[Senate Hearing 113-206]
[From the U.S. Government Printing Office]
S. Hrg. 113-206
THE 90/10 RULE: IMPROVING EDUCATIONAL OUTCOMES FOR OUR MILITARY AND
VETERANS
=======================================================================
HEARING
before the
COMMITTEE ON
HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS
UNITED STATES SENATE
ONE HUNDRED THIRTEENTH CONGRESS
FIRST SESSION
__________
JULY 23, 2013
__________
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COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS
THOMAS R. CARPER, Delaware Chairman
CARL LEVIN, Michigan TOM COBURN, Oklahoma
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 MICHAEL B. ENZI, Wyoming
TAMMY BALDWIN, Wisconsin KELLY AYOTTE, New Hampshire
HEIDI HEITKAMP, North Dakota JEFF CHIESA, New Jersey
Richard J. Kessler, Staff Director
John P. Kilvington, Deputy Staff Director
Gohar Sedighi, Legislative Fellow, Office of Senator Carper
Walter S. Ochinko, GAO Detailee
Keith B. Ashdown, Minority Staff Director
Christopher J. Barkley, Minority Deputy Staff Director
Catharine A. Bailey, Minority Director of Governmental Affairs
Laura W. Kilbride, Chief Clerk
Lauren Corcoran, Hearing Clerk
C O N T E N T S
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Opening statements:
Page
Senator Carper............................................... 1
Senator Coburn............................................... 4
Senator McCaskill............................................ 22
Prepared statements:
Senator Carper............................................... 35
Senator Coburn............................................... 37
WITNESSES
Tuesday, July 23, 2013
Curtis L. Coy, Deputy Under Secretary for Economic Opportunity,
Veterans' Benefits Administration, U.S. Department of Veterans'
Affairs; accompanied by Robert M. Worley, II, Director,
Education Services............................................. 7
Hollister K. Petraeus, Assistant Director, Office of Service
Member Affairs, Consumer Financial Protection Bureau........... 9
Hon. Steven C. Gunderson, President and Chief Executive Officer,
Association of Private Sector Colleges and Universities........ 11
Tom Tarantino, Chief Policy Officer, Iraq and Afghanistan
Veterans of America............................................ 13
Sergeant Christopher J. Pantzke, USA, Ret., Veteran.............. 16
Alphabetical List of Witnesses
Coy, Curtis L.:
Testimony.................................................... 7
Prepared statement........................................... 38
Gunderson, Hon. Steven C.:
Testimony.................................................... 11
Prepared statement with attachment........................... 53
Pantzke, Sergeant Christopher J.:
Testimony.................................................... 16
Prepared statement with attachment........................... 80
Petraeus, Hollister K.:
Testimony.................................................... 9
Prepared statement........................................... 48
Tarantino, Tom:
Testimony.................................................... 13
Prepared statement........................................... 77
APPENDIX
Chart referenced by Senator Coburn............................... 95
Additional statements for the Record:
American Public University System............................ 101
Education Management Corporation............................. 104
Response to request for information from ITT Technical Institute. 111
Response to testimony from the Art Institute of Pittsburgh....... 123
Responses to post-hearing questions for the Record:
Mr. Coy...................................................... 124
Ms. Petraeus................................................. 126
Mr. Gunderson................................................ 128
Mr. Tarantino................................................ 159
The 90/10 RULE: IMPROVING
EDUCATIONAL OUTCOMES FOR OUR MILITARY AND VETERANS
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TUESDAY, JULY 23, 2013
U.S. Senate,
Committee on Homeland Security
and Governmental Affairs,
Washington, DC.
The Committee met, pursuant to notice, at 10:33 a.m., in
room SD-342, Dirksen Senate Office Building, Hon. Thomas R.
Carper, Chairman of the Committee, presiding.
Present: Senators Carper, Pryor, McCaskill, and Coburn.
OPENING STATEMENT OF CHAIRMAN CARPER
Chairman Carper. The hearing will come to order. I
understand that our fifth witness, Sergeant Pantzke, is looking
for parking. Hopefully he found it, and is on his way to join
us.
I want to welcome everybody this morning to our hearing.
This hearing focuses on a very considerable amount of money
that we are providing in high-quality education benefits to our
servicemembers and to our veterans. In examining this issue,
the Committee is asking a couple of questions. One of them is,
are we getting the results to taxpayers that servicemembers and
veterans deserve?
The G.I. Bill helped me to afford the cost of getting a
Masters of Business Administration (M.B.A.) at the University
of Delaware (UDEL) after I transitioned off of active duty in
the U.S. Navy near the end of the Vietnam War. And while I was
grateful for that financial support--I think it was about $250
a month--those benefits pale in comparison to the very
considerable taxpayer investment that the new G.I. Bill makes
toward an education for our servicemembers and for our
veterans.
For years through the service academies and through
programs like the Reserve Officer's Training Corps (ROTC) and
the G.I. Bill and tuition assistance, we have sought to raise
the skill levels of those who serve in our armed forces as well
as the skill levels of those who later return to civilian life.
However, in 2008, it became clear to Congress that after
years of multiple tours of duty in Iraq and Afghanistan, a
modern day military needed a modern day G.I. Bill to ease
soldiers' transition to civilian work here at home.
That is why we passed the post-9/11 G.I. Bill, to help our
modern day veterans afford the cost of college and put them on
a path toward getting a good-paying job. The modern day G.I.
Bill 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.
I like to say in Delaware, you can go to the University of
Delaware, Delaware State University (DSU), Wilmington
University, Delaware Technical Community College (DTCC), and a
variety of other schools in our State tuition-free, books, fees
paid for, tutoring paid for, plus a $1,500 a month housing
allowance. And for those of us who came back at the end of the
Vietnam War, I think we got about $250 a month. So this is
quite a rich benefit and I do not deny them it for a moment.
Since it was enacted, though, $29.4 billion has been spent
to send veterans back to school. In addition, the Department of
Defense (DOD) offers military servicemembers the opportunity to
pursue a high quality education through the Tuition Assistance
Program (TAP). Service members and veterans taking advantage of
the benefits available to them under the G.I. Bill are free to
pursue the educational path of their choice. They can go to
public school like I did when I studied at the University of
Delaware, or they can attend a private, non-profit school, or a
for-profit school.
However, recent reports show that many veterans, too many
veterans have been subjected to highly questionable recruitment
practices--we have heard about those--exposed to deceptive
marketing and substandard educational instruction in some of
the schools they attended, particularly among the for-profit
schools. Not all of them. Some of the for-profit schools are
excellent, we know that, I know that, but not all. And frankly,
some of the same could be true of the public schools and the
private schools.
But what I am interested in is uniform excellence across
the board. I want to make sure that at least all these Federal
dollars that we are spending on these programs, that we are
going to end up with veterans and active duty personnel who
actually have the skills that they need to get a job, keep a
job, and be self-sufficient. That is what my goal is.
Under current law, in order for a for-profit school to
receive Federal student aid from the Department of Education
(ED), the school must ensure that no more than 90 percent of
its revenues come from Federal funding. The definition of
Federal funding, as it applies to this limit, is not as
straight forward as one might expect. It turns out that under
current law, Federal funding means only money that comes
through the Department of Education.
Other Federal funds such as G.I. Bill benefits that come
from the Department of Veterans' Affairs (VA) and military
education benefits that are offered through the Department of
Defense are excluded from the 90 percent limit that makes up
the Federal share of a school's revenue.
That means that a school that maxes out on its 90 percent
limit can bring in federally funded military and veterans'
education benefits in order to skirt the limit, and in some
cases, get 100 percent of their funding from the Federal
Government. I choke on that. The idea that any college or
university, I do not care if they are profit, public, for-
profit that gets 100 percent of its revenues from the Federal
Government for me is troubling. It is just troubling.
As several reports have shown, this loophole has, in some
cases, put a target on the backs of our military and veteran
students, and then once students enroll, they are often not
obtaining the knowledge and skills that they need to get a job,
that will enable them to earn a livable wage and sound
benefits.
Clearly, the incentives at some for-profit schools are
misaligned. These institutions are rewarded for enrolling more
students, especially veterans with a fully paid-for education,
but have too little incentive to make sure that their graduates
are prepared to join the workforce and begin productive
careers.
Having said that, this is not an issue solely for for-
profit schools, as I said already. There are also too many
public and private non-profit 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 quality education and have a history of
success with placing students in well-paying jobs.
I believe we have a moral imperative to ensure that abusive
practices, no matter where they occur, are stopped so that
those who have sacrificed for our country can obtain an
education that will equip them with the skills they need to
find a good job, repay their loans, college loans or others
that they have taken out, and go on to live productive lives.
Two years ago I chaired a couple of hearings on this issue
in the Subcommittee on Federal Financial Management (FFM).
Today I am holding this hearing to learn what is being done by
the Department of Veterans' Affairs and others, to protect our
military and our veteran students from the predatory practices
of some bad actors, not totally--but primarily in the for-
profit industry.
This hearing will also focus on what the association that
represents for-profit schools has done to address concerns
raised about the industry that it represents. My goal for
today's hearing is to learn how we can fix this problem by
better incentivizing schools to deliver a higher quality
education to our military and veteran population that will
enable them to be successful in work and in life.
We have a very good panel, I think a terrific panel here
today, and we are grateful to you for joining us. Before I turn
to Dr. Coburn, I just want to say this: When I was on active
duty--I was on active duty for close to 5 years, and Commander
Coy, you were on active duty for a lot longer than that. I
think we had about 12 permanent changes of station in not a
very long period of time.
I got an undergraduate degree at Navy ROTC at Ohio State
(OSU), and 5 years later I moved to Delaware and got an M.B.A.
with the G.I. Bill. It would have been great, all those times
that I was traveling around the world with my squadron being
deployed to different places, it would have been great if I
could have worked on a Master's degree at that time, or maybe
just taking courses. We did not have that opportunity.
We did not have the Internet, did not have the opportunity
for distance learning. And it is a great tool. It is a great
benefit if done well. For folks who are on active duty, the
folks that are deployed or activated, Reserves, Guard, it is
potentially a very valuable tool, not only in helping them
improve their skills, but also making them more valuable to our
country, to the branch of service in which they are serving.
So I am not interested in the blame game here, I am not
interested in demeaning any particular schools. I just want
better results for less money. We have to get better results
for less money in everything we do. It includes this area
because we are spending a lot of money. Dr. Coburn.
OPENING STATEMENT OF SENATOR COBURN
Senator Coburn. Well, thank each of you for being here. As
I think about costs for the American public, we looked at
health care costs, and we all know that they have risen
uncontrollably. They are somewhat slower now due to the economy
and a couple of other factors, but there is one thing that has
risen faster than health care costs in this country and that is
the cost of a college education. It is the fastest growing
thing.
At the heart of today's hearing are questions about the
appropriate role of the Federal Government in higher education.
In 1958, the National Defense Education Act (NDEA) was
established and the Federal Government began its foray into the
private sector of public education, higher education.
Not everyone agreed with this bill's passage. Some feared
that it would lead to Federal intrusion into the halls of
higher learning, and boy, has it. Barry Goldwater said, if
adopted, the legislation will mark the inception of age
supervision, ultimately, the control of the higher education in
this country by Federal authorities. Fast forward to today and
the prophecy is manifest.
Higher education today is dramatically more expensive
despite hundreds of billions of dollars, Federal dollars, being
poured into the system-loans, Pell Grants, G.I. benefits,
research dollars, tax benefits and more. More money has brought
more Federal interference. Washington seemingly wants to
regulate everything, even what constitutes a credit hour,
something that is fundamentally the job of colleges.
There is a lot to be said about the larger topic of the
current state of higher education. However, when it comes to
the 90/10 Rule, it is arbitrary and government engineering at
its worst. Let us ask ourselves a few questions, Mr. Chairman.
If 90/10 is sound policy, why not apply this rule to all
schools regardless of control type? After all, graduation rates
at many non-profit schools around the country leave much to be
desired, and I would like to submit for the record both the
public and private profit, non-profit education graduation
rates\1\ for the State of Delaware and the State of Oklahoma
for the record. Both are abysmal.
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\1\ The chart submitted by Senator Coburn appears in the Appendix
on page 95.
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Chairman Carper. Without objection.
Senator Coburn. I would also like to submit at this time
statements\2\ from other individuals who would like to have
their words as a part of the record.
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\2\ Additional statements submitted for the Record appear in the
Appendix on page 101.
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Chairman Carper. Without objection.
Senator Coburn. And if the 90/10 Rule is sound policy, why
stop at 10 percent? Why not lower the threshold? How does 50
percent sound? Fifty percent applied to all schools, all
Federal dollars. We would see some miraculous changes, would we
not? Non-profit schools and Congress, of course, would never
agree to this.
The truth is, the 90/10 Rule is the government picking
winners and losers among colleges that have already proven
themselves by being accredited, approved by State-approving
agencies, eligible for Title IV, and by complying with a myriad
forms of compliance and levels of compliance.
I look forward to our hearing. The real problem is, whether
it is in private or public, profit or non-profit, we have
abysmal graduation and completion rates. We ought to take the
fraud out of the system. Nobody would disagree with that. We
ought to take the shysters out. There are those both in public
and private, if you look at graduation rates.
But we ought to be concerned about what the cost is to get
an education, to enable somebody to have a life skill that will
support them. And that would be where I would hope that we
would focus. 90/10 is an arbitrary rule. It is arbitrary. It
causes us to focus on not fixing the right problem. With that,
I yield back.
Chairman Carper. Believe it or not, Dr. Coburn and I
probably have more agreement in this area than you might think,
having heard his comments and mine. Neither of us like to waste
money. We do not like to waste real money. We do not like to
waste taxpayers' money. And what we want to make sure of at the
end of the day is we are not wasting money on the G.I. Bill, we
are not wasting money on tuition assistance for folks on active
duty.
I am one of those people that likes to see how we can
properly align incentives in order to get the kind of results
that we are looking for. So we will work on this and we are
going to keep working on this until we get a better result.
Dr. Coburn asked. Mr. Coy, I said you spent like 20 years
in the Navy, I think, Academy graduate in the Class of 1975,
and I said, when you finished up, what was your rank? He says,
he is a Commander. So he is Commander Coy and that is the way I
will introduce him today. My favorite rank in the Navy was when
I was a Commander. I loved saying to people, I am Commander
Carper. Who are you? I am Commander Carper.
But Commander Coy, we are grateful that you are here. We
are grateful for all your years of active duty service in the
United States Navy. You now serve, as I understand it, as the
Under Secretary for Economic Opportunity in the Department of
Veterans' Affairs, overseeing all education benefits, loan
guarantee service, and vocational, rehabilitation and
employment services for America's veterans.
And prior to that appointment in the V.A., you have had
quite a career. Mr. Coy served in a variety of key positions at
the Department of Health and Human Services (HHS), including
Deputy Director for Operations in the Office of Consumer
Information and Insurance Oversight. We are grateful for your
service in those regards, and also in the United States Navy,
where I understand you started off in Athens, Georgia, after
you left the Naval Academy.
I thought about going to supply school, too, and ended up
taking a detour and went to Pensacola instead. But we are
grateful for your service there and welcome your testimony
today.
Hollister K. Petraeus, known as Holly, great to see you
again, Assistant Director of Service Member Affairs of the
Consumer Financial Protection Bureau (CFPB), which actually has
a Director now. Our second witness, Assistant Director of the
Consumer Financial Protection Bureau, is head of the Office of
Service Member Affairs. She partners with the Pentagon to (1)
help ensure that military families receive a strong financial
education, (2) monitor their complaints, and (3) coordinate
Federal and State consumer protection measures for military
families.
Prior to joining the CFPB, she was the director of a
program at the Council of Better Business Bureaus (CBBBs)
providing consumer education advocacy for military families. A
military spouse of 37 years. We thank you for your service. And
a former Department of Army civilian employee, Mrs. Petraeus
also has extensive experience as a volunteer leader in military
family programs.
A graduate of Dickinson College, not that far from where I
live, and a recipient of the Department of Defense Medal for
Distinguished Public Service. Mother to several, including a
guy named Steven, who is a fraternity brother of my son,
Christopher, at Massachusetts Institute of Technology (MIT). So
you turned out some pretty good kids as well, so thanks for
joining us today.
Next, Steve Gunderson, a colleague of mine. Did you serve
with Steve in the House?
Mr. Gunderson. I did.
Chairman Carper. A colleague of ours and someone I enjoyed.
He is not just a colleague, he is a friend. So we welcome him
as both. He has been President and Chief Executive Officer
(CEO) of the Association of Private Sector Colleges and
Universities since January 2012. Prior to his appointment, he
served as President of the Council on Foundations where he
placed a high priority on education and workforce development.
At the age of 23, elected to the Wisconsin State
legislature--I do not know if Tammy Baldwin is going to join us
today, but I think she started as a pup as well. That is a
pretty young age.
Mr. Gunderson went on to serve for 16 years with a couple
of us in the U.S. House of Representatives where education was
one of his areas of focus. A graduate of the University of
Wisconsin, a Badger, the Brown School of Broadcasting in
Minneapolis, and we are delighted to see you today. Welcome.
Thank you.
Tom Tarantino, sitting alongside of Steve, is the Chief
Policy Officer at the Iraq and Afghanistan Veterans of America
(IAVA). As Chief Policy Officer, Mr. Tarantino provides
strategic guidance for and leadership of Iraq and Afghanistan
Veterans of America as the Legislative Research and Political
Departments.
Mr. Tarantino is a former Army captain who left after 10
years of service in 2007, returned from Iraq in 2006 after 1
year of deployment with the 11th Armored Cavalry Regiment where
he served in combat as both the cavalry and mortar platoon
leader. Awarded the Combat Action Badge and the Bronze Star.
Thank you for all that you did in uniform and all that you have
done since. Delighted to welcome you here.
I will introduce Sergeant Christopher Pantzke and our
expectation is that he will join us shortly. But he is our
final witness, Sergeant Pantzke, who served in the Minnesota
Army National Guard from October 2002 until April 2004. He was
promoted from Private First Class to Specialist after 6 months
of serving in the National Guard.
Sergeant Pantzke enlisted in the U.S. Army in April 2004
and was promoted to Sergeant in the following year. In 2005,
his unit was deployed to Iraq. Sergeant Pantzke was medically
retired from the Army in 2009 after serving his country for 6
years. And we welcome all of you. Your entire testimony will be
made part of the record and you are invited to proceed at this
time. Commander Coy, welcome.
TESTIMONY OF CURTIS L. COY,\1\ DEPUTY UNDER SECRETARY FOR
ECONOMIC DEVELOPMENT, VETERANS' BENEFITS ADMINISTRATION, U.S.
DEPARTMENT OF VETERANS' AFFAIRS; ACCOMPANIED BY ROBERT M.
WORLEY, II, DIRECTOR, EDUCATION SERVICE
Mr. Coy. Good morning, Mr. Chairman, Ranking Member Coburn,
and other Members of the Committee. Thank you for the
opportunity to be here today to discuss the 90/10 Rule and the
Department of Veterans' Affairs efforts to safeguard veteran
students from questionable practices by some institutions.
Accompanying me this morning is Mr. Robert Worley, our Director
of VA's Education Service.
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\1\ The prepared statement of Mr. Coy appears in the Appendix on
page 38.
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While VA defers to the Department of Education on the 90/10
calculation, we recognize the argument for including post-9/11
G.I. Bill in the 90 percent limit on Federal funding.
Modifications to the 90/10 calculation could assist in
protecting some veteran students. However, such a change could
cause some schools to exceed the 90 percent threshold and be at
risk of losing eligibility.
Our concern is to ensure that veterans are not adversely
affected by any proposed changes or, if so, to mitigate them to
the extent possible. VA is happy to work collaboratively with
the Department of Education and the Committee as it considers
changes in this area.
VA is acutely aware of concerns raised regarding for-profit
institutions and potential fraudulent activities, and in VA's
oversight of for-profit institutions they are held to the same
standards and criteria as non-profit institutions for the
purpose of approval for use of VA education benefits.
Since testifying on this issue in 2011, VA has done
significant work to ensure veteran students are informed
consumers when using their well-deserved and hard-earned G.I.
Bill benefits. In conjunction with the Veteran Employment
Initiative Task Force (VEIT) directed by the President, along
with the Vow to Hire Heroes Act of 2011, we have collaborated
with multiple agencies to redesign the Transition Assistance
Program (TAP) for departing servicemembers. The redesigned TAP
transforms the previous VEIT powerpoint presentation into a
truly informative session for servicemembers.
During the day-long VA benefits overview, we provide
servicemembers with detailed information on VA education
benefits, Federal financial aid programs, and factors to
consider when applying for school. We are also piloting a 2-day
special session called Accessing Higher Education dedicated to
providing information on education and training opportunities.
The new TAP program is truly transformative. The Veterans
Opportunity to Work (VOW) Act mandates that TAP be a mandatory
requirement now reaching all departing servicemembers and that
will be over one million in the next several years.
Through our Integrated Disability Evaluation System (IDES)
program, we are placing 200 vocational rehabilitation
counselors at over 75 military installations across the country
to provide a full range of vocational, rehabilitation, and
employment counseling and benefit services to members during
earlier in their transition process, including counselors
counseling those wounded warriors and disabled veterans on
their educational benefits.
Of particular importance to the Committee, VA has greatly
increased oversight of all schools, including for-profit
schools. Some specific actions include, but are not limited to,
in fiscal year (FY) alone, our State Approving Agency (SAAs)
completed over 38,000 approvals of for-profit schools. In
fiscal year 2, we completed 2,418 compliance reviews of for-
profit institutions representing over 96,000 students.
We should note that these reviews also survey students and
review marketing material of those institutions. Overall, with
our SAA partners, we completed over 4,700 reviews last year.
This year through the end of May, we have already conducted
over 3,000 compliance reviews. We have withdrawn approval for
nine institutions representing 177 veteran students due to
erroneous or misleading practices.
We continue to work to improve our oversight, including
work groups with our SAA partners, hotlines, et cetera. VA is
also undertaking significant efforts to implement the
provisions of the Principles of Excellence, Executive Order
(EO) and Public Law 112-249, Improving Transparency of
Education Opportunities Act.
As part of the Executive Order, VA, with Department of
Education, Defense, in consultation with the Department of
Labor and the Consumer Financial Protection Bureau, we are in
the process of implementing the Principles of Excellence. I am
pleased to report that over 6,300 schools have already
voluntarily agreed to comply with the Principles.
In conjunction with DOD, Education, CFPB, and the
Department of Justice (DOJ), we are also developing student
outcome measures that are comparable, to the extent possible,
across Federal educational programs and institutions. With our
agency partners, we continue to work on the development of a
centralized complaint system for veteran servicemembers and
family members to submit complaints about schools that are
engaged in deceptive or fraudulent practices.
We expect this tool to be available by late summer.
However, veteran students are always able to use our toll-free
G.I. Bill hotline or our G.I. Bill website to report complaints
to us. Additionally, we have successfully registered the term
G.I. Bill as a trademark to help prevent its use in a deceptive
or fraudulent manner.
VA provides a wealth of resources and guidance on our G.I.
Bill website. For example, the site contains our Choosing the
Right School handbook which provides potential veteran students
with factors to consider when choosing a school. We have also
integrated the Department of Education's College Navigator onto
our G.I. Bill website. Since integrating the tool in May 2013,
it has already received over 27,000 hits.
VA also plans to pilot an online assessment tool called
CareerScope that allows veterans or servicemembers to assess
whether he or she is ready to engage in post-secondary
education and determine his or her likely vocational aptitude.
In addition, we are promoting our Chapter 36 program, resources
that emphasize sources of financial aid and other choices.
Finally, VA has strengthened our on-campus presence.
Started in 2008, our VetSuccess on Campus program placed an
experienced Vocational Rehabilitation and Employment (VR&E)
counselor at colleges and universities. This program has grown
from 8 to 32 campuses, and by the end of this fiscal year,
counselors will be on more than 90 campuses across the country.
With our partner agencies, VA is working hard to ensure
veterans are informed consumers and that schools meet their
obligations in training this generation's next greatest
generation. Mr. Chairman, this concludes my statement. Thank
you for the opportunity to appear before you today and we would
certainly be pleased to respond to any questions you or other
Members of the Committee may have.
Chairman Carper. Good. Well, that was a much welcomed bit
of testimony and encouraging testimony.
Mr. Coy. Thank you, sir.
Chairman Carper. We are appreciative of the effort that is
going in, his report he shared with us and we are anxious to
find out all that we are doing, all that you are doing, what is
actually working, what is actually working the best, what do we
need to do more of. Thank you. Welcome.
Mrs. Petraeus, please proceed. It is great to see you.
TESTIMONY OF HOLLISTER K. PETRAEUS,\1\ ASSISTANT DIRECTOR,
OFFICE OF SERVICE MEMBER AFFAIRS, CONSUMER
FINANCIAL PROTECTION BUREAU
Ms. Petraeus. Chairman Carper, Ranking Member Coburn, and
distinguished Members of the Committee, thank you for the
opportunity to testify before you today concerning higher
education for our Nation's servicemembers and their families.
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\1\ The prepared statement of Ms. Petraeus appears in the Appendix
on page 48.
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The government has provided a number of benefit programs to
assist servicemembers and, in some cases, their family members
to gain a post-secondary education, most significantly the G.I.
Bill and the Military Tuition Assistance program.
Today's servicemembers and veterans are eager to earn
advanced degrees, and many for-profit colleges are eager to
enroll them as students, due in no small part to the 90/10 Rule
created by the 1998 amendments to the Higher Education Act
(HEA). Put simply, the Rule says that a for-profit college has
to obtain at least 10 percent of its revenue from a source
other than Title IV Federal education funds.
Although tuition assistance (TA) and the G.I. Bill are
federally funded, they are not Title IV, and that puts them
squarely into the 10-percent category of the 90/10 Rule.
This has given some for-profit colleges an incentive to see
servicemembers as nothing more than dollar signs in uniform,
and to use some very unscrupulous marketing techniques to draw
them in.
A military spouse at Fort Campbell, Kentucky, told me that
she was attending a ``military-affiliated college.'' It was
not. It was a for-profit school with no official military
status, but she had been given this impression by the
recruiter. After she filled out an interest form, she was
called multiple times per day until she enrolled. But when she
had trouble logging on to her online class, she could not get
anyone from the college to help her. She failed the class due
to lack of access, but was charged the full fee anyway.
National Guard education officers in Ohio and North
Carolina told me that they are besieged by for-profit colleges
desiring access to the troops. If they hold a job fair, over
half the tables may be for-profit colleges, an implied promise
that you are likely to get a job if you graduate from that
school.
In Nevada, a woman from the VA overseeing vocational
rehabilitation for veterans told me that she had patients with
traumatic brain injury (TBI) and post-traumatic stress disorder
(PTSD) who had been persuaded to sign up for classes at for-
profit colleges, and did not even remember doing so. That did
not stop the colleges from pressing them for full payment, even
though they were not regularly attending classes. Some of the
schools were also pushing her patients to enroll in Master's
Degree programs even though they were not capable of doing the
work. Their tactics were aggressive enough that she described
it to me as ``tormenting veterans.''
The overall cost to the government of the G.I. Bill and TA
has soared in recent years. While the number of individuals
using VA education benefits has roughly doubled since 1998, the
monetary cost has grown ten-fold, and the cost of TA has also
grown exponentially, with for-profit colleges taking an
increasing share. In 2011, for-profit colleges collected one of
every two TA dollars.
President Obama has taken an interest in the issue, signing
Executive Order 13607 in April 2012, ``Establishing Principles
of Excellence for Educational Institutions Serving
Servicemembers, Veterans, Spouses, and Other Family Members.''
Pursuant to the order, the VA, DOD, and Education, in
consultation with the CFPB and the Department of Justice, are
poised to launch a centralized complaint system for students
receiving TA and G.I. Bill benefits. They are also working on a
crosswalk system to share data about schools, improve consumer
information for beneficiaries, and track outcomes.
At CFPB, we have developed products for our website,
consumerfinance.gov, that give useful information about student
loan issues. They include a financial aid shopping sheet and an
online G.I. Bill benefits calculator.
So there are some very worthwhile efforts underway to help
military personnel, veterans, and their families learn more
about the schools where they may spend their hard-earned
education benefits. However, it also seems prudent for Congress
to examine the 90/10 Rule. As long as it adds a significant
extra incentive for for-profit colleges to enroll military
students, concerns will remain.
Although there may be some for-profit colleges with solid
academic credentials and a history of success for their
graduates, others have low graduation rates and a poor gainful
employment history. They also tend to have a higher-than-
average student loan default rate, which can be an indicator
that students are being recruited with little concern for their
ability to do the course work, graduate, and repay their loans.
Although the Association of Private Sector Colleges and
Universities recently convened a blue ribbon task force to make
recommendations for best practices for military and veteran
students, one of the recommended best practices was simply that
schools ``consider assessing academic readiness prior to
enrollment,'' which indicates that there is still plenty of
room for improvement.
The G.I. Bill and TA are supposed to provide the
opportunity to build a better future. The wonderful education
benefits provided to our military and their families should not
be channeled to programs that do not promote and may even
frustrate this outcome.
Thank you for the opportunity to testify before the
Committee.
Chairman Carper. Thank you so much for testifying before
the Committee. Congressman Gunderson, welcome.
TESTIMONY OF THE HON. STEVEN C. GUNDERSON,\1\ PRESIDENT AND
CHIEF EXECUTIVE OFFICER, ASSOCIATION OF PRIVATE SECTOR COLLEGES
AND UNIVERSITIES
Mr. Gunderson. Chairman Carper, Ranking Member Coburn,
Members of the Committee, thank you for this opportunity. We
share your commitment to ensuring that every post-secondary
institution provides the highest level of service to every
student, especially active duty military, veterans and their
families. We take great pride in our institutions that they are
designing and delivering education in ways that meets the needs
of today's military and veteran students.
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\1\ The prepared statement of Mr. Gunderson appears in the Appendix
on page 53.
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According to the Department of Defense, 762 of our
institutions have been approved to offer courses to active duty
military. The Department of Veterans' Affairs reports that more
than 325,000 veterans and their families have been served by
our institutions using the post-9/11 G.I. benefits.
Although veterans make up less than 10 percent of our
students, we are proud to serve those who choose our schools.
Why do veterans and active duty military choose to attend our
schools? The answer lies in our customer service to veterans.
Returning from duty, most veterans do not want to live in a
dorm and take five different three-credit courses at a time.
They want a focused and accelerated delivery of academic
programs that can support their transition from the front lines
to full-time employment as soon as possible.
Because of our longer school days and year-around academic
programming, our students can often complete an associate's
degree in 18 months, or a bachelor's degree in just over 3
years. As Mr. Coy said in his opening testimony, of their 3,000
compliance reviews, they have identified only nine problem
schools.
But we take the position that one veteran who is mis-served
is one veteran too many. And that is why we created this set of
best practices on veteran's education. I do want to followup
with Mrs. Petraeus's suggestion on the comments on enrollment
because I want you to hear the whole section.
To ensure students are appropriately placed and prepared
for the programs in which they enroll, consider employing any
of the following practices: Access academic readiness prior to
enrollment, offer appropriate remediation if necessary, offer
limited course loads, offer a reasonable trial period for
enrollment, offer penalty-free drop/add periods upon
enrollment. So I want the total story to be understood in terms
of our best practices.
Because the government's Integrated Postsecondary Education
Data Systems (IPEDS) systems only follows first-time, full-time
students right out of high school, last year we invested in a
survey of our institutions to better understand the path of our
veteran students. In this survey, we looked at 16,500 veteran
graduates and found 24 percent are single parents, 50 percent
attend part-time, 80 percent are over 25 and independent, 33
percent are female, 46 percent have dependents, 29 percent are
African-American, and 12 percent are Hispanic.
As for what they pursued, we found that 75 percent earned
certificates and/or associate degrees, while 25 percent earned
bachelor's or higher. 40 percent of the veterans graduated,
earned credentials in the health care field; 20 percent in the
skilled trades such as construction, maintenance, and
engineering; 10 percent earned credentials in computer
information programs.
Just as important as the programs we offer is the spending
on instruction by institutions of higher education. According
to the latest Department of Education data, instruction
expenses are a percent of total expenses. It is 32 percent for
public institutions, 33 percent for private non-profit
institutions, and 27 percent for our institutions.
Considering that our schools have fewer tenured and
research faculty, our spending on instruction is very
comparable to our post-secondary colleagues. Today we now see
the majority of post-secondary students attend more than one
institution before completing their education. When students
transfer, they often face the nerve-wracking and uncertain task
of having their credits accepted by a new institution.
All too often, institutions will simply not accept credits
earned at an institution accredited by a different
organization, especially when that sending institution happens
to be a nationally and not a regionally accredited school.
We encourage the Congress to examine policies that
facilitate credit transfer so that completion is not delayed
and extra debt massed as a result of repeating course work,
especially when it comes to our active duty military and
veterans.
Finally, Mr. Chairman, I would like to comment specifically
on 90/10 in the context of today's student veterans attending
our schools and the skill demands of our future workers. The
90/10 Rule is not a measure of institutional quality. It is a
financial calculation that is a measure of the socioeconomic
position of the student population served by that institution.
An institution that is close to the 90 percent threshold is
enrolling low-income students in the need of post-secondary
education, but simply dependent upon Title IV funding to make
that dream a reality. The government should be encouraging this
behavior, rather than penalizing those institutions that serve
a majority of low-income students. This metric simply undercuts
the very reason we have Federal loan and grant programs.
Further, across this country, because of cuts in public
funding for public institutions like community colleges, they
have reached their capacity and simply cannot accept more
students for post-secondary education, especially in the
skilled trades like I was discussing earlier.
Imposing changes that make 90/10 more punitive endangers
student access and choice because schools will be forced to
limit enrollment of low-income students. We should judge all
schools, including private sector colleges and universities
(PSCUs), based on outcomes, retention, graduation, employment;
based on appropriate metrics that look at those students. But
we should not judge any institution on the financial net worth
of the students they serve.
Mr. Chairman, thank you for this opportunity to testify. I
look forward to answering your questions and discussing the
important issues later.
Chairman Carper. Good. Thanks for your testimony and for
joining us today. Mr. Tarantino.
TESTIMONY OF TOM TARANTINO\1\ CHIEF POLICY OFFICER, IRAQ AND
AFGHANISTAN VETERANS OF AMERICA
Mr. Tarantino. Chairman Carper, Ranking Member Coburn,
distinguished Members of the Committee, on behalf of Iraq and
Afghanistan Veterans of America (IAVA), I would like to extend
our gratitude for being given the opportunity to share with you
our views and recommendations regarding this issue that affects
the lives of thousands of servicemembers and veterans.
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\1\ The prepared statement of Mr. Tarantino appears in the Appendix
on page 77.
---------------------------------------------------------------------------
My name is Tom Tarantino. I am the Chief Policy Officer for
IAVA and I proudly served 10 years in the Army. Although my
uniform is now a suit and tie, I am proud to work with this
Congress to continue to have the backs of America's
servicemembers, veterans, and military families.
The World War II G.I. Bill was one of the most successful
government programs in our Nation's history, doubling the
number of degrees awarded by colleges and universities from
1940 to 1950, and resulting in a fivefold increase in the
percentage of Americans with bachelor's degrees. It is
estimated that for every dollar invested in America's veterans
through the World War II G.I. Bill, the government took in $7
in increased tax revenue.
And much of the success can be traced to Congress wisely
protecting the World War II G.I. Bill from predatory actors in
education by enacting what was called the 85/15 Rule that
allowed the free market to weed out bad actors in the education
sector.
As the student population changed, the protections offered
by the 85/15 Rule lived on in the current 90/10 Rule as the 85/
15 was a head count model that existed when 50 percent of all
college students were G.I.s. Now with an all-volunteer force
and a head count that is much lower, the 90/10 Rule is a
revenue-based model. But there is one major exception between
the spirit of the 85/15 and the 90/10 Rule is that tax dollars
that fund the G.I. Bill are counted under private funds that
are supposed to allow the market to regulate the for-profit
industry.
The proposed reforms that IAVA strongly support seek to
make educational institutions accountable to free market
principles by counting the post-9/11 G.I. Bill funds as
government-sourced funds under the 90/10 Rule. The intent of
Congress with regard to the 90/10 Rule and its predecessor was
not only to decrease instances of fraud and predatory targeting
of veterans by educational institutions, but also to ensure
that these institutions provided a quality product to students
by making them accountable to free market forces.
Unfortunately, due to a loophole in the law, or the fact
that the G.I. Bill just simply did not exist when they wrote
the 90/10 Rule, military and veteran's benefits are counted as
part of the 10 percent of revenue that is supposed to come from
private sources.
This ends up putting a target on every single veteran's
back. Because of this loophole, every veteran that a for-profit
school recruits is worth nine additional students on Federal
financial aid, potentially raising revenue up to $125,000 per
veteran recruited.
IAVA believes that in order to protect the future of the
post-9/11 G.I. Bill, Congress must act to classify G.I. Bill
dollars as government funds subject to the 90 percent
restrictions, if for any other reason than because the G.I.
Bill are unquestionably government funds. The goal of the
proposed reform is not to penalize educational institutions,
but to ensure that America's veterans are receiving a quality
education that will help them transition successfully from
military to civilian life.
Unfortunately, as a result of the actions of some bad
actors in the system, this transition is being made more
difficult for too many of our Nation's veterans. Although less
than 20 percent of veterans are attending a for-profit school,
a lot of these schools are taking over a third of all G.I. Bill
dollars. Drop-out rates at for-profit schools are above 60
percent on average, and even though they account for 13 percent
of all college students in the country, they produce half of
all student loan defaults.
In this period of deficit cutting and waste reduction that
we are seeing in Congress, the failures of the handful of bad
actors in the for-profit school industry with regard to
providing quality job training and education programs to
servicemembers represents an unacceptable threat to the future
of the G.I. Bill.
One IAVA member, Maggie Crawford, expressed frustration
with a for-profit school on IAVA's Defend the New G.I. Bill web
page. After serving a tour of duty in Afghanistan, Maggie, a
member of the Army National Guard, enrolled in ITT Tech to
study nursing. It was not until the second quarter of her
program that they informed her that she was not eligible for
the Yellow Ribbon Scholarship that she was told she was
originally eligible for and she could not cover the full cost
of her degree.
According to Maggie, ITT was also dishonest about its
nursing accreditation, first telling her that they were an
accredited program, and then later telling her, as she was
going through her program, that the accreditation was still
pending. She quit ITT and is still to this day working to pay
off the debt she incurred. She is actually enrolled at another
for-profit school in a nursing program and is extremely pleased
with her experience thus far.
Another IAVA member, Howard Toller, expressed a similar
frustration. He enrolled in ITT in 2010 for a degree in
computer networking services, and later admits that he was
``duped'' by their high pressure recruiting tactics. A couple
of months after his enrollment, he learned that ITT was not
properly accredited for him to get a job in the field that they
were training him for, thereby, rendering his degree completely
worthless.
The experiences of these veterans and thousands like them
demonstrate the need for more effective policies to protect
military and veterans' education benefits from the practices of
a handful of predators in the higher education system. And I
agree with the rest of my panel. We do have to increase
outcome-based metrics, but the 90/10 Rule is one piece of that
puzzle.
Many for-profit institutions, I would argue most, are
valued participants in education, and as has been pointed out
earlier, they actually provide veterans with a service that is
not widely available by traditional non-profit universities,
including online vocational programs that offer highly
technical degrees.
Unfortunately, it is difficult to separate the good actors
from the bad actors in for-profit education without closing the
90/10 loophole. This loophole undermines the spirit and intent
of the G.I. Bill and should be closed this year. IAVA stands
ready to assist Congress in closing a loophole that virtually
every veterans', educational, and consumer advocacy group
agrees should be closed. Thank you for your time and attention.
Chairman Carper. Mr. Tarantino, thanks so much. It is good
to see you. Thank you for joining us on this occasion.
We have been joined as well by Sergeant Christopher--is it
Pantzke?
Sergeant Pantzke. Yes, sir.
Chairman Carper. We are happy that you are here and
appreciate the time and effort you have made to get here.
Welcome. Your whole testimony will be made part of the record.
If you would like to summarize that, feel free. Thanks. We are
just delighted that you could join us.
TESTIMONY OF SERGEANT CHRISTOPHER J. PANTZKE,\1\ USA, RET.,
VETERAN
Sergeant Pantzke. Greetings to the Committee and panel
Members. My name is Christopher James Pantzke, formerly known
as Sergeant Pantzke. I am a 100 percent disabled Iraq combat
veteran. In 2005, one of the convoys that I was in was attacked
by a vehicle-borne improvised explosive device (IED). After
coming back to the States, I found I had trouble adjusting to
everyday life. From 2006 to 2008, I received intensive therapy.
---------------------------------------------------------------------------
\1\ The prepared statement of Mr. Pantzke appears in the Appendix
on page 80.
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In 2008, I was placed in the Wounded Warrior Transition
Unit at Fort Lee, Virginia, to heal and make the transition
back into civilian life. In March 2009, I was medically retired
and placed on temporary disability retired list (TDRL) status.
And this is my story.
To begin with, I believe that anyone can take a picture,
but a photograph is created. I wanted to learn how to take a
photograph. So in March 2009, I contacted an enrollment advisor
at the Art Institute of Pittsburgh (AIP) and I informed her
that I was a disabled veteran, and I specifically mentioned
what my disabilities were. I started their enrollment process
right away and within 48 to 72 hours later, I was notified that
I was accepted into school.
I believe it was July 2009 when I started my classes.
Almost immediately I started having trouble with my classes and
I started to fall behind. I struggled with my classes on a
daily basis, especially my math classes. I was forced to find
an alternative source to help me with my math assignments.
I notified the academic advisor and told her that I was
having trouble in keeping up with my classes and I asked her if
there was any type of face-to-face tutoring or remedial classes
that I could take to help me. She told me that tutoring
services were not available for me because I had not applied
for disability services through the Art Institute. I was livid.
Why was I not referred to or informed of disability
services when I first enrolled into the school? So I was
granted accommodations for my disabilities. The accommodations
granted me one extra day to submit my assignments. That was it
and I still struggled.
During my attendance at the Art Institute of Pittsburgh
online, my post-traumatic stress disorder was raging. I was so
frustrated with the Art Institute Online (AIO). Anyone and
everything was a target. The Art Institute of Pittsburgh had
placed me on academic probation several times and withdrew me
twice, once because I had a bought with depression, and the
second time because of my grade point average (GPA), which I
disputed. I was readmitted both times.
I did several written and televised interviews hoping to
effect change on how for-profit colleges dealt with and treated
veterans. While I was being interviewed by Natalie Morales from
the National Broadcasting Company (NBC), she asked me why I had
not withdrawn from school because it was causing such suffering
and pain for myself and my family.
So in late October 2011, I officially withdrew from the Art
Institute of Pittsburgh online, stating that I felt that the
Art Institute had failed to provide me with proper disability
services and that they were unable to provide me with an
education to become a viable and credible photographer. And
topping it all off was that they were overcharging my G.I. Bill
benefits for a worthless degree.
After doing the interview, Educating Sergeant Pantzke, I
believe it was my digital image management class that I did one
of my assignments in 3 hours and submitted it, knowing that it
was a sloppy job, but I did not have time to do the assignment
properly. To my amazement, I received an A for this assignment.
When I last checked my account for the breakdown of the
costs of my tuition, which was on February 18, 2011, it was
roughly $91,000. And just the other day, on July 17, 2013, I
rechecked the tuition costs again. The costs went down to
$34,000. I would like to know what happened to the rest of the
$57,000. I also have $26,000 in student loan debit.
In closing, I learned more about photography on my own than
I did while I was in attendance at the Art Institute. Also,
education should never be for sale or traded on the public
market. The only person that should profit from education
should be the student who is striving for a better life for
themselves and/or their family. I thank you for your time.
Chairman Carper. Sergeant Pantzke, thank you for sharing
that sad story with us.
Let me just ask, Commander Coy, talk about--what was that,
4 years ago? Was it roughly 4 years ago where you went through
the ordeal that you just described? Commander Coy, what is in
place today to better ensure that other G.I.s coming home,
whether it is from Afghanistan or other places around the
world, enrolling in a college or post-secondary education, what
do we have in place today to better ensure that this kind of
story is not going to be told and retold again and again?
Mr. Coy. Yes, sir, Senator. And I feel for Sergeant
Pantzke's plight, and we certainly would like to help in any of
those kinds of instances. What we have in the VA is our
Vocational Rehabilitation and Employment Service. In that
service, we provide case management for individual veterans. As
you might imagine, with respect to G.I. Bill benefit payments,
we have done close to a million post-9/11 G.I. Bill payments,
but none of that is done on a case management basis.
But for our disabled veterans or wounded warrior veterans,
we provide, when they come into our office at Case Management--
I would further suggest that for those students like the
sergeant that was in need of some additional help or
counseling, we would be able to provide that as well. So I do
not know if the sergeant is or continues to be in our VR&E
program.
Chairman Carper. I am going to ask you to go back in your
testimony, Commander, and to talk a little bit more about some
of the changes that have been adopted in the last year or two
within the VA to address some of the abuses that I think most
of us are aware have existed. I said in my comments, and Dr.
Coburn has said, we have problems, not just with for-profit
colleges. We have problems with a quality education and
preparation for jobs, job readiness, in public schools and in
private schools as well.
But just talk to us about, again, some of the changes that
you mentioned earlier in your testimony, safeguards in place to
reduce the likelihood they are going to be wasting money for
veterans and helping ensure that we do not waste their lives.
Mr. Coy. Yes, sir. We work very hard in the VA to ensure or
hopefully ensure that veterans are informed consumers, and we
try and provide them with as much information as possible. We
have also initiated a number of things in the last year or two
that I related in my oral testimony, and I will sort of flip
through some of those as well.
On our G.I. Bill website, we have a wealth of information
that is on there and we continue to build on that. We have a
handbook that is a wonderful handbook called Choosing the Right
School, and it talks about things like employment, graduation
rates, credit transfer, military credit. It asks a whole realm
of questions that the veteran should consider when they are
choosing a school.
As well, we put together, as I mentioned in my oral
testimony, we have put up the Department of Education's College
Navigator which provides a wealth of information about schools.
Across the board, we work very close with our partners at
Department of Education, Department of Defense, CFPB,
Department of Justice to implement a number of things.
Just to go through some of those, we have developed an
increased partnership with out State approving agencies in just
the last couple of years. We have launched a 64-hour training
module on compliance reviews. We have rewritten our School
Certifying Official (SCO) manual. The School Certifying
Official is really the front line on most schools that deal
with veteran issues.
And so, we have rewritten our entire School Certifying
Official manual. We have established a School Certifying
Official hotline that is just for them, that they can call in
and do those kinds of things.
I mentioned the compliance reviews. Last year we did over
2,400 compliance reviews of for-profit schools, but we also did
overall about 4,700 compliance reviews. We, by the end of May,
have done over 3,000 compliance reviews this year alone. So
just the ramp-up of the number of compliance reviews we do.
Just to give a perspective, in fiscal year 2011 we did about
1,900 compliance reviews. Last year we did over 4,700, and our
target this year is over 6,300. So we really have ramped up our
compliance review process with our SAA partners.
I mentioned the withdrawals that we talked about, but with
respect to the Principles of Excellence, working with our
colleagues, we have trade-marked the G.I. Bill and added
College Navigator. We are developing outcome measures. I would
be happy to talk in depth about those. But those outcome
measures were developed with our partners at Department of
Education, DOD, and CFPB.
We are developing a comparison tool for schools that sort
of racks and stacks whether or not a school is veteran-friendly
or not. We have also been working very hard in the TAP program.
Chairman Carper. I am going to ask you just to hold just
for a moment, if you would.
Mr. Coy. Yes, sir.
Chairman Carper. I want to give Mrs. Petraeus an
opportunity during this round just to comment, if you would. We
have heard from Commander Coy some of the changes that have
been made, adopted at the VA, that are being implemented at the
VA. My dad used to talk to my sister and me a lot about common
sense, and said, You just use some common sense. Which of these
measures that he has described do you think meet, if you will,
a common sense test, which is likely to give us a better result
for the veterans and for the taxpayers, in your judgment?
Ms. Petraeus. Well, I think we need to take a multifaceted
approach, really. I certainly applaud the work that is being
done at this point by the VA, the Department of Defense, and
the Department of Education in concert to see if they can
address these issues to some degree. I think it is important
that while Congress may look at the 90/10 Rule, that the VA and
the Department of Education work to make it easier really for
servicemembers, veterans, and their families to see what they
are getting when they go to apply for a school.
I think there are a number of steps in place to do that. I
also think the single complaint portal is going to be very
helpful because it will allow folks to go to one place to
complain, to have their issues addressed in a systemic way,
and, for those of us who take an interest in this, to see what
the trends are, to really be able to have some metrics about
complaints.
It has been kind of on an informal basis by each agency. So
I think that is a very important step. We are also trying to do
some common sense things at the CFPB. We have a financial aid
shopping sheet that tries to make it easier for someone to see
what it is actually going to cost, where can I get the money to
pay for school, and we have a G.I. Bill calculator as well on
our side, and I know we are working with the VA who are also
going to design one.
I think we also need to work together to stop some of the
very aggressive marketing tactics. One thing I was pleased to
see was the copyrighting of the term G.I. Bill. So you no
longer have websites that are able to give the misleading
impression that they are an official source of G.I. Bill
information when they are not.
So I think there are a lot of ways we can approach this. I
think accreditation is another important one. Mr. Gunderson
mentioned that there are different types of accreditation and
some of them will not get you the job you want or get your
credits transferred. That is another thing, I think, that is
very important, that the accreditation process be looked at as
well.
So there are a number of steps that can be taken,
basically, so students choose schools not based on which one
has the best marketing, but on which one has the best potential
for them to have a positive outcome.
Chairman Carper. Thanks very much. Dr. Coburn.
Senator Coburn. Thank you. Mr. Tarantino, I think you
testified a moment ago that the other veteran service
organizations have endorsed this?
Mr. Tarantino. Yes, they have.
Senator Coburn. I checked with the American Legion and the
Veterans for Foreign War (VFW) and they did not endorse it this
last year, so would you want to correct your testimony?
Mr. Tarantino. No, I am happy to talk with them again, but
the three of us were all working together, along with Small
Business Administration (SBA), and we had endorsed Senator
Carper's bill from last year.
Senator Coburn. There was no letter of endorsement from the
American Legion or the VFW on that bill.
Mr. Tarantino. Well, I will check with our staff, but I was
sitting in multiple meetings with them.
Senator Coburn. One of the things you testified about is a
quality education. And so, one of the things I try to do as a
Senator is try to fix the right problem. We now have nine
schools that have been deleted based on the 90/10 Rule. I think
that was Commander Coy. Or was that through your assessment
of----
Mr. Coy. It was through compliance reviews, sir, not 90/10.
Senator Coburn. OK. But since 2007, I think three schools
have been eliminated. The question I would ask is, what if the
three schools that were eliminated under the 90/10 Rule had an
80 percent graduation rate and an 80 percent job placement
rate? Which is higher than every other institution, on average,
in this country. What would we do then?
I mean, they are doing the job. They are giving a quality
education, have great placement, but because they do not meet
the rule, they no longer qualify. If we are looking for quality
education, we ought to be looking for different metrics, much
like Ms. Petraeus had testified. It ought to be quality.
And so, when we get hung up, whether it be the 85/15 Rule
that we had before, or the 90/10 Rule now or the expanded 90/10
Rule that we are going to make, it does not direct us toward
the problem. It may solve one problem of taking pressure off
recruiting of veterans, and I agree that is something we ought
to look at, but do we really solve the problem?
And so, our whole hearing focusing on the 90/10 Rule, as
long as we focus on that, we are not focusing on what is really
going to make a difference for our veterans. What we ought to
be saying is, across the board, if you are going to get
government help and government payment, you ought to perform.
There ought to be a metric. We ought to know how well you
do in terms of graduating students, what your matriculation
rate is, what your job placement rate is, what is the quality
of your education? And we are talking about everything except
that. We are talking about the symptoms of the problem instead
of the problem.
The other thing that concerns me, Mr. Tarantino, in your
testimony, ITT, although accredited, was not accredited for the
things they marketed. That is fraud.
Mr. Tarantino. Yes.
Senator Coburn. And so, where is the Justice Department in
terms of going after fraud? If, in fact, they are marketing
something that is accredited when it is not, that is deception.
And so, we ought to be talking about it. We should have
somebody from the Justice Department saying, ``Why have you not
gone after this? ''
Congressman Gunderson, do you all have a sanction procedure
within your organization for bad actors?
Mr. Gunderson. Any school that is not licensed by the
State, approved for Title IV by the Department of Education,
and accredited is not allowed to be a member of our
association. So you have to meet all three standards to be
eligible for membership in the Association of Private Sector
Colleges and Universities.
When we take the issue of veterans and, specifically, our
veterans' education best practices, people ask me, Do you have
an enforcement measure in there? And I said, We endorse the
President's Executive Order. We supported the Bilirakis
legislation last year. We drafted these, our best practices,
and we believe that the VA and the complaint process will
determine whether or not we are meeting that standard.
If the records show that there is a disproportionate number
of complaints targeted at our schools, then we have work to do.
Senator Coburn. Can any of you think of any untoward event
if we were to incorporate the TA and new G.I. Bill in this 90/
10? It seems to me there might be an economic incentive for
people not to participate with the new G.I. Bill and tuition
assistance, and force people who have a good program to say go
student loan rate. In other words, a perverse incentive to not
use what is available and send people in another direction
because of the 90/10 Rule. Any worries about that?
Mr. Gunderson. Mr. Coburn, we have a number of schools that
fit the description you discussed earlier, and let me just name
one of them for you. It is called Praxis Institute, Miami,
Florida, 100 percent Hispanic student body, graduation rate is
86 percent, default rate is 9.5 percent; yet, they receive 89.8
percent of their funding from Title IV because of the economic
circumstances of that Hispanic community.
If you were to move this into the 90/10 ratio, that school
would simply have to turn away every veteran who applied.
Senator Coburn. Any comments, Holly?
Ms. Petraeus. I would just suggest that one alternative
idea might be not to move the military money into the 90
percent, but just take it off the table altogether so it is not
part of the calculation, take it out of 10 percent, but do not
put it in the 90 percent. That could address the issue you have
mentioned.
Senator Coburn. OK. I want to go back. Mr. Tarantino, did
you want to comment on that?
Mr. Tarantino. No, I am good.
Senator Coburn. OK. I want to go back to what I mentioned
earlier. Does anybody here disagree that what we really ought
to do is change it to outcomes-based? Anybody disagree with
that?
Mr. Tarantino. Senator, I do not think the two are mutually
exclusive, though, but I absolutely agree. I think we should
have outcomes-based. I think that should be the first thing.
The problem is, is that we should be talking largely about how
the Department of Education does not measure graduation rates
properly.
There is a large argument about community colleges having a
low graduation rate. That is because community colleges have
five different types of students, from guys who take adult
education to people who get vocational and transfer degrees.
Not one of those students are technically graduates. According
to the Department of Education, I have dropped out of college
twice because I deployed to Bosnia and transferred from
community college to the University of California.
Senator Coburn. I agree. That is a good point. Well, my
time is up.
OPENING STATEMENT OF SENATOR MCCASKILL
Chairman Carper. Senator McCaskill.
Senator McCaskill. Mr. Gunderson, is the online Video Game
Developer School a member of your association that is
advertised so frequently? Become a video game developer online.
Mr. Gunderson. I have to plead guilty that I do not follow
the media advertising at all. We have schools that are
accredited, that are members of our association that provide
instruction in the gaming skill set, but I do not know that
particular school.
Senator McCaskill. I will send you a clip----
Mr. Gunderson. Yes.
Senator McCaskill [continuing]. And I would like to find
out if it is a member, and I would also like to find out if it
qualifies for this G.I. Bill money. What percentage of the
revenue do your members get from taxpayers, of their overall
revenue, Mr. Gunderson? What percentage is provided by
taxpayers?
Mr. Gunderson. Very small, because we have no public
subsidies. If you compare community college to one of our
schools, there is no public subsidy in that regard.
Senator McCaskill. But of all the revenue that is taken in,
what percentage of that--if you are worried about 90/10----
Mr. Gunderson. Yes.
Senator McCaskill. I mean, what----
Mr. Gunderson. It varies by school.
Senator McCaskill. Right.
Mr. Gunderson. There is no one set.
Senator McCaskill. But if you took them all together, all
of your members.
Mr. Gunderson. I do not know that we have ever done that
calculation because it rotates by year.
Senator McCaskill. Well, it seems to me it is really
relevant. One, because if more than half of the money that your
schools are realizing is coming from the public sector, then I
think Congress has a right to be more aggressive in terms of
oversight. If it is a smaller percentage, then I think the
argument that many of my colleagues might make, that it is none
of our business, might apply.
And it is interesting to me that is a figure that you do
not know, because if we are worried about 90/10, what does that
tell us?
Mr. Gunderson. Well, the problem, Senator, is there are
schools, as I mentioned, that are right at that 90 percent
criteria.
Senator McCaskill. Which means 90 percent of their revenue
is coming from that.
Mr. Gunderson. That means that exactly 90 percent would
come from Title IV.
Senator McCaskill. Right. So how can it be very small if
you are worried about 90/10?
Mr. Gunderson. There are also schools that are well below
50 percent. What?
Senator McCaskill. How could the percentage of revenue you
receive be very small if you are worried about 90/10?
Mr. Gunderson. I am worried about 90/10 for the same reason
a Senator from Missouri would be worried about 90/10. I come
from rural Wisconsin. If you look at rural America and if you
look at the inner city, you will find a population that, based
on economics, is dependent upon financial aid in order to
pursue their education.
We need to be very careful. The reality is, my schools,
because they are for-profit, they are private sector schools,
they can move where they want, they can move where the
enrollment is best available to their mission. I had a
conversation with the president of a college in one of our
large inner cities in the Midwest. I said to him exactly what
you are saying to me.
I said, You have very high Federal financial numbers. You
have low graduation rates. You have high default rates. What is
going on? What he said to me? He said, Steve, I can fix that
tomorrow. I said, You can fix it tomorrow? Why do you not do
that? He said, Well, I would fix it tomorrow by closing the
school and moving to the suburb and dealing with upper middle-
income students and I would not have any issue at all. But the
students that I am serving in this inner city school would have
no opportunity for the very career skills I am trying to
provide.
Senator McCaskill. Well, listen, I am sure that there are
many altruistic people among your members, and I am sure there
are many of them that are answering a calling. But it is
interesting to me that we are arguing about 90/10, and I would
make the argument, if graduation rates were high, if the
metrics were high, they would not worry about 90/10 because
they would not have any problem with 10.
If this was a quality school, they would not have any
problem attracting at least 10 percent of their revenue from
something other than the government. What is the average--first
of all, I would like to get the number of what the overall
percentage of your schools, how much of it is public money. And
then I would like the average salaries of these folks that are
in the inner city because they are worried about that.
I mean, I am not usually one to care about salaries in the
private sector, and everybody has the right to make a profit.
This is a free market economy.
Mr. Gunderson. Sure.
Senator McCaskill. But when the taxpayers are footing the
bill, there becomes a requirement of a level of accountability
that I do not sense is there. It is like all these institutions
want our money. Would you support your institutions not getting
their money from veterans until the veteran graduates?
Mr. Gunderson. The reality is, Senator, that if you will
look at that survey we did of our 16,500 veterans, we had a
graduation rate on 2-year certificates of 63 percent----
Senator McCaskill. So would you accept----
Mr. Gunderson [continuing]. For our veterans.
Senator McCaskill. Then----
Mr. Gunderson. If you would look at the Department of
Education statistics on 2-year institutions, we are at 62.7
percent graduation rate. The public schools are at a 21.9
percent graduation rate. We do incredibly well in the career
certificate in 2 years program, but because we are dealing with
an adult population coming back to school that often has----
Senator McCaskill. Let me ask you this question.
Mr. Gunderson [continuing]. To drop out and go back and
startup again----
Senator McCaskill. I understand.
Mr. Gunderson [continuing]. The 4-year program----
Senator McCaskill. Believe me, I understand. My son is----
Mr. Gunderson [continuing]. Graduation rates are not great.
Senator McCaskill [continuing]. My son is back in school at
25. I get it.
Mr. Gunderson. But the 2-years are incredibly good.
Senator McCaskill. Let me ask you this: Would you tell us,
what would be the metrics--let us assume that Senator Carper
decides to draft a different bill, a bill that maybe Senator
Coburn has in mind in his testimony. What are the metrics that
your association would endorse today as a requirement that you
must achieve before you can receive VA benefits? What would
that metric be?
Mr. Gunderson. The best set of metrics that I have seen is
probably the National Governors' Association (NGA) in their
development of what is called Complete to Compete. And they
have set up a series of metrics that look at outcomes based on
those particular metrics. I think my association would endorse
those particular metrics as a standard for outcomes for all
students, all schools in this country.
We stand ready, Senator, and let me emphasize this as
clearly and as loudly as I can. We absolutely support being
judged by the same set of risk-based metrics that every other
college and university in America is in terms of outcomes. What
we do not want to happen is, simply because we are for-profit
in our organizational structure that we are denying students
with multiple risks the opportunity to ever even pursue that
career-based education that gets them a path to the middle
class.
Senator McCaskill. And your average cost is three times
higher than the not-for-profits?
Mr. Gunderson. What you need to stop and do here is say,
Are you looking only at tuition charge----
Senator McCaskill. Well, I was looking at your testimony.
Mr. Gunderson [continuing]. Or are you looking at total
public dollars, because if you look at----
Senator McCaskill. I was looking at your testimony. The
mean cost was $928 versus $3,000-some.
Mr. Gunderson. You are looking at my written testimony in
terms of the----
Senator McCaskill. The mean cost for a student, $928 versus
$3,000-some.
Mr. Gunderson. The cost of producing the education?
Senator McCaskill. Correct.
Mr. Gunderson. Yes.
Senator McCaskill. Three times as high.
Mr. Gunderson. Times what?
Senator McCaskill. Three times as high.
Mr. Gunderson. Well, of course, we are going to be higher
in terms of tuition because we do not have any public
subsidies.
Senator McCaskill. Obviously, except for the fact that you
are worried about more than 90 percent of your money coming
from the public.
Mr. Gunderson. Yes, but here is the problem, Senator, as I
said in my testimony. Because of the cutback, and we have seen
in the last decade a 25 percent----
Senator McCaskill. I know.
Mr. Gunderson [continuing]. Per capita reduction in public
support for 2-year and 4-year institutions in this country. If
you are pursuing allied health or the career trade skills, you
have two opportunities. One is the community college, and I am
a big fan of community colleges, or it is our schools. Most
community colleges in this country have no ability to expand to
meet the demand for increased education in those areas. If we
do not exist, there is no opportunity for those students. That
is the real tragedy.
Senator McCaskill. Well, I would look forward to working
with your organization. I have found a reluctance to accept
metrics by your organization, so maybe I have it wrong, and I
look forward to working with you----
Mr. Gunderson. Well, I cannot speak for the staff, but we
stand ready----
Senator McCaskill. OK.
Mr. Gunderson [continuing]. To work with you on those----
Senator McCaskill. And I will look forward to getting that
number from you for the overall percentage of the revenue for
for-profit schools coming from taxpayers.
Mr. Gunderson. OK.
Senator McCaskill. Thank you.
Chairman Carper. Dr. Coburn and I have focused for a couple
of years now in another area of the Federal Government, Federal
expenditures. I think there is actually a correlation here. One
of our concerns has been the money we spend in Medicare,
especially, but also in Medicaid, dollars that are spent
improperly for services provided by dead doctors, maybe to dead
beneficiaries. There is a lot of money in fraud, in tens of
billions of dollars in fraud every year, tens of billions of
dollars in improper payments every year in Medicare.
And what we have done for years is, Medicare has actually
paid the money and then chased the dollars. It is called pay
and chase. I want to make sure that if an institution is
screwing up or behaving in a way that is harmful to our
veterans, I want us to punish them. I want us to pursue them
and punish them if we can.
By the same token, I want to make sure that up front we are
not paying that money in the first place to an institution that
has a reputation, maybe well-deserved, for not doing a good job
of screening, preparing, educating, helping to place,
supporting, the veteran that has gone through that school.
I want to take just a moment and talk about the kind of
metric that we ought to be looking for. Among the metrics that
I think are appropriate, and I think you said this as much
today, to make sure that we are working with the veteran to
make sure that he or she is prepared for the work that they are
expected to do.
Some students work perfectly well over the Internet. That
is fine. Some need to be face-to-face with a professor, a
teacher on a regular basis. Some do well with a combination of
the two. The metric that I am most interested in is not just
well-screening people, offering a curriculum, making sure that
they actually get to a graduation or a certificate.
I want to make sure they get a job and I want to make sure
that they get a job that actually relates to their education,
in many cases, and that they will be gainfully employed. I seem
to recall a couple of years ago the Department of Education
actually worked on a regulation. I think it was called the
Gainful Employment regulation, and I think it was, their effort
was to say, how do we actually create a metric that enables us
to look at a school and what is happening with their graduates,
those that receive their certificates, that actually enables us
to measure whether or not did he get a job. Was it a decent
job? Was it the kind of job they hoped and expected, that they
were led to believe they could get.
Ms. Petraeus, I do not know if you have any thoughts about
that, but if you do, I would welcome your thoughts, Ms.
Petraeus.
Ms. Petraeus. Yes. I believe the Department of Education is
poised to take another look at the gainful employment rule.
Chairman Carper. I hope so, because what they came up with
was pitiful, and, as I recall, there was push back, huge push
back from some of the institutions that we are talking about
here today. Not all, but some.
Ms. Petraeus. I think as with what you described with
Medicare, when there is a great deal of money at stake, and
certainly I would say $10.5 billion is a great deal of money,
and that is, at this point, what is being spent on the G.I.
Bill. When there is a lot of money at stake, there will be a
lot of people who will fight tooth and nail to get a piece of
that money and to fight any restrictions or limitations on how
they access it. So they are looking again at gainful
employment.
I want to go back a little bit to what Dr. Coburn mentioned
about schools that market themselves improperly and do not have
consequences. I would like to mention that the State Attorneys
General have done a very good job, in many cases, going after
those schools. There is one I can think of in Chicago that was
advertising a Criminal Justice degree saying, You could get a
job as an Illinois State trooper or a Chicago city policeman,
but that particular school did not have regional accreditation.
It was nationally accredited and those organizations would not
even look at their graduates.
So she did file suit against them for false, deceptive
advertising. So there are some efforts to go after those
practices. I wanted to mention that while it was still in my
head.
Chairman Carper. Commander Coy, you talked a little bit
about the VA doing compliance reviews, and I think the numbers
that you mentioned were actually quite impressive. I think you
said you were looking at about 6,000-some this year over 4,000
last year, over 2,000 the year before that. Just talk to us
about, what is a compliance review? What does it entail? Why is
it relevant here and should we be encouraged by those numbers?
Mr. Coy. Compliance review covers a broad waterfront of
things. It certainly looks at all of the administrative pieces
of the
post-9/11 G.I. Bill specifically. What kind of information do
they have and all their procedures and internal-type
procedures.
It also takes a look at all of the marketing material that
the school has, compares it against what they are actually
doing. And then finally, the third piece of the compliance
reviews are, we actually survey students that go to that school
and get feedback directly from them. So it is sort of those
three general areas.
I will let Mr. Worley elaborate, if he has some additional
information. But it is generally those three areas, sir.
Chairman Carper. Mr. Worley.
Mr. Worley. Thank you, Mr. Chairman. I would add that
during a compliance survey, a number of student records are
looked at. The enrollment term, for example, is looked at. The
policies for progress are examined. There is direct contact
with the school's certifying official and other officials at
the school as needed. They look at prior credit granted to a
particular student, if that is done properly and in accordance
with school policy.
There is a whole host of things that are looked at with the
ultimate goal of making sure that the school is complying with
all the statutory and regulatory requirements for serving those
veterans, and that ultimately, the information provided to the
VA by which VA pays these veterans is accurate and proper and
timely.
You mentioned, if I could add one other thing, Senator, at
the beginning of the process, approval of programs is the first
step. When a school wants to have a program approved, they come
in with a written request to the State approving agency. The
State approving agency looks over many of the items I just
mentioned, standards of progress, standards of conduct, and so
forth, to make sure that school is meeting the statutory
requirements to gain approval for G.I. Bill benefits.
Chairman Carper. I have heard of the State approval process
that you referred to, and I will be generous and say that the
approval process, from what I understand, is uneven. In some
States, there is rigor; in other States, there is not much at
all. And that is something I would like to come back the next
round and talk a little bit more about. Thank you. Dr. Coburn.
Senator Coburn. Thank you. Commander Coy--I like that name.
That is great. It goes well.
Mr. Coy. Thank you, sir.
Senator Coburn. You are working on the centralized
complaint process and eventually with the hopes of making that
a live interactive site, correct?
Mr. Coy. Yes, sir.
Senator Coburn. Talk to me a little bit about when you see
that coming to fruition. You have talked a little bit about it,
but tell me a little detail about that, if you would.
Mr. Coy. Thank you. We are looking at this complaint system
and we are working with our partners over at the Department of
Defense, as well as CFPB. There are a number of loops and steps
that one has to go through to get a system like this up and
running. There is the system of record notification. There is
the Paperwork Reduction Act. In other words, you cannot
literally survey people without getting approval for that
process.
And then there is the actual IT piece of it. And so, all of
those things, as we walk down that path. The interesting thing
that the complaint tool, as we are at the final stages of
trying to launch this, is accepting that complaint, and it will
be on our G.I. Bill website, it will be on our E-Benefits
website, and it will also be on the DOD website as well, and we
are going to encourage schools to also put the link on their
websites as well.
And then collecting the information that basically we want
to know what your complaint is, what do you think has happened.
Then we want to know what you think is a fair resolution to
that issue. We then need to take that complaint. There needs to
be a centralized place for them all to be in one place, and we
will probably be using a centralized database that is already
in existence.
Then we need to have a feedback mechanism for the school.
In other words, in the case of a school, we need to either send
that issue or complaint to the school or we will send it to an
SAA, or in some cases, we may refer it to the Department of
Justice for something that is extreme.
Then we also need another mechanism to get feedback back to
the student or the person that made the complaint, and then a
place to register all of those complaints. So our initial look
was, Gee, this is going to be pretty easy to do, and then we
looked at it and it is a process.
Senator Coburn. Did I understand from Ms. Petraeus that the
CFPB has something like that working now?
Ms. Petraeus. Of course, we do take consumer complaints and
we do take consumer complaints about private student loans, and
we also have a student loan ombudsman. So just based on that
experience, we do have someone who is working very closely with
the VA on how to help them tailor their efforts. And then we
also have a suite of tools at consumerfinance.gov, our website.
We developed a financial aid shopping sheet and then worked
in concert with the Department of Education to get one that
they were comfortable with that could be given to schools to
use on a voluntary basis, and a number of them have adopted it,
as well as the G.I. Bill calculator, which the VA is also--we
are going to work with them so they can----
Senator Coburn. You have the G.I. Bill calculator already
up?
Ms. Petraeus. Yes, it is.
Senator Coburn. So you cannot just hand that to them?
Ms. Petraeus. The devil is in the details always. It sounds
easy. As you said, it sounded easy when they were talking about
their process. We are certainly working with them to share that
information so they do not have to replicate. They do not have
to start from scratch.
Senator Coburn. Right. Mr. Coy, a recent report by the
American Action Forum found that our Nation's veterans are
being overwhelmed by Federal paperwork. For example, a disabled
veteran seeking health and educational benefits could encounter
up to 49 different forms, 49 different forms, more than--to
fill those out, a minimum of 4 hours, $125 it cost. If you just
do the income net worth and employment statement, it has 40
questions, takes over an hour to complete, and you get 104,000
of those a year.
What can Congress and the agencies do to cut down on the
duplication and the requirements for our veterans? If you go
through all 49 forms, there is a terrible amount of redundancy,
the same question asked in multiple forms.
Mr. Coy. I would agree that certainly the redundant forms
are a challenge and we are taking that on head-first. General
Hickey, the Under Secretary for Benefits, is approaching this
in a transformative way, and her transformative plan looks at
doing a number of different things.
Internal to VA, we are establishing a central database for
veterans. One would think that would be easy; it is certainly
not and it is a challenge. In a benefits piece, the disability
claim process is being automated with the Veterans Benefits
Management System (VBMS). That is a paperless system that is
now online at all 56 of our regional offices.
Within education, we have a computer system that is called
the Long-Term Solution. In that, we just launched automation of
supplemental claims. Supplemental claims are those claims where
people actually get paid their housing allowance and school. We
are now averaging about 50 percent of all supplemental claims
going through the system without being touched by human hands.
What that has done is it has driven down our supplemental
claim processing time from about 20 days to currently 5 days.
By doing that, the original claims, which is where we look at a
veteran's eligibility for various programs, that has been
reduced from 40 to 50 days down to 17 currently. So we are
attacking the automation front from about four or five
different angles.
But I would agree with you that the paper process that we
have is being mitigated now with some of these automation
systems.
Senator Coburn. All right. Thank you.
Chairman Carper. Senator McCaskill.
Senator McCaskill. I neglected last time to thank all of
you for your public service. I think you have all served the
public in various capacities, and I thank you all for that.
Mrs. Petraeus or maybe Mr. Tarantino, do you get a sense
that there is enough education--and maybe, Sergeant Pantzke,
you could talk about this? It is one thing for there to be
information if a veteran tries to seek it out. Are we making
any effort, as people are leaving the service, as these
benefits accrue to them, are we making sure our active becoming
veteran population learns about.
They have a Byzantine number of things they need to figure
out, both from what is their status going to be, in terms of
disabilities, which is another whole really difficult process.
I am sure you could educate us about that, Sergeant Pantzke. I
am sure.
But are we making an effort as, for example, the National
Guard come back, to actually educate these--our military and
their families about some of these pitfalls that they need to
be watching for? If they are not seeking it out, are they
getting it anyway?
Ms. Petraeus. I think there are a lot of folks attempting
to see that they get that information. We did work with the
Department of Defense and the VA. They revamped the Transition
Assistance Program that Secretary Coy was talking about. We
wrote the financial piece for that. So I think it is a vast
improvement over what was provided to folks before when they
were transitioning out.
We are working on initiatives to talk to folks before they
enter the military to give them a little bit of education so
they are aware, if they enter with student loans, some of what
they might do with that. I know the National Guard, when they
come back from deployment, has what they call Yellow Ribbon
events, not related to the government funded Yellow Ribbon for
Education. But they also have a variety of folks come to those
and provide information.
Senator McCaskill. You know what I found in those, though?
Everyone is so anxious to get to their families. They are not
always listening as carefully as they might, maybe, in another
setting, but I do not know.
Ms. Petraeus. That is true. You are kind of standing
between them and the gate sometimes.
Senator McCaskill. That is exactly right.
Ms. Petraeus. They do bring them back, often 30 days later
to say, ``OK, how is it going? Here is some more information.''
Senator McCaskill. That is great.
Ms. Petraeus. So I think there are a lot of initiatives.
Different people are going to process the information better at
different times, so we need to try to reach them at different
moments.
Senator McCaskill. Is there a reason, Commander Coy, that
you could not just put a link over to the CFPB website up right
now? I do not know about your organization, Mr. Tarantino, or
any of the other Veterans Service Organizations (VSOs). Is
there some ridiculous rule that says that you cannot put a link
right now, if somebody went to the American Legion website or
went to your website or went to the VA website that could not
link over to the G.I. Bill calculator and all the things that
they have online right now and available?
Mr. Coy. No, ma'am, there is not, the short answer. One of
the first things that Holly mentioned to me is we had one of
her staff members detailed to us to help us work through this,
and the first thing she said to me is, You are not allowed to
steal him. And so, the short answer is yes, we can do that
link, but what we want to do is make sure, because there are
some other things that we want to put in there, so we want to
take, if you will, the bones of what they have and then bring
it over to us and put some modifications on it.
Senator McCaskill. Well, in the meantime, it seems to me
that the link would be helpful. Do you all have the link on
your website and can you put it up?
Mr. Tarantino. Well, Senator, actually IAVA created the
G.I. Bill Calculator back in 2008 and, I think, it is still the
most comprehensive one you can find and it is on the
newgibill.org as well as tons of information that links to
various sources.
But I think we are kind of on step two before we have
actually fixed step one. This whole thing starts with better
consumer education, which was the focus of efforts last year by
the President with his Executive Order, as well as H.R. 4052.
We are still living in a world today where I can pull out my
iPhone to go get lunch, I can go on Yelp, and I can look at all
the criteria based on my individual needs and figure out where
to go have lunch.
There is nothing. We are not even close to doing that for
education, because the first thing you have to ask a veteran
is, What do you want?
Senator McCaskill. Right.
Mr. Tarantino. Do you want an English degree? Do you need
to get a mechanical degree? Are you just going because you want
to learn poetry and it is interesting to you? You have to start
with that and then be able to give them tools to make good
consumer choices based on those needs, and we are nowhere near
that. I think we are getting there, but it is going to take
some time before we have the data and the tools and the
transparency to actually get there.
Senator McCaskill. Yes, I agree with you. It does seem to
be hard. Do all the VSOs have a G.I. Bill Calculator on their
websites? Do you know?
Mr. Tarantino. As far as I know, we are the only one.
Senator McCaskill. Yes. I think it would be good to reach
out to them and see if we could--because, with all due respect,
Commander Coy, I have heard a lot in my other life on the Armed
Services Committee. There is a tendency of people in the
military to want to do their own requirements. And we have seen
some bad things happen when something is supposed to be joint,
but every branch has their own requirements, and before you
know it, you have a system that has taken twice as long and
costs twice as much because everybody keeps tweaking their
requirements as opposed to just going all in, in one system.
We have seen this in IT over and over in the military. I do
not probably need to tell any of you of the horror stories of
IT in the military with every branch wanting their own
requirements and not talking to each other. So the simpler we
can make this for everybody to be on the same platform the
better it would be. I do not begrudge you wanting to put
additional things on, but I certainly would encourage you to
use the work that has been done by either Mr. Tarantino's group
or CFPB.
I thank you all for being here today. I learned a lot and,
hopefully, we can work together so that there are not very many
veterans that find themselves as frustrated by their
educational opportunities as they have been by other parts of
their recovery from a very, very difficult service to our
Nation. Thank you.
Chairman Carper. Thank you, Senator McCaskill. I want to
come back, if I could, Sergeant Pantzke, and just to ask you
to, first of all, just share with us, if you would, a little
bit about your life since your experience with the Art
Institute. Just share with us what has happened in terms of
education, employment, and so forth.
Sergeant Pantzke. Of course, I did a lot of interviews
hoping to effect a change of for-profits, deal with veterans of
all eras. So what I did, after my very last interview, I went
around my area that I live in to several photography studios,
media, stuff like that, and I asked them, what would you rather
have, a degree from a brick-and-mortar or a degree from an
online college? And every time, I would say, 95 percent of them
said they would rather have a degree from a brick-and-mortar
traditional school.
So, that really kind of cut my hopes down quite a bit. The
thing is, with the Art Institute program, it was supposed to be
a 2-year degree program, a bachelor of science in photography.
My classes were 6\1/2\ weeks long, two classes per 6 weeks.
That was really condensed. I would have four to five
assignments per class. So my days ran from 8 a.m. to 4 a.m. the
next morning. I would only get 4 hours sleep and it would start
all over again. And it was just tearing my family apart.
So like I said, Ms. Morales had asked me--well, both my
wife and my individual therapist told me, You need to quit, but
I did not want to give up. I had that mentality of, do not
surrender, keep driving forward, and I did not realize the pain
that I was causing myself and my family. So it came to a head
where actually I was in an auto accident on Easter Sunday in
2011. I had to withdraw from school for medical reasons because
my right arm was messed up.
So I had a lot of thinking during that time. I just had to
withdraw because there was no--there was no way I could
complete the degree program. And actually, I really did a lot
of self-learning, I guess, through other Internet resources
such as learnmyshot.com. There is a gentleman out in Oregon, I
believe it is, and I do not remember his name, but he has got
an eBook out called Photo Extremists, which I have been using
and I have learned so much more from those two sources than I
did my entire enrollment.
Chairman Carper. OK, thank you. Let me go back and let us
talk, if we could, about sort of quality assurance at the front
end for these institutions, whether they are for-profit, non-
profit, private, but in terms of licensure, by whom,
accreditation, by whom, the standards used across the different
States, among different agencies, whether State or Federal.
Commander Coy, can you talk a little bit about that?
Mr. Coy. Yes, sir, and I will ask Mr. Worley to also
address that. In terms of the accreditation or approval process
for schools at the VA, if you are a public school and already
accredited, it is generally accepted as being deemed approved.
Chairman Carper. Accredited by? You said if you are already
accredited, accredited by whom?
Mr. Coy. By a recognized accrediting agency.
Chairman Carper. Within a State?
Mr. Coy. Most of them are national.
Chairman Carper. OK. All right.
Mr. Coy. Rob, do you want to----
Mr. Worley. Recognized by an accreditation recognized
nationally by the Department of Education. So this is under
Public Law 111-377, so public accredited institutions and
private non-profit institutions are deemed approved if they are
accredited by a recognized--nationally recognized accrediting
agency.
Chairman Carper. Well, what I am trying to get at is the
rigor of the accreditation or the rigor of the licensure
process. Ms. Petraeus, do you have anything that you could
share with us on that?
Ms. Petraeus. I am certainly not an expert in that area,
but I would say simply that once it is accredited, then I
believe the VA is obligated to, by law, to put that school on
their list of a place where benefits can be spent, which to me
really points out the importance of a rigorous accreditation
process so you do not have schools that are able to accept that
G.I. Bill and TA money and have very poor outcomes for their
students.
Chairman Carper. Please, go ahead.
Mr. Coy. The accreditation process is a process that is run
by the Department of Education, so I would defer any specific
questions on the accreditation issue to them.
Chairman Carper. OK. Mr. Worley?
Mr. Worley. If I could just add one more qualifier, that is
for standard degree programs at those institutions. Some of
those institutions provide----
Chairman Carper. A standard degree program would be what, a
2-year degree, an associate's degree, or a B.S., B.A.?
Mr. Worley. Correct.
Chairman Carper. OK. Not a certificate program?
Mr. Worley. There are non-college degree--programs offered
at those institutions as well. Those have to go through a
review and approval process by the State approving agencies.
Chairman Carper. All right. I think we are running out of
time here and I think we have a vote underway. Does anybody
know how much time is left? Five minutes? On the clock? Dr.
Coburn, do you want to add anything else?
Senator Coburn. No. I just wanted to thank Sergeant Pantzke
for his service, and I have a query of you. I have read your
testimony this morning early, and one of the things--I think
one of the ways you solve problems is get all sides of the
story, and I wonder if you would give the Committee a release
so that we can get the information the school has on you?
Sergeant Pantzke. Oh, definitely.
Senator Coburn. So we can see the full story and see where
the problems land.
Sergeant Pantzke. Oh, definitely, though when Educating
Sergeant Pantzke was released, the Vice President gave me a
call from 99 Division and asked me--well, actually, I am sorry.
That was the wrong thing. They had mentioned that they had
offered me extensive tutoring services. I did not receive one
phone call or one email about those tutoring services.
Senator Coburn. That is why I would like you to give us a
release so we can have your information----
Sergeant Pantzke. Oh, yes, definitely.
Senator Coburn [continuing]. So we can look at the whole
side of it. I thank you very much for that. Thank you, Senator
Carper.
Chairman Carper. You bet. Let me just close by using a term
that we used a fair amount in the Navy and that is, all hands
on deck and a call for general quarters when we were under
attack. When a country is running a deficit of about $750
billion, we need all hands on deck. When we are looking down
the road in another 10 years or so, the deficit is going down,
but it eventually is going to come right back up. So I say that
is an all hands on deck.
When we have not just a handful of veterans but hundreds,
probably thousands who have gone through the kind of experience
not unlike what Sergeant Pantzke has explained and shared with
us, it is all hands on deck. I am encouraged today that after
several years of feeling that not a whole lot of attention or
time or effort or energy was going into making sure that we are
righting this wrong, I am encouraged that a good deal is being
done.
And part of it is being done by the VA and part of that
effort is being led by the Department of Education. Part of it
is being led by a new agency, the CFPB. Part of it is being led
by the efforts that Congressman Gunderson talked about, and,
frankly, some of our veterans organizations, particularly the
one that is represented here today is part of the all hands on
deck.
Are we where we need to be in cleaning up this problem? No.
I think as Congressman Gunderson said, as long as one veteran
is being disadvantaged or taken advantage of, that is one too
many. And unfortunately, it is not just one that is still being
taken advantage of. It is not just one taxpayer, it is all of
us. We have plenty of work to do.
The driving force for me on the 90/10 Rule is that I find
it abhorrent that the Federal Government is going to be paying
100 percent of any post-secondary schools' revenues. I just do
not get that. That makes no sense to me. And are there changes
that could be made to the 90/10 Rule that we are talking about
here? Yes. Can we improve on it? Yes, we can.
I am interested in that being part of the all hands on deck
and part of the, if you will, all the above kind of approach to
solving this problem. For those of you who are working on it,
for those of you who shared your life's experiences with us to
help better inform what we do going forward, I want to thank
you. And while I think we are making progress, I like to say if
it is not perfect, let us make it better. It is not perfect
yet. I think it is getting better.
With that, this hearing is almost adjourned, but we are
going to announce that the hearing record will remain open for
15 days, that is until August 7, at 5pm, for the submission of
statements and questions for the record. With that, we are
adjourned. Thanks so much.
[Whereupon, at 12:19 p.m., the Committee was adjourned.]
A P P E N D I X
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