
that, ``We work in conjunction with the GI Bill, we work with
VA.'' However it was not true, and they ended up dunning him
$9,600. The night before this morning's press conference, he
got word from the school, proprietary school, that his $9,600
in debt was forgiven.
Well, let me just ask you and sort of following onto that,
are these State Approving Agencies that we are talking about in
charge of cracking down on schools that incorrectly claim, like
the one I just described, that incorrectly claim that they are
eligible to accept veterans assistance benefits? Whose job is
to crack down on an institution like that, whether they are
proprietary, public, or private?
Mr. Wilson. Yes, Mr. Chairman. Ultimately, it is the VA's
responsibility. The State Approving Agencies act as our agents
in this area. They do have the enforcement authority by law in
this area, but they are acting as our agent, so it is a
cooperative relationship. Specifically on the individual you
are referring to, I do know about the specifics of that case. I
am a little bit reluctant to talk about it obviously publicly,
but I would be happy to talk a little bit one-on-one. There are
a little bit more issues involved.
Senator Carper. Good.
Mr. Wilson. But I would be happy to talk to you about that.
Senator Carper. All right, appreciate that.
Mr. Wilson. But ultimately, it is the State Approving
Agency's authority to pull approval when those situations do
occur. They do exercise that authority. We have had
specifically one situation recently where we have pulled
approval. That approval is still under suspense, so we do
exercise that authority.
Senator Carper. All right. Any idea--and you may have to
answer this for the record since the implementation of the
Post-9/11 GI Bill, how many schools have been barred from
receiving GI Bill payments? And what was the nature, just in
general, what was the nature of these violations that may have
led to these actions?
Mr. Coy. We were just talking. I think this fiscal year we
have one school that we barred from getting GI Bill payments.
Senator Carper. And tell me again how many schools are
there that are eligible for GI Bill reimbursement, how many?
Mr. Coy. I think we mentioned about 6,000.
Senator Carper. So out of 6,000, one has been barred?
Mr. Wilson. If I could amplify a little bit?
Senator Carper. Please.
Mr. Wilson. We are aware of specifically one case this
fiscal year. One of the things that we have recognized is that
nationally we didn't do a good job of collecting information.
Senator Carper. So you did do a good job or did not?
Mr. Wilson. What we did----
Senator Carper. No, no, I just misunderstood what you said.
Mr. Wilson. I'm sorry.
Senator Carper. I could not tell if you said we did a good
job or we did not do a good job nationally.
Mr. Wilson. One thing that we did not do a good job
nationally on is collecting information at the national level
specifically on the compliance, et cetera. Up until this fiscal
year, that information was stored, collected independently
within each of the States on however they did it within their
State. So it made it difficult for us to respond to those type
of questions from a national perspective, from a programmatic
perspective.
We do, beginning this fiscal year 2011, we started
collecting that information nationally and the one school that
we mentioned is the one that we are specifically aware of in
fiscal year 2011.
Senator Carper. Well, I would just urge you to look harder.
Let us talk for a little bit before we wrap up and move to our
second panel about the incentives for veteran recruitment. And
as I mentioned earlier, I believe our higher education
incentives are misaligned. Too often we incentivize schools to
recruit high quantities of students without necessarily
incentivizing those same schools to provide a high quality of
education.
I think that is especially true with our veterans, and I
would like to refer to something that Holly Petraeus said in
her statement that you also discussed, I think, when you were
talking about the 90/10 rule. There is an op-ed that she wrote
in today's New York Times. And she is the wife of a veteran,
David Petraeus, and the mother of a veteran, Stephen. But Ms.
Petraeus stated that, under the 90/10 rule, a for-profit school
has to make sure that it obtains at least 10 percent of its
overall revenue from a source other than the Department of
Education funds. And therefore, no more than 90 percent of a
school's revenues contracting can come from Federal student
aid, in this case through the Department of Education.
However, because revenues from the Post-9/11 GI Bill or the
DOD Tuition Assistance Program (TAP), which is assistance that
accrues to active duty personnel, military personnel, those are
not counted as Federal student aid. And they are treated as
other revenues, really equivalent to private dollars.
I am going to paraphrase what Ms. Petraeus stated, but
something to this effect. For every servicemember that a for-
profit college recruits who will be using DOD Tuition
Assistance or GI Bill funds, the for-profit college can then go
out and enroll nine other students who are using Federal
student aid from the Department of Education. This has given
some for-profit colleges an incentive to see servicemembers as
nothing more than dollar signs in uniform, and they use some
very unscrupulous marketing techniques to draw them in.
My next question would be, do you agree with this statement
by Mrs. Petraeus about the negative incentives that we have
created under the current 90/10 rule?
Mr. Coy. Thank you. We certainly recognize that an argument
could be made to include the GI Bill and Tuition Assistance
Programs under the 90 percent rule, and we would be happy to
work most certainly with the Subcommittee. I think our most
significant concern would be if there was a policy change, a
change of this nature, how it would be implemented and what
effects it may or may not have on our veterans.
Short of that, we would be absolutely delighted to work
with the Subcommittee, Department of Education, and Department
of Defense to implement such a policy if that is what was
decided upon.
Senator Carper. Mr. Wilson, do you want to add anything to
that?
Mr. Wilson. I think that is a very good summary. We are
actively engaged with DOD and Department of Education talking
specifically about this.
Senator Carper. What incentives does the Department, your
Department, the Department of Veterans Affairs, have in place
to motivate schools not just to recruit veterans, but to
provide them with a quality education that leads to good-paying
jobs?
Mr. Wilson. I am having a little bit of a difficult time
getting my head around that because there are so many things at
work here. Ultimately, we consider that a school should be
honored to be able to train these individuals. These are our
best and brightest in the country. I think everybody recognizes
that. They deserve the best education this country has to
offer.
Our experience has been that most institutions have the
same philosophy on that. We do have statutes in place that hold
all schools to the same level of accountability statutorily.
One of the things that we are looking at, as Mr. Coy talked
about in the task force, is going beyond. One of the things
that we are specifically looking at is how do we identify best
practices, where are the schools, what are they doing to
maximize the veterans' experience on campus and doing a good
job of handing them off to become employable individuals who do
become employed. That is core to what we are talking about in
this task force.
Senator Carper. I think it is important for us to identify
best practices. One of the things we try to do on this
Subcommittee, as Senator Brown knows, we try to identify best
practices. We try to put a spotlight on best practices in the
Federal Government from A to Z. And we also try to put a
spotlight on worst practices, and in part to use positive
reinforcement to encourage worst practice to become better
practices and maybe ultimately best practices.
In closing my questioning here, I would just say it again.
Our country faces huge budget deficits. We are not sure how we
are going to get out of it. I think at the end of the day, it
has to be a combination of cutting spending, a combination of
raising some revenues, a combination of growing the heck out of
the economy, in combination of getting better results for less
money in every nook and cranny in this government, and that
includes in these programs.
It includes to make sure that we are getting our money's
worth out of Pell grants and out of student loans, out of GI
Bill, out of Tuition Assistance. We are spending money here and
not getting a very good result, in too many cases where we do
not have the money to spend in the first place. We simply
borrow it from other countries, borrow it overseas in too many
cases. We are wasting it.
We are going to hear from some schools here in a few
minutes in this second panel where they are, in one case, a
for-profit, but they both work all over the country, in fact,
around the world providing educational opportunities who
actually get a pretty good result. And what we want to do is
incentivize a lot more of that.
This needs to be, as we used to say in the Navy, all hands
on deck. I know I can do a better job here, so can Senator
Brown, so can the Members of our Subcommittee making sure that
the behavior that is untoward, unethical, that kind of behavior
stops. And that we need everybody in the VA, particularly for
those that are working with you that are doing the Lord's work
on this front in trying to make sure that we get on the right
track. I thank you for that.
But we need the folks that are on active duty, the people
that are doing the transitioning, making sure that the people,
when they are leaving the Guard or coming home, the Army, Navy,
Air Force, Marines, that they are getting the kind of
transitioning and turn over that they needed to make wise
decisions.
And at the end of the day, there is a moral imperative
here. It is not just an economic imperative, like we do not
have the money to pay for this and the taxpayers are getting
screwed. There is a moral imperative here because we have been
saying to people who have been willing to lay down their lives,
if they have to, and if they are asked to, that when you come
home, you are going to get a GI Bill that Jim Webb and others
worked really hard to create that is not worth the paper that
it is written on, and that is just morally wrong and we are
going to change that. Senator Brown.
Senator Brown. Mr. Chairman, one of the reasons I have
enjoyed being on this Subcommittee is to try to identify a lot
of the things that are actually now being worked on by the
Administration and by both parties to try to get more value out
of our dollars. So I appreciate you bringing this forward and I
look forward to the next hearing as well.
Senator Carper. Gentlemen, give us a closing statement,
please, just a closing comment, both of you.
Mr. Coy. My only closing comment, Mr. Chairman, is aye,
aye, we hear you. It is an honor to testify and it has been an
honor to work at the VA for those wonderful vets that you just
described.
Senator Carper. A closing thought, Mr. Wilson.
Mr. Wilson. I think it is clear we have the same desire. We
want the veterans to get the best education they can and we
look forward to working with the Subcommittee to achieve those
goals.
Senator Carper. Good, thank you both. And we welcome our
next panel of witnesses and would ask, as Mr. Coy and Mr.
Wilson weight anchor, that our third panel actually come to the
table, please. I am going to begin giving a brief introduction
of them.
Ted Daywalt, the first witness, President and CEO of
VetJobs. VetJobs is the leading military jobs board on the
Internet. It connects veterans transitioning from the military
or completing their post-military education with employers
across the country. Mr. Daywalt has worked with veterans of all
backgrounds and has helped them to find good paying jobs in
successful careers.
In addition to his work with VetJobs, Mr. Daywalt served on
active duty in the U.S. Navy. There seems to be a recurring
theme here, Senator Brown. We have to get some Army guys in
here.
Mr. Wilson. I object. We need to have more Army guys, Mr.
Chairman.
Senator Carper. I promise.
Mr. Wilson. Pulling rank on me here.
Senator Carper. Mr. Daywalt served on active duty in the
Navy for 7 years before transitioning to the Naval Reserve
Intelligence Program in 1978, and he retired from the U.S. Navy
with 28 years of service at the rank of captain. Mr. Daywalt
also sits on the board of the College Educators for Veterans in
Higher Education, has previously sat on the board of Emory
University and the International Association of Employment Web
sites (IAEWS) and testified before the President's Commission
on the National Guard and Reserves. Thank you for your service
as a member of the Navy and for the work that you are doing as
a citizen.
Ryan Gallucci is the Deputy Director of the National
Legislative Service for the Veterans of Foreign Wars. With 2.1
million members nationwide, the VFW is the largest veterans
service organization for combat veterans in our country. I am
honored to be a life member, and I suspect others on our
Subcommittee are as well.
Mr. Gallucci served as the education expert for the
Veterans of Foreign Wars and is responsible for carrying out
the organization's efforts to help transitioning servicemembers
and veterans pursue higher education and viable career paths
following their military service. Here we go. In addition, Mr.
Gallucci served 8 years in the U.S. Army Reserve leaving the
military in 2007 as a Civil Affairs sergeant.
He was awarded the Meritorious Bronze Star, the Army
Commendation Medal, and Combat Action Badge for his actions
while deployed to Iraq in 2003 and 2004. We thank you
especially for that service.
Upon returning statewide, Mr. Gallucci earned a bachelor's
degree in journalism and political science from the University
of Rhode Island using his GI Bill benefits. Mr. Gallucci,
again, we thank you for being here today and for your service.
Next is Dr. Russell Kitchner and our third witness, the
Vice President for Government Affairs, Regulatory Affairs for
the American Public University System (APUS). The American
Public University System is the parent organization of two for-
profit colleges, the American Public University (APU) and the
American Military University (AMU).
The American Public University System serves more than
83,000 students with 64 percent of its student population
currently serving in the military. Dr. Kitchner is joining us
today because by all accounts, American Military University is
a for-profit school that does a good job of serving the active
duty military personnel of our country. Dr. Kitchner is here
today to discuss some of the keys we discussed, describe that
his school has adopted on educating our military.
Dr. Kitchner, we have talked a little bit about the bad
actors in the for-profit education industry, and frankly, in
the non-profit and private non-profits, too. But I want to
thank you for agreeing to come today and share with us a
different perspective, from a school's perspective, a school
that appears to be doing it right.
And finally Dr. Greg Von Lehmen. Our last witness, but
certainly not our least. Greg Von Lehmen, Provost, Chief
Academic Officer of the University of Maryland University
College (UMUC). The University of Maryland University College
is a non-profit public college and one of 11 accredited degree-
granting institutions in the University of Maryland system
offering courses on 130 military installations across the globe
and serving over 90,000 students.
The University of Maryland University College is one of the
largest distance learning institutions in the world. Prior to
becoming Provost, Dr. Von Lehmen worked for the University of
Maryland University College's Asia office serving as the Area
Development for Japan, I believe, for about 4 years and also
spent time in a classroom teaching constitutional
administrative law, political philosophy, political
administration at Georgia, Southwestern State University and
Troy University.
Dr. Von Lehmen is here today to talk about the University
of Maryland University College service and how the college
serves its military and veterans population and the initiatives
they have undertaken to improve the education provided to these
students. Doctor Von Lehmen, great to see you and thank you for
coming before us and for your testimony.
Let me just say before we all start, when you think about
it, Senator Brown and I have spent a fair amount of our lives
and years in uniform. I remember in my 5 years of active duty,
13, I think permanent duty station changes and just a whole lot
more of temporary active duty, we will go here or there, all
over Southeast Asia and other parts of the world. And it is
really hard to get an education when you are doing that.
And the idea of being able to do distance learning, it is a
great idea, particularly for folks in the military, if it is
done right. And at the end of the day, we want to make sure it
is done right, not just in a couple States in this country. We
want to make sure it is done right all over the world for
economic reasons and for moral reasons. Thank you.
Mr. Daywalt, your whole testimony will be made part of the
record. Please summarize and proceed as you wish. Thank you.
TESTIMONY OF TED DAYWALT,\1\ PRESIDENT, VETJOBS
Mr. Daywalt. Thank you, sir. Good afternoon, Chairman,
Ranking Member Brown, staff of the Subcommittee. Let me first
thank you for the opportunity to come before the Subcommittee
today to share with you information that is relevant to the
Subcommittee's discussions on improving veterans education
outcomes. It is an honor to be here.
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\1\ The prepared statement of Mr. Daywalt appears in the appendix
on page 56.
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VetJobs has a unique vantage point on these discussions
just by the nature of our business. VetJobs deals with veterans
and their family members on a daily basis who are pursuing
employment, but also the education necessary to obtain
meaningful employment.
As I mentioned in my written testimony, veteran education
prospects have improved greatly with the new Post-9/11 GI Bill,
but when one looks at the evidence, the current Post-9/11 GI
Bill has truly been usurped by predatory for-profit schools.
Note I use the term predatory for-profit schools as not all
for-profit schools have engaged in less than ethical behavior.
I would not put schools like the University of Phoenix and
American Military University in the same category as Kaplan and
Education Management Corporation. You may seen the New York
Times story that Education Management is being sued by the
Department of Justice (DOJ) in four States for $11 billion of
fraud.
The actions and behaviors of these predatory for-profit
schools like Kaplan and Education Management need to be
stopped. I first became aware of the issue while working with
the veterans who thought they had earned the credible associate
or bachelor degree only to learn that their degree was
worthless and they had no chance to recover their now lost GI
Bill.
For example, Stephen Kimball of McComb, Illinois had
obtained a bachelor's in business administration from the
University Management in Technology while he was on active
duty. When he left service, he applied to many graduate schools
but was rejected because his degree was not recognized as a
legitimate degree. As Stephen told me, in order to go to
graduate school, he needs another bachelor's degree, which
could take years since he no longer has his GI Bill. Kimball's
experience is unfortunately typical of many veterans who have
been deceived by the predatory for-profit schools.
Besides the deceptive practices used by the predatory for-
profit schools, I learned that the fees charge by the predatory
for-profit schools are outrageous. A bachelor's degree from the
University of Florida costs $24,458, but a bachelor's degree
from the predatory for-profit school Everest College in Florida
costs $81,680. And the predatory for-profit schools degree are
not recognized by the traditional brick and mortar schools.
The students who attend these schools----
Senator Carper. I am sorry. Would you just say that again?
Mr. Daywalt. You can get a bachelor's degree from the
University of Florida as an in-state student for $25,000. It is
actually $24,458. The Everest College which is based down in
Florida, your bachelor's degree would be $81,680.
Senator Carper. OK, thank you.
Mr. Daywalt. I could have put both my kids through Emory
for that.
The students who attend these schools are wasting their GI
Bill benefits due to not understanding the system and not
receiving guidance from their command educational counselors.
And many of the veterans who are snarled in this quagmire are
aggressively encouraged to take on more debt by the predatory
for-profit schools. This ultimately leads to many veterans and
their spouses defaulting on their college notes.
Since over 60 percent of companies now run credit checks on
prospective employees, it becomes very hard for any of these
veterans and their spouses to be able to obtain employment. And
that is why VetJobs involves itself in this issue. The
predatory for-profit schools are hindering our veterans and
their spouses from being able to obtain gainful employment. I
have also learned of predatory for-profit schools that target
military spouses on bases, setting up a recruiting table at the
post exchanges and commissioners. I have been told they have
admitted spouses who did not have a high school diploma or an
acceptable SAT.
But what really bothers me, Chairman, is that after last
year's GAO undercover investigation that found 15 predatory
for-profit schools had made deceptive or otherwise questionable
statements to GAO's undercover applicants, and four schools
actually encouraged personnel to falsify their financial aid
forms to qualify for Federal aid, the VA and DOD did nothing to
decertify the schools or ban them from receiving GI Bill or
Tuition Assistance monies.
VA continues to allow these predatory for-profit schools to
enroll active duty, veterans, and spouses. These predatory for-
profit schools continue today to target veterans and their
spouses. There obviously is no effective oversight of the
educational programs at DOD and VA!
As a businessman and a retired senior officer and a
taxpayer, I have to ask, how does this situation be allowed to
persist, and more importantly, why? To be fair, yesterday there
was a report in the Chronicle of Higher Education that DOD is
stepping up its oversight of online learning amid growing
congressional scrutiny of its tuition benefit program. But I
think it is a shame that it took congressional and press
pressure to get DOD to do its job.
It is obvious to me that many predatory for-profit schools
see military students as dollar signs in uniforms. The actions
of the predatory for-profit schools need to be stopped.
Veterans, the very people who have defended our country and
protected our Constitutional Republic and given us the free
market society that we in business so dearly enjoy, deserve
better treatment.
In conclusion, I now want to point out that had DOD and VA
provided the proper oversight, we would not be here today, and
veterans and their family members would not have been
encountering they myriad of problems discussed above. Any
solution considered by this Subcommittee and Congress to the
above problems must include a way to ensure DOD and VA are held
accountable. Thank you for your time, sir.
Senator Carper. You bet. And before you start, Mr.
Gallucci, thanks for that testimony, very much. Some of you are
familiar with the Gainful Employment Rule that the Department
of Education has worked on, tried to update and to put in
place, and I know we tend to blame in some cases the VA, DOD or
whatever. They have been--their efforts to make the
meaningful--Gainful Employment Rule meaningful and more
rigorous have been, as you may know, not supported, not
endorsed, not welcomed here in our Legislative Branch. There
have been too many instances, especially I think in the House,
strongly opposed.
So there is plenty of blame to go around, that none of us
is without blame. All of us have to be part of the solution,
and my hope is that following today's hearing, we will be more
inspired to do that.
Mr. Gallucci, thank you.
TESTIMONY OF RYAN GALLUCCI,\1\ DEPUTY DIRECTOR, NATIONAL
LEGISLATIVE SERVICE, VETERANS OF FOREIGN WARS OF THE UNITED
STATES
Mr. Gallucci. Thank you. Chairman Carper, Ranking Member
Brown, and Members of the Subcommittee staff. On behalf of more
than 2 million members of the Veterans of Foreign Wars and our
auxiliaries, the VFW would like to thank this Committee for our
opportunity to present our views on this critical issue.
---------------------------------------------------------------------------
\1\ The prepared statement of Mr. Gallucci appears in the appendix
on page 67.
---------------------------------------------------------------------------
During tough economic times, military and veterans'
education benefits provide a critical tool in ensuring that our
Nation's heroes can compete in a cut-throat job market.
Unfortunately, certain schools, particularly predatory for-
profit, have chosen to prey on those eligible for military and
veterans education benefits, failing to deliver a quality
education.
When schools prey on veterans, they quite literally steal
their benefits. For example, a veteran may enroll in a
predatory school using up to 2 years of their GI Bill. At this
point, the veteran realizes that the program is worthless,
withdraws, and seeks education elsewhere. Unfortunately,
credits from the predatory school do not count. The veteran
must start over. With 4 years of school ahead, but only 2 years
of benefits to pay for it, the veteran must now pay out-of-
pocket, wasting time and taxpayer dollars, while the predatory
school walks away with cash to find their next victim.
We are only 2 years into the new GI Bill, so the VFW
believes that we have not yet seen the worst of this
phenomenon. Some say that this is just the free market at work
and that the government should stay out of this fight since
only quality for-profits will survive. The VFW disagrees since
both quality and the predatory schools have been shown to
profit off government benefits regardless of the outcomes for
student vets.
The VFW equates GI Bill funds to Federal contracts since
both are paid for by the taxpayer which is why outcomes are
paramount. As an example, when the military contracted to build
a new hospital at Fort Belvoir, a for-profit company earned a
healthy payday from the taxpayers as a result of the project.
However, at Fort Belvoir a new fully functional hospital is
serving soldiers.
Similarly, when students use the GI Bill, the VFW expects
schools to be able to deliver degrees or certificates with
which veterans can find jobs. If the school's business model
ensures that veterans cannot receive such credentials, the
school should not receive further Federal funding. Two rules
that attempt to address the free market issue are VA's 85/15
rule and is companion 90/10 rule in the Higher Education Act,
which my written remarks explain in detail.
These rules set government funding caps for schools at 90
and 85 percent respectively, but operate independently of each
other. 90/10 includes only higher education funds, while 85/15
only includes VA and military funds. To the VFW, this creates a
perfect storm through which predatory schools can master a
complex cycle of compliance.
Should they approach the 90 threshold, aggressively
targeting military students will ensure compliance, yet revenue
still comes entirely from Federal sources. The VFW believes
that predatory schools recognize that consumers will not invest
in their product so they look for government funds to insure
solvency.
To protect military and veterans education benefits, the
VFW would recommend changing these rules to ensure that all
taxpayer-funded programs fall under a single umbrella, as they
were intended to do, creating an incentive for schools to
deliver a product that can survive at least some free-market
scrutiny.
As I mentioned before, VFW's primary concern is student
outcomes. To some, this means graduation rates. The VFW would
not recommend legislating graduation or default rate thresholds
to improve outcomes. Rather, the VFW believes that the
Department of Education and VA must insist on transparency for
institutions to receive taxpayer dollars, providing incentives
for schools to do better.
The VFW makes several recommendations on how to improve
transparency in our written remarks with the help of some for-
profits who have chosen to do business the right way. Most
notably, we recommend that VA implement specific Memorandums of
Understanding (MOU) for schools to be eligible for funding,
building on the Department of Defense's model, and ensuring
that student veterans have all the information up front to make
an informed decision.
Unfortunately, the approval process for veterans and
academic programs create two more hurdles for those seeking to
use GI Bill. First, VA solely verifies eligibility for veterans
based on military service. Today veterans are allowed to enroll
in programs for which they never satisfied prerequisites, only
to rack up bills that VA cannot pay. Given the new pay models
for the Post-9/11 GI Bill, the VFW believes that VA could also
play a role in verifying a veteran's eligibility to enroll in a
program.
Second, many State Approving Agencies tasked with ensuring
education program compliance are understaffed or inadequately
trained. For example, the agent in Rhode Island took on her
role as a collateral duty. This is not an isolated incident,
with more than 16 States facing similar circumstances and
agencies literally screaming for more resources. Approving
agencies are the first line of defense against predatory
schools and need the right tools to do their jobs.
In recent months, discussions over fiscal responsibility
have us concerned about the continued viability of the new GI
Bill should veterans not receive the educational opportunities
they were promised. Our veterans have earned these benefits and
it is our duty to ensure that predatory companies cannot
exploit them.
The VFW looks forward to working with this Subcommittee and
the education community on developing solutions to better serve
our veterans. Mr. Chairman, this concludes my remarks and I
would be happy to answer any questions you may have.
Senator Carper. Very good testimony, thank you, Mr.
Gallucci. Thanks a lot. Dr. Kitchner, please proceed.
TESTIMONY OF RUSSELL S. KITCHNER,\1\ PH.D, VICE PRESIDENT FOR
REGULATORY AND GOVERNMENTAL RELATIONS, AMERICAN PUBLIC
UNIVERSITY SYSTEM
Dr. Kitchner. Mr. Chairman, Senator Brown, please accept my
sincere thanks for the privilege of sharing with you and the
other members of this Committee our perspectives on the
important subject of how institutions of higher education can
better serve our Nation's military personnel and their
families.
---------------------------------------------------------------------------
\1\ The prepared statement of Dr. Kitchner appears in the appendix
on page 72.
---------------------------------------------------------------------------
If I may, before beginning my formal comments this
afternoon, I would like to acknowledge the presence behind me
and to over my left shoulder, two members of our APUS Board of
Trustees, General Julius Becton and Dr. Kate Zatz.
Senator Carper. Would you all raise your hand, please?
Good, nice to see you both. Thank you for joining us.
Dr. Kitchner. And also our APUS Vice President for
Strategic Initiatives, Colonel Phil McNair.
Senator Carper. Who is that? OK, thanks. Thanks so much.
Dr. Kitchner. I also sit here as a representative of more
than 60,000 members of our armed forces and veterans whom we
support as students. They have entrusted their educational
futures to us as we, in this room, entrust our safety and
security to them. Retired Marine Corps Major James P. Etter
founded American Military University in 1991 as a graduate
school to provide military officers with the opportunity to
earn an advanced degree in a discipline associated with their
military professions.
The American Public University System was chartered in 2002
in response to the educational needs of the public service
community, particularly in such fields as criminal justice,
public safety, and national security. AMU and APU share a
common curriculum, facilities, faculty, and staff, and a common
mission which is to provide access to an affordable, high-
quality post-secondary education with an emphasis on educating
the Nation's military and public service communities.
The university is both regionally and nationally
accredited. It offers more than 80 associate's, bachelor's, and
master's degree programs including many specifically
established to respond to the career interests and objectives
of military personnel and their families. All of its courses
are offered exclusively online in a format that enables
students and faculties to interact asynchronously regardless of
location or time zone.
Today APUS serves more than 90,000 military and public
service professionals and other civilians studying from all 50
States and 130 foreign countries. APUS has maintained its
historical commitment to monitoring and assessing its
performance. Our efforts in this regard have not gone unnoticed
and our written testimony points to some noteworthy examples.
However, whatever success we have enjoyed in terms of
program assessment and evaluation would be of little
consequence unless the resulting data were applied to
institutional performance as measured by student success. It is
due to this dedication and commitment that we are pleased and
honored to be present at this hearing and to share this table
with representatives of our Nation's servicemembers and the
University of Maryland which, as many of us know, is a pioneer
in extending educational opportunities to America's military
personnel.
I would like to offer five straightforward strategies that
we have found to be helpful in serving military students and
veterans. No. 1, maintain affordable prices and reduce the time
to completion by not placing unwarranted limits on a certified
or other forms of transfer credit.
No. 2, encourage a one-course-at-a-time approach to
enrollment, particularly among students studying online for the
first time. No. 3, recognize that active duty military are
working adults, as are most veterans, and as such, they deserve
an appropriate institutional investment in academic counseling
and other support services.
No. 4, design, develop, and implement courses, curricula,
and programs that align with military-related careers and
professional vocations outside the military that are relevant
to this special population of students. And finally,
participate in nationally benchmarked surveys and studies and
openly publish institutional metrics that effectively inform
prospective students, as well as education service officers and
commanding officers.
I have been asked to address the relative merits of two
proposals relating to the so-called 90/10 rule. One proposal
would shift DOD and VA funds to the 90 side of the formula and
the other would eliminate it from the formula altogether. The
only fundamental difference between these two suggestions is
that the impact of the first would be felt sooner. In the end,
the effect of 90/10 is that it likely will unnecessarily
increase the cost of and access to education options available
to our servicemembers.
Academic quality and institutional performance are issues
that warrant at least as much attention, but at this time I
would ask that we consider the chart\1\ that is before you.
Note that given equal amounts of Federal financial aid for
which a student qualifies, Institution A whose tuition is 50
percent less than Institution B would be out of compliance with
90/10 unless it increases its tuition by slightly over 11
percent.
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\1\ The chart referenced by Mr. Kitchner appears in the appendix on
page 129.
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A thoughtful analysis of the actual impact of 90/10 reveals
that it does nothing to enhance the prospects for student
success, it is not reward operational efficiency, it does not
extend access to traditionally under-served populations, and it
does not reduce educational costs to students or taxpayers. If
anything, it inhibits initiatives that support or have the
potential to support those objectives.
In a generous spirit expressed by this Subcommittee in
calling for this hearing, we would like to work toward
meaningful alternatives to 90/10, alternatives that place
greater emphasis on institutional performance regardless of
funding models. To that end, we would welcome the opportunity
to work with the Department of Defense and the Veterans
Administration to ensure that America's military personnel have
access to high-quality educational programs.
And I would emphasize the importance of the concept of
cooperative efforts in this regard. Clearly our interests are
not mutually exclusive. And we have a duty to do a better job
for those whose duty continues to be to serve us and protect
us. Thank you, Mr. Chairman, and I do welcome your questions.
Senator Carper. Great testimony and thank you for those
great and very thoughtful suggestions.
Dr. Kitchner. Thank you.
Senator Carper. Dr. Von Lehmen, please proceed.
TESTIMONY OF GREG VON LEHMEN,\1\ PH.D., PROVOST AND CHIEF
ACADEMIC OFFICER, UNIVERSITY OF MARYLAND UNIVERSITY COLLEGE
Dr. Von Lehmen. Good afternoon, Chairman Carper. On behalf
of our President, Dr. Susan Aldridge, I thank you for the
opportunity to appear today to discuss improving educational
outcomes for our military and veteran populations.
---------------------------------------------------------------------------
\1\ The prepared statement of Dr. Von Lehmen appears in the
appendix on page 83.
---------------------------------------------------------------------------
The University of Maryland University College was
established in 1947 to meet the unique academic needs of
working adults. As you have noted, it is one of 11 public
degree-granting institutions that form the University System of
Maryland. And today, UMUC serves 94,000 students in 28
countries, all 50 States, about 40,000 of whom are active-duty
members, veterans, or family members.
In fact, it is accurate to say that UMUC's focus on adult
students started with its service to active-duty members which
began largely with face-to-face programs on military
installations in Europe in 1949 and Asia in 1956, and continues
to this day at 130 locations around the world. These locations
include sites in Iraq, Afghanistan, Africa, elsewhere in the
Middle East where the University has had faculty and staff in
harm's way to offer face to face educational opportunities for
servicemembers in those countries.
My submitted testimony points to a few of UMUC's processes
that were instituted to increase positive educational outcomes
for all of our students, but especially for our military and
veteran students. These included measures of accountability
that have been instituted, long-standing measures that have
been instituted within our Office of Enrollment Management
(OEM), the academic support service that we provide by our
Effective Writing Center, our 24/7 library support that is
available to our students, among others.
I will not duplicate those details here, but wish to use
the remainder of my time to directly discuss the areas in which
UMUC believes the Federal Government can support improved
educational outcomes for military and veterans student
populations.
First, while mindful of the fiscal exigency which you have
underscored several times, Mr. Chairman, we believe that
military tuition assistance is essential to the success of our
military students. Veterans are coming home to a highly
competitive job market and as the unemployment numbers
indicate, far too many are unemployed and countless others are
underemployed. When competing against non-veterans, the key
differentiator is often a college degree.
The military services have made significant investments in
narrowing this gap by funding the cost of college through the
Tuition Assistance Program. This program has catapulted a
significant number of active-duty members toward educational
goals that they once had thought were impossible.
The impact of increased investments in tuition assistance
is substantial. In fiscal year 2002, the first year of 100
percent tuition assistance, there was an increase of 32 percent
in individual enrollments DOD-wide, and this increase has been
sustained in subsequent years. We ask this Subcommittee to
continue its leadership in this area and to closely examine the
impact of proposed changes to the Tuition Assistance Program.
Second, we believe that there should be continued support
for the American Council on Education (ACE) and Service Members
Opportunity College's (SOC) programs. These programs can
jumpstart the veterans' academic progress toward degree
completion by evaluating and certifying military training for
academic credit, ensuring reciprocal acceptance of credit
across participating institutions, and accelerating the entry
of military members and veterans into the workforce by
shortening their time to degree completion.
Third, we recommend that the Federal Government create and
implement a regime that would produce real consequences for
institutions that are significantly out of compliance with the
Military Voluntary Education Review Program (MIVER). DOD
Directive 1322.25 requires that all institutions participating
in the military Tuition Assistance Program sign a memorandum of
understanding with DOD committing these institutions to
participate in the review of all their programs according to
the MIVER best practices.
In the past, this program has resulted in team visits to
installations, review of academic programs, team
recommendations about issues or problems to be addressed. But
historically, there's been little real consequence for
institutions that did not observe these principles or address
the recommendations. So consequences for noncompliance could
include suspension of eligibility to participate in the DOD
Tuition Assistance Program for institutions that are seriously
out of compliance.
Fourth, we have seen that the funding shortfalls have
resulted over the years in a drastic reduction in providing
servicemembers and veterans with easy and convenient access to
highly qualified education counselors. Despite the very best
efforts of the military service, this latest generation of
largely first-time college students are often left to their own
devices to make a decision that should be preceded by unbiased
and highly qualified advising.
We ask that the Subcommittee look at the importance of
education counselors as it considers how best to assure sound
Federal investments in educational programs that serve our
military and veteran populations.
So in conclusion, the University of Maryland University
College strongly supports the work of this Subcommittee in
exploring proven practices and improving education outcomes for
those who have honorably volunteered to support and defend this
country. They deserve nothing less than the best. This
concludes my remarks, Mr. Chairman. I am happy to answer any
questions that you may have.
Senator Carper. Great, thanks very much for that testimony.
Really, uniformly excellent testimony from this panel. Thank
you. Thank you all.
I want to come back to the 90/10 rule in just a moment.
Before I do that, I just want to draw the attention of our
Subcommittee to a number of letters that many of our top
veterans groups have sent us calling on Congress to fix the 90/
10 rule so that GI Bill benefits are counted toward the 90
percent limit on Federal funding. We realize there are other
alternatives to that.
But we received letters\1\ from, among others, American
Veterans, Student Veterans of America, Veterans of Foreign Wars
(VFW), the Vietnam Veterans of America (VVA), Military Officers
Association, Blue Star Families, Paralyzed Veterans of America,
VetsFirst, and I would, without objection, want to submit those
letters for the record.
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\1\ The letters referenced by Senator Carper appears in the
appendix on page 115.
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I want to come back to solutions, if we could for a couple
of different ideas here for how to address the 90/10 rule, keep
it as it is, change it so that the monies that are government
funds meant to help veterans, or active duty personnel,
actually become a part of the 90 percent. There is a variety of
things that could be done. We have heard from some. I think we
heard from Dr. Kitchner here that suggest that maybe simply
fixing the 90/10 rule is not quite so easily as just making
sure that we count all the veterans assistance and all the
active duty military assistance in the 90 percent. Maybe that
is something, another way to deal with this.
I just want each of you to take a minute or so and just
talk about, if you were in our shoes and you are looking at
this problem with the perverse incentives that we are getting
from the 90/10 rule, among the perverse incentives is that
there is no skin in the game. There is no skin in the game for
the colleges and universities, whether they are proprietary,
private, public, no skin in the game.
And I am reminded a little bit here of the subprime lending
episode that we went through this last decade where you had, in
some cases, mortgage brokers are getting people who were really
not in any position to become homeowners, did not have the
wherewithal to become homeowners, folks buying homes on which
the appraisals were not worth the paper they were written on,
and the mortgage folks did not have any skin in the game
because they handed off the application to a mortgage bank and
the mortgage bank ultimately hands it off maybe to Fannie Mae
or Freddie Mac to get securitized.
These mortgages were bundled together and you have a whole
string of players there who had no skin in the game. And when
you have no skin in the game, market forces do not work very
well. I am reminded a little bit of that situation here.
Let me just start with Mr. Daywalt. Let us say you are on
this side of the dais and you have to figure out what to do in
this instance with the 90/10 rule. What would you do? Why would
you do it?
Mr. Daywalt. Do you want us to only address the 90/10 or--
--
Senator Carper. Start just with 90/10, but then we will go
beyond that.
Mr. Daywalt. As I put in my written statement, sir I think
all of the Federal funds should be put on the 90 percent side,
because I think you will find that the way some of these
predatory for-profits are operating, there is no skin in the
game from non-Federal funds. It is all Federal funds. I know
everybody talks 90/10. I would not have a problem going to 80/
20 and push it back some more. That may put some of them out of
business, but if they cannot act as a normal university, then
maybe they should not be in business.
Senator Carper. All right, thank you. Mr. Gallucci.
Mr. Gallucci. As the VFW mentioned in our written
statement, we would also support bringing all Federal funds on
the 90 side, and as I stated, this was the intention of the
law. If you look at the legislative history of 85/15, where it
came from, why it was started, it was designed to make sure
that school solvency was not strictly reliant on Federal funds.
What we have now with the two stovepiped regulations is a
situation where a school can manipulate one population simply
to fall into compliance with the other rule.
85/15 is still on the books in Title 38, part of Chapter 36
in how the GI Bill is administered, but it is relatively
irrelevant just because of the number of veterans who are
eligible for benefits and how robust higher education benefits
are these days. So to fall in line with the original intention
of the law, we feel it is perfectly appropriate to bring that
money on the 90 side.
Senator Carper. All right. Thank you. Dr. Kitchner.
Dr. Kitchner. Thank you, Mr. Chairman. I prefer to point to
the fact that it is our position--I believe that we should
first differentiate between Federal student aid and VA or DOD
funds. The GI Bill is what we consider to be an earned benefit.
It is not financial aid. It is not something that someone
qualifies for because of financial status or any other
determination. It is an earned benefit that I think most of our
military people were very well aware of when they enlisted.
This was a part of the inducement to enlist, would be to
take advantage of the Post-9/11 GI Bill or the Montgomery Bill
before it. I think that is an important distinction that we
should maintain and keep that in front of our mind because that
is part of the reason why I think the original higher education
authorization wrote the law the way it did.
I also would not want to encourage any kind of a policy
change that ended up with unintended consequences such as
reducing the amount of opportunities and access to higher
education that our veterans enjoy and deserve.
I think it is very important that we not let a policy
decision that could affect the number of students that an
institution could enroll or would involve having an institution
have to go out and find more cash paying students in order to
avoid a 90/10 trigger when, in fact, those cash-paying students
are neither part of their fundamental mission, historical
mission, nor for that matter would they necessarily be
available unless we went to an international market which does
nothing, quite frankly, to help support the President's
objective to further educate America's civilian and military
population.
So I think we want to make sure that as we struggle through
this challenge of identifying bad actors and promoting good
practices, that we focus on the academic dimension of this
question and not simply the economic one. Thank you.
Senator Carper. Good, thank you. Doctor Von Lehmen.
Dr. Von Lehmen. Thank you, Mr. Chairman. As an institution,
we would support including all Federal funds on the 90 percent
side of the formula. We do not think it is unreasonable that
institutions receiving Federal funds should be able to
demonstrate, by some consequential measure, that other
stakeholders have confidence in them. So we have reservation
about including veterans benefits and military tuition
assistance on the 90 percent side with Title IV.
Senator Carper. All right. Thank you. That question that I
just gave you is pretty narrow, how would you fix the perverse
incentives provided by the current 90/10 rule. Mr. Daywalt, I
think you were prepared to go just a little bit beyond that
specific question. Do you want to go back and pick that up? If
not, I have another more specific question.
Mr. Daywalt. Sure. I have some other recommendations that
you can consider. I look at it from a business perspective and
from having sat on the boards of different schools. These
schools are using Federal funds--I'm talking about the
predatory for-profits. They are using Federal funds to fund
their marketing and sales and commission campaigns. Some of
them as much as 50 percent of the revenues coming in are being
used to advertise, which I see them all over the place.
If they are going to use Federal monies--our taxpayer
dollars--I do not think they should be allowed to use any more
then 10 percent of their total revenue for marketing and sales
campaigns. I was on one school's board when the new dean of the
business school asked to raise the marketing funds for the
business school from 5.5 to 7 percent. You would have thought
that he had raped the Queen and killed the President. I mean,
the board members were going nuts. What do you mean, 7 percent?
But he wound up getting 8, by the way.
But limiting it to 10 percent, I think, would be very
important. I think the agencies should make better use of their
mechanisms that they have. There was a school that was
suspended earlier this year, but it was reinstated, and it goes
back to the things with the GAO. If they take people that are
blatantly violating the law, why are we still giving them
money? Something tells me that there is something wrong.
And the issue that has been brought up several times about
having better information available for the veterans through
the command curriculum counselors through the TAP and ACAP
centers is very important because a lot of these people came
into the military when they were 18 and they have no idea what
higher education is all about. They did not stick around to
talk to the kids who went to college. They came straight into
the military. So they are flying blind and they do need some
help and assistance.
Senator Carper. Is it fair to say that some of their
parents never went to college either?
Mr. Daywalt. I think that is very fair to say. I came from
a family where I was the first one that went to college and
then my mom and dad got their degrees after my dad retired
after 30 years of working.
Senator Carper. My parents had an expectation for their son
and daughter, my sister and me, to go to college, but also we
had to figure out how to pay for it.
Mr. Daywalt. Yes, we did.
Senator Carper. All right. Did you want to continue?
Mr. Daywalt. No. I think the other suggestions I have in
here stand--there is one and that is the accreditation issue. I
know it is not popular to say that some of these for-profits
put together what is called, on the Internet, fake accrediting
agencies, but we need to look at that issue very hard. If they
are running a business school program and they cannot get
accepted by the American Association of the Collegiate Schools
of Business, why are we putting Federal dollars into it?
Senator Carper. OK. Good point, sir. Mr. Gallucci, do you
want to speak more about it? I want to give Mr. Daywalt a
chance to do that. Do you want to speak more broadly on how to
proceed on a strictly 90/10 rule fix?
Mr. Gallucci. Absolutely. So you are talking about some
other ways that the VFW believes we could solve this problem?
Senator Carper. Yes, sir.
Mr. Gallucci. Basically, it is improving oversight
mechanisms. 90/10 is really just one facet of this. We also
spoke about memorandums of understanding with colleges. That is
one avenue that you could go down. VA eligibility, also, State
Approving Agency resources, and this is really one of the
largest ones that I wanted to touch on, because as I mentioned
in my testimony and as we heard from the previous panel, that
they are the boots on the ground for enforcement.
And what we found is basically they have been broken, they
have been broken for a long time. They do a great job with the
resources they have, but they haven't had enough since 2006.
They have not had a funding increase since 2006. The new GI
Bill came in place in 2009 and dictated that State Approving
Agencies were going to have to take on even more work as a
result.
This benefit is too robust and their responsibilities are
too great that at 2006 funding levels, there is no possible way
that they can accomplish their mission successfully. The VFW
testified on this back in 2009 before the House. Our concerns
were reiterated last year before the Senate VA Committee by the
National Association of State Approving Agencies. So this is
not a new problem. We know that our front line troops, the
State approving agents, do not have the resources they need and
predatory schools are obviously slipping through the cracks.
Senator Carper. All right. Dr. Kitchner, I am going to ask
if we could just hold it right there and I will come back and
ask you and Dr. Von Lehmen to just sort of pick up where we are
leaving off.
Senator Brown, would you like to proceed with your
questions? Thanks.
Senator Brown. Sorry. I am bouncing back and forth. I am
working on a couple of things back home that are very serious.
So, Mr. Gallucci, first of all, thanks for your testimony
and your service. I do not believe you answered this question,
but you described today's 90/10 and 85/15 rules ineffective,
stovepiped regulations. And I can kind of understand that being
here in Washington, now how we have a regulatory process that
is broken and needs to be done better.
It seems to be a point of agreement amongst most
stakeholders. I do not think there is much argument. How do we
stop viewing each program and its own independent like entity
and start realizing that all these programs are just a means to
educate our military and veterans? No. 1. And do you think this
weakens oversight of these programs and where do you think we
can make improvements?
Mr. Gallucci. With respect to 90/10 and 85/15, we feel that
going back to the original intent of the rules is what we
really want to do. 85/15 was really one of the original rules
to rein in fly by-night schools, and as it has been eroded over
the decades as we have heard, higher education developed a very
similar rule, 90/10, which covers higher education funds, work-
study programs, but there is no interplay.
What we have heard is that 85/15 is effectively irrelevant.
It is still in Title 38, but it does not really apply these
days because there are enough veterans going to school and
higher education dollars are a much more lucrative source of
revenue. We do not feel that bringing the VA and military
dollars onto the 90 side would have an adverse effect on
oversight.
VA is still authorized to--the State Approving Agencies are
still authorized to do their jobs. The military is still
authorized to monitor its education programs and how its
dollars are spent. This is simply making sure that schools
cannot solely rely on taxpayer dollars for solvency.
Senator Brown. And Dr. Kitchner.
Dr. Kitchner. Yes, sir.
Senator Brown. Considering the challenges that have been
described, what are the challenges in administering these
financial aid programs from an institutional perspective? And
then Dr. Von Lehmen, if I could have you answer that question
as well.
Dr. Kitchner. Thank you, Senator. One of the jobs that my
wife said she would never touch is being a financial aid
director, and I feel exactly the same way. Financial aid
administration is a complex business and it is not actually one
of those areas that I have a great deal of expertise in. I
think the issue that we have been trying to address, both in
the context of this hearing and, I think, in some broader
context with the Department of Education program integrity
rules, is that we ultimately want to see whatever form of
policy and rules are established, that they end up
accomplishing the objectives for which they are being proposed,
and that is, program integrity and quality of the instruction.
It is our sense that 90/10 does not deal with that at all.
Senator Brown. Let us take it a step further then as a
followup. What is the suggested streamlined process that we can
use from an administrative perspective while ensuring also that
Federal oversight is maintained?
Dr. Kitchner. Well, one option I think would be to
establish academic metrics, meaningful academic metrics that
would reflect institutional performance, publish those metrics
so that we have an opportunity to compare institutions to
institutions, providing prospective students and other members
of the public with useful and relevant information to make
decisions about colleges and programs that they may be
interested in.
I think another opportunity that we have is to identify
what Chairman Carper referred to as skin in the game. There
needs to be an opportunity for institutions to show that they
are going to be accountable for what they do not do well, and I
think some of us have reasonably good opportunities to make
changes or to modify practices so that we do not have to bump
up against accountability issues that will end up costing
institutions money.
Senator Brown. Thank you. Doctor Von Lehmen.
Dr. Von Lehmen. Like my colleague, Dr. Kitchner, I am not
one who is well-schooled in all the details of financial aid
advisement, but I do know from where I sit that it is extremely
complicated to administer, very complicated for the student,
and I think that recent regulations that have been implemented
by the Department of Education make it even more complicated
still and more difficult to administer.
From the standpoint of our institution, I think the
fundamental issue is that these regulations are designed for
more traditional colleges and universities that do not have, as
their principal mission, serving adult students. They are
designed for the kind of traditional enrollment patterns that
you find on traditional colleges and universities where you
have three opportunities to enroll, fall, spring, and summer.
What the changes might be I could not say in detail, but I
think if you ask any college administrator or any student, they
would say the same thing about the complexity and difficulty of
administration.
I would like to reinforce some comments that Dr. Kitchner
made. I think that as a Nation, we need to take stronger steps
toward accountability in higher education, and I think that the
first step is agreeing on what the metrics are. And that is a
complicated question because depending on what the differences
among institutions are, the metrics might be the same, but now
they are applied might be different.
I will say from my institution, our student population is
very different from the population that is captured by the
IPEDS data which looks at traditional college cohorts and how
many of them graduated in a 6-year period. Our experience is it
takes students on average maybe 10 years to graduate. We have
people who walk across our platform, including active duty
members who may have been at it for 12, 13 or 14 years before
they graduate.
So I think this area of metrics is very important. In fact,
there are efforts underway to achieve some clarity about what
these metrics should be, especially as they are applied in the
context that we are talking about, active duty members and
veterans. The servicemembers' opportunities consortium has
formed a group representing colleges and universities,
including American Military University, to discuss this very
issue and to produce some recommendations about what these
metrics should be.
Senator Brown. Thank you for those thorough answers. I must
say I will come back if it is appropriate.
Senator Carper. Well, it will be. Dr. Kitchner, Dr. Von
Lehmen, I am going to go back. Mr. Daywalt and Mr. Gallucci had
a chance to respond more fully. And if you would like to as
well, to my earlier question. If not, I will just come up with
a somewhat different question for Mr. Daywalt. Dr. Kitchner.
Dr. Kitchner. Chairman Carper, would you mind repeating the
question?
Senator Carper. I am not sure that I can. I said, beyond a
90/10 fix, what are some other things we ought to be doing? You
have already cited this to some extent, beyond a 90/10 fix.
What are some other things that we ought to be doing, we being
the Legislative Branch?
Dr. Kitchner. OK. Mr. Chairman, I think that one of the
things that I think you are already doing, and I commend you
for that, is monitoring carefully what the Department of
Education has attempted to do with its program integrity rules.
I think many of us in this room, if perhaps not everyone in the
room, would recognize that those rules are subject to
refinement and perhaps reconsideration in some cases.
But nevertheless, they have the potential of getting at the
core issues here, which is program integrity, which is, in
fact, institutional performance. And I believe, for example,
while gainful employment is a very controversial issue and
perhaps one of those that does need some thoughtful tweaking,
if not more, the fact is, gainful employment has the effect or
the potential effect of driving down the cost of higher
education; that it will force institutions to manage very
carefully their finances in order to not have an issue with the
formula between the cost of instruction and the employment
opportunities of their graduates.
Ironically, at the same time that we look at gainful
employment as maybe having that potential, it then bumps right
up against 90/10, which as I have tried to demonstrate in that
brief poster next to me, has precisely the opposite effect of
driving up the costs.
So we have two initiatives, both appropriate in many
respects, but they are working at cross purposes. And so I
would suggest that working closely with the Department of
Education, working closely with the higher education community.
There is much that we can do, and to Dr. Von Lehmen's point, I
think we need to look thoughtfully at whether or not rules that
were in place 20 years ago, for that matter 10 years ago, if
they still have relevancy, given the fact that we have an
entirely different population that is looking at higher
education as an opportunity that they can take advantage of
because the methodologies and the technology are out there to
do so. Thank you, sir.
Senator Carper. Good, thank you, sir. Dr. Von Lehmen.
Dr. Von Lehmen. I have no further comments.
Senator Carper. OK, good. We are back to Mr. Daywalt, if I
could. I just want to give you an opportunity to respond to
what our friends from the Department of Veterans Affairs said
earlier about barring only one school out of, I think, 6,000
from receiving GI Bill benefits or funds. Do you think the VA
is doing a good enough job at policing schools?
Mr. Daywalt. Well, that kind of puts me on the spot, but my
personal feeling says no, they have not, and I speak as a
person who--I mean, I am responsible for bottom line where I
work at. If we cheat, I am going to wind up in front of the
SEC. If you have 15 colleges that are cheating and basically
lying, committing fraud, why were they not suspended? Why are
they even allowed on the military bases? They should have been
thrown off.
That seems to be common sense, but common sense does not
seem to be ruling things right now. And as a businessman, I
have to ask, if these 15 were really doing all this to whose
benefit is it to have them still there? Does not someone who
commits fraud supposed to not be able to get access to Federal
funds?
Senator Carper. I think the answer is self-evident. Thank
you. All right.
In my old job as Governor of Delaware, one of the things we
used to do, when we had a problem--I will give you a couple of
examples. We had a problem in Delaware where we raise a lot of
chickens in our State. There are 300 chickens for every person
who lives in Delaware. And on the Delmarva Peninsula which
includes the Eastern shore of Maryland and the Eastern shore of
Virginia, poultry is a huge industry. Eighty percent of our ag
industry in Delaware is poultry.
And we have a lot of chickens living in chicken houses and
every so often the chicken houses are cleaned out and the
nutrients that are high in phosphorus, high in nitrogen and we
have to do something with it. For years the farmers just spread
the nutrients very thickly across farm fields across Delmarva.
When it rains or when this stuff is stacked up in the
middle of a field and it rains and washes off into our rivers,
lakes, streams, eventually finds its way over to the Chesapeake
Bay. There is a large expense of the Chesapeake Bay where there
is nothing living. It is just dead, in part because of the high
nutrient loads.
About 10 or 12 years ago, we pulled all the farmers
together in our State and said, ``Look, we have a big problem
here.'' It is a problem. Now, you guys and gals and environment
stewards, help us figure this out, and they did. They took off,
if you will, maybe the darker hat and they put on a white hat
and said, ``We ought to have rules on how much of these
nutrients can be spread for every farm.''
We are going to have a nutrient application program
designed for that farm, given what the soils are like. We are
going to make sure that everybody is trained who are going to
be spreading these nutrients, and we are going to come up with
ways to take nutrients and treat them under high temperatures
in a special manufacturing situation. We take about 15 percent
of the chicken waste now to a facility run by Perdue, Perdue
Poultry, where they actually transform them into an organic
fertilizer which is pelletized, sold all over the country by
Scott and just get it off the Peninsula.
But that was a problem where the folks who were helping to
create the problem--it was not just the farmers. It is golf
courses, it is other people who put fertilizer on their lawns.
The farmers helped us come up with a solution.
We have a problem in Delaware with welfare, in fact, in the
country. I spent a lot of time on this as Governor with the
National Governors Association (NGA). When we incentivize
people not to go to work, people on welfare not to go to work,
just to have more kids, because when they went to work, they
lost their health care benefits, they didn't have anybody to
help look after their kids. All the incentives were just
misaligned. So we asked to help solve the problem? We asked
people on welfare.
Welfare moms and dads it is not a good situation. Help us
solve this. We did the same thing with teen pregnancy. We got a
lot of kids, a lot of high school students to help us solve
that problem. Part of the problem here is proprietary schools
and, frankly, the private and the public schools who are not
doing the kind of job they need to with respect to delivering
the results, that is, people who get an education and are
unable to go out and make a living, be productive citizens.
They are not doing their share.
I hope that some of them feel ashamed. I hope some feel
very proud, some of the folks. The representatives in your
State would be very proud of the job that you do, but some of
the other folks that are out there offering these so-called
services ought to feel ashamed.
But they can be part of the solution and we need for them
to be part of the solution. My hope is that going forward, that
they more and more will feel like, I am part of the problem
here, everything I do, everything I know I do I can do better,
the same is true of them. And we need for them to be part of
that solution.
Let me stop there and go back to Senator Brown.
Senator Brown. I just have a few questions. I am just going
to read something. I think it was either yesterday's or today's
New York Times, Holly Petraeus notes that there are some of
for-profit colleges with a long record of serving the military,
solid academic credentials, and a history of success for their
graduates. But compared with other schools, for-profit colleges
generally have low graduation rates and a poor record of
gainful employment for their alumni.
So Mr. Gallucci, with those results, it does not really
seem like a sustainable business model. And if so, why have
some of these bad actors in the for-profit industry persisted?
Mr. Gallucci. Well, thanks for the question, Senator Brown.
We would have to believe that some of these institutions have
persisted because of poor oversight and poor regulations.
Senator Brown. And the thing that Mr. Daywalt just said
about not kicking them out and actually following through with
the threats, I think, is critical.
Mr. Gallucci. Exactly, and that comes back to who is
actually vetting the processes and what I had said about the
State Approving Agencies. This is one of the reasons that we
had suggested that VA possibly adopt something similar to the
memorandums of understanding that the Department of Defense
uses. There are positive actors who are out there, who are
doing this right.
We had the opportunity to sit down with some folks from the
University of Phoenix who had launched a 2-year pilot on an
orientation program. They saw that in the 2-years that they
implemented this pilot program, 20 percent of students just
walk away right then. It is free of charge. They realize they
cannot handle it and they walk away. They decided to institute
that nationwide. This is a step that they have taken to say
that, We are focused on the outcomes that our students receive.
Another step that they have taken was an online
questionnaire to determine whether or not you are ready for it.
With some healthy skepticism, I went online and took it myself
and discovered that given my time requirements, I am not ready
to attend one of their programs. Your time available for your
studies is of serious concern. Your reasons for going to school
are a reasonable concern.
Your support and resources are a reasonable concern. I
thought that was incredibly transparent. Some of these
memoranda, if they are comprehensive enough, if you are
transparent about graduation rates, job placement rates,
accreditation, and also your student services to veterans, can
improve these outcomes.
Senator Brown. So Dr. Kitchner, how is AMU doing it
differently, other than other for-profits that have been
criticized for putting profits over students' success.
Dr. Kitchner. Senator Brown, I am not able to speak to a
lot of our colleagues, but I will say that I think one of the
strategies that we have in place and we have had it in place
historically is very similar to what Mr. Gallucci referred to
in terms of making sure that, No. 1, that the students that
enroll are prepared to succeed.
I think anything short of some kind of a process, a vetting
process, an introductory course, which is what we have--which,
by the way, if a student is not passing it, they are refunded
the cost of it. The department is not on the hook for it, the
student is not on the hook for it.
Senator Brown. That is not the case in all programs?
Dr. Kitchner. Again, I would not presume to know, but I
suspect it is probably not. I do not think there are probably
very many public universities that offer that option, to be
honest with you, and I am not suggesting everyone should.
I think it depends on the population you are trying to
serve and it is one of the variables that often gets lost here,
is that the for-profit sector, for all of its imagined and real
faults, is reaching out to an under-served population, an
historically under-served group of people who probably were not
particularly academically inclined in high school and perhaps
not as successful in high school as they ultimately can be and
will be.
But they reach out to that population and try to help them
succeed. I think as we look at metrics, as we look at
thresholds of performance, we really need to look at an
institution by institution process, to some extent, to
determine what kind of students they are working with, what the
challenges of those students are, and how effective the
institutions are with those populations. So it needs to be sort
of population specific, if you will.
Senator Brown. Thank you. And Dr. Von Lehmen, in your
opinion, what quality controls and best practices in the public
education sector can be applied to address some of the concerns
regarding the for-profit industry, if you can comment?
Dr. Von Lehmen. Well, let us see. I think that is a big
question. It involves a number of things which I know some of
the for-profits do in fact do. Learning outcomes assessment is
extremely important. This is assessing your programs at an
institutional level to see whether or not the institution is
actually engendering the qualities that it promises them that
they will achieve at institutions. I am talking about things
like critical thinking, ability to write and speak well,
quantitative literacy, information literacy, so on and so
forth, as well as competency in their chosen field of study.
So I think learning outcomes assessment is extremely
important to the quality and the effectiveness of academic
programs. I think it is extremely important, especially for the
student population that we serve, to try to understand what
makes successful students successful. The term of art that is
used these days is data mining. The idea is to use the data
that you have on your successful students, including their
behaviors, to the extent those behaviors, and to try to come up
with actionable conclusions that you can institutionalize in
some way that will help other students be successful.
So those are two, I think, key academically centered
quality control measures, but I think the quality control
measures extend to student services and other parts of the
university. Services have a big impact on students and their
success. A very good example is degree audit.
It is not uncommon for active duty members to have attended
a number of different colleges and universities. And so, when
they come to us and talk to us about our degree programs,
certainly one question that has to be answered is, not only
what are the requirements of that program, but where would they
stand in that program with us in terms of the previous college
work that they have completed; how much of that would transfer
into their degree program.
So it is very important that their previous college work be
evaluated in a timely manner. We are dependent on them to
provide us with the information that we can evaluate, but once
provided, should be evaluated quickly, within a day, or 2, or 3
days, so that the active duty member or veteran, will know, in
that 120 semester hour-undergraduate program or that graduate
program, how much of their prior college work and indeed,
military training through ACE evaluation, will transfer into
their degree program.
So there should be metrics on services like degree audit so
that once a student's file is complete, there is no excuse for
that information to sit there for a month, 2 months, 3 months
or a year. They should be receiving an evaluation within days,
if that long, so that they know where they stand. The same
thing is true for processing their applications for veterans
assistance or financial aid. There should be metrics around how
quickly those services are provided.
So metrics are key and I think those metrics need to apply
not just to academic programs, but across the spectrum
including student services.
Senator Brown. Thank you and thank you, Mr. Chairman.
Senator Carper. Sure. Thank you very much for being part of
this hearing. Senator Brown and I are supposed to be in another
meeting in the Capitol in about 15 minutes, so we are going to
wrap up here in about 10 or 12 minutes.
The last question I will probably ask of you is just if you
have a closing thought and it is an opportunity. We already
asked you to do opening statements and we do not ask you to do
closing statements, but I will give you that opportunity for
maybe a minute. So just be thinking about what you might want
to say.
I think this will be for Dr. Kitchner and Dr. Von Lehmen.
There is a recent study, I believe, out of Columbia University
that showed that students enrolled in online courses control
for a number of factors, but were more likely to fail or drop
out of courses than were those who took the same courses in
person. I am not surprised at that, but it was interesting to
hear what they reported. Some have suggested we address this by
requiring students to take a readiness assessment for online
instruction providing training for faculty members in online
pedagogy and improving student support services such as round-
the-clock tutoring and academic services, not just technical
support.
How do your schools address these areas and what do you
think about the need for such reforms in order to increase
online retention and completion? Dr. Kitchner.
Dr. Kitchner. Thank you, Mr. Chairman. As an online
university that responds to students and interacts with
students literally 24/7 from around the world, No. 1, we have
to staff for that and we have to have an information technology
backbone that will support that. That is absolutely critical.
That is where we have a tremendous investment of resources and
we continue to support that.
We have a large cohort of individuals who work in student
support services. I think the number is approaching 50 in
student support services alone. We have admissions counselors
who basically handle in-bound calls, not outbound. In other
words, they are responding to individuals who have an inquiry
about the institution, whether or not it is going to fit their
needs, whether or not the program is available and it is going
to fit their career aspirations.
We have an online, a very robust online color-coded degree
audit that an individual who enrolls in a program can literally
go online and determine whether a course that they might be
interested in taking will fit into that degree program, so that
they know that they are not looking at a degree option that
will not actually meet their long-term expectations. These are
just examples of what we feel is essential to an online
environment, that you really have to take advantage of the
technology, while at the same time, making sure that there is
this interactivity.
And our students and faculty both have to go through a very
rigorous, what you referred to, I think, sort of introductory
vetting of whether or not they are capable of succeeding. We do
not want faculty that do not like the mode and they are not
going to be successful adapting to that mode. And obviously
students have to be comfortable with it. So we focus very
intently on making sure that we have a right match there. Thank
you, sir.
Senator Carper. All right, thank you. Dr. Von Lehmen.
Dr. Von Lehmen. Thank you, Mr. Chairman. Well, just to
respond to the point you made in reference to the Columbia
University study, let me start by saying UMUC does offer quite
a few face-to-face classes, especially overseas, under our
large military contracts. But certainly the majority of our
enrollments stateside are online.
I guess the first thing I would say is, the Columbia
University is right. Online education is not for everyone. And
so, I do think it is a responsibility of institutions to give
students an opportunity, before they commit anything, to
determine whether or not this is a mode in which they can be
successful.
At UMUC, we have what we call UMUC 411. We have several
versions of this. We have a military and veterans UMUC 411, but
at its core it is the same as what we would offer any other
student, which is a week-long opportunity at no charge to
enroll in kind of an online orientation.
This is an active class. The purpose is really twofold. One
is to give students an opportunity to experience the platform
itself and how it works and how an online class would work.
Through that week, they also have an opportunity to interact
asynchronously with financial aid advisors, with academic
advisors, with faculty members so they get some understanding
of the institution and the people who staff it.
I mentioned data mining before. What we have found is that
the retention rate of students who go through the UMUC 411 is
far higher than students who do not. And so, I think it just
underscores the point that online education is not for
everyone.
Faculty training is key. Online teaching--and I say this as
someone who taught face to face for many years. I was a tenured
associate professor at another university some time ago before
joining UMUC, so I taught face to face for many years, and, in
fact, was skeptical as a face-to-face instructor. And so, I
went through the online training myself with UMUC, which at
that time was a 5-week online training course. There was a
class, it had an instructor, and we as faculty novices, had
assignments to complete and readings to do, and I found at that
time it took me about 15 hours a week, apart from my day job,
to complete that training from week to week. I have since
taught online.
But the point is that even today, we require all of our
faculty, whether they are full-time or adjunct, to go through
this training program. And it is not just pedagogy. I like to
view it as kind of a seminary. The purpose of seminaries is not
just education, it is formation. And what we try to do is imbue
our faculty with our values and the value is students first,
respect for students, excellence, and those are values to which
we subsequently hold them to.
We likewise give them some practical pointers. We found--
and this is really maybe a commonplace thing to say, but we
have actually found through analysis that one of the biggest
things that correlates with student success and student
persistence is the engagement of the faculty member in the
online classroom, being there for the student, providing them
with very quick feedback on work, being mindful when they are
not there and going after them, Why were you not in class last
week, we really missed you. This is critical.
Good academic advisement, that again is empirically
informed. Academic advisement does not just mean being fluent
about what the admission requirements and the degree
requirements of a given program are. It is being mindful of
those things that I mentioned before. What does actionable
research tell us is more likely to make students successful?
And some of these things should be embedded, and in our
institution are embedded, in the academic advisement.
Here is one concrete example, we have found that students
who have completed their college writing before they come to
UMUC are far more likely to succeed in an online environment
than students who have not completed their college writing
before they come to UMUC. And if you think about that, that
intuitively makes perfect sense because writing is how much of
the interaction occurs in the online asynchronous classroom.
And so, if we have students that come to us or want to
begin who have not had their college writing course, we advise
them that this is one of the first courses they should take
with us in their first semester because we know that it will
make them more successful in the long run.
Support is very important. I recently returned from a trip
to Russia. We have had 20 year agreements with Russian
universities, one Irkutsk State University in Siberia, another
in Vladivostok, and they are very interested now in moving
their programs into the online mode. One of the things my
President emphasized to them is that it is not just about the
classroom.
If you are going to successfully offer online programs at a
distance, it is different from serving a traditional campus
residential community with some occasional online courses where
if they need library support they can walk over to the library,
or if they need advising, they can just walk over to the
advising center.
You have to put your whole campus online so that students
can access not simply library resources, but have 24/7
librarian assistance as well; that they can get academic
advisement when they need it, and help with their writing if
that is a difficulty for them and so on, as well 24/7 technical
support. And certainly our university does all of those things.
Senator Carper. Good. Well, I had said the last thing I
wanted to ask for you all each to take a short period of time
and give a benediction. We do not have time. I need to be in
the Capitol in about 3 minutes, so we are going to have to
forego that.
I just want to say, this has been an illuminating hearing,
troubling to some extent, but also very encouraging. For the
schools out there, proprietary schools or those that are not
proprietary schools that are not giving taxpayers what we
deserve and their students, especially military and veterans
what they deserve and have earned, You need to start. You need
to look very carefully at some of the very smart things that
you are doing at your two institutions and get with it.
We are just one Subcommittee. We are part of the Committee
on Homeland Security and Governmental Affairs (HSGAC), but this
is a Subcommittee that is very tenacious. And in the words of
Winston Churchill, we do not give up. I mean, when we get our
teeth into something, we just do not give up. We are not going
to let up on this one either. There is too much money involved,
taxpayer money that we do not have, and there are too many
veterans involved that need a better break than they are
getting and need a bigger helping hand than they are getting.
We are there to help our brothers and sisters.
I just want to thank you for being here. Mr. Gallucci,
special thanks to you and all veterans groups that have helped
us prepare for this day, and also to say there are a number of
other committees, certainly the Education Committee led by
their Chairman, Tom Harkin, other Members of the Senate and
House, I am sure, who have an interest in these issues and have
are anxious to help address the concerns that have been raised
and solve this problem.
Part of the solution is going to be, I think, is available
in the Department of Defense, in the Department of Veterans
Affairs, Department of Education, the veterans organizations,
but also in the institutions that are providing these
educational services, in some cases very well, in some cases
not well at all.
I will close with this. In a hearing we had here a month or
so ago, we had friends from the Department of Defense including
Marines who were trying to lead the way to be the first on the
beach and the first of the services to have auditable finances,
financial statements. We need to look for those good examples.
We need to look for those best practices and find ways to
incentivize and do more of that.
What we cannot measure, we cannot manage. And we talked a
lot here today about metrics and how do we figure--like I
always say, how do you measure success? For me, this is kind of
simple, but it is to make sure that people who use taxpayer
dollars to get a better education, at the end of the day, that
education is worth something to them and to our country.
Sometimes when George Voinovich was here, and he and I
served together first as Governors and as Senators for many
years, we would, from time to time, hold round tables. When we
were trying to get the, interested parties in a room, rather
than a hearing. That was the kind of structure we were
interested in really developing a consensus. It can be pretty
helpful.
And I think we might want to try to do one here. Lamar
Alexander, the Senator from Tennessee, another former Governor,
he likes to say that hearings are where the Senators just talk
and they do not listen. We do not listen very well. He said, we
should really call them ``talkings.'' But round tables actually
give a chance for all the interested parties, the stakeholders,
including the white hats from the industry and those that do
not have white hats. And I think it would be a good idea to get
folks in a room and talk about what we are doing well and what
we need to do better.
So with that having been said, my colleagues who were not
here will have the opportunity for 2 weeks to submit written
questions. If they do, I would just ask that you respond to
those promptly. This is not an issue that is going to go away.
Deficits are not going to go away. Veterans who need a real
good education, it is not going to go away. Our Nation, which
needs a good workforce, that need is not going to go away.
There is a lot here at stake and we are going to get it done.
Thank you, very, very much. With that, this hearing is
concluded. Thank you.
[Whereupon, at 4 p.m., the Subcommittee was adjourned.]
A P P E N D I X
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