[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]


 
                    UPDATING THE MONTGOMERY GI BILL 
=======================================================================

                                HEARING

                               before the

                  SUBCOMMITTEE ON ECONOMIC OPPORTUNITY

                                 of the

                     COMMITTEE ON VETERANS' AFFAIRS
                     U.S. HOUSE OF REPRESENTATIVES

                       ONE HUNDRED TENTH CONGRESS

                             FIRST SESSION

                               __________

                            OCTOBER 18, 2007

                               __________

                           Serial No. 110-56

                               __________

       Printed for the use of the Committee on Veterans' Affairs

                               ----------
                         U.S. GOVERNMENT PRINTING OFFICE 

39-465 PDF                      WASHINGTON : 2008 

For sale by the Superintendent of Documents, U.S. Government Printing 
Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; 
DC area (202) 512-1800 Fax: (202) 512-2104 Mail: Stop IDCC, 
Washington, DC 20402-0001 









































                     COMMITTEE ON VETERANS' AFFAIRS

                    BOB FILNER, California, Chairman

CORRINE BROWN, Florida               STEVE BUYER, Indiana, Ranking
VIC SNYDER, Arkansas                 CLIFF STEARNS, Florida
MICHAEL H. MICHAUD, Maine            JERRY MORAN, Kansas
STEPHANIE HERSETH SANDLIN, South     RICHARD H. BAKER, Louisiana
Dakota                               HENRY E. BROWN, Jr., South 
HARRY E. MITCHELL, Arizona           Carolina
JOHN J. HALL, New York               JEFF MILLER, Florida
PHIL HARE, Illinois                  JOHN BOOZMAN, Arkansas
MICHAEL F. DOYLE, Pennsylvania       GINNY BROWN-WAITE, Florida
SHELLEY BERKLEY, Nevada              MICHAEL R. TURNER, Ohio
JOHN T. SALAZAR, Colorado            BRIAN P. BILBRAY, California
CIRO D. RODRIGUEZ, Texas             DOUG LAMBORN, Colorado
JOE DONNELLY, Indiana                GUS M. BILIRAKIS, Florida
JERRY McNERNEY, California           VERN BUCHANAN, Florida
ZACHARY T. SPACE, Ohio
TIMOTHY J. WALZ, Minnesota

                   Malcom A. Shorter, Staff Director

                                 ______

                  SUBCOMMITTEE ON ECONOMIC OPPORTUNITY

          STEPHANIE HERSETH SANDLIN, South Dakota, Chairwoman

JOE DONNELLY, Indiana                JOHN BOOZMAN, Arkansas, Ranking
JERRY McNERNEY, California           RICHARD H. BAKER, Louisiana
JOHN J. HALL, New York               JERRY MORAN, Kansas

Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public 
hearing records of the Committee on Veterans' Affairs are also 
published in electronic form. The printed hearing record remains the 
official version. Because electronic submissions are used to prepare 
both printed and electronic versions of the hearing record, the process 
of converting between various electronic formats may introduce 
unintentional errors or omissions. Such occurrences are inherent in the 
current publication process and should diminish as the process is 
further refined.






























                            C O N T E N T S

                               __________

                            October 18, 2007

                                                                   Page
Updating the Montgomery GI Bill..................................     1

                           OPENING STATEMENTS

Chairwoman Stephanie Herseth Sandlin.............................     1
    Prepared statement of Chairwoman Herseth Sandlin.............    54
Hon. John Boozman, Ranking Republican Member.....................     3
    Prepared statement of Congressman Boozman....................    55
Hon. Timothy J. Walz.............................................    32
Hon. John Kline..................................................    13

                               WITNESSES

U.S. Department of Education, Allison Jones, Member, Advisory 
  Committee on Student Financial Assistance, and Assistant Vice 
  Chancellor for Academic Affairs, California State University 
  System.........................................................    27
    Prepared statement of Mr. Jones..............................    86
U.S. Department of Veterans Affairs:
  James Bombard, Chairman, Veterans Advisory Committee on 
    Education, and Chief, New York State Division of Veterans 
    Affairs, Bureau of Veterans Education........................    30
      Prepared statement of Mr. Bombard..........................    89
  Keith M. Wilson, Director, Education Service, Veterans Benefits 
    Administration...............................................    43
      Prepared statement of Mr. Wilson...........................   112
U.S. Department of Defense:
  Thomas L. Bush, Acting Deputy Assistant Secretary of Defense 
    for Reserve Affairs (Manpower and Personnel).................    40
  Curtis L. Gilroy, Ph.D., Director, Accession Policy, Office of 
    the Under Secretary of Defense for Personnel and Readiness 
    (Military Personnel Policy)..................................    42
      Prepared statement of Mr. Bush and Dr. Gilroy..............   106

                                 ______

American Association of State Colleges and Universities, Steve 
  Francis Kime, Ph.D., Former Vice President (2003-2005), and on 
  behalf of the Partnership for Veterans' Education..............    19
    Prepared statement of Dr. Kime...............................    76
American Legion, Ronald F. Chamrin, Assistant Director, Economic 
  Commission.....................................................     6
    Prepared statement of Mr. Chamrin............................    62
Military Officers Association of America, Colonel Robert F. 
  Norton, USA (Ret.), Deputy Director, Government Relations......     4
    Prepared statement of Colonel Norton.........................    56
Minnesota National Guard, Major General Larry W. Shellito, Ed.D., 
  Adjutant General...............................................    33
    Prepared statement of General Shellito.......................    94
National Association of State Approving Agencies, Charles Rowe, 
  President, and Chief, State Approving Agency, New Jersey 
  Department of Military and Veterans Affairs....................    23
    Prepared statement of Mr. Rowe...............................    79
National Association of Veterans Program Administrators, David A. 
  Guzman, Legislative Director...................................    21
    Prepared statement of Mr. Guzman.............................    78
Veterans of Foreign Wars of the United States, Eric A. Hilleman, 
  Deputy Director, National Legislative Service..................     8
    Prepared statement of Mr. Hilleman...........................    72
Vietnam Veterans of America, Richard F. Weidman, Executive 
  Director for Policy and Government Affairs.....................     9
    Prepared statement of Mr. Weidman............................    74

                       SUBMISSIONS FOR THE RECORD

National Organization for Competency Assurance, James Kendzel, 
  MPH, SPHR, Executive Director, statement.......................   114

                   MATERIAL SUBMITTED FOR THE RECORD

Post-Hearing Questions and Responses for the Record:
Hon. Stephanie Herseth Sandlin, Chairwoman, Subcommittee on 
  Economic Opportunities, Committee on Veterans' Affairs, to 
  Colonel Robert Norton, Deputy Director, Government Relations, 
  Military Officers Association of America, letter dated October 
  23, 2007, and response letter dated October 31, 2007...........   120
Hon. Stephanie Herseth Sandlin, Chairwoman, Subcommittee on 
  Economic Opportunities, Committee on Veterans' Affairs, to 
  Ronald F. Chamrin, Assistant Director, Economic Commission, 
  American Legion, letter dated October 23, 2007 and response 
  letter dated October 30, 2007..................................   123
Hon. Stephanie Herseth Sandlin, Chairwoman, Subcommittee on 
  Economic Opportunities, Committee on Veterans' Affairs, to Eric 
  A. Hilleman, Deputy Director, National Legislative Service, 
  Veterans of Foreign Wars of the United States, letter dated 
  October 23, 2007, and DAV response.............................   124
Hon. Stephanie Herseth Sandlin, Chairwoman, Subcommittee on 
  Economic Opportunities, Committee on Veterans' Affairs, to Rick 
  Weidman, Executive Director for Policy and Government Affairs, 
  Vietnam Veterans of America, letter dated October 23, 2007, and 
  response letter dated November 2, 2007.........................   125
Hon. Stephanie Herseth Sandlin, Chairwoman, Subcommittee on 
  Economic Opportunities, Committee on Veterans' Affairs, to 
  Steve Kime, Ph.D., American Association of State Colleges and 
  Universities, letter dated October 23, 2007, and response 
  letter dated October 24, 2007..................................   127
Hon. Stephanie Herseth Sandlin, Chairwoman, Subcommittee on 
  Economic Opportunities, Committee on Veterans' Affairs, to 
  David Guzman, Legislative Director, National Association of 
  Veterans Program Administrators, letter dated October 23, 2007, 
  and response letter dated November 1, 2007.....................   130
Hon. Stephanie Herseth Sandlin, Chairwoman, Subcommittee on 
  Economic Opportunities, Committee on Veterans' Affairs, to 
  Charles Rowe, President, New Jersey State Department of 
  Military, Veterans' Affairs State Approving Agency, letter 
  dated October 23, 2007, and response dated November 2, 2007....   132
Hon. Stephanie Herseth Sandlin, Chairwoman, Subcommittee on 
  Economic Opportunities, Committee on Veterans' Affairs, to Tom 
  Bush, Acting Deputy Assistant Secretary of Defense for Reserve 
  Affairs (Manpower and Personnel), U.S. Department of Defense, 
  letter dated October 23, 2007, and DoD responses...............   134
Hon. Stephanie Herseth Sandlin, Chairwoman, Subcommittee on 
  Economic Opportunities, Committee on Veterans' Affairs, to Curt 
  Gilroy, Ph.D., Director, Accession Policy, Office of the Under 
  Secretary of Defense for Personnel and Readiness (Military 
  Personnel Policy), U.S. Department of Defense, and DoD 
  responses......................................................   137
Hon. Stephanie Herseth Sandlin, Chairwoman, Subcommittee on 
  Economic Opportunities, Committee on Veterans' Affairs, to 
  Keith Wilson, Director, Education Service, Veterans Benefits 
  Administration, U.S. Department of Veterans Affairs. letter 
  dated October 23, 2007, and VA responses.......................   140


                    UPDATING THE MONTGOMERY GI BILL

                              ----------                              


                       THURSDAY, OCTOBER 18, 2007

             U.S. House of Representatives,
                    Committee on Veterans' Affairs,
                      Subcommittee on Economic Opportunity,
                                                    Washington, DC.

    The Subcommittee met, pursuant to notice, at 2:04 p.m., in 
Room 334, Cannon House Office Building, Hon. Stephanie Herseth 
Sandlin [Chairwoman of the Subcommittee] presiding.
    Present: Representatives Herseth Sandlin, McNerney, and 
Boozman.
    Also present: Representatives Walz and Kline.

        OPENING STATEMENT OF CHAIRWOMAN HERSETH SANDLIN

    Ms. Herseth Sandlin. Good afternoon, ladies and gentlemen. 
The Veterans' Affairs Economic Opportunity Subcommittee hearing 
on updating the Montgomery GI Bill (MGIB) will come to order. I 
ask unanimous consent that Congressman Timothy Walz from 
Minnesota's first district and Congressman John Kline from 
Minnesota's second district be invited to sit at the dais for 
the Subcommittee hearing today. Hearing no objection, so 
ordered.
    Welcome, Mr. Kline, we appreciate you joining the Ranking 
Member and me. I believe your colleague from Minnesota will be 
joining us soon, Mr. Walz, for this very important hearing.
    Before I begin my opening statement, I would like to call 
attention to the fact that Mr. James Kendzel, Executive 
Director for the National Organization for Competency 
Assurance, has asked to submit a written statement for the 
record. If there is no objection, I ask for unanimous consent 
that his statement be entered. Hearing no objection, so 
entered.
    [The statement of Mr. Kendzel appears on p. 114.]
    Ms. Herseth Sandlin. As the lone representative from South 
Dakota, I continue to hear concerns from returning 
servicemembers and veterans throughout my State about the 
confusion over existing Montgomery GI Bill entitlements and the 
inequity of benefits that exist between Active Duty and our 
Reserve forces. Unfortunately, this is an all too common 
concern of Guard and Reserve members across our Nation who have 
oftentimes served side by side with Active Duty forces in 
support of military operations at home and abroad.
    Since the Montgomery GI Bill was enacted more than 20 years 
ago, our Nation's utilization of the Selected Reserve forces 
has dramatically increased. When the Montgomery GI Bill was 
signed into law in 1984, servicemembers of the Guard and 
Reserve were rarely mobilized, but that simply is not the 
reality today. Indeed, today's citizen soldiers are serving 
with distinction and have sacrificed a great deal in 
contributing to our Nation's efforts in Iraq and Afghanistan. 
Unfortunately, we will hear today from our witnesses that Guard 
and Reserve members are being called to duty for extended 
periods of time, while their educational benefits do not 
reflect their increased service to our Nation. I know that I am 
not alone in this Congress when I say that our veterans deserve 
a Montgomery GI Bill that will meet their needs in the 21st 
century.
    Much progress has been made in education benefits and 
National Guard, Reserve and Active Duty servicemembers. 
However, I think everyone would agree that we must remain 
vigilant to protect against any decline in benefits. Veterans, 
servicemembers and military families of this Nation deserve our 
best efforts.
    Some of the panelists may recall a hearing we held on March 
22nd on the subject of educational benefits for National Guard 
and Reserve members of the U.S. Armed Forces. Even before that, 
under the leadership of Mr. Boozman we had a field hearing in 
the great State of Arkansas and other hearings that probed this 
same issue in the prior Congress.
    After those hearings, and during the hearing on March 22nd 
of this year, many of our members and panelists expressed 
concerns over: the confusion of Chapters 1606 and 1607 
entitlements; the need to consolidate policy and funding for 
the Montgomery GI Bill Selected Reserve and the Reserve 
Educational Assistance Program under the authority of the U.S. 
Department of Veterans Affairs (VA); and the U.S. Department of 
Defense's (DoD's) concern over the issue of retaining authority 
over kickers.
    Since the March 22nd hearing, we have worked with our 
colleagues in the House and Senate Armed Services Committees to 
include language in the National Defense Authorization Act of 
2008 to recodify Chapters 1606 and 1607 of title 10, United 
States Code, in title 38. I believe that this small, but very 
important, step will simplify and improve the educational 
assistance programs created to provide our Nation's 
servicemembers, veterans and their dependents with the benefits 
they rightfully deserve.
    Furthermore, we have worked with the House Armed Services 
Committee to ensure that kicker authority is not affected by 
legislation that might be considered by Congress in the near 
future. We understand DoD's use of this important recruitment 
and retention tool and look forward to working with them to 
ensure future legislation improves their recruitment and 
retention goals.
    Today's hearing will follow-up on the recommendations that 
were provided in the 109th Congress and by our Subcommittee 
hearing earlier this year.
    Ranking Member Boozman, I look forward to working with you, 
all Members on this Subcommittee, and our colleagues in 
Congress to streamline, update and expand existing Montgomery 
GI Bill entitlements.
    I now recognize our Ranking Member, Mr. Boozman, for any 
opening remarks he may have.
    [The prepared statement of Chairwoman Herseth Sandlin 
appears on p. 54.]

             OPENING STATEMENT OF HON. JOHN BOOZMAN

    Mr. Boozman. Thank you, Madam Chair. I appreciate you 
bringing us together to discuss the future direction of the GI 
Bill. As in the other programs under our jurisdiction, GI Bill 
education and training benefits enable veterans and surviving 
dependents with the opportunity to improve their ability to 
achieve financial independence outside of any other VA benefits 
that they may receive. According to the College Board, those 
with at least a bachelor's degree will make at least a million 
dollars more over a lifetime than someone with a high school 
diploma.
    Clearly, it pays to invest in education and training for 
our veterans. You and I have held several hearings on this 
subject over the last 3 years and we have heard from literally 
dozens of witnesses about the need to make changes to reflect 
today's operational environment. Today, members of the National 
Guard and Reserves are carrying a huge portion of the War on 
Terrorism, and if nothing else, I hope we can find a way to 
improve their benefits.
    I am also concerned that 30 percent of those who sign up 
for the GI Bill never use a penny of the benefit. There are 
many reasons they don't avail themselves of the program, some 
of which will be difficult to overcome. But I do think that we 
could reduce that 30 percent to a significantly lower number, 
and I know that we will be working together to do that, Madam 
Chair.
    Several of today's witnesses will advocate paying veterans 
the full cost of education. If that is our goal, I think we 
need more data. For example, according to the College Board, 
the average tuition fees at a public 4-year institution is 
about $5,800 and about $2,300 at 2-year schools. Board data 
also shows that 65 percent of all students attend 4-year 
schools with tuition fees below $9,000 per year. Fifty-six 
percent attend public 4-year schools with tuition and fees 
ranging from $3,000 to $6,000 per year.
    Finally, the College Board data indicates 41 percent of all 
students attend a 2-year school with a net cost considering all 
forms of aid at less than $100. I am quoting those figures to 
show that the full cost of tuition and fees vary significantly 
and that there are opportunities to attend a wide variety of 
schools at reasonably low cost. Obviously, room and board costs 
will add to those costs.
    Additionally, there are financial packages available today 
that will--that did not exist in earlier generations of 
veterans. Madam Chair, I think it might be helpful, in fact, I 
think it would be helpful if we ask the College Board to assist 
us in determining what is the real level of benefits we need to 
make as our guide.
    I want to acknowledge that VA has made significant progress 
in lowering the processing time for original and supplemental 
claims for educational benefits. Last year, VA averaged about 
43 days for an original claim. Today, it averages about 23 
days. Supplemental claims are down to 11 days from 17 last 
year. I wish the folks at Compensation and Pension could do as 
well. I know the education service has achieved a high level of 
automation to accomplish that decrease and again, they should 
be complimented for that.
    Finally, Madam Chair, you and I would make many 
improvements if we didn't have the PAYGO offsets. However, 
PAYGO is a fact of life and some of these things are proving 
difficult to do as far as figuring out where we can get 
offsets, and yet something that we can do that is very 
achievable is making the process simpler for veterans in 
schools, and I am eager to work on the VA's report on 
streamlining, getting the report that was due in July so that 
we can make an even further effort in that regard.
    If we can't get veterans more money, we should at least cut 
some of the red tape involved in getting checks to our 
veterans. Thank you very much. I yield back.
    [The prepared statement of Congressman Boozman appears on
p. 55.]
    Ms. Herseth Sandlin. Thank you, Mr. Boozman.
    Mr. Kline, I am aware of your broader interest in this 
entire topic, but also the specific circumstances that bring 
you to our hearing today. We would certainly welcome you to 
insert written opening statement for the record. We will go 
straight to the first panel so we can have time to get to the 
others.
    Mr. Kline. Thank you, Madam Chair.
    Ms. Herseth Sandlin. Okay. Thank you.
    I would now like to invite our first panel to join us. All 
of our witnesses today are distinguished individuals who are 
well qualified to discuss the issue of updating the Montgomery 
GI Bill. Joining us on the first panel is Colonel Robert 
Norton, Deputy Director of Government Relations for the 
Military Officers Association of America (MOAA); Mr. Ronald 
Chamrin, Assistant Director of Economic Commission for the 
American Legion; Mr. Eric Hilleman, Deputy Director for 
National Legislative Service, Veterans of Foreign Wars (VFW) of 
the United States; and Mr. Richard Weidman, Executive Director 
for Policy and Government Affairs for the Vietnam Veterans of 
America (VVA).
    Gentlemen, welcome back to the Subcommittee. I do want to 
remind each of you that your complete written statements have 
already been made part of the record for today, please limit 
your remarks to 5 minutes. There is a lot to say on this topic 
and we will have a lot of questions. Because we have four 
panels today, if you could limit the remarks to 5 minutes so 
that we do have sufficient time for follow-up questions.
    Colonel Norton, please, we will begin with you. You are 
recognized for 5 minutes.

  STATEMENTS OF COLONEL ROBERT F. NORTON, USA (RET.), DEPUTY 
 DIRECTOR, GOVERNMENT RELATIONS, MILITARY OFFICERS ASSOCIATION 
  OF AMERICA; RONALD F. CHAMRIN, ASSISTANT DIRECTOR, ECONOMIC 
COMMISSION, AMERICAN LEGION; ERIC A. HILLEMAN, DEPUTY DIRECTOR, 
 NATIONAL LEGISLATIVE SERVICE, VETERANS OF FOREIGN WARS OF THE 
 UNITED STATES; AND RICHARD F. WEIDMAN, EXECUTIVE DIRECTOR FOR 
   POLICY AND GOVERNMENT AFFAIRS, VIETNAM VETERANS OF AMERICA

             STATEMENT OF COLONEL ROBERT F. NORTON

    Colonel Norton. Thank you, Madam Chair. Good to see you 
again. And thank you, Ranking Member Boozman, for this 
opportunity to appear before you today on behalf of the 
Military Officers Association. We are very grateful for the 
Subcommittee's continued interest in approving educational 
benefits for the members of our Armed Forces and veterans.
    The GI Bill exists to support the readiness of our Armed 
Forces and to assist those who have honorably served this 
Nation. Recruiting, retention and readjustment are the pillars 
of the program. All three are critical to the success of the 
all-volunteer force.
    If we were grading the Montgomery GI Bill (MGIB) on 
outcomes, we would conclude that the program is not an honor 
graduate. The MGIB is not structured to best accomplish what 
Congress intended, and benefits do not match the service and 
sacrifice of our warriors. In considering legislation to 
modernize and improve the GI Bill, we recommend that three 
tests be applied. First, do legislative proposals match 
benefits to the service and sacrifice of our Armed Forces men 
and women? Second, are the components of the GI Bill organized 
to give optimal support to recruiting, retention and 
readjustment outcomes? And three, are benefits keeping pace 
with the cost of education in training programs?
    In the case of the Minnesota National Guard and tens of 
thousands of other Reservists, the Reserve Montgomery GI Bill 
does not meet the test, the first test of matching benefits to 
service and sacrifice. We can debate the administrative aspects 
of their case, but in our view, two points are 
incontrovertible.
    First, under current law, Reservists can't use their 
benefits earned on Active Duty after they complete their 
service commitments. Second, when these troops are reacted, and 
they will be called up again and again under operational 
Reserve policy, they can't earn any additional Montgomery GI 
Bill entitlement.
    On the second test, is the GI Bill optimized to accomplish 
its basic purposes, the answer in our view is no. Active duty 
recruits still must give up $1,200 of their first year's pay at 
a time when they are under great stress and often in economic 
straits. Basic Reserve benefits have dropped from 48 percent to 
29 percent of the Active Duty program at a time when Guard and 
Reserve recruiting is under enormous strain.
    In terms of readjustment, the GI Bill only pays 75 percent 
of the average cost of a 4-year public college education for 
full-time study, according to Department of Education data. So 
recruiters don't have as strong a product to offer and service 
men and women and veterans don't have a readjustment benefit 
that matches the cost of education.
    These young men and women are our Nation's finest. If they 
want to go to school in the service or later after they 
separate, the GI Bill should cover at least the average cost of 
a public college. MOAA recommends 10 priorities for updating 
the Montgomery GI Bill as indicated in the Executive Summary of 
our statement. I will restate our top three, Madam Chair.
    First, put all the eggs in one basket. Move the Reserve 
programs into title 38, Total Force team, Total Force 
Montgomery GI Bill. The full House, as you indicated, Madam 
Chair, has already adopted this recommendation and we strongly 
recommend that final passage of this provision in the Defense 
Authorization Act for fiscal year 2008. In other words, we are 
hoping that the House will insist in negotiation with the 
Senate that this outcome happen.
    Second, establish a 10-year readjustment benefit as 
authorized for activity duty members for National Guard and 
Reserve veterans called to Active Duty. We either treat 
operational Reservists as veterans or we don't. It is as simple 
as that. The House has endorsed a sense of Congress provision 
that this should happen. This makes sense to us, but now the 
House needs to adopt a provision in the Senate's defense bill 
to establish a readjustment benefit for activated Reservists.
    And third, raise GI Bill monthly rates to cover the average 
cost of a 4-year public college or university education.
    In closing, Senator Webb expressed the core idea at a 
Senate hearing on the GI Bill in July. Same soldier, same 
battlefield, same benefits. The all-volunteer force has been 
tested as never before and we must not let it fail. Action on 
the Montgomery GI Bill is long overdue and we respectfully 
recommend the Subcommittee and the full Committee make this 
issue a priority.
    Thank you, Madam Chair. I look forward to your questions.
    [The prepared statement of Colonel Norton appears on p. 
56.]
    Ms. Herseth Sandlin. Thank you, Colonel.
    Mr. Chamrin, you are recognized.

                 STATEMENT OF RONALD F. CHAMRIN

    Mr. Chamrin. Madam Chairwoman, Ranking Member Boozman, 
Members of the Subcommittee and guests, thank you for the 
opportunity to present the American Legion's views on veterans' 
education benefits. We commend this Subcommittee for holding a 
hearing to discuss these very important and timely issues. We 
thank the Committee for accepting our record in its entirety 
and for brevity, as we are limited to a brief statement, we 
will try to highlight our most key point.
    The American Legion supports passage of major enhancements 
to the current All-Volunteer Force Education Assistance 
Program, better known as the Montgomery GI Bill. The current 
make-up of the operational military force requires that 
adjustments be made to support all Armed Forces members. We 
would like to see all of our recommendations enacted into law, 
but the most pressing need is to ensure that all veterans who 
have earned education benefits are able to use them.
    Accordingly, the American Legion strongly supports measures 
that create portability of benefits. These portability measures 
must also be retroactive to protect those veterans who have 
already lost Reserve Education Assistance Program (REAP) and 
Selected Reserve benefits. It must occur immediately.
    A closer look at the Selected Reserve enlisted attrition 
figures that were released by the Office of the Secretary of 
Defense, Public Affairs Office, reveals that the total number 
of enlisted servicemembers who have departed the Reserve 
components since 2002 is 850,000, or an average of 142,000 
annually. 443,000 of the Reserve components have deployed in 
support of Operation Iraqi Freedom/Operation Enduring Freedom 
(OIF/OEF) as of August 31st, 2007. We can safely assume that a 
significant majority of these Reservists served honorably on 
Active Duty for at least 90 days, thereby earning them REAP 
benefits in addition to any GI Bill Selected Reserve benefits 
that they have.
    Therefore, we conservatively estimate that at least 400,000 
veterans of the Reserves, or 50 percent of the force that have 
already left, have lost earned education benefits that could 
have been used to increase their earning potential. Only 41,000 
have used REAP benefits, a sharp contrast to the 400,000 who we 
believe have lost earned benefits. Noting that our figures are 
of National Guard and Reserve servicemembers that were deployed 
in support of OIF/OEF, there are additional Reservists that 
were called to Active Duty to the Continental United States or 
deployed to other regions of the world.
    Hence, our conservative estimate of 400,000 veterans losing 
earned benefits is more likely than not much greater. The DoD 
Office of Public Affairs recently reported that their attrition 
rates are actually equal and/or lower in the Reserve components 
since the Global War on Terrorism began. They even announced 
recently that it met or exceeded their Active Duty recruiting 
or retention goals for fiscal year 2007. So prior retorts from 
the DoD in opposition of extending the delimiting date for fear 
of harming retention are hard to explain, given the recent 
recruitment and retention rates.
    The most visible example of the unjust denial of benefits 
is the demobilization of 2,600 members of the Minnesota 
National Guard who have just performed the longest continuous 
combat tour in Iraq of any military unit to date. If they leave 
the Selected Reserve, they will lose all earned education 
benefits. This travesty is not unique to these Guardsmen and 
the passing of portability benefits would assist these 
veterans.
    Corporal David Tedford Holt, a Tennessee enlisted Reservist 
currently on Active Duty states: ``With the high operational 
tempo of my unit, and with that many of our soldiers are 
deployed for more than 18 months during their initial six-year 
contract with the Army Reserves, it has become virtually 
impossible to support a family, develop as a soldier and member 
of the Army Reserve and obtain a 4-year degree using the GI 
Bill benefits that are lost the moment a soldier leaves the 
Army Reserve. While many soldiers enter the Army Reserve 
without families or financial obligations and are thus able to 
attend school full-time when not in military training, the 
Global War on Terrorism has stirred the patriotism of more and 
more men and women who are choosing to take a leave of absence 
from their jobs and families in order to serve. These important 
soldiers and leaders are far less able to take advantage of the 
GI Bill benefits that are offered to them during their term of 
enlistment.''
    An officer that works closely with Corporal Holt stated 
that ``he had no idea that enlisted soldiers lose their GI Bill 
benefits when they leave the Reserves.'' He continued to state, 
``I wonder how many officers actually know the reality of the 
situation. I bet that they don't and in turn are harming their 
subordinate enlisted soldiers.''
    I will now briefly talk about one selected piece of 
legislation, H.R. 1102. The American Legion supports the Total 
Force GI Bill. This bill solves many problems, most 
significantly the inequities of benefits of the members of the 
Reserve components as compared to their full-time Active Duty 
counterparts. One major selling point of this proposal is the 
portability of education benefits. The American Legion asserts 
that servicemembers called to active service perform duties at 
an equal rate to their full-time counterparts and should be 
treated as such.
    In conclusion, portability legislation must be enacted into 
law immediately. This legislation discussed today aims to 
better serve veterans and ultimately assist them in financial 
stability and helps our country. We also strongly feel that our 
full list of recommendations in our written statement should be 
enacted to ensure that veterans and military members are better 
equipped with a secondary education. In turn, highly skilled 
veterans with advanced degrees can be emplaced in the workforce 
to ensure the country's competitive edge in the global market 
in the not so distant future.
    The American Legion appreciates the opportunity to present 
this statement for the record and to continue our proud history 
of advocating for increased educational benefits to members of 
the Armed Forces. I will be happy to answer any questions that 
you may have.
    [The prepared statement of Mr. Chamrin appears on p. 62.]
    Ms. Herseth Sandlin. Thank you for your testimony.
    Mr. Hilleman, you are recognized for 5 minutes.

                 STATEMENT OF ERIC A. HILLEMAN

    Mr. Hilleman. Thank you, Madam Chairwoman. Ranking Member 
Boozman, Members of the Subcommittee, on behalf of the 2.3 
million members of the Veterans of Foreign Wars and our 
Auxiliaries, I would like to thank you for holding this 
important hearing on the GI Bill. The original GI Bill was an 
investment in America. The GI Bill benefited half of the 16 
million service men and women of World War II. These men and 
women earned higher degrees and higher salaries because of the 
education benefit. Higher taxes were earned on their wages and 
the investment paid for itself seven times over. These veterans 
are largely responsible for the tremendous prosperity that we 
enjoyed in the last century.
    Over the years, the purchasing power of the benefit has 
dissolved while the purpose of the GI Bill has also evolved. 
The Department of Defense now uses the GI Bill to recruit and 
retain high quality personnel, attracting young education-
oriented troops. The GI Bill has shifted from being a robust 
transition assistance benefit to now only covering a fraction 
of the cost of education.
    The current benefit requires veterans to seek large student 
loans, compete for scholarships, work part or full-time jobs, 
and rely on family funding to get through school. This is far 
from the original intent of the legislation. In cases where a 
young veteran has a family, they must choose between feeding 
their family and working to support them, or seeking an 
education. Making the decision to feed your family today or 
forego an education tomorrow is not a decision we should ask 
our young men and women to make.
    We urge this Committee, and the Members of Congress, to 
fully invest in a seamless transition for today's troops. We 
believe that the benefit of a comprehensive GI Bill for the 
21st century would provide full tuition support, a small 
stipend and other education-related costs. It would serve to 
strengthen DoD's recruitment efforts and retention, provide a 
national cadre of seasoned patriotic leaders, and most 
importantly, improve the lives of veterans and their families.
    The VFW strongly supports the enactment of H.R. 2702, the 
``Post-9/11 Veterans Educational Assistance Act of 2007.'' We 
recognize that this bill does not address the inequities that 
exist between Active Duty service served by Guard and Reserve 
members in Afghanistan and Iraq under 24 months. Yet we believe 
that with this bill as a vehicle, Congress can move forward and 
build in provisions to reward the noble service of the Guard 
and Reserve members. We believe the GI Bill would boost 
recruitment, maintain retention standards and ease the 
transition from Active Duty to civilian life, while covering 
the complete cost of education.
    I thank you for this opportunity to testify and present our 
views. I look forward to answering any questions this Committee 
may have. Thank you.
    [The prepared statement of Mr. Hilleman appears on p. 72.]
    Ms. Herseth Sandlin. We appreciate the testimony. Thank 
you.
    Mr. Weidman, you are recognized.

                STATEMENT OF RICHARD F. WEIDMAN

    Mr. Weidman. Madam Chairwoman, thank you for inviting 
Vietnam Veterans of America to present our views today. Mr. 
Boozman, distinguished Members of the Committee, we would like 
to associate ourselves with the specific programmatic remarks 
for the short run in terms of fix of the Montgomery GI Bill as 
outlined by the Military Officers Association.
    As you know, there was a broad education coalition that led 
to significant increases about 7 years ago in the Montgomery GI 
Bill to make it more affordable, and Colonel Bob Norton led 
that effort and held us all together. It is not an easy task to 
hold the entire veterans and military organization community 
together for a long period of time, but Bob has those kinds of 
skills, learned as an officer in the 196th Light Infantry 
Brigade.
    I do want to take a broader view here though if I may, 
please, Madam Chairwoman. Other statements talked about us 
being at war or the military at war, and there is no shared 
sacrifice in this war. The cost of war does not stop when you 
pull the people off the battlefield. Healthcare goes on for the 
rest of their lives. Benefits for those who have been torn up, 
either physically or neuropsychiatrically, goes on for most of 
their life, and as well as the need for ongoing healthcare that 
doesn't diminish with age. It only becomes greater, but also 
all benefits.
    It is part of the cost of war, and under the schemata that 
we have set up and the rules of the game, if you will, to put 
it as part of PAYGO in discretionary domestic spending, the 
cost of taking care of the men and women who have put life and 
limb on the line in defense of the Constitution of the United 
States, is simply unacceptable.
    It should be on the defense side, quite bluntly, not 
subject to caps, not pitting the needs of veterans against 
those of the nutrition needs of small children and other very 
important domestic programs, because it is part of the cost of 
war just as new replacement F-16's and Raptor fighters are. And 
it is our contention that that is where we need to go with this 
entire thing, because otherwise, we are going to be fighting 
over scraps for the time on and on and on.
    In terms of whether legislation that is needed, not that is 
``what is practical,'' is we need an amalgamation of the bills 
introduced on the Senate side by Senator James Webb, himself a 
combat veteran of Vietnam and father of an OIF veteran, and 
Senator Blanche Lincoln, that combines the best and makes it a 
Total Force real GI Bill for two reasons really, beyond the 
intrinsic rightness of it.
    Number one is that we need to show the young people who are 
contemplating enlisting, either in the Guard, Reserve, or 
Active Duty, that we value their service, that the country 
really values their service when we go to war and they put 
their life and limb on the line in defense of the Constitution 
so that they--it is not just when they get torn up that we will 
take care of them with medical care, but that we value 
investing in them in winning the peace after they have won the 
war on the battlefield.
    And the second reason is, it is not just in the veteran's 
interest. It is very much in the country's interest to train a 
whole new generation, a whole new generation to take their 
rightful place of some of our finest young people. They should 
not be limited by finances. They should be limited only by 
their intelligence, their drive, and their ambition to succeed.
    There are countless folks, including Senator Frank 
Lautenberg, who spoke very movingly a few months ago about 
without the real GI Bill, and I say the real GI Bill that paid 
tuition, books, and fees, he could not have even conceived 
going to college, much less going to Columbia University. And 
he came from a very poor family and then went on to become very 
wealthy and a leader in both the private sector and the public 
sector.
    And that is true of many individuals coming out of that 
World War II. It is an investment in America's future that we 
cannot afford not to make, if I may suggest to the Committee. 
And so we look forward to working with you on either of the 
short-term fixes. But in the 110th, right now is the time to 
change the rules of the game and to move in the second session 
to have a real GI Bill modeled on that, which was afforded to 
my father's generation, your grandfather's generation, Madam 
Chairwoman.
    So I thank you very much for allowing us to present our 
views here today, and be glad to answer any questions that you 
may have. Thank you.
    [The prepared statement of Mr. Weidman appears on p. 74.]
    Ms. Herseth Sandlin. Thank you, Mr. Weidman.
    Thank you all for your testimony.
    Mr. Boozman, did you want to start out with a question this 
afternoon?
    Mr. Boozman. Thank you very much. And I will very quickly, 
because we have Colonel Kline and Sergeant Major Walz, and I am 
really interested in what they have to say, especially with 
their backgrounds.
    But I guess a couple things, Colonel Norton, I agree with 
the three things that you mentioned about putting all the eggs 
in the basket and all of you mentioned that--lumping this thing 
together.
    And I mentioned earlier, one thing that we have to do is 
when you look at--you quoted 75 percent, I think, based on the 
figures you had. We can pull all these different figures and 
they are just all over the place. So one thing I do think, and 
you all will be very helpful in doing this, is we have to 
figure out what is the cost now, compared to the benefit that 
was back after World War II or what we intended with the 
current law, and then, go from there. That, to me, only makes 
sense.
    The other thing you mentioned, that this is just a part of 
the cost of war, and I agree with that totally. There are no 
ifs, ands, or buts. And I think that this Committee is on the 
forefront of pushing all of these things forward. And I guess 
when I alluded to PAYGO in my opening statement, right now the 
reality is that we are stuck with that situation.
    And so I think we are trying to get those things changed. 
All of us are tremendous advocates of Total Force GI Bill. We 
are all co-sponsors or original cosponsors in many cases of the 
bill that you have, you know, that we have alluded to. But like 
I said, that is a battle that we have got to fight.
    And then we have to fight another battle in the sense of 
what can we do right now with these ancillary things. And that 
is really what I was referring to. So I think we really do have 
a very, very bipartisan Committee. We are like a family. We 
have our spats at times, but the heart of everybody on this 
Committee is in that direction.
    But I see those as two different battles, the big battle 
that we have in the sense of how do we fund these things. I 
agree totally, it is a cost of the war.
    On the other hand, what can we do right now to make our 
servicemembers' lives easier with the current rules that we 
have. I yield back.
    Ms. Herseth Sandlin. Thank you, Mr. Boozman.
    Mr. Walz, did you have any questions for this panel?
    Mr. Walz. Well, just a couple here, Madam Chair. And I want 
to thank you and Ranking Member Boozman for your leadership on 
this very important Subcommittee. I appreciate the opportunity 
of joining you as a Member of the full Committee. I know the 
work you do, the bipartisan work, and I would associate myself 
with the Ranking Member's comment that we are committed to 
getting this right. We are committed to working together.
    I would also like to mention my colleague from the second 
district of Minnesota is here. Congressman Kline, Colonel 
Kline, Marine Corps Colonel, has been a tireless advocate for 
our veterans and for our servicemembers. We have traveled 
together to welcome our servicemembers back home from their 
tour of duty in Iraq, and we share the same commitment on this.
    So you are joined by a group of people here who share this, 
and there are just a few, just a couple questions I would ask 
on this. It does come back to this issue of resources and we 
know right now that one of the things you are going to hear 
later from the Minnesota National Guard, and it may be an issue 
to ask of them, this issue of using incentives for recruitment 
and retention and as they play into that. And right now we have 
seen a shift to signing bonuses and the re-up bonuses and 
things like that.
    Is it your opinion from your organizations here, are we 
putting the resources in the right spot at a time of conflict 
or a time of war, or are we not looking long-range on this, 
because I share your concern on this. I am absolutely committed 
that we need a Total Force GI Bill. I am absolutely committed. 
We need to upgrade this for long-range goals of educating our 
next generation of leaders that are coming back, making sure 
that we are getting our best and brightest, not only to see 
that we will take care of them, but to make that investment.
    So I would just ask you your knowledgeable opinion on this. 
I know it is somewhat subjective. But do you think we are 
putting our resources in the right place on this? If you just 
want to go down the line, whoever wants it.
    Colonel Norton. Congressman, I think it is a question of 
balance. A recent U.S. Government Accountability Office report 
concluded that the Defense Department has increased cash 
bonuses for enlistment and re-enlistment by about a thousand 
percent since 9/11. The reality is that DoD manages the force, 
distributes needed manpower into the needed skills by using 
cash bonuses.
    At the same time, over the last 6 years, the Defense 
Department has not put forward any, and I mean any, substantive 
recommendations on the GI Bill, especially for the Reserve 
Forces, to improve it as part of the recruiting incentive 
package. So we would conclude by that, frankly, that the 
Department really sort of takes the GI Bill for granted.
    And if that is the case, and I think that adds substance to 
the argument that we should move the Reserve programs over 
where the Active Duty GI Bill has been since World War II, use 
the GI Bill primarily as a readjustment tool and let the 
Department of Defense use cash bonuses, as they increasingly 
want to do, to attract people into the Armed Forces and to get 
them to reenlist.
    Mr. Chamrin. Mr. Congressman, we don't have an official 
policy for recruitment or retention incentives. We feel that 
the DoD should be able to use what they feel is right to get 
troops enlisted or join the military. However, in regards to 
education, the American Legion is a community organization. We 
try to take care of the veteran and take care of their family.
    So with education benefits, you are looking at long-term 
investments. I believe 78 million baby boomers will retire by 
2010 according to the ILO Institute and 13 million to 15 
million skilled workers will also retire by 2020. So, we have 
to invest in the future, not just for the veteran, but for the 
family of the veteran.
    Mr. Hilleman. If I may, Congressman, thank you for this 
question. The VFW is very supportive of a comprehensive 
improvement to the GI Bill, one that would boost recruitment. 
We have seen in recent years eroding of the standards for 
individuals entering the force. They have raised the enlistment 
age to 42, I believe, in the Army. They are taking more waivers 
for drug offenses and Graduate Equivalent Degrees than ever 
before. We believe with a comprehensive and powerful education 
incentive, we would up the quality of our recruits.
    Most recruits coming in the military list the GI Bill as 
one of the top five reasons for joining. When DoD polls those 
same troops that stay, the ones that stay on Active Duty, the 
retained enlisted, do not list the GI Bill as a reason they 
stayed in. The GI Bill is a powerful recruitment tool and we 
believe that if employed properly, the quality and the quantity 
of the troops would increase. Thank you.
    Mr. Weidman. In regard to the bonuses, you give a man a 
fish and he eats for a day. You teach a man how to fish and he 
eats for a lifetime. Twenty-five thousand dollars sounds like a 
whole lot of money to an E-4, but it is going to cost that 
individual, that young man or woman more than that to buy a new 
pick-up. You increase GI Bill benefits available to that 
individual and their lifetime earnings will more than double.
    Mr. Walz. Thank you, Madam Chairwoman.
    Ms. Herseth Sandlin. Thank you, Mr. Walz.
    Mr. Kline.

              OPENING STATEMENT OF HON. JOHN KLINE

    Mr. Kline. Thank you, Madam Chair, for allowing me to join 
you today. I am a Member of the Personnel Subcommittee of the 
House Armed Services Committee and I have had the opportunity 
to sit in on some joint hearings before. But it is interesting 
to me that we are scrambled up in red tape. There is red tape 
in the bureaucracies in the Executive Branch, in the VA, in the 
Army, in the Office of the Secretary of Defense and here in 
Congress, as we have Committees with cross-jurisdiction and a 
lot of confusion.
    I know, for example, that our good friend, Vic Snyder, who 
was the Ranking Member and then the Chairman of the Personnel 
Subcommittee, has been pushing this rope for a long time to get 
these GI Bill benefits merged. And it has been tough sledding. 
That is no excuse. It is just the way it has been. And I am 
very glad that we are addressing this issue now in a very 
serious way.
    I regret that the Minnesota National Guardsmen and those in 
surrounding States are kind of paying a price for some of this 
bureaucratic snarl that we have going right now, and I am 
looking forward to that panel. So let me just say that I think 
there is a broad commitment in Congress on both sides of the 
aisle to address this problem and fix the problem so that the 
GI Bill benefits are modernized and simplified and there is a 
simplified execution of it.
    And I will not ask any questions, just in the interest of 
time. And certainly, I want to talk to our Minnesota AG. But 
thank you, gentlemen, very much for your testimony.
    And thank you, Madam Chair.
    Ms. Herseth Sandlin. Thank you. We have also been joined by 
Mr. McNerney, a distinguished Member of our Subcommittee. Mr. 
McNerney, do you have any questions for the panel or opening 
comments you would like to make?
    Mr. McNerney. I have one question, actually. The GI Bill, 
as I just heard since I have walked in, is an important tool to 
motivate people to join the service, to motivate our young 
Americans to join the service. And I think it should be. A lot 
of people that join the service are in lesser economic 
situations and see that as an opportunity. And I think it is a 
fine way for the American government to motivate and to help 
people along and to get service in return.
    One of the things about the GI Bill is that if you are 
going to be going to a program that is not a 4-year program, 
but a 3-year or a 2-year program like law school or some 
graduate study, you still only get the same rate of GI Bill as 
if you would be going to an undergraduate program, and yet the 
expenses are so much higher. The tuition is higher and so on. 
Do you think that would be a good idea to change that so that 
if you are in a 2-year program or a three-year program, you get 
the same total payout in a smaller timeframe as someone that is 
going to an undergraduate program? Colonel Norton.
    Colonel Norton. Congressman, in the ideal, I think that is 
probably a good idea. In the real world, I think it would be a 
living nightmare for the VA to be able to figure out for each 
of the tens of thousands of veterans getting out of service 
every year exactly how much they would get, depending on 
whether they went to a 2-year school, a training program, 
undergraduate, graduate. It would be extremely difficult to do 
that.
    That is why we like the idea, and the Partnership for 
Veterans Education likes the idea, of benchmarking GI Bill 
rates on the average cost of a 4-year public college or 
university. And the Department of Education tracks that data. 
Our friends in the Partnership from the American Association of 
State Colleges and Universities watch that data very closely 
for the Partnership. And right now the average cost that is 
picked up by the GI Bill is about 75 percent.
    So if a young man does decide to go to--young man or woman 
does decide to go to a 2-year school, they would actually be 
out ahead of the game, because they would be--for full-time 
study, they would probably be able to cover a little bit of 
their living costs at the cheaper rates of a community college 
and enable them to bootstrap up, if you will, to a 4-year 
school. And in fact, a lot of veterans do start out at 2-year 
schools.
    So we like the idea of an average benchmark as the way to 
do it. But we also think that if they can't use it when they 
get out of the service, then whatever rate is set by the 
Congress is no good. In your State, Congressman, there are 
4,300 Guardsmen and Reservists on Active Duty defending the 
Nation right now, as of October 17th. When they separate from 
the Guard or Reserve honorably, complete their commitment, they 
can't take a penny of their earned Active Duty benefits with 
them into civilian life. So whatever the rate is for them and 
for the Minnesota Guardsmen is meaningless.
    Mr. McNerney. Thank you for that answer. Actually, the real 
problem is that I think that Congress isn't putting enough 
resources into the GI Bill to give that--at a high enough level 
to really be able to help students through college. The level 
it is at right now, it is good, but it is not really sufficient 
and we need to do our best as Members of Congress to convince 
the public that that is a worthwhile investment. So those are 
my comments.
    Ms. Herseth Sandlin. Thank you.
    Mr. Weidman. Madam Chairwoman, may I comment back on that?
    Ms. Herseth Sandlin. Briefly, yes, because I have some 
questions, too, and we have to get on to our next panel. 
Briefly, if you want to comment on it briefly, please do.
    Mr. Weidman. The problem you touch on, Mr. McNerney, is the 
problem. The public hears that there is a GI Bill and thinks it 
is my father's GI Bill. But this ain't my father's GI Bill by a 
long shot. He was able to go to Southern Methodist University 
in Texas, which was very expensive at the time, as somebody who 
came from nothing on the real GI Bill as we call it at VVA.
    And that is not true today by a whole long shot. The 
solution is to be paid tuition, books and fees and a living 
stipend no matter where you can get in. If you can get into the 
high cost institution you are talking about, then you can go 
there and not be limited by your family background.
    Ms. Herseth Sandlin. Thank you. I think that is an 
important point to make, about the comparison between and among 
generations.
    I have a couple of comments and then a couple of questions. 
Picking up on the dialog between you, Mr. Weidman, from your 
opening statement, and some comments that the Ranking Member 
made on PAYGO. I want to be clear as not only Chairwoman of the 
Subcommittee, but as a Blue Dog Democrat who advocated for 
PAYGO, that educational benefits come under mandatory spending. 
Any changes that we make to increase the benefits, which I 
favor, should be as comprehensive as we can get to improve 
these benefits.
    Not to abide by PAYGO is not good for today's veterans and 
their children, because it adds to the deficit. At some point 
someone is going to have to pay, and it is future generations 
that are going to have to pay. PAYGO is simply about 
priorities. We have established other priorities thus far in 
this Congress. There are 360 bills, most PAYGO compliant. This 
is about priorities and I think every Member on this side and 
many of my colleagues in Congress on both sides of the aisle, 
if we have to find the offsets, we will find the offsets 
because we support enhancing these benefits. It is a priority 
for us. It is a priority for many.
    But I also don't want us to fail to pick up a dime in 
search of the dollar and that we make the kind of progress that 
is feasible if we can't find agreement. Especially when you 
have seen, obviously, some barriers in both the House and 
Senate in the last and current Congress in being able to pass 
legislation, even when there seems to be widespread agreement 
and then get them signed into law.
    I think that we can do this and we can make progress like 
we have made progress even incrementally so far in terms of 
what we have done to move the jurisdiction over. That has been 
a condition precedent that we have needed to make sure that we 
are able to then have our ducks in a row to make all of this 
happen.
    Again, I just wanted to state that, because I think that we 
shouldn't shy away from the issue of PAYGO because it makes for 
some tough choices. Many of us are willing to make the tough 
choices necessary to enhance these benefits. Again, I don't 
want today's veterans and their children to be paying for this 
in another way, because we simply added on to the deficit and I 
think that we can do this in the short-term. I am hopeful we 
can do this in this Congress and we can certainly keep making 
progress, whether it is Senator Webb's proposal on something 
very comprehensive or whether it is something that addresses 
certain issues that we have confronted, that we have addressed 
and tried to formulate proposals both in the last Congress and 
this one.
    This is about streamlining benefits, whether it is taking 
what does cost money and finding the offsets. We want to be 
responsible and I think that is what today's veterans would 
want us to do, is to be responsible with how we do this, and to 
ultimately get it done. You have the assurance from me, and I 
think what you have already heard from my colleagues on the 
dais, their commitment as well to continue to push this with 
leadership on both sides of the aisle.
    I do want to ask a few very specific questions. Colonel 
Norton, let me start with you. My understanding is that 
servicemembers who go directly to school have their previous 
military wages count against them as income, even though they 
are not going to continue to get those wages. So that prohibits 
them, unlike their fellow students who went to college right 
from high school who don't have maybe, clearly, the same level 
of wages if they were working part-time or even full-time for 
the summer in terms of what could be counted against them.
    I don't know how the parent's contribution comes into play 
for someone leaving the service versus someone who is going to 
college right from high school. If the idea is to make sure 
that we are doing things so that our servicemembers who go 
directly to college, to school from separating service, can 
qualify for other types of financial aid, should we give 
servicemembers a one-time exemption and not count their annual 
wages if they enter school directly following their separation 
from service?
    Colonel Norton. I would agree with that. I would also point 
out, Madam Chairwoman, that in the calculation of annual income 
for tax purposes, the GI Bill benefits, the value of the GI 
Bill used counts in the calculation of entitlement to Federal 
student loans. So that is another problem that is related to 
your question. And I would agree with your approach on that. 
Thank you.
    Ms. Herseth Sandlin. Thank you. Building on that, 
understanding from your testimony that the current MGIB for 
Active Duty pays only about 75 percent of tuition. We work to 
address that, at the same time we could also make a difference 
if we, again, not only took the MGIB benefit and did not use 
that in calculating eligibility for Federal student loans, but 
also the 1-year exemption.
    Do you agree that we should be taking into account the 
Federal Pell grants or other resources, whether they be grants, 
scholarships, loans, that might be available to veterans? Is it 
your position and the position of the others on the panel that 
the Montgomery GI Bill benefit should, regardless of other 
resources, at least cover the costs of tuition and books for 
the average rate at a 4-year or 2-year public institution?
    Colonel Norton. Yes. We would recommend that the baseline, 
the benchmark, would be the average cost at a 4-year public 
college or university. That would be the start point. If in the 
future, if Congress wanted to go beyond that, fine. The problem 
we have, and our friends in the Partnership for Veterans 
Education, is that there are now about two dozen bills out 
there in the House and Senate on the GI Bill. And sadly and 
unfortunately, with all due respect, there has really been no 
action in either the House or the Senate on the GI Bill.
    So even modest steps at this point, I think are overdue. I 
mean if we can spend billions of dollars a week on the war, we 
can spend a modest amount, at least, on the warrior. Thank you, 
Madam Chairwoman.
    Ms. Herseth Sandlin. Thank you.
    Yes, Mr. Chamrin.
    Mr. Chamrin. We just recently passed a resolution that 
supports the exemption of the prior year's wages for a military 
member when they enter service. So if you take an E-4 who earns 
about $35,000 a year, if they are deployed to OIF/OEF, they 
count that as income, as wages. Even though it is outside the 
continental U.S., they count that as wages.
    But what about the E-4 who is stationed in Fort Bragg, 
North Carolina? The same person, equal veteran, equal rates. I 
myself, when I left Iraq, I had to get a student loan. I got a 
$15,000 student loan. REAP wasn't enacted yet and--well, it was 
enacted, but not just in law yet. Sorry, not rolled out yet. So 
I am $30,000 in debt when I leave college and I am not alone. 
So there are all kinds of others veterans who have this similar 
story because of that prior year tax income stipulation.
    Ms. Herseth Sandlin. Thank you for sharing your personal 
experience. It helps shed light on the broader experience or 
problems that we are talking about that some of our 
servicemembers are experiencing.
    Mr. Chamrin. I had come back in 2004 and REAP was enacted, 
I believe, in 2005, so during that first year of school, I 
wasn't eligible to get any REAP benefits. That is why I took 
out that loan. I am not alone. Imagine the people from 2001 to 
2004.
    Ms. Herseth Sandlin. Unlike what some of us are proposing 
and some of you stated, REAP wasn't retroactive.
    Mr. Chamrin. Right. It was retroactive for the time when it 
was actually in law and the time I was actually in school, but 
not before that.
    Ms. Herseth Sandlin. Right. Okay.
    Mr. Hilleman. Thank you for this question. The VFW would 
support what the coalition is advocating for, which is the 
average cost of tuition education, reimbursement with fees and 
books. But in terms of working on the margins, yes, there is a 
great deal of work to be done there.
    Well, Madam Chairwoman, when I left service in 1999 and 
ended up in school in 2002, I was at a very affordable 
institution. My previous year's income counted against me for 
financial aid. The money that I had scrimped and saved while in 
service, while deployed for 3 years plus overseas, also counted 
against me for financial aid reporting purposes. And then on 
top of it I had to report on the financial aid form, that yes, 
I was in receipt of GI Bill benefits.
    So for the first 2 years of my educational experience, I 
received minimal, minimal subsidized student loans. I didn't 
receive any financial grants. I was ineligible for Pell grants. 
My last 2 years, I was eligible, because I wasn't working 
enough to count part-time employment. I was taking a 
scholarship which didn't count against me. A $14,000 
scholarship didn't count on my financial aid, but the GI Bill 
did. That didn't make sense to me at the time. But nonetheless, 
there is work to be done in both places.
    Colonel Norton. Madam Chairwoman, could I just add a point 
on Eric's remark? I think it is important for everybody to 
understand that in applying for a Federal student loan, there 
is no requirement of service to the Nation. They are not 
obligated to serve. And they don't have to pay up money out of 
their own pockets to get those benefits. Our volunteer 
servicemembers contribute $1,200 out of their pay and they 
serve their Nation in uniform for years on end to get the GI 
Bill.
    So there is a huge gulf between Federal student loan 
benefits and what you get from the GI Bill and it is amplified 
in the negative by the examples that Eric and Ron indicated. 
Thank you.
    Ms. Herseth Sandlin. Thank you very much for making that 
point. I absolutely agree, not only as we look at the equity 
involved for the Selected Reserve. I think it is very helpful 
to compare, not only in terms of the benefit, but then, 
eligibility for other Federal loan programs that are available 
to all students; the comparison of those who have served and 
those who chose not to, and the equity that needs to exist 
there and not having these artificial barriers to eligibility 
for other financial assistance tools for investment in 
education.
    I do have other questions that I am going to submit for the 
record, in the essence of time. I want to see if any of my 
other colleagues have questions as well. I would ask each of 
you if you could submit to the Subcommittee in writing your 
recommendations for--your top five recommendations--and again, 
we have a lot of recommendations. I would like from each of 
your organization the top five recommendations in order of 
priority, because again, as you pointed out, we have a number 
of bills, not necessarily competing bills, but variations of 
bills.
    I think that for purposes of going forward, and you are 
absolutely right in terms of the need to act further, both with 
the Subcommittee, with leadership and other avenues. We just 
want to make sure that we are advancing something that is 
consistent with the recommendations that we are getting from 
all of those in the coalition. I know you have been one of the 
point people, Colonel. I appreciate that. I think it would be 
helpful to the Subcommittee if you could submit that.
    Mr. Boozman, did you have any follow-up questions for the 
panel?
    Mr. Boozman. No.
    Ms. Herseth Sandlin. Okay. Any other Members have any 
follow-up questions? Thank you.
    Well, I thank you all again for your testimony and the 
answers to our questions.
    I would now like to invite Panel Two to the witness table. 
Joining us on our second panel of witnesses is Mr. Steve Kime, 
Former Vice President of the American Association of State 
Colleges and Universities (AASCU); Mr. David Guzman, 
Legislative Director for the National Association of Veterans 
Program Administrators (NAVPA); and Mr. Charlie Rowe, President 
of the National Association of State Approving Agencies 
(NASAA).
    Gentlemen, thank you for being here. We had a chance to see 
a few of you in Arkansas and since that time. We appreciate 
your time before this Subcommittee today. Again, the same as 
with the first panel, your entire written statement has been 
made part of the record. If you could limit your oral testimony 
to 5 minutes, we would appreciate it.
    Mr. Kime, why don't you begin.

STATEMENTS OF STEVE FRANCIS KIME, PH.D., FORMER VICE PRESIDENT 
    (2003-2005), AMERICAN ASSOCIATION OF STATE COLLEGES AND 
 UNIVERSITIES, AND ON BEHALF OF THE PARTNERSHIP FOR VETERANS' 
  EDUCATION; DAVID A. GUZMAN, LEGISLATIVE DIRECTOR, NATIONAL 
  ASSOCIATION OF VETERANS PROGRAM ADMINISTRATORS; AND CHARLES 
   ROWE, PRESIDENT, NATIONAL ASSOCIATION OF STATE APPROVING 
   AGENCIES, AND, CHIEF, STATE APPROVING AGENCY, NEW JERSEY 
          DEPARTMENT OF MILITARY AND VETERANS AFFAIRS

                STATEMENT OF STEVE FRANCIS KIME

    Dr. Kime. Yes. Chairwoman Sandlin, Dr. Boozman and the rest 
of the Committee. I am here today as an educator and as a 
veteran of three decades of service in uniform. I speak on 
behalf of the American Association of State Colleges and 
Universities and the five other presidentially based national 
higher education associations. These people all support and are 
all members of the Partnership for Veterans Education and all 
of those national presidential associations support the Total 
Force GI Bill. They would like to see this thing happen.
    I have submitted very detailed testimony, and what I would 
like to do is address five interrelated topics here. I am not 
sure I have them quite in priority order yet, Madam Chairwoman, 
but I will do that.
    First, the GI Bill should actually pay for college and it 
doesn't. AASCU and the Partnership for Veterans Education 
support this 4-year public college benchmark. And what I would 
like to emphasize to you here, because I listened very 
carefully to what you said, Dr. Boozman, and I understand that 
you can't get to a hundred percent tomorrow or maybe next year 
on whatever your idea of the cost of education is.
    But you need a vision. And Congress really needs to 
recognize a benchmark. Where are we going here? Well, a 4-year 
public college education is a very modest benchmark. In my 
opinion, it is the most modest possible benchmark that fulfills 
the national requirement to reward these people for what they 
have done. That is why it is the benchmark. We had long 
discussions about that.
    Right now, that benchmark, by the way, is $13,145.00 a 
year, this school year. And the benefit for Chapter 30 now--
this is not for your Reservists. This is the best case--is 
$9,900. So that is where you get 75 percent. And remember, that 
75 percent is based on the best case. So the first point is, 
the GI Bill ought to actually pay for college. Otherwise, it is 
a promise we are not fulfilling.
    The second thing that I would like to address is the fact 
that the GI Bill has not kept pace with national military 
strategy and national force deployment policies. Now, from a 
philosophical and conceptual point of view, this is a scandal. 
In the last 25 years, we have radically changed our military 
strategy and our force deployment policies.
    We are doing war entirely differently, how you serve, who 
serves. Our old notions about those pot-bellied Reservists who 
only go on the weekends, that is all nonsense. All of those old 
images we had about the Reserves have to go away. These are the 
people who serve right alongside that so-called Active Duty 
servicemember. But we have a GI Bill that is trapped in these 
old notions about what is a Reservist, who goes, when they go 
and what they do when they get there.
    So how can you have a GI Bill that is totally out of sync 
with your National strategy and your National deployment 
policy? We need to look at this from a big picture point of 
view. And the public needs to understand it from the strategy 
and policy point of view.
    The third thing is that in spite of the fact that we have 
radically changed our strategy and our deployment policies, we 
have made precious little progress on the Reserves. When I 
first started messing with this, they got 47 percent of what an 
Active Duty person would get. We are nowhere even close to that 
now. So when I say 75 percent of the cost of college is 
covered, that is just a dream to Reservists. We have not gotten 
anywhere on this.
    And the benefits are not pegged in any meaningful way to 
the actual service that these young people perform. How in the 
world can that be? So not only do we have it out of sync with 
our national strategy and national deployment policies, but we 
have it totally out of sync with what each individual does. 
That is wrong.
    The fourth thing is that--and by the way, Madam Chairwomen, 
when I put these in priority order, this might be first. And 
that is that the legal, political and budgetary architecture, 
the very architecture, the structure of the GI Bill is 
outdated. It is 30 years old. It doesn't fit what we do.
    The GI Bill legislation that we have is totally out of step 
with our own cabinet departments. This is ridiculous. Thirty 
years ago we didn't have a Department of Veterans Affairs. That 
doesn't make any sense. GI Bill funding belongs where the 
advocates for veterans are.
    Remember when we did the first GI Bill in 1945, the 
Department of Defense, which, by the way, didn't exist, opposed 
it. These people are not interested primarily in veterans. Now, 
that sounds nasty to say, but the fact of the matter is, Mr. 
Gates' job is war fighting. Whoever the Secretary of Veterans 
Affairs will be, might be or whatever here, his duty is to be a 
veterans advocate.
    So war fighting is war fighting. Veterans are veterans. War 
fighters are war fighters. They do something different. Anybody 
who thinks that those kids sitting over there in Walter Reed 
with one leg gone or one leg and one arm gone, those are not 
war fighters anymore. I am sorry. But it is just true. Those 
are veterans. The public was outraged at the way those people 
were treated, because they legitimately felt that these were 
veterans and should be handled by the Veterans Administration. 
They darn well should be. We need to separate, just like we 
have separated in the cabinet, the responsibilities and the 
advocacy and the funding, the budgeting.
    So our architecture for the GI bill is just totally fouled 
up. It is nowhere near correct.
    Ms. Herseth Sandlin. Dr. Kime, if you could summarize.
    Dr. Kime. I am sorry?
    Ms. Herseth Sandlin. If you could summarize.
    Dr. Kime. I will.
    Ms. Herseth Sandlin. Thank you.
    Dr. Kime. It is time for the Veterans Department to be a 
Veterans Department and not be a Veterans Administration 
anymore. I would like to add one last thing. And that is that 
the management of the GI Bill needs serious help and we will 
never solve the management of the GI Bill until we get the 
architecture correct. All of these other problems that we have, 
about how do we give funds, when do we give funds, whether you 
can get it for a 3-year school, we will never get those solved 
if we don't get them in one department. Thank you very much.
    [The prepared statement of Dr. Kime appears on p. 76.]
    Ms. Herseth Sandlin. Well, thank you Dr. Kime. I am glad to 
hear that you would have put that priority first, because that 
is essentially what this Subcommittee did, and we have made 
progress in moving the Selected Reserve benefits over to the 
VA. We hope that is ultimately signed into law so that we can 
keep making progress on the other priorities. Thank you very 
much for your testimony.
    Mr. Guzman, thank you for being here. You are now 
recognized for 5 minutes.

                  STATEMENT OF DAVID A. GUZMAN

    Mr. Guzman. Chairwoman Herseth, Ranking Member Boozman, 
Members of the Subcommittee----
    Ms. Herseth Sandlin. Could you make sure your microphone is 
on? Okay. There we go.
    Mr. Guzman. Okay. You honor us today on behalf of 
American's most important resource, the American servicemember, 
past and present, who preserve the freedoms we so much enjoy 
through their selfless contributions to this great Nation.
    We, NAVPA, have long touted the concept that the school 
certifying official is at the business end of the VA education 
programs. And each year, we develop our legislative agenda and 
my comments will come from that agenda and I have made 
distribution of that earlier in the year.
    Our government has a history of finding dollars for the 
bullets and bombs, but when it comes time for bandages and 
band-aids, we seem to limit our liability. Veterans deserve 
better. NAVPA has proposed that appropriations for war contain 
a set-aside for medicine and benefits for when the 
servicemember returns and becomes one of our veterans of war.
    We fully support the Total Force GI Bill proposal. We would 
like to see an equitable education program for all veterans for 
all periods of service, especially for those who put their life 
on the line in combat. The National Guard and Reservists are 
pulling their share of active deployments, yet their 
educational benefits lag well behind the Active Duty Montgomery 
GI Bill Chapter 30 benefit. They fight alongside their fellow 
Active Duty companion, yet receive much, much less in 
compensation.
    We advocate administrative-like changes to the Montgomery 
GI Bill that would expand the student work-study program, clean 
up the financial aid dilemma discussed earlier that excludes 
veterans in need from receiving financial assistance. We 
advocate the elimination of the 10-year delimiting date in 
favor of the life-long learning concept, and urge the VA to 
embrace electronic processing for all claims, all programs of 
education, for all veterans and their dependents at one 
efficient processing center versus the four we have now.
    We also advocate for the combat veteran who receives 
general discharge under honorable conditions who currently are 
denied benefits, though they have paid into the Montgomery GI 
Bill. Perhaps if this small group of veterans were able to 
receive education or training under the Montgomery GI Bill, 
they too would become better citizens, gain meaningful 
employment and contribute to society in a positive manner. 
These veterans do receive other VA benefits now.
    NAVPA would also like to see an increase in compensation 
for schools and businesses that administer Veterans 
Administration education and training programs. When the 
Vietnam era GI Bill was in existence, the schools responsible 
for the administration of education worked with two programs. 
Today, they are responsible for 11 programs, with no change in 
the $7.00 per student compensation in over 25 years. The result 
is that some schools are slowly eliminating the standalone 
office of Veterans Affairs and placing the certification 
responsibilities as additional duties, moving enrollment 
certification responsibilities to other offices and lessening 
the training opportunities for program administrators and 
placing the burden on the program administrator to maintain 
compliance with Federal and State laws, this resulting in 
lessening of service to our veterans.
    The program should include full funding, not only for the 
veteran, but also for the administration of the many programs 
at all levels, from the Department of Veterans Affairs to the 
school or agency administering the programs.
    Finally, veterans' education benefits, be they Active Duty 
benefits, benefits for Guard, Reservists, vocational 
rehabilitation, on-the-job training (OJT) and apprenticeship or 
survivors benefits, actually cost little to nothing to the 
American citizen, because, as history has proven, the return on 
the investment will pay back up to sevenfold. Legislation for 
veterans education and training must continue to adjust to fit 
the changes in America's society.
    An educated society is less likely to be involved in crime, 
will pay taxes, buy a home and contribute to the community. To 
me, it is a no-brainer to upgrade the education and training 
opportunities for our servicemembers and veterans and give them 
a meaningful benefit that will, in turn, be right for America 
and the right thing to do for our veterans.
    Again, I thank you for this opportunity. I have dropped two 
copies of our legislative agenda here today for the Committee. 
And I now stand ready for any questions you may have. Thank 
you.
    [The prepared statement of Mr. Guzman appears on p. 78.]
    Ms. Herseth Sandlin. Thank you Mr. Guzman. We appreciate 
the copies of the report as well.
    Mr. Rowe, you are now recognized for 5 minutes.

                   STATEMENT OF CHARLES ROWE

    Mr. Rowe. Chairwoman Herseth, Ranking Member Boozman, 
Members of the Subcommittee, I am pleased to appear before you 
today on behalf of the National Association of State Approving 
Agencies to provide NASAA's view on the current state of the 
Montgomery GI Bill and to make some recommendations to upgrade 
the Montgomery GI Bill.
    We feel the fundamentals of the Active Duty GI Bill remain 
essentially sound. The recent changes allowing flexibility for 
utilization for accelerated payments and the payments for 
licensing and certification tests have been viewed positively 
by benefit recipients. And the annual cost of living 
adjustments are important in the effort to keep pace with the 
rising cost of education.
    Of course, it is widely known, as Mr. Boozman pointed out, 
that the cost of an education in this country has outpaced the 
inflation rate by a wide margin for a number of years. As a 
result, the education benefits provided to recipients under the 
various chapters continues to fall short of actually paying for 
a college education or a non-college degree school program.
    In a different light though, we find it unfortunate that 
the increased benefit rates for apprenticeship and other on-
the-job training benefits are scheduled to sunset back to their 
previous rates on January 1, 2008. And we fought very hard to 
get those benefits increased.
    The speed of the benefit payments for recipients enrolled 
in schools, in our experiences in the field, is that after the 
first semester they seem to have improved because of the 
implementation of the electronic certification of students. At 
the same time, the delays encountered for the payments of 
benefits to those receiving apprenticeship or on-the-job 
training programs remains exceedingly slow.
    Current state. As other people have stated here before, I 
have my rates here, that today the prorated benefit rate for 
the Selected Reservist is about 29 percent of the Montgomery GI 
Bill Active Duty rate. Initially, it was around 47 percent.
    As other people have also stated, the experience of some of 
our members in NASAA has been the Selected Reservists 
themselves generally have a poor understanding of the 
Montgomery GI Bill Selected Reserve benefits that they actually 
have. A number of them who I have talked to personally have 
said they didn't know they were not eligible anymore.
    So the recommendations, as other people have stated, NASAA 
is firmly 100 percent behind the concept of the Total Force GI 
Bill for the purposes of portability, as we have stated 
earlier. Fairness, we believe that there should be equal 
benefit for equal service. And also the administration of the 
program, the various programs are complex and they lead to a 
lot of confusion on the part of the Reservist.
    We strongly feel that the hard won increase of benefits 
that was provided to those using apprenticeship and on-the-job 
training benefits should be restored. We strongly support any 
legislation that would seek to prevent this reduction in the 
benefit rate.
    NASAA wholeheartedly supports the Total Force GI Bill. We 
believe the events have overtaken the original intent. Our 
experiences today are leading us strongly to the conclusion 
that a major overhaul of the Montgomery GI Bill is now overdue.
    I would like to thank you for inviting me here today and I 
will take any questions you have.
    [The prepared statement of Mr. Rowe appears on p. 79.]
    Ms. Herseth Sandlin. Thank you, Mr. Rowe.
    Mr. Boozman.
    Mr. Boozman. Thank you very much. I want to thank the 
panel. Your testimony was very informative. I really don't have 
any questions though.
    Ms. Herseth Sandlin. Mr. Walz? Mr. Kline? Mr. McNerney.
    Mr. McNerney. Thank you, Madam Chairwoman.
    Dr. Kime, you strongly advocate a VA structure that is 
organized to serve the modern service philosophy. That sounds 
good. Do you have specific recommendations? And if so, could 
you submit those to the Committee in writing so that we can 
ponder those and perhaps find some legislative outlets----
    Dr. Kime. I would be glad to. Thank you.
    [The information was provided in the Post-Hearing Questions 
and Responses for the Record, which appears on p. 126.]
    Mr. McNerney. You mentioned the Reservists used to get 47 
percent of Active Duty members. That is as 1985. Where are we 
now and how did it fall down to the level that it is?
    Dr. Kime. Well, I think you are right about 19 percent, but 
I am not sure exactly. But it is in that realm, 19 percent as 
opposed to 47 percent for the Reservist, roughly. I think that 
is correct.
    How did it fall down is easy to answer. When we tried to 
fix the GI Bill, we fixed Chapter 30, because we have this 
thing in our mind about Active Duty are Active Duty and 
Reservists are Reservists. And we always assume that we will 
get around to patching up the Reserve side of it sooner or 
later and that it will just follow on. The problem is, it 
didn't just follow on. We changed all of our deployment 
policies and our activities. But we didn't actually fix the 
amount of money. That is how it fell behind.
    Mr. McNerney. Thank you.
    Mr. Rowe, you have some specific recommendations in your 
written testimony. I will be glad to spend some time, as other 
Committee Members will, I am sure, to look at these and if we 
have any questions, we would like to address those to you.
    Mr. Rowe. I am very happy to do that, sir.
    Mr. McNerney. Thank you.
    Ms. Herseth Sandlin. I will not take too much time either. 
However, I do want to ask a couple of questions.
    Dr. Kime, you write in your written testimony that there 
are ``major backlogs in veterans getting their benefits.''
    Mr. Rowe, your testimony is such that it seems that after 
the first semester, once it is recurring, it is better 
especially with the electronic processing, but on-the-job 
training and apprenticeship is slower.
    Could each of you address these numbers? Mr. Wilson from 
the VA, who is going to be testifying here a little bit later 
on, has supplied the Committee in his testimony with a table 
for the processing days and it indicates that it takes on 
average--and I think this is all claims on average 32 days for 
original claims to be processed and 13 days for supplemental 
claims.
    What is your experience? Is that about right as an average? 
Is there a major backlog still now that we have the electronic 
processing more fully underway as we have done some oversight 
there in the last couple of years? Mr. Rowe, could you comment 
on it as well?
    Dr. Kime. My experience, what I have actually seen, has not 
been as good as that and that is because they have improved it 
a lot. I think Mr. Wilson and his bunch of people in education 
services have worked very, very hard on this, as has Dan 
Cooper, Admiral Cooper. These people have focused on this and I 
think they have made progress.
    The thing that the Committee should keep in mind is what 
are we asking, how much information are we asking for and is 
the system itself sensible? Is it coherent and is it rational? 
I dare say that if you turn this whole thing over to MasterCard 
you would get this done in 2 days.
    Ms. Herseth Sandlin. I appreciate that.
    Mr. Rowe.
    Mr. Rowe. Madame Chairwoman, I can only speak anecdotally. 
But particularly for the apprenticeship on-the-job training 
payment of benefits, they are paid in an out of system system 
that only Mr. Wilson could probably better describe than I. So 
for that reason, there is an incredible amount of delay in the 
amount of--because it is taken out of the regional process 
office and sent to a different one. And I know in speaking with 
individuals who have received those programs, it could take 
anywhere from 4 to 6 months to receive their first benefit 
check from the time of initially processing.
    The institutionals are a little bit better, as I said 
earlier. I agree.
    Ms. Herseth Sandlin. Okay. Thank you. One final question, 
we heard from the first panel the issue of the MGIB benefit 
counting against the veteran as it relates to Federal student 
aid programs. What is your experience? Is there a difference in 
terms of unsubsidized loans, subsidized loans, Pell grants? 
Could you take a minute or two to elaborate from your 
experience what you have seen in working with veteran students?
    Dr. Kime. I have seen a great deal of confusion. I have 
talked to college people, and regardless of what the rules are 
at any given time, I have seen practices get out of whack with 
them.
    Now, you are going to have someone testify who knows a lot 
more about this than I do. So I won't get over in that realm, 
except to say this: The GI Bill is reward for service to your 
country of a very special kind. I personally, and I am not 
speaking for higher education here. I am speaking as a veteran. 
But I personally find it incomprehensible that the GI Bill 
should count in any way against any means that you have that 
the government provides. The GI Bill should be over and above 
every other thing the government does to help the kids go to 
college who don't serve in the military.
    This is a special thing and this should be over and above. 
If it were up to me and I could pass a law just by writing it, 
it would be a simple one-sentence affair, and it would say you 
can never count the GI Bill as a means in any test for any 
Federal money. But I realize the world is a lot more 
complicated than that and that the colleges would have their 
own scholarship moneys that they would apply it to differently 
anyway. But I think the GI Bill should be treated specially.
    Ms. Herseth Sandlin. Thank you. Mr. Guzman or Mr. Rowe.
    Mr. Guzman. Yes. My experience has been the same at the 
colleges and universities. And in our paper, we write that 
according to the U.S. Department of Education, when determining 
eligibility for title IV funds, a financial aid administrator 
must take into account all forms of assistance received by the 
student to help pay the education costs. The Montgomery GI Bill 
is considered a resource and thereby deducted from any 
assistance. Only veterans with large families are--not only, 
but for the most part, veterans with large families are the 
ones that are receiving any kind of Pell assistance at all.
    And I agree that shouldn't be part of the consideration 
when receiving financial aid, especially those that are really 
in need. There is no consideration to award credit for the 
months of military service, personal sacrifices, family 
separation, irregular duty hours, conditions, or for the 
protections and freedoms that they give us. And the $1,200 
contribution isn't even considered in that formula. So they are 
getting whacked twice on that.
    Dr. Kime. Madam Chairwoman, may I make a comment on 
something I think is often missed here?
    Ms. Herseth Sandlin. Please, if you can be brief because I 
want Mr. Rowe----
    Dr. Kime. I will.
    Ms. Herseth Sandlin. Okay.
    Dr. Kime. The veteran is an adult student. All of these 
rules that we have are for your standard kid going to college. 
Remember, your veteran comes out after having been shot at for 
4 or 5 years, they will have a wife. They will have a baby. 
They will have a car to maintain. They will have a lot of other 
things. And that is why that GI Bill should be treated--there 
should be a hands off policy on the GI Bill.
    Mr. Rowe. I am not a title IV expert. However, I did ask 
this very question with somebody who I consider to be an expert 
on one of my college campuses and she informed me in a very, 
very long e-mail that I can't capture here, that the GI Bill is 
not considered as income, but it is considered another 
resource. And so if someone who is not familiar in financial 
aid says, well, do you have any other income? And the veteran 
may say well, I get GI Bill benefits, and they put it down in 
the wrong calculation, then they will get penalized. And that 
is an error. I don't know how often that happens, but, you 
know, it is a possibility.
    Ms. Herseth Sandlin. Thank you. I appreciate that 
information.
    Any final questions from my colleagues? Okay.
    Well, thank you, gentlemen, very much. Again, we may have 
questions we would like to submit to you in writing and take 
for the record. We appreciate the information and your 
dedication to our Nation's veterans and students.
    Joining us on our third panel of witnesses is Mr. Allison 
Jones, member of the Advisory Committee on Student Financial 
Assistance for the U.S. Department of Education; Mr. James 
Bombard, Chairman of the Veterans Advisory Committee on 
Education (VACOE) for the U.S. Department of Veterans Affairs; 
and Mr. Walz of Minnesota will be introducing our third 
panelist, Major General Larry Shellito, Adjutant General for 
the Minnesota National Guard.
    I am going to recognize you in that order. But before we go 
to Major General Shellito's testimony, I will have Mr. Walz 
formally introduce you.
    Mr. Jones, you are recognized for 5 minutes.

  STATEMENTS OF ALLISON JONES, MEMBER, ADVISORY COMMITTEE ON 
STUDENT FINANCIAL ASSISTANCE, U.S. DEPARTMENT OF EDUCATION, AND 
  ASSISTANT VICE CHANCELLOR FOR ACADEMIC AFFAIRS, CALIFORNIA 
  STATE UNIVERSITY SYSTEM; JAMES BOMBARD, CHAIRMAN, VETERANS 
 ADVISORY COMMITTEE ON EDUCATION, U.S. DEPARTMENT OF VETERANS 
    AFFAIRS, AND CHIEF, NEW YORK STATE DIVISION OF VETERANS 
AFFAIRS, BUREAU OF VETERANS EDUCATION; AND MAJOR GENERAL LARRY 
W. SHELLITO, ED.D., ADJUTANT GENERAL, MINNESOTA NATIONAL GUARD, 
 ACCOMPANIED BY SERGEANT BENJAMIN LEE HATTON, LONG PRAIRIE, MN

                   STATEMENT OF ALLISON JONES

    Mr. Jones. Thank you very much, Chairwoman Herseth Sandlin 
and Members of the Subcommittee on Economic Opportunity. On 
behalf of the Advisory Committee on Student Financial 
Assistance, thank you for the opportunity to provide testimony 
this afternoon on the Montgomery GI Bill education benefits and 
title IV Federal financial aid.
    As we have heard already today, there are a lot of 
questions and a lot of misinformation and we are going to try 
to address some of this today. My name is Allison Jones and I 
am testifying as a member of the Advisory Committee. As 
Assistant Vice Chancellor for Academic Affairs for the 
California State University System, I am also involved in 
Governor Schwarzenegger's initiative which is called California 
Troops to College and an ardent supporter of efforts to 
increase veterans' access to postsecondary education.
    The Advisory Committee was authorized by Congress in the 
1986 amendments to the Higher Education Act. For more than 20 
years, we have provided independent and objective advice and 
counsel on Federal student aid policy to Congress and the 
Secretary of Education. Our most important legislative charge 
is to make recommendations that maintain and improve college 
access and persistence for low- and moderate-income students. 
Although we have traditionally worked most closely with the 
House Committee on Education and Labor and the Senate Committee 
on Health, Education, Labor and Pensions, we appreciate this 
opportunity to share our knowledge of financial aid programs 
with you and your Subcommittee in order to assist our Nation's 
veterans.
    This afternoon I will explain the interaction between the 
Montgomery GI Bill and title IV Federal student financial aid 
programs. The question I will be addressing is whether 
Montgomery GI Bill benefits restrict in any way eligibility for 
need-based title IV aid. Therefore, my testimony will focus on 
the relationship between the GI Bill benefits and need-based 
title IV aid, including Pell grants, loans and campus-based 
aid. I would note that my statements are not directed at 
whether Montgomery GI Bill education benefits are an adequate 
reward for the service of our brave men and women.
    A student's eligibility for need-based Federal aid depends 
on his or her ability to contribute to college expenses. The 
expected family contribution is the way we assess the family's 
ability to pay. It is used to determine two key dollar amounts, 
a student's Pell grant award, which is an entitlement award, 
and a student's total need for student aid which is equal to 
the cost of attendance minus the family contribution. And 
Congress mandates how we build that cost of attendance.
    In addition, title IV prohibits over-award, that is, the 
sum of the family contribution and aid from all sources cannot 
exceed the cost of attendance. For veterans, the monthly 
education benefits that he or she receives are not used in the 
calculation of the family contribution. That is, the amount of 
the GI education benefit does not affect in any way how much 
the student is expected to contribute toward college expenses.
    Consequently, since the expected family contribution, or 
EFC, is used to determine a student's Pell Grant award, the 
amount of these benefits that a veteran receives does not 
actually affect that award in any way. Also, since the benefits 
do not affect the family contribution, they do not affect the 
student's total need. While the effect of the GI education 
benefits on Pell grant and the family contribution is 
straightforward, the effect of these benefits on the 
eligibility for student loans is a bit more complicated.
    Briefly, for Active Duty personnel, GI Bill benefits do not 
affect the amount of a subsidized Stafford loan. The subsidized 
loans are those in which the government pays the interest while 
the student is enrolled. For Selected Reservists, however, the 
GI education benefits do limit and can eliminate the student's 
eligibility for subsidized Stafford loans. And for both Active 
Duty and Selected Reserve, these benefits do affect eligibility 
for unsubsidized Stafford loans. And unsubsidized loans are 
those in which the interest accrues while the student is in 
school, but payment can be deferred and the interest is 
actually capitalized or the student can pay it.
    Let me turn to the effect of the GI Bill benefits on other 
financial aid programs. There are three campus-based programs 
that allocate funds to each college to distribute to eligible 
students. These are known as the campus-based programs, the 
Federal Supplemental Educational Opportunity Grant, the Perkins 
Loan and the Federal Work-Study. While GI Bill benefits do not 
affect the student's Pell grant, family contribution, or total 
need, they can, in fact, affect the awards under the campus-
based programs because of the prohibition against over-awards.
    For example, if a student's family contribution, Pell grant 
and GI Bill benefits equal or exceed the cost of attendance, 
awards under these other programs can be eliminated. However, 
as previously mentioned, an exception is allowed for subsidized 
Stafford loans which can offset Montgomery Bill benefits. This 
exception plays a role in the determination of campus-based 
aid. Only in cases where the veteran's full need is fully met 
by Pell grant, State grants, Montgomery GI Bill benefits and 
other resources in subsidized loans can the prohibition against 
over-awards limit campus-based awards.
    Even in this case, aid administrators can, in fact, 
exercise their discretion to disburse campus-based aid up to 
the amount of the subsidized Stafford loan that the student was 
awarded to offset or replace the GI Bill benefits. Also, the 
student can borrow an amount equal to the family contribution 
in unsubsidized loans, as well as some other loan programs.
    More research is needed to assess the interaction of 
Montgomery GI Bill education benefits on other sources of aid, 
including Federal tax incentives, the Academic Competitiveness 
Grant, the National Science and Math Access to Retain Talent 
Grant, which goes by the acronym SMART, and State grant aid.
    Based on the analysis above, three potential changes in 
title IV might be considered. First, Selected Reserve benefits 
could be treated like Active Duty benefits in the consideration 
of subsidized Stafford loans. That is, don't count the GI 
Education Bill benefits against eligibility for subsidized 
loans from either Active Duty or Selected Reservists. This 
benefit would improve parity between the two GI Bill programs, 
Active Duty and Selected Reserve, and increase access to the 
subsidized loan program for Reservists.
    Second, the exception that allows for campus-based aid to 
be distributed up to the amount of the subsidized Stafford 
loans might be required, rather than discretionary. This 
benefit would increase veterans' access to the campus-based aid 
programs. And we have heard comments about that already today.
    Third, an exclusion for unsubsidized loans similar to the 
one for subsidized loans could be implemented. This would allow 
veterans to borrow additional funds to cover educational 
expenses.
    Whether such changes are necessary or desirable, including 
an assessment of unintended consequences, requires a thorough 
review by your Committee, relevant education committees in the 
House of Representatives and Senate, the Department of Veteran 
Affairs, the Department of Education and the higher education 
and the financial aid community.
    On behalf of the Advisory Committee members, thank you 
again for this opportunity to testify before you today. We look 
forward to continuing to provide technical assistance on the 
matters discussed today.
    [The prepared statement of Mr. Jones appears on p. 86.]
    Ms. Herseth Sandlin. Thank you, Mr. Jones, for laying out 
the complexity of what we are grappling with here today.
    Mr. Jones. And I am so sorry.
    Ms. Herseth Sandlin. No, no, I was going to--initially 
though I wanted to thank him for clarifying, although I am not 
entirely sure it is clarified right now in my mind. It will be, 
because you have gone through the complexity and once we get it 
all down--but I can certainly understand why students would be 
confused and possibly financial aid officers as well.
    Mr. Bombard, you are now recognized for 5 minutes.

                   STATEMENT OF JAMES BOMBARD

    Mr. Bombard. Chairwoman Herseth Sandlin, Ranking Member 
Boozman and Members of the Subcommittee on Economic 
Opportunity----
    Ms. Herseth Sandlin. Could you turn on your microphone, 
sir?
    Mr. Bombard. How about now? Okay.
    Chairwoman Herseth Sandlin, Ranking Member Boozman and 
Members of the Subcommittee on Economic Opportunity, I am 
pleased to appear before you today on behalf of the Department 
of Veterans Affairs Secretary's Veterans Advisory Committee on 
Education to provide the Committee's views on the current state 
of the MGIB Active Duty and the Montgomery GI Bill Selected 
Reserve and provide recommendations to update the Montgomery GI 
Bill and possible legislative action that should be considered 
by the Subcommittee.
    It is the Advisory Committee's view that the program 
flexibility and efficient claims processing are the keys to a 
veteran's seamless transition of providing earned education 
benefits to eligible participants. The reason seamless 
transition is difficult to accomplish is that the Montgomery GI 
Bill was created in 1984. It was both similar and different 
from previous GI Bills. It was similar in that it provided 
benefits for veterans who chose to enroll in an educational 
program or an approved educational training institution. It was 
different because education programs' special rules provided 
higher benefit levels for persons having eligibility for prior 
programs with lower benefits authorized for persons enlisting 
for less than 3 years. Another unique feature of the Montgomery 
GI Bill is that it authorized benefits for those in the 
Selected Reserves, Chapter 1606 program, although the maximum 
benefit was much lower than the Active Duty rate. Additionally, 
the MGIB authorized kickers or additional monthly benefits for 
certain veterans in certain military occupations and buy-ups 
for certain seeking higher monthly benefits.
    Congress, although well meaning, tends to create new 
initiatives designed to shore up existing deficiencies in the 
current MGIB, without dealing with the administrative problems 
inherent in trying to integrate new program components in the 
established Montgomery GI Bill. As a result of the 
proliferation of eligibility categories and benefit levels, 
fewer educational claims are straightforward. The complexities 
of a number of new GI Bill opportunities have resulted in a 
cumbersome data management system that does not timely respond 
to the needs of veterans and other GI Bill recipients.
    It is the Committee's belief that the VA Education Service, 
in conjunction with Congress, can create an effective, 
efficient claims processing system by adopting the following: 
Restructure the GI Bill, adopt the Total Force. This will 
streamline claims processing. Create a synergistic relationship 
with Congress in order to ensure feasibility and support for 
any additional programs associated with the GI Bill, improve 
information exchange between DoD and VA. The need for constant 
communication between DoD and VA would be minimal with a 
restructure of the GI Bill. Invest in state-of-the-art 
information technology (IT) systems, and hire additional staff 
to do claims processing, or, at a minimum, maintain the budget 
direct full-time equivalents.
    Recommendations, Total Force. The Advisory Committee, after 
nearly 2 years of studying the Montgomery GI Bill, recommended 
the fundamental change to the structure of the Montgomery GI 
Bill and also put forth the framework for a new GI Bill that 
reflects the realities of the Total Force policy.
    It is the Committee's belief that this restructuring is 
necessary to incorporate program flexibility, ease of 
administration and equity of service rendered.
    For these reasons, we recommend replacing the separate GI 
Bill programs for veterans and Reservists with one program that 
consolidates the GI Bill programs under one umbrella, title 38, 
U.S. Code. This would include enrolling all current eligible 
personnel in Chapters 30, 1606 and 1607 in the new Total Force 
GI Bill. This approach would add value to the Montgomery GI 
Bill as a recruitment and retention tool for the Armed Forces, 
including the National Guard and Reserve, establish an equity 
of benefits for returning Guard and Reserve members, support 
Congress' intent for the Montgomery GI Bill, and potentially 
save taxpayers money through improved administration.
    Because most of the Reservists have both careers and 
families which are embedded in towns and cities across the 
country, these activated citizen-soldiers, Mayors, police 
chiefs, firefighters, small businessowners, face additional 
burdens as financial and career obligations mount, while their 
families, employers and communities frequently face sacrifices 
and hardships as well.
    This has led to an inequitable situation. First, Selected 
Reserve members and members of the Individual Ready Reserve may 
be called to Active Duty for considerable periods, but less 
than 2 years. When they return to civilian life, what is 
available to them to readjust? They have nothing at all if they 
don't stay on Active Duty.
    In the essence of time, the VACOE has focused on 
consolidating veterans' education benefit programs into a 
single Total Force structure, placing them in the department 
where veterans advocacy is the first priority and ensuring that 
a fair framework for providing benefits commensurate with the 
nature of military service is established and maintained.
    The architecture of any future GI Bill is very important. 
Shifting the funding out of title 10 and placing responsibility 
for GI Bill administration in the proper cabinet department, 
VA, is the key of any future efforts to improve the 
administration and fundamental fairness of the GI Bill.
    If implemented, we envision wins for the individual 
Selected Reserve, a win for the Armed Services, and a win for 
our national security.
    Summary of Differences: Separate GI Bill programs contain 
different titles vs. Total Force proposal with one title; 
confusing separate GI Bill programs vs. straightforward Total 
Force; separate GI Bill programs have multiple committees vs. 
Total Force with half the committees; separate GI Bill programs 
costly redundancies vs. Total Force savings through 
efficiencies; separate GI Bill programs have different benefits 
for same risks vs. Total Force with same benefits for same 
risks; separate GI Bill programs contain delimiting date 
inequities vs. Total Force fair delimiting dates; separate GI 
Bill programs result in modest retention incentive vs. Total 
Force increased retention incentive; separate GI Bill programs 
have no Selected Reserve readjustment benefits vs. Total Force 
Selected Reserve readjustment benefit; separate GI Bill 
programs have different rules for different recruiters vs. 
Total Force with same rules for recruiters; separate GI bill 
programs with inequitable upgrades vs. Total Force equitable 
upgrades; separate GI Bill programs result in recipients 
confused vs. Total Force is simplified for recipients; separate 
GI Bill programs with staff training complexities vs. Total 
Force simplified staff training.
    The Total Force proposal provides a unique opportunity to 
create a comprehensive GI Bill that is both fair and simple. 
Its eloquence is its equity and simplicity.
    The question always raised by Congress when considering the 
GI Bill is can we afford it. Well, I don't think we can afford 
not to.
    I will be happy to take your questions.
    [The prepared statement of Mr. Bombard appears on p. 89.]
    Ms. Herseth Sandlin. Thank you for your testimony.
    I would now like to recognize Congressman Walz of Minnesota 
to make the introduction of our final witness on this panel.
    Mr. Walz.

           OPENING STATEMENT OF HON. TIMOTHY J. WALZ

    Mr. Walz. Thank you, Madam Chairwoman. It truly is an honor 
for me to introduce our next witness. Major General Larry 
Shellito is the Adjutant General of the Minnesota National 
Guard. It is kind of an unusual situation here. As a former 
member of the Minnesota National Guard, I served under General 
Shellito's command, including a deployment in support of 
Operation Enduring Freedom. I have had the privilege of working 
with him on many issues affecting the Guard.
    And as General Shellito became the Adjutant General of the 
Minnesota National Guard, he has led them through operations in 
Iraq, Afghanistan, the Balkans, other areas of the world, plus 
major State emergencies from flooding to fires and created what 
is considered to be the best reintegration program in the 
Minnesota National Guard's Beyond the Yellow Ribbon 
Reintegration Program.
    The Minnesota National Guard is the gold standard for 
reintegration, readiness, training and recruitment throughout 
the country and those successes have a lot to do with General 
Shellito's leadership. General Shellito is well-positioned to 
testify today on this issue, as a former educator who served as 
the President of Alexandria Technical College. He served in the 
Vietnam War earning the distinguished service medal, legion of 
merit, bronze star, combat infantry badge and numerous other 
awards. He holds a doctorate in education from the University 
of Minnesota, extensive military education, U.S. Command and 
General Staff College, U.S. Army War College.
    General Shellito is going to speak about a specific 
incident today that maybe some of you have heard about, the 
1,162 members of the 1st Brigade Combat Team (BCT) of the 34th 
Division who, by a glitch in, as my colleague from the second 
district of Minnesota put out, this red tape that is causing 
these people to be denied benefits. And I am very pleased--I 
think General Shellito is in a unique position with his 
experience and his insight, well qualified to not only address 
the specific issue he is going to talk about, but help us draft 
further legislation.
    And then he is going to do something that I think is very 
important for all of us here today. He is going to put a human 
face, what a bureaucratic snafu can do when he introduces you 
to one of our warriors recently returned from Iraq, in Sergeant 
Ben Hatton. And he will tell his story.
    So with that, it is a real pleasure to introduce the 
Adjutant General of Minnesota, Larry Shellito.

      STATEMENT OF MAJOR GENERAL LARRY W. SHELLITO, ED.D.

    General Shellito. Thank you. Madam Chair, Representative 
Boozman, Members of the Subcommittee, thank you for the 
opportunity to testify before you today. I will begin by 
identifying that I am testifying on behalf of the State of 
Minnesota and its Commander in Chief, Governor Tim Pawlenty.
    Although I am a federally recognized Army General Officer, 
I appear before you today as a State official at State expense. 
My testimony is an independent expression of the State's 
interest. The Department of Defense has not previewed, edited 
or otherwise approved my testimony.
    Now, with that having been said, this afternoon I will 
discuss with you the problems surrounding the Montgomery GI 
Bill that more than 1,000 members of the Minnesota National 
Guard's 1st Brigade Combat Team of the 34th Infantry Division, 
known as the Red Bulls, have faced upon their return from 
Active Duty.
    I want to acknowledge that the stakeholder agencies 
involved in the process, the Army, the National Guard Bureau, 
the Congressional Delegations, all have been very supportive of 
our citizen-soldiers of the Minnesota National Guard and the 
BCT. In particular, the Department of Veterans Affairs is 
attuned of the issue and is willing to assist once the 
challenges are overcome.
    I thank Congressman Kline and Walz and the Minnesota 
Delegation for recently authoring a resolution commending the 
Red Bulls for completing the longest deployment of any military 
unit during Operation Iraqi Freedom. While on title 10 status, 
more than 5,000 Red Bulls from 38 States were slated to return 
home in the spring of this year. However, the President's 
announced surge strategy extended the tours of combat brigades 
in Iraq.
    When the Army orders units to perform its mission or 
execute a change in existing mission, they generate an order to 
reflect that action. Twenty-five hundred Minnesota soldiers 
were extended to support this surge, but there are some 
significant discrepancies that brings me here today. Eleven 
hundred thirty-eight orders reflected a 730-day duty duration 
and 1,162 orders reflected a duration of 729 days or less. Six 
hundred forty-eight soldiers were ordered exactly 729 days or 
55.7 percent of those that were under the 730.
    Being ordered to Active Duty for 730 days, or 2 years, as 
you are all very well aware, is an important factor in 
qualifying for educational benefits. A soldier ordered to 
Active Duty for 730 days is entitled to benefits under Chapter 
30 of the Montgomery GI Bill, while a soldier ordered to Active 
Duty 729 days or less is entitled to benefits under Chapters 
1607 or 1606.
    The center of gravity for those who are affected by orders 
less than 730 days is not only that they receive $220 less per 
month than their counterpart, but also lose the portability of 
educational benefits. We first discovered this discrepancy of 
the length of tour orders during the demobilization process at 
Fort McCoy in July of this year. Some soldiers learned that 
they would get this portable benefit that they could use over 
the next 10 years while literally the soldier standing next to 
them in formation, with whom they had served from the 
deployment from start to finish, did not receive the benefit.
    One such 729er is Sergeant Benjamin Lee Hatton, of Long 
Prairie, Minnesota. He joined the National Guard after his 
junior year in high school and he exemplifies the patriotism so 
prevalent throughout the American military today. Sergeant 
Hatton knew that his membership in the Guard would enable him 
to achieve his goal of graduating from college. He was called 
by this Nation to serve in Iraq. Ladies and gentlemen of the 
Subcommittee, he did so with honor and distinction. And in 
fact, this young soldier sitting before you today was twice 
awarded the Purple Heart for wounds received in combat.
    [Applause]
    General Shellito. Upon his return to Minnesota to pursue 
his dreams of college, he learned that even though he had 
served the entire length of the deployment, his extension 
orders reflected 1 day less than required for Chapter 30 
Montgomery GI Bill benefits. This is the bottom line. Sergeant 
Hatton and his comrades were extended in keeping with the Total 
Force concept, but are not being provided the commensurate 
Total Force benefits.
    As I conclude, I hope that you will each take the necessary 
actions to provide these patriotic young Americans the 
educational benefits they have earned in our Armed Forces. The 
National Guard is no longer a strategic reserve. It is an 
operational force and educational entitlements for our 
servicemembers must be overhauled to reflect this new reality.
    Madam Chair, Representative Boozman, Members of the 
Subcommittee, I thank you for your time this afternoon and I, 
too, want to thank you for your service to your Nation.
    [The prepared statement of General Shellito appears on p. 
94.]
    Ms. Herseth Sandlin. Thank you, General Shellito.
    I would ask unanimous consent that we allow Sergeant Hatton 
to share a few words with us. No objection is heard.
    Sergeant Hatton, if you would like to speak, you are not 
expected to speak. I had to ask unanimous consent because you 
were not listed officially on our agenda today. I think it is 
wonderful that you also made arrangements along with General 
Shellito to be with us today. If there was something that you 
would specifically like to share with us, we would be more than 
happy to hear from you.
    Sergeant Hatton. Well, Madam Chairwoman, Mr. Boozman, 
Members of the Subcommittee, I was in Iraq for 16 months and 
before that, we had 6 months training in Camp Shelby. There was 
a certain individual, Private Wingus, he was with me from day 
one until day end, when we left, with me every single day. He 
was in my platoon. For most of the time he was my gunner and 
when we came back to Fort McCoy for the demob, it turned out 
his orders said 739 days, mine are at 700--or his were 730 and 
mine were 729. So that is a perfect example of someone who was 
with me every single day doing the exact same job who ends up 
making about $600 more a month on the GI Bill than I do just 
because his orders say one more day.
    And I really, I mean it is really nobody's fault. It is 
just a mistake in the government and I just think it needs to 
be fixed, so the rest of the guys who were in my case, 1,162 of 
us, can get the money that we are entitled to.
    Ms. Herseth Sandlin. Well, I agree with you and I think 
other Members on the panel will express their sentiments as 
well. I think you should go into diplomacy. I think you were 
very kind.
    Thank you for the unanimous consent to hear from Sergeant 
Hatton.
    Again, General Shellito, thank you for making the 
arrangements to be here.
    I would now like to recognize Mr. Boozman.
    Mr. Boozman. Thank you, Madam Chair.
    And very quickly I want to thank all of the panel for being 
here, but especially you, Sergeant. We appreciate your service 
to your country and we are very, very proud of you. I think you 
summed up what we needed to do very, very quickly and I am 
going to yield my time to Colonel Kline. And again, with Mr. 
Walz and Mr. Kline's leadership, hopefully we are going to get 
this thing settled very quickly. Thank you.
    Mr. Kline. I thank the gentleman for yielding. I hope that 
we are going to get this fixed quickly.
    I thank all the panelists for being here.
    Thank you, Mr. Jones, for your complex enlightenment. Like 
the Chairwoman, I don't know how much was clarified, except 
that it is even more complicated than I thought.
    I thank all you for being here, and of course, General 
Shellito, thank you for being here to testify and thank you for 
your tremendous leadership. As my friend and colleague, Mr. 
Walz, said, the Beyond the Yellow Ribbon Program is emerging as 
the model for the country to help these soldiers move from 
wartime to peacetime and reintegrate into their civilian 
communities and lives.
    Let me take just a second and say how much I admire 
Sergeant Hatton. He not only received two Purple Hearts, but 
the results of one of those is reflected in the smile and he 
has been trying, with some effort, to perhaps not display that. 
You should be proud of it. We are certainly proud of you.
    Let me just take just a second to express some of the 
frustration that I think all of us on this panel, and certainly 
Mr. Walz and I have experienced as we have tried to resolve 
what is clearly an inequity that you, Sergeant Hatton, have 
suffered. It is clearly not fair for two soldiers to head out 
together, serve every day together, including the 16-month 
longest combat tour of any combat unit in America when you 
served in Iraq, and come back together and get off the plane--
you may have been there perhaps when Mr. Walz and I were 
standing on the tarmac and you walked off the plane and then 
you look at the piece of paper and one of you gets full 
Montgomery GI Bill benefits and the other does not.
    Everyone that I have talked to in the Department of 
Defense, the Department of the Army, in the National Guard, in 
the Department of Veteran Affairs, in the White House and here 
in Congress, agrees that this is not fair. And it is something 
that we ought to fix. What has been frustrating to all of us is 
that when we talk to the Secretary of the Army, Mr. Garrin, who 
has been trying mightily to fix this thing, he is told by his 
lawyers that he can't fix it with a stroke of a pen. And he has 
come up with a system which we hope is going to--it is a bit 
complex, but we hope it is going to fix it so that you can go 
to school in January with full Montgomery GI Bill benefits.
    And the Acting Secretary of the Department of Veterans 
Affairs in the VA, he can't fix it with a stroke of a pen 
according to the lawyers on his staff. And I found out today 
that according to the lawyers in the White House, the President 
can't fix it with a stroke of a pen or with an Executive Order.
    And so everyone knows it is not fair. Everyone knows it 
needs to be fixed. And yet, day after day is going by and the 
spring semester--you already need to get underway to start 
going to school in January and we have to get these things 
fixed. I am very happy to be a cosponsor of Mr. Walz's bill. I 
would be, and I am on another bill and I would be on five 
others if we could fix this immediate problem.
    I think that--I know that I have the support of Mr. Boozman 
and I am sure the Chairwoman and other Members, because every 
single Member that I have talked to understands it is not fair 
and it has to be fixed and we want to do that.
    Now, having said that, I also agree with much of the 
testimony today. We have had panel after panel who said, in 
effect, we need to overhaul the GI Bill. We need to consolidate 
it. We need to go to a Total Force concept. We need to rewrite 
it. We need to fix it, because clearly, we have other 
inequities in the system beyond the issue that is facing the 
1,162 of you who have 729 or fewer days, and that is from 
Minnesota. And there are other soldiers that are involved and 
have the same thing from neighboring States.
    So that is an immediate problem that I hope we can move 
quickly, even if someone out of regular order in Congress to 
get some legislation which will fix that in the longer term. As 
I mentioned earlier, I know that our friend and colleague, Vic 
Snyder, has been working this issue. And I remember him 
complaining specifically about the 730 issue, the 24-month 
issue that affects the Reserves 3 or 4 years ago, and we have 
been unable to fix it in a comprehensive fashion. I hope that 
we are going to be able to do that in a comprehension fashion. 
But in the near term, I hope that Mr. Walz's bill is able to 
move forward at the speed of heat so that these soldiers can go 
to school in January with their full benefits.
    I won't ask any questions because I am afraid Mr. Jones 
would answer and then I would have to start again with that 
whole complexity thing. But again, I want to thank you, sir, 
for your testimony and actually really the clarity that you 
brought to what is an enormously complex problem and it speaks 
to the issue of trying to fix this thing in a comprehensive way 
so that students, as well as financial aid officers and others, 
can understand what they are supposed to be doing.
    Thank you very much for your indulgence, Madam Chair.
    Ms. Herseth Sandlin. Of course, Mr. Kline, and again, thank 
you for being with us today and for your work on this specific 
issue. We look forward to working with you to make this fix 
happen sooner, rather than later, much sooner, we hope.
    Mr. Walz, you are recognized.
    Mr. Walz. Well, thank you, Madam Chairwoman, and I would 
like to thank my colleague from the 2nd District and let 
Sergeant Hatton know you have one very motivated and irritated 
Marine Colonel who is on this. You have added an irritated 
Sergeant Major to it now. So I can tell you that every waking 
moment we are working to deal with this. Please know that your 
sacrifice and the people of the first and the second districts 
of Minnesota will not rest until we make sure that is honored. 
And you have heard the other people testify. You have 
generations of people behind you.
    You have the Vietnam Veterans of America testifying that we 
need to get this thing right for you and an understanding. We 
heard many people talk about, and I appreciate Dr. Kime's 
comments that the old stereotype of the National Guard is dead 
and gone, as you so well know with 16 months of combat duty in 
Iraq. Those are the old days and the GI Bill is outdated. So I 
appreciate those comments.
    I just wanted to just make one point. This is just to help 
me on this. You got back, Sergeant Hatton, in July and you 
enrolled at the University of Minnesota Duluth; is that 
correct, for fall term?
    Sergeant Hatton. That is correct, Congressman.
    Mr. Walz. Have you received your GI Bill benefits at all 
for the fall term then, your Reserve? Have you got a check from 
them?
    Sergeant Hatton. Negative. When we originally went in to 
sign up, I signed up pretty much as soon as I got back, 
probably about August 5th, and she said that the system was 
going to be so backlogged we shouldn't expect anything until 
December or later.
    Mr. Walz. Now, you just heard the VA people say it takes 15 
days. That is not your experience?
    Sergeant Hatton. Well, based upon my experience, 
Congressman, I would have to totally disagree with that, but--
and also, they said that since I had gone to college prior to 
going to Iraq at the University of North Dakota and I had 
collected GI Bill there, they said that since I was already in 
the system it would go faster than people who were just first 
signing up for it.
    Mr. Walz. Now, this issue has nothing to do with the 730-
day issue. You are just trying to get your benefits under the 
Reserve side of benefits. So this is totally separate, correct?
    Sergeant Hatton. That would just be the Chapter 1607 
benefits right now.
    Mr. Walz. So your experience after 16 months of combat in 
defense of this Nation has been on the GI Bill that you have 
received nothing and we are sitting here on October 18th.
    Sergeant Hatton. Roger that, Congressman.
    Mr. Walz. Okay. Thank you.
    And I yield back, Madam Chairwoman, just to set the----
    Ms. Herseth Sandlin. Mr. Boozman, did you--that is right. 
You had yielded.
    Mr. McNerney.
    Mr. McNerney. Thank you, Madam Chairwoman.
    My observation is that there is a tremendous amount of 
information here. You all have done a terrific job putting this 
together in a way that we can use it to do what we need to do 
to make sure that we take care of these problems. We have heard 
a story of heroism and inequity and now it is our job, again, 
on this panel, in this Committee, in this Congress, to make 
sure that we fix these problems so that you can proceed to get 
the benefits that you are entitled to. We will do our job. 
Thank you very much for your service.
    Ms. Herseth Sandlin. Sergeant Hatton, thank you for being 
so good-natured about this issue. We appreciate your service. 
The reason we are concerned is not only the broader issue that 
you described in your initial statements about the disparity of 
the 1 day and how that affects the benefit. Then to understand 
even in more specific terms what you are eligible for, despite 
the mistake that we are going to try to fix very quickly, that 
there is now this delay in the benefits actually being applied 
to your tuition. That is something that, we are grateful for 
your testimony in response to Mr. Walz's question, we can 
explore with our next panel as well.
    I do have a question for Mr. Jones, because it is so 
enlightening and we are going to probably follow up with you 
with some written questions for the record. Could you address 
the issue that the prior panel, Mr. Rowe, had stated in terms 
of other income versus other resources and the possibility of 
errors being made because MGIB benefits might be considered as 
another resource, but they are not to be considered other 
income. Could you elaborate a bit on that?
    Mr. Jones. Right. I mean the law is pretty straightforward. 
The Montgomery GI Education Bill benefits is considered a 
resource. It is not to be used as income in the calculation of 
a family contribution. Can I state unequivocally that every 
financial aid director understands that? I can't. I wish I 
could.
    But clearly, it has been my experience that everyone is 
pretty familiar that this is not considered income in any way 
at all, although there is the misunderstanding, I understand, 
in the general public. And we have encountered this even in 
California and our Troops to College initiative, I must tell 
you, a misunderstanding in the general public on how it is 
used.
    If you would think of the GI Education Bill benefits, it is 
used against any need. The difference between the cost of 
attendance and whatever the family income is, is the need and 
that is where the Montgomery Bill benefits apply, against that 
need.
    Ms. Herseth Sandlin. Just to clarify, cost of attendance is 
tuition or fees and/or fees and books?
    Mr. Jones. No, it is actually more than that. Congress has 
dictated that the cost of attendance in the Higher Education 
Act includes tuition, fees, room, board, books, supplies, 
transportation and other educational-related expenses.
    Ms. Herseth Sandlin. Thank you. I am going to submit a 
question to you regarding the Perkins Loan Program.
    General Shellito, from your understanding in working with 
the Department of Defense to try to solve the particular 
problem we are facing with the Minnesota National Guard. 
According to your understanding, is it policy, regulation or 
law that prevents the Army from changing the orders?
    General Shellito. Madam Chair, everyone that we have talked 
to says they are going to do everything in their power to 
correct the situation. But every time it hits a snag, it is 
after legal opinion. So I would have to say, answering your 
question, it would be in the law.
    Ms. Herseth Sandlin. Is there a situation here where the 
change would be easier if your members were still on Active 
Duty?
    General Shellito. Madam Chair, no. The only solution that 
is--and we are working this one, which is logistically 
intensive--is that we are contacting each and every soldier 
that we have identified as affected, sitting them down. They 
are filling out the 11 pages of paperwork. We are putting 
that--sending that in and sending it here through the National 
Guard Bureau or to the Army Board for Correction of Military 
Records (ABCMR). They will review each and every one of those 
records on an individual basis, as we are being told.
    To give you an example, we just delivered yesterday a 16-
pound box with about 200 and some forms. We wanted to do a 
class action. Their legal counsel said that is unacceptable, 
according to their interpretation of the regulations.
    Ms. Herseth Sandlin. Their interpretation of the 
regulations. That is what they----
    General Shellito. I have had our Judge Advocate General 
(JAG) look at it and he thought there was more latitude----
    Ms. Herseth Sandlin. Subject to differing interpretation, 
perhaps.
    General Shellito. Yeah.
    Ms. Herseth Sandlin. Right? I am sorry. I didn't mean to 
interrupt. You had your JAG look at it and----
    General Shellito. They think they did have some latitude, 
they could have. But we have had too many people say help us 
help you and just get the paperwork done. So we bit the bullet 
and that is what we are doing.
    Ms. Herseth Sandlin. Okay. Thank you.
    Mr. Boozman. Hopefully we can----
    Ms. Herseth Sandlin. Mr. Boozman.
    Mr. Boozman. Well, the only comment I would say, Madam 
Chair, is that hopefully we can work with Mr. Filner and Mr. 
Buyer and perhaps get this on the suspension calendar and get 
Mr. Walz and Mr. Kline's legislation pushed through so that 
they can finally get some relief and not have to fill out those 
long forms.
    Ms. Herseth Sandlin. I think that is a very good 
suggestion, one that we have already had some informal 
discussions about. We will certainly do all we can within the 
jurisdiction of our Subcommittee to put the pressure on the 
powers that be here in this institution to get this done. 
Perhaps you don't have to be delivering another 16-pound box 
full of those forms. It is ridiculous. That is the general 
consensus here. Thank you, again, for your responses, for the 
time of all of our witnesses on this panel. Thank you for your 
service to the Nation and the service to our Nation's veterans.
    I would now like to ask our final panel to the table. 
Joining us on our final panel of witnesses is Mr. Thomas Bush, 
Acting Deputy Assistant Secretary of Defense for Reserve 
Affairs, U.S. Department of Defense; Dr. Curtis Gilroy, 
Director for Accession Policy, Officer of the Undersecretary of 
Defense for Personnel and Readiness, U.S. Department of 
Defense; and Mr. Keith Wilson, Director of Education Service 
for the Veterans Benefits Administration for the U.S. 
Department of Veterans Affairs.
    Gentlemen, thank you all for being with us. Thank you for 
your patience. We knew this was going to be a rather lengthy 
hearing today because of the importance of the topics to 
discuss and the number of individuals with helpful testimony on 
a number of these different matters related to the overarching 
issue of modernizing the Montgomery GI Bill.
    Again, the written statements have been made a part of the 
record and we will start with you, Mr. Bush. You are recognized 
for 5 minutes.

STATEMENT OF THOMAS L. BUSH, ACTING DEPUTY ASSISTANT SECRETARY 
 OF DEFENSE FOR RESERVE AFFAIRS (MANPOWER AND PERSONNEL), U.S. 
   DEPARTMENT OF DEFENSE; CURTIS L. GILROY, PH.D., DIRECTOR, 
ACCESSION POLICY, OFFICE OF THE UNDER SECRETARY OF DEFENSE FOR 
   PERSONNEL AND READINESS (MILITARY PERSONNEL POLICY), U.S. 
    DEPARTMENT OF DEFENSE; AND KEITH M. WILSON, DIRECTOR OF 
   EDUCATION SERVICE, VETERANS BENEFIT ADMINISTRATION, U.S. 
                 DEPARTMENT OF VETERANS AFFAIRS

                  STATEMENT OF THOMAS L. BUSH

    Mr. Bush. Thank you, Madam Chairwoman.
    Congressman Boozman, Members of the Subcommittee, thank you 
for the opportunity to be with you today to discuss the 
educational assistance programs available to National Guard and 
Reserve members. As we all know, we are at war and the 
dedicated men and women who serve in the Guard and Reserve have 
answered the call to duty, as you have seen here in the room.
    Most importantly, they are joining our ranks and staying 
with us. This year combined, the Reserve components achieved 98 
percent of their recruiting objectives. Through August, 
combined attrition for officer enlisted personnel is at its 
lowest level since 1991. All indications are that we finish 
2007 at 98 percent of our authorized strength for the Selected 
Reserve.
    Many factors play into those incredible statistics. 
Providing our members with pay and benefits that recognize and 
rewards their service and sacrifices clearly helps. But 
ultimately, these young men and women are superb patriots who 
are volunteering to serve our country.
    Over the past 5 years, my boss, Secretary Tom Hall, has 
traveled extensively to talk to Guardsmen and Reservists. He 
has traveled to over 200 sites. He has spoken with over 230,000 
servicemembers and their families. During these visits, he has 
heard many positive comments in the manner in which the 
Department and Congress are supporting them and their families. 
He has heard that educational benefits are important to our 
Guard and Reserve members.
    Having said that, we believe there are areas within the 
educational benefits arena that are of concern to our troops 
and need addressing. First, the most frequent comment that 
Secretary Hall receives regarding Reserve education benefits is 
the benefit level for the Selected Reserve MGIB program is 
atrophied over the year and you have heard testimony to that 
effect, and it has not kept pace with the cost of education or 
the amount available under the Active Duty Montgomery GI Bill 
program.
    We are committed to addressing that issue. In fact, 
although, as some of you testified today, there hasn't been a 
single bill that has come out of the Department, we, in fact, 
have been working on that for the last 2 years. We also believe 
we need to examine ways in which we might incentivize our 
people to serve longer. One way to accomplish this might be to 
extend the timeline in which the Montgomery GI Bill for the 
Selected Reserve is available for use by Guard and Reserve 
personnel. As you know, eligibility essentially ends now at the 
14-year point.
    We also believe we need to review the ceiling on the MGIB 
kicker, since this is an important incentive that helps us 
shape the force. This is particularly important as we evolve 
the force to meet the challenges of the 21st century. There are 
other areas that need to be addressed as well.
    We have members who may not be able to remain in the 
Selected Reserve because of Base Realignment and Closure 
(BRAC). We propose extending the draw-down provision of the 
1990's that allowed a member affected by force shaping and 
reductions to retain his or her Selected Reserve MGIB 
eligibility for up to 10 years after being separated from the 
Selected Reserve. This change is included in the Senate-passed 
version of the 2008 National Defense Authorization Act. And I 
would ask for your support in encouraging your colleagues on 
the Armed Services Committee to support this provision.
    The Department also proposed modifying the REAP program to 
allow a member who incurs a short break in Selected Reserve 
service, up to 90 days, to continue to receive benefit payments 
during that break and to retain the REAP eligibility, even if 
the break exceeds 90 days. Currently, a Selected Reserve member 
cannot receive benefit payments during the break and loses 
eligibility if the break exceeds 90 days. Unfortunately, this 
has not been acted upon by Congress and we would ask for your 
support for this proposal as well.
    One area where we would urge caution, and I know this is 
controversial amongst the Members of this Subcommittee, and 
that has to do with making changes that would affect the 
retention aspects of the Reserve programs. Since service in the 
Selected Reserve is voluntary and most Selected Reserve members 
are able to transfer from the Selected Reserve at any time, and 
unless they have obligated for service in Selected Reserve 
because they receive an incentive, a bonus, loan repayment or 
the MGIB for the Selected Reserve.
    This is why we are so interested in the retention aspects 
of these programs. We need incentives that encourage people to 
stay, not incentives that encourage them to leave.
    I would like to thank the Members of the Committee for all 
you do and all you have done for the men and women who serve 
this great country. I look forward to answering your questions.
    [The joint prepared statement of Mr. Bush and Mr. Gilroy 
appears on p. 106.]
    Ms. Herseth Sandlin. Thank you, Mr. Bush.
    Dr. Gilroy, we look forward to your testimony. You are 
recognized for 5 minutes.

              STATEMENT OF CURTIS L. GILROY, PH.D.

    Dr. Gilroy. Madam Chair, Ranking Member Boozman, Members of 
the Subcommittee, and members of the distinguished staff behind 
them who work so hard, you need to be recognized, too. I, too, 
am delighted to appear before the Subcommittee on Principal 
Deputy Under Secretary Dominguez's behalf. And I thank the 
Committee, too, for many years of service and concern for 
promulgating and protecting educational benefits, in 
particular, to our service men and women.
    These programs are particularly important to the Defense 
Department for a whole host of reasons. They help us manage the 
force, for one thing. But they are so critical and valuable to 
military members and veterans simply because they help them 
achieve their educational goals about which we were talking in 
previous panels.
    We know that education is a private benefit to individual 
servicemembers and veterans, but we also know that it is a 
social benefit as well. It is a significant asset to the Nation 
as we invest in our human capital, particularly our young men 
and women who have served.
    I am going to limit my remarks, and they will be brief, to 
policies relating to the Active Duty program for which I have 
responsibility. I will make three points. Point number one is 
this: the Montgomery GI Bill program and the supplemental 
kickers, which when combined with the basic benefit, make up 
the service college funds, are simply the cornerstone of our 
service recruiting efforts. It is as simple as that. We attract 
high aptitude recruits with high school diplomas and that is 
our prime market. Money for college, our educational benefits, 
continue to be and consistently rank as one of the most 
important reasons for young men and women to enlist in the 
military today, and we recognize that.
    Enrollment in the Active Duty MGIB program has risen from 
only 50 percent when it first began in 1985 to over 96 percent 
today. Two point eight million men and women have chosen to 
participate in the Montgomery GI Bill program since its 
inception. So such participation certainly speaks clearly and 
loudly to its attractiveness both as an incentive and as a 
benefit.
    Point number two. Today's Montgomery GI Bill has its 
lineage in the post-World War II Bill of Rights during which 
time we had a conscripted or draft force. Its purpose was to 
ease the transition of those servicemembers to civilian life. 
We all know the history and some have benefited from that in 
this room.
    Today, we have a volunteer military and, as codified in 
title 38, we use the Montgomery GI Bill benefit for that 
original purpose, this transition to civilian life. But we also 
use it, and this is very important, in recruiting and also for 
managing the force. In a way, we have a different GI Bill for a 
different time. We no longer have a draft or a conscripted 
force. We have a voluntary military, managed very differently.
    Point number three, and this is my last point and it is the 
most important one. If you forget everything I said today, I 
ask you to remember this point. And it has to do with the value 
of the educational benefit, which is particularly important, 
not only in terms of the monetary benefit itself to 
servicemembers and veterans, but it is also important because 
of the effect it has on recruiting and retention, something 
that my colleague to the right has just mentioned in his 
closing remarks, force management.
    The benefit has to be large enough to be an effective 
recruiting incentive. It has to be large enough, of course, to 
provide a significant amount for educational purposes, too. We 
won't forget that. But it cannot be too large so as to 
seriously and adversely affect retention. Don't forget that the 
Montgomery GI Bill and education benefits, in general, are a 
double-edge sword. You have to leave to use them. It is clearly 
a recruiting incentive. But it is just as strong a retention 
disincentive.
    So there is a fragile balance that must be maintained 
between the two. We have studied this balance, and researchers 
in academia and elsewhere have also looked at this 
relationship. And that is something that we can talk about in 
the Q&A in terms of actual numbers. If the benefit is too 
large, many members will simply leave after their first term. 
This lowers first-term retention and reduces the number of 
experienced non-commissioned officers and petty officers in the 
force.
    It also puts more pressure on recruiting to backfill for 
those losses. It also changes the force profile or inventory 
that the services try to maintain for force readiness. So the 
implications are profound. That is why my point number three is 
so important.
    To conclude, the current MGIB program continues to serve 
the active components of the military quite well, and from an 
Active Duty perspective we see no significant problems with the 
program or in its administration.
    I thank the Committee again for its patience as I am over 
my time. I stand ready to address any questions.
    Ms. Herseth Sandlin. Thank you.
    Mr. Wilson, you are now recognized.

                  STATEMENT OF KEITH M. WILSON

    Mr. Wilson. Thank you. Good afternoon, Chairwoman Herseth 
Sandlin, Ranking Member Boozman and other Members of the 
Subcommittee. I am pleased to be here today to discuss the 
current state of the MGIB and potential ways to improve upon 
its success and the success of the other educational assistance 
programs administered by VA. My testimony will address areas in 
which the MGIB can be updated, streamlined and simplified. In 
addition, I will comment on selected bills which have been 
introduced in the 110th Congress and certain concepts and 
provisions within those bills in which we find merit, as well 
as areas in which we could find potential problems.
    We are pleased to report that in fiscal year 2007, we paid 
an estimated $2.8 billion in benefits to approximately 500,000 
trainees. In fiscal year 2007, on average, we processed 
original claims in 32 days and supplemental claims in 13 days. 
The reduction in our processing time last year also met or 
exceeded the performance goals set forth for 2007.
    Recent congressional actions have addressed areas that we 
see as essential to the continued vitality of our educational 
benefit programs. For example, VA supports in principle the 
proposals in S. 293 for the expansion of accelerated payment, 
although we do have concerns arising from the potential 
inequities in the bill. Another proposed bill, H.R. 797, would 
extend certain provisions of the Work Study program through 
June 30th of 2012. VA believes these provisions of the Work 
Study program serve a valuable purpose and we agree that they 
should be extended.
    The programs we administer are a complex group with 
complicated benefit criteria. VA appreciates Congress' strong 
interest in streamlining the education benefits available to 
veterans and servicemembers. However, many of the proposals 
currently under consideration by Congress not only create 
additional eligibility categories but, in the process, also 
include retroactive eligibility criteria with amendments 
otherwise effective on the date of enactment.
    A multitude of programs and eligibility criteria create 
confusion for veterans, our partners in the Department of 
Defense, and for our Department as well. This also works 
against our efforts to further improve program participation 
and understanding. We share your desire to improve education 
benefits available to all veterans and believe it can be done 
within the goal of streamlining existing programs versus adding 
new programs and additional layers of complexity associated 
with administering them.
    Two proposals which have garnered a great deal of attention 
would create a new Chapter 33 benefit, a new benefit for post-
9/11 servicemembers and veterans. Under the current benefit 
structure, many individuals find themselves potentially 
eligible under one or more of the three VA-administered 
programs that I have already mentioned. Those individuals are 
tasked with comparing payment rates, impacts of kickers, and 
other areas to determine which program would be most 
advantageous in their individual circumstances.
    Incorporating a new Chapter 33 program, the extent of 
entitlement to which would require factoring in length of 
service and previous eligibility benefit usage, would make the 
process even more complex and difficult for individuals to 
understand.
    Finally, I note additional concerns with certain other 
pending legislation. Senate bills 723, 1719 and 698, as well as 
House bills 112 and 1102 raise issues of equity in providing 
benefits to servicemembers and veterans. For example, these 
bills contain provisions that would give preference to one 
period of service or benefit program over another. S. 723 
proposes to reimburse the payment reduction required for MGIB 
enrollments to members of the Armed Services who served after 
November 16th, 2001, through the date of termination of 
Executive Order 13235.
    Many individuals bravely served our country during periods 
that do not coincide with these dates. These individuals would 
be disadvantaged merely because of their dates of service. Both 
S. 1409 and H.R. 2385 include provisions that would exclude 
graduate programs from eligibility. About 8 percent of our 
individuals now use the benefits for graduate level training. 
Disallowing graduate training would limit the eligibility, or 
the person's choice of the type of training they want to 
pursue.
    Additionally, Senate bills 22, 1409, 1719, 644 and House 
bill 1102 pose significant logistical obstacles by requiring 
substantial changes in entitlement determinations and payment 
methods. These payment methods would require extensive 
enhancement to existing payment systems with significant 
attendant costs, implementation delays, and impact on current 
claims processing. Our continued concern is limiting the impact 
on beneficiaries and ensuring timely receipt of payments.
    In closing, I reiterate that VA is dedicated to providing 
the most beneficial education programs to veterans and their 
dependents. We believe that changes made to enhance these 
programs must not create an extra burden on the beneficiaries 
by making programs more complex.
    Madam Chairwoman, that concludes my statement. I look 
forward to your questions.
    [The prepared statement of Mr. Wilson appears on p. 112.]
    Ms. Herseth Sandlin. Thank you, Mr. Wilson.
    Thanks to all of you.
    Mr. McNerney, did you have questions for the panel?
    Mr. McNerney. Of course. This afternoon I ran into the 
Chairwoman and asked her if there was going to be a hearing 
today because our session ended early this afternoon and she 
said yes, and that it is going to be a good one. And I came out 
here, and yes, it has been very good. It has been very 
informative, a lot of different opinions, a lot of opinions 
that actually coincided. So thank you, Madame Chairwoman, for 
that recommendation of making sure that I made it this 
afternoon.
    Mr. Bush, do I understand you correctly, or did I 
understand you correctly that base relocations and closures are 
impacting soldiers' and National Guard's ability to get 
benefits, through no fault of their own?
    Mr. Bush. As we are closing some bases, we are shifting 
where units are located. There may not be a slot for somebody 
that is currently serving in the Selected Reserve in a new unit 
or they may have to travel extensive distances to get to a new 
unit and not be willing to do that. Therefore, they may no 
longer be in the Selected Reserve.
    If that is the case, then yes, they would be adversely 
affected because if they leave the Selected Reserve, they lose 
their MGIB-SR benefit. The provision we propose would allow 
them, if they are affected by BRAC, to keep the benefit.
    Mr. McNerney. Thank you.
    I have to say, Dr. Gilroy's testimony was one of the most 
interesting. The notion that the GI Bill is a good incentive 
for recruiting, but it is somewhat of a disincentive for 
retention. The way I see what is being asked for is that GI 
Bill should pay for college education and that is sort of a 
yes/no. It is either you pay for college education or you 
don't. So if we pay for college education, what other parts of 
the GI Bill, or is that basically what you are talking about, 
would be a disincentive for retention?
    Dr. Gilroy. No. I was speaking specifically to the basic GI 
Bill benefit as a disincentive at some level. Currently it is 
not. Recruiting ``wins'' over retention at the current benefit 
level of about $1,100 a month, on average, which we have heard 
in other testimony accounts for about 75 percent of the cost of 
an average public 4-year institution.
    So having said that, what then would be the optimal level, 
would be the next logical question I would expect you to ask, 
Congressman.
    Mr. McNerney. Go ahead and ask it yourself.
    Dr. Gilroy. Yes. We have asked that question, because there 
are pending bills which call for increases in the benefit of 
varying amounts. So we have done some statistical analysis, 
econometric work, which tries to get at what the benefit level 
ought to be before the retention disincentive effects outweigh 
the recruiting incentive effects.
    We find, and it is corroborated by several other 
researchers, that the level would roughly be about $1,400 a 
month. Coincidentally and serendipitously, that happens to be 
roughly the average cost of a public 4-year education today. So 
while we don't necessarily recommend, or we don't for the 
Active Duty side feel that it is necessary to increase the 
monthly benefit, if it were raised to around $1,400 as been 
recommended by others in previous panels, at least as a 
minimum, that would not have any deleterious effects on 
retention. And that, I think, is an important point.
    Mr. McNerney. Well, not only that, but it is very specific, 
which I appreciate.
    Dr. Gilroy. It is. It is fairly specific. That is correct. 
Now, if we include next year or the year after, it might be 
somewhat different. We don't know. But that is what the numbers 
look like right now with the statistical analysis that has been 
conducted.
    Now, there is another point here, too. And that is that we 
talk about the basic benefit being 75 percent of the average 
cost. If you add the service kickers into this, on average that 
benefit rises for those who receive it, to nearly 140 percent 
of the average cost of a public 4-year institution. That is 
just a point of interest for you. But in terms of the basic 
benefit, there is room, not a lot, but there is room for an 
increase.
    Mr. McNerney. Thank you.
    I have a question for Mr. Wilson.
    You indicated there is a significant reduction in the 
processing time for GI Bill and yet, Sergeant Hatton has a very 
different experience. Could you explain that? Is there a local 
effect here or what do we think about the discrepancy?
    Mr. Wilson. Some of it I can explain. The numbers that we 
report and the numbers that we track in my testimony today, 
those were fiscal year 2007 average numbers. So that means and 
these are the real numbers that last October, a year ago, it 
was taking us 46 days on average to process an original claim 
for benefits. This month it is taking us 23 days. But on 
average, if you look at everything that was processed over the 
year, it took us an average of 33 days to process an original 
claim for benefits.
    It wouldn't surprise me that an individual's experience 
would not be consistent with the 33 days, since it would be an 
average. Another issue is the seasonal nature of our work. Come 
August, there are about 6,800 institutions around the country 
that are siphoning enrollment information to us. That is a very 
heavy workload period for us. It would not surprise me that an 
individual did not experience a 10- or 15- or 20-day turnaround 
on his or her claim during that period of time, again, because 
we are looking at average numbers as I reported.
    Having said that, I am familiar with the claim and the 
information I have is somewhat inconsistent. So I can assure 
you that, before I leave this room, I will be getting down to 
finding out exactly what the issue is.
    Mr. McNerney. Well, I am glad to hear that. Thank you.
    And I yield.
    Ms. Herseth Sandlin. Thank you, Mr. McNerney.
    Mr. Wilson, if I could just follow up then. Refresh my 
memory. When we had our hearing back in March, you will recall 
I asked you about some of the problems associated with the 1-
800 number and you had contracted out and you were terrific in 
being so forthcoming about the problems that weren't 
anticipated. I think you did that in part to address the 
seasonal issues that you confront.
    I want you to know that is helpful information to have, 
because if the averages vary, I think that we need to provide 
more help to you to address the seasonal issue. I appreciate 
your willingness to work to get to the bottom of Mr. Hatton's 
experience, Sergeant Hatton's experience, and hope that we can 
work with you and you can work with the folks from the 
Minnesota Delegation and perhaps General Shellito as well. If 
there are any other individuals in this particular Guard. We 
don't want to have any delays, but the circumstances there are 
quite unique. We appreciate your willingness to assist them 
with this particular issue.
    Could you also address, Mr. Wilson, the point made by Mr. 
Rowe in the earlier panel about the apprenticeship and on-the-
job training programs in terms of the processing of those 
claims? He made reference to those claims being taken out of 
the regional system, perhaps going through a different process 
and leading to, on average, a longer period of time to process 
those claims.
    Mr. Wilson. The process involved with OJT cases does 
require a more manual processing. There are also more entities 
involved with a lot of the OJT cases because we are often 
dealing with employers. We are often dealing with State 
approving agencies if these are new OJT programs that they are 
going into, as well as the folks in our processing offices that 
are actually working the cases.
    So it is frustrating at times because there are more 
players involved with these processes, unfortunately, because 
of the limitations in our current claims processing system, a 
lot of the work involved with the OJT cases cannot be done what 
we call ``in system.'' They are done out of system.
    The initiative that we have underway that is now fully 
funded and we are moving forward on, our The Education Expert 
System (TEES) initiative, will address exactly that issue, as 
well as several other issues. TEES, several people have heard, 
did have a delay for several years. It is fully funded. We are 
aggressively moving forward on that. And that is ultimately the 
solution to unique situations like this: replatforming our 
system and leveraging IT better so we can move forward more 
effectively.
    The reduction in pending claims is something that we have 
worked very hard on all year as well. Right now we have about 
half of the number of pending claims that we had at this time 
last year. That will allow us to process OJT claims quicker, as 
well as the other claims.
    Ms. Herseth Sandlin. Okay. Just a final comment here. Mr. 
Boozman had mentioned at the outset in terms of the report that 
I believe was due in July on recommendations for streamlining. 
Do you anticipate when we might receive that?
    Mr. Wilson. I can't give you an exact date. I do know that 
it is in OMB going through the internal vetting and concurrence 
process.
    Ms. Herseth Sandlin. Okay. Okay. Thank you.
    Mr. Bush and Dr. Gilroy, thank you again for being here. I 
do want to start with a few questions about the particular 
circumstances surrounding the Minnesota National Guard. I do 
know that in hearings, either here in this Committee or with 
the Armed Services Committee, that my colleague, Mr. McHugh 
from New York, he along with a number of us on both sides of 
the aisle don't really see eye to eye with the Department of 
Defense's assessment here on recruitment and retention as it 
relates to the basic benefit and the Selected Reserve.
    He believes that much of what you refer to, Mr. Gilroy, has 
been discredited and I am wondering, rather than challenging 
you directly on that, I am wondering, when you refer to the 
numbers and the researchers and the studies, are the numbers 
backed up by anything that is perhaps objective or is it more 
subjective, including the experience and information provided 
by Adjutants General in the various States as to what their 
opinion is, based on their familiarity and knowledge of their 
members, of their units, for what are the primary reasons for 
retention in the Guard?
    Dr. Gilroy. Madam Chair, I should have alluded to the fact 
more strenuously that my analysis referred to the Active Duty 
program only and not to the Guard or the Reserve. So I am sorry 
if I didn't make that more clear.
    Ms. Herseth Sandlin. I thought at some point you had 
addressed the Selected Reserve in your testimony.
    Dr. Gilroy. No, no. All of my numbers in my analyses 
reflect----
    Ms. Herseth Sandlin. Are all Active Duty.
    Dr. Gilroy. Active Duty numbers, yes, ma'am. So I would 
yield to my colleague to the right.
    Ms. Herseth Sandlin. Yes. Mr. Bush, if you could respond to 
the question about the information or experience provided by 
State Adjutants General of the National Guard.
    Mr. Bush. We have not asked the Adjutants General to 
provide their information. And this is anecdotal, just as 
information from the Adjutants General would be anecdotal. But 
when Secretary Hall has traveled extensively, as I said, his 
comment, the comment he gets is about the amount of the 
benefit. In our discussions yesterday with him, he said that he 
hasn't received any comments about the post--using the benefit 
after service as a concern.
    Now, maybe he is not talking to the right folks in the 
230,000 people that he has talked to. But that is his 
experience. But the only other thing we have that has any 
information on the value of the benefit or how people view the 
benefit is in our status of forces surveys and in the status of 
forces surveys, 74 percent of the people find the benefit 
either very effective, or they like the benefit, they either 
significantly like it or like the benefit, they find it useful. 
It is only about 12 percent, I think, that don't think the 
benefit is fitting their needs.
    Ms. Herseth Sandlin. Of the status of forces surveys you 
are referring to, do those surveys go out to all Active Duty 
and Selected Reserve or just Selected Reserve?
    Mr. Bush. I am talking about the survey for members of the 
Selected Reserve.
    Ms. Herseth Sandlin. Are they required to respond? Do you 
just send those surveys out and----
    Mr. Bush. It is a random sample that we send out. We do two 
surveys a year and in each one of the surveys we ask a 
different group of questions. We are trying to get a 
longitudinal look across the force at a variety of issues. And 
education benefits, that is one of the questions or one of the 
areas that we focus on in the periodic surveys.
    Ms. Herseth Sandlin. Have you ever phrased a question on a 
survey that is more specific, rather than just the over 70 
percent that you state find it useful, to ask more specifically 
regarding the benefit? The reason I ask this question is 
because we heard from earlier panels that it is very 
disheartening and disturbing information, that many soldiers 
and many officers, it seems, sometimes aren't aware that the 
benefit is lost post-separation. Do you ever ask in the surveys 
more specific questions as it relates to the importance of that 
benefit in staying in the National Guard or Reserve Force?
    Mr. Bush. No. We haven't asked that specific question, 
although every time somebody signs up for the Montgomery GI 
Bill for the Selected Reserve, they get a notice of eligibility 
which outlines the criteria and the conditions in which they 
get the benefit.
    Ms. Herseth Sandlin. Certainly, and I didn't suggest that 
the information at some point in time isn't offered in 
materials that are provided. As we all know, even--I mean there 
is a reason that we just introduced a bill to allow the VA to 
do national advertising on television, to let veterans know of 
their benefits.
    Mr. Bush. No, and I understand that.
    Ms. Herseth Sandlin. I will submit these two questions to 
you in writing for the record, because I want to--it has been a 
long hearing and I want to take the rest of the time that we 
have available to talk about the Minnesota National Guard.
    It is my understanding that the Army Office of the Judge 
Advocate General and the Office of the General Counsel have 
opined that orders may be amended retroactively only to correct 
an administrative error, or for legitimate mission-related 
reasons and that modifying a soldier's orders retroactively for 
the sole purpose of conveying a benefit to a soldier to which 
the soldier would not otherwise be entitled could be found to 
be objectionable.
    My question is, would correcting the orders to reflect 
accurate dates not be a legitimate administrative reason or 
mission-related reason?
    Mr. Bush. Well, if we corrected the orders to reflect an 
accurate date, they would actually have fewer days in those 
orders, because the prospective period of service would not be 
for 730 days. The period of service would end on the date they 
were separated. So we would actually, in that scenario that you 
painted, have more people that would not be eligible because we 
would have to modify the orders back to an earlier date, the 
date they left Active Duty.
    Now, I think your question may be, should we modify the 
orders and say that is what they--they had that prospective 
period because that is what is authorized in law under the 
partial mobilization authority, is 24 months maximum.
    Ms. Herseth Sandlin. I am afraid, Mr. Bush, that your 
initial response maybe answers a question that I wasn't going 
to ask, because in some ways I didn't think it was fair. Yet 
that initial response leads me to think that you are giving the 
impression, in my opinion, that the Department of Defense and 
the Army aren't going to take care of these soldiers.
    Now, based on that initial response, I think you understood 
that we are trying to figure out a way, given everything we 
have been hearing from our colleagues from Minnesota, given 
everything that was testified to earlier in terms of even 
General Shellito believing that the Department of Defense wants 
to be helpful, but there is a legal issue here that we have to 
deal with. Yet at every opportunity, it appears that whenever 
there is discretion, whether it is an interpretation of a 
regulation or discretion as it relates to Minnesota's request 
to deal with the entire unit rather than the individuals who 
have to individually submit these forms, that you are making it 
more difficult.
    If the soldiers met the time required, then they should be 
eligible for the benefit. I think we can all agree on that.
    Mr. Bush. Absolutely. If I could comment, okay. The Army, 
the Department of Defense, the President, we are committed to 
fixing the problem with the Minnesota National Guard. In fact, 
as General Shellito mentioned, he has 201 applications they 
sent yesterday. As we speak, the ABCMR is adjudicating those 
cases. So that process that has been developed--that we are 
using, it is not one that we developed, it is one that is 
required by statute, that we have expedited that process and we 
should have decisions. In fact, we may already have decisions 
on the first batch of cases by the time this hearing ends.
    We have gone to the lawyers and asked the lawyers exactly 
what we could do. We have probed every aspect of what we might 
be able to do. When the testimony said that it was a regulation 
that said you couldn't do a batch request, it is not a 
regulation. If it was a policy, we could waive the policy. We 
can make an exception to policy.
    We are bound by the statute. The statute said the 
individual must submit the request and that is what we are 
dealing with. We are trying to expedite that as much as we can 
to make it as simple as we can to batch them. We are working 
with Minnesota. We are working with the National Guard Bureau. 
We are working with the Army. They work as a team. We are 
working with VA to process these claims just as quickly as we 
can.
    Ms. Herseth Sandlin. What do you think the average time is 
going to be to process these claims?
    Mr. Bush. The average time they have laid out is a maximum 
of 4 weeks. Based on our experience, if we got claims yesterday 
and they are adjudicating them today, that is a 2-day process 
where they have already built in the Army timeline a seven to 
9-day window. So we are pressing this just as fast as we can. 
The Army is taking this very, very seriously.
    Ms. Herseth Sandlin. Oh, I understand. Let me go back to my 
initial question. Can you talk with me about the impact of 
terminal leave?
    Mr. Bush. Terminal leave, I asked that specific question 
when we were looking at the orders. If the orders didn't 
include terminal leave or didn't contemplate all that, can we 
amend the orders? Yes. If there isn't sufficient time on the 
orders to cover that period, it--but if there is already 
sufficient time to cover terminal leave, then there is no 
reason to modify the orders.
    I think it may be helpful for the Committee to understand 
how we got into this situation, what the policies and what the 
process was which allowed somebody to have 730 days in their 
orders, somebody to have 729 days. If you would like me to 
explain that, I would happy to. I think it would be useful.
    Ms. Herseth Sandlin. I think it would be useful as well, 
and then that might help us understand why the Department of 
Defense would write orders that would state not to exceed 730 
days or not to exceed 729 days, etc. So please, take the time 
to explain.
    Mr. Bush. Yes. The process that we used, the process the 
Army used is to look at the first person that was mobilized 
under the partial mobilization authority. And the partial 
mobilization authority says that we can keep some, we can call 
somebody to Active Duty involuntarily for a maximum of 24 
consecutive months. And so they looked at that time period, 
they said they are going to be extended. What is the extension? 
What is the amount of time that they were going to take for 
out-processing, for terminal leave, all the things they have to 
do and looked at when that 2-year period ended for the first 
person that was called up. And that end date was September 
29th, 2007.
    So what they did is, this year it is all going to, we are 
going to have all these people off Active Duty by September 
29th, 2007. So now you look back and say when were they 
mobilized? And that determined the date on the orders for the 
extension. This wasn't done maliciously. This wasn't done to 
deny somebody a benefit. This was actually consistent with the 
DoD policy that we said we want to build the proper 
expectations. How long can you expect to be mobilized and to be 
realistic about it, rather than have an expectation out there 
that you were going to be on duty for 2 years.
    Now, it is unfortunate that we have people that are in a 
situation where it is 1 day short. If we had realized that, we 
would have done business differently. We are going to do 
business differently in the future. I have talked to our 
leadership. We are committed to not having this happen again. 
There are bills pending that would make sure that we didn't do 
that. But we can do it by policy and that is what we are going 
to do.
    Ms. Herseth Sandlin. Thank you. I don't mean to suggest 
that you are doing it maliciously. It is just that with all of 
the red tape that Mr. Kline stated at the beginning, that Mr. 
Boozman made reference to, that Mr. Walz is worried about, the 
impression that we are giving these young men and women is that 
we are not willing to get through this red tape and that is 
why, obviously, we are going to have to get involved to give 
you the authority you need.
    The President was told he couldn't even do it by Executive 
Order. I am glad to know that we are going to be doing this 
differently. I do think that it seems to me that we have maybe 
not done all that we could. We are going to keep looking for 
other avenues.
    I would take, by your explanation of that, Mr. Bush, that 
the correction of the Minnesota Guard issue, it is far more 
than a clerical error? It is how you counted back from finding 
the date of September 29th and then looking back to the----
    Mr. Bush. Right. I mean it wasn't a typo. It was a 
conscious decision to say if we are going to have everybody off 
by this date, then how many days do we expect them to serve?
    Ms. Herseth Sandlin. So there is no calculation error. This 
is no typo, but there is an error. There is sort of a 
misjudgment somewhere in there that we are now going to correct 
through policy, as you just stated.
    Mr. Bush. Right. As we were looking at the way that we were 
doing business, building the proper expectations, part of that 
quite frankly we didn't see, and I don't think anybody saw, 
because we had the Army that wrote the orders for each unit. We 
sent that out. The Adjutant General wrote the actual individual 
order. So there are opportunities there along this chain for 
people to say wait a minute, somebody is going to be adversely 
effected because of a benefit. Had we realized that, I think we 
could have acted sooner.
    Ms. Herseth Sandlin. Okay.
    Mr. Bush. But we are in the, you know, we are sort of at 
the point we are where our Board of Correction for Military 
Records is the avenue that we have to take now. It is 
cumbersome. Nobody likes it. But at least it provides an avenue 
and we are committed to expediting that process.
    Ms. Herseth Sandlin. We are committed to expediting our 
process here so that as General Shellito has reached out to as 
many members of this unit as he thinks may be affected, it 
doesn't sound like maybe all of what has already been delivered 
is still what could be out there in terms of forms to fill out 
and to be delivered. Hopefully, even if, within 4 weeks' time, 
although it would be nice to get this resolved before another 
month passes by, that you say maybe the average by expediting 
this, that we can get this resolved. We can at least prevent 
this rather cumbersome process for others that may be affected.
    I have one final question. Sergeant Hatton, you heard him 
testify. Now, he stated that he and a friend, who most times 
was operating as his gunner during their deployment, they 
departed and returned at the same time. So he doesn't qualify 
for the Chapter 30 benefit. I am wondering as you explained how 
you calculated the dates, including the assessment and 
consideration of terminal leave, how could that happen exactly, 
that two individuals who left and came back at the same time, 
there could be that discrepancy?
    Mr. Bush. I would have to look at the two sets of orders 
and see the actual date that they were mobilized, because that 
would trigger then the calculation. You look at the end date 
and you count backward. So if there was 1 day difference, and 
that is what this appears to tell me, there was 1 day 
difference between when they actually reported for duty. There 
would be the 1 day----
    Ms. Herseth Sandlin. How common is that when you are 
sending out the notice to a particular National Guard unit that 
individuals within that same unit would have different dates?
    Mr. Bush. We did it, the Army did it by derivative unit 
identification code (UIC). The composition of the first 34th 
was 181 individual UICs, individual units. That included the 36 
or 39, I think I heard, units from different States. It 
included 300-plus members from the Army Reserve and 188 members 
from the Individual Ready Reserve.
    Ms. Herseth Sandlin. Okay. I know you can't predict this, 
but this is such an unusual circumstance. What is your sense on 
the Army Board of Corrections for Military Records processing? 
What happens now that we have filed these and we go through 
hopefully the next 4 weeks? What if they say no, then what is 
the recourse?
    Mr. Bush. The recourse would be asking Congress for relief.
    Ms. Herseth Sandlin. Yes. We might have to trump that 
process. I mean there is always the event they are going to say 
no and then we are right back to square one. Well, I 
appreciate, again, the testimony, your responses to our 
questions, and the difficulty posed by this situation, as well 
as the broader issue of equity and keeping pace with a whole 
host of things, whether it is college tuition, whether it is 
retention and recruitment needs and the overall force needs for 
our National security.
    Mr. Wilson, it is always good to have you at the Committee. 
We look forward to following up with you on a number of issues 
as well. Thank you for your service to the Nation, to our men 
and women in uniform, and to our veterans. We value the insight 
and interest in the topic and the information you have provided 
today that allows us to do our work more effectively.
    I, too, as Dr. Gilroy noted, want to thank the members of 
our staff here on the Veterans' Affairs Committee and our 
personal offices for their hard work in preparing for and 
following up on these hearings.
    Thank you again, and the hearing now stands adjourned.
    [Whereupon, at 4:59 p.m., the Subcommittee was adjourned.]































                            A P P E N D I X

                              ----------                              

         Prepared Statement of Hon. Stephanie Herseth Sandlin,
            Chairwoman, Subcommittee on Economic Opportunity
    As the lone representative from South Dakota, I continue to hear 
concerns from returning servicemembers and veterans throughout my State 
about the confusion over existing MGIB entitlements and the inequity of 
benefits that exists between Active Duty and our Reserve Forces. 
Unfortunately, this is an all too common concern of Guard and Reserve 
members across our Nation who have often times served side by side with 
Active Duty Forces in support of military operations at home and 
abroad.
    Since the Montgomery GI Bill was enacted more than 20 years ago, 
our Nation's utilization of the Select Reserve forces has dramatically 
increased. When the Montgomery GI Bill was signed into law in 1984, 
servicemembers of the Guard and Reserve were rarely mobilized, but that 
simply is not the reality today. Indeed, today's citizen-soldiers are 
serving with distinction and have sacrificed a great deal in 
contributing to our Nation's efforts in Iraq and Afghanistan. 
Unfortunately, we will hear today from our witnesses that Guard and 
Reserve members are being called to duty for extended periods of time 
while their educational benefits do not reflect their increased service 
to our Nation. I know that I am not alone in this Congress when I say 
that our veterans deserve a Montgomery GI Bill that will meet their 
needs in the 21st century.
    Much progress has been made in education benefits for National 
Guard, Reserve and Active Duty servicemembers. However, I think 
everyone would agree that we must remain vigilant to protect against 
any decline in benefits. Veterans, servicemembers, and military 
families of this Nation deserve our best efforts.
    Some of the panelists may recall a hearing we held on March 22nd on 
the subject of Education Benefits for National Guard and Reserve 
Members of the U.S. Armed Forces. During that hearing, many of our 
members and panelists expressed concerns over the: confusion of 
Chapters 1606 and 1607 entitlements; need to consolidate policy and 
funding for the Montgomery GI Bill Selected Reserve and the Reserve 
Educational Assistance Program under the authority of the VA; and DoD's 
concern over the issue of retaining authority over ``kickers.''
    Since the March 22nd hearing, we have worked with our colleagues in 
the House and Senate Armed Services Committees to include language in 
the National Defense Authorization Act of 2008 to recodify Chapters 
1606 and 1607 of title 10, United States Code, to title 38. I believe 
that this small, but important, step will simplify and improve the 
educational assistance programs created to provide our Nation's 
servicemembers, veterans and their dependents with the benefits they 
rightfully deserve.
    Furthermore, we have worked with the House Armed Services Committee 
to ensure that kicker authority is not effected by legislation that 
might be considered by Congress in the near future. We understand DoD's 
use of this important recruitment and retention tool, and look forward 
to working with them to ensure future legislation improves their 
recruitment and retention goals.
    Today's hearing will follow-up on the recommendations that were 
provided in the 109th Congress and by our Subcommittee hearing earlier 
this year. Ranking Member Boozman, I look forward to working with you, 
all the Members on this Subcommittee, and our colleagues in Congress to 
streamline, update and expand existing MGIB entitlements.
    I now recognize our Ranking Member, Mr. Boozman, for any opening 
remarks that he may have.

                                 
                Prepared Statement of Hon. John Boozman,
    Ranking Republican Member, Subcommittee on Economic Opportunity
    Good afternoon everyone. Madam Chairwoman, I appreciate your 
bringing us together to discuss the future direction of the GI Bill. As 
in the other programs under our jurisdiction, GI Bill education and 
training benefits enable veterans and surviving dependents with the 
opportunity to improve their ability to achieve financial independence 
outside of any other VA benefits they may receive. According to the 
College Board, those with at least a bachelor's degree will make at 
least $1 million more over a lifetime than someone with a high school 
diploma. Clearly, it pays to invest in education and training for 
veterans.
    You and I have held several hearings on this subject over the last 
3 years and we have heard from literally dozens of witnesses about the 
need to make changes to reflect today's operational environment. Today, 
members of the National Guard and Reserves are carrying a huge portion 
of the War on Terrorism and if nothing else, I hope we can find a way 
to improve their benefits.
    I am also concerned that 30 percent of those who sign up for the GI 
Bill never use a penny of the benefit. There are many reasons they 
don't avail themselves of the program, some of which would be difficult 
to overcome, but I think we could reduce that 30 percent to a 
significantly lower number and I want to work with you on that.
    Several of today's witnesses will advocate paying veterans the full 
cost of education. If that is to be our goal, I think we need more 
data. For example, according to the College Board, the average tuition 
and fees at a public 4-year institution is about $5,800 and about 
$2,300 at 2-year school. Board data also shows that 65 percent of all 
students attend 4-year schools with tuition and fees below $9,000 per 
year, 56 percent attend public 4-year schools with tuition and fees 
ranging from $3,000 to $6,000 per year. Finally, the College Board data 
indicates 41 percent of all students attend a 2-year school with a net 
cost, considering all forms of aid at less than $100. I am quoting 
those figures to show that the full cost of tuition and fees varies 
significantly and there are opportunities to attend a wide variety of 
schools at reasonably low cost. Obviously, room and board costs will 
add to those costs.
    Additionally, there are financial aid packages available today that 
did not exist for earlier generations of veterans. So, madam 
Chairwoman, maybe it would be helpful if we asked the College Board to 
assist us in determining what is the real level of benefits we need to 
make as our guide.
    I want to acknowledge that VA has significant progress in lowering 
the processing time for original and supplemental claims for education 
benefits. Last year VA averaged about 43 days for an original claim. 
Today it averages about 23 days. Supplemental claims are down to 11 
days from 17 last year. I wish the folks at C&P could do as well. I 
note the Education Service has achieved a high level of automation to 
accomplish that decrease and again, C&P should follow suit.
    I have one disappointment with our witnesses. Mr. Rowe, the State 
Approving Agencies are our main sources of information on how to ensure 
veterans receive quality education and training in exchange for their 
benefit payments. Unfortunately, virtually none of your testimony and 
only 1 or 2 of the association's 13 legislative recommendations have 
any relationship to the duties of the SAAs outlined in chapter 36 of 
title 38. I believe your testimony does not reflect the SAAs' 
responsibilities under title 38 and suggest your association refocus 
future testimony on your statutory duties rather than sounding like an 
adjunct to the Veterans Advisory Committee on Education.
    Finally, madam Chairwoman, you and I would make many improvements 
if we had the PAYGO offsets. However, PAYGO is a fact of life and we 
must live by it until Congress changes the budget rules. There are lots 
of education bills out there, some of which are estimated to cost up to 
$75 Billion over 10 years. That type of legislation does not appear 
within the realm of possibility under PAYGO.
    But we can do something about making the process even simpler for 
the veteran and schools and I am eager to see the VA's report on 
streamlining that was due to us back in July. If we can't get veterans 
more money, we should at least cut some of the red tape involved in 
getting checks to our veterans.
    I yield back.

                                 
      Prepared Statement of Colonel Robert F. Norton, USA (Ret.),
Deputy Director, Government Relations, Military Officers Association of 
                                America

    MADAM CHAIRMAN AND DISTINGUISHED MEMBERS OF THE SUBCOMMITTEE, on 
behalf of the 366,000 members of the Military Officers Association of 
America (MOAA), I am honored to have this opportunity to present the 
Association's views on updating the Montgomery GI Bill to meet the 
needs of our Armed Forces and to strengthen its value as a readjustment 
tool for our veterans.
    MOAA is an original founding member of the Partnership for 
Veterans' Education, a consortium of 45 military, veterans, and higher 
education groups which advocate for passage of a ``total force'' 
approach to the Montgomery GI Bill to meet the needs of our operating 
forces--active duty, National Guard and Reserve--and veterans in the 
21st century.
    MOAA does not receive any grants or contracts from the federal 
government.

            EXECUTIVE SUMMARY: MONTGOMERY GI BILL PRIORITIES

    As a general principle, GI Bill benefits for the 21st century 
should be structured according to the length and type of duty performed 
by all members of the armed forces, provide better support to 
recruitment and retention programs, and improve readjustment outcomes 
for our veterans. This approach to the MGIB is endorsed by Veterans 
Advisory Committee on Education, a congressionally established panel 
that advises the Secretary of Veterans' Affairs on educational benefits 
programs.
     MOAA would, of course, prefer to see enactment of a ``WWII-style'' 
GI Bill. However, past proposals along these lines by retired Ranking 
Member Lane Evans of this Committee have not been taken up. We believe 
that the existing MGIB can be restructured to better achieve desired 
outcomes, namely: support armed forces recruitment/retention and the 
readjustment needs of our veterans, including National Guard and 
Reserve veterans who have been called into active federal service:

     1.  Recodify reserve MGIB programs from title 10 to title 38. 
(Section 525, H.R. 1585) so that the MGIB can match 21st century 
military policy and better accomplish statutory purposes.
     2.  Establish a 10-year readjustment benefit--as authorized for 
active force members--for National Guard and Reserve veterans called to 
active federal service (Chap. 1607, 10 U.S.C.)
     3.  Raise MGIB monthly rates to cover the average cost of a 4-year 
public college/university education. Dept. of Education data indicate 
the MGIB covers about 75 percent of such costs.
     4.  Authorize cumulative month-for-month entitlement under the 
MGIB (Chapter 30, 38 U.S.C.) for reservists who serve on multiple 
active duty tours in contingency operations.
     5.  Restore proportional parity between basic reserve MGIB 
(Chapter 1606, 10 U.S.C.) rates and the active duty program (Chapter 
30).
     6.  Repeal the 14-year in-service limitation for basic reserve 
benefits (Chapter 1606).
     7.  Expand the scope of programs that can offer accelerated 
payments under the MGIB for designated training, education, and 
licensure/certification programs.
     8.  Authorize ``buy up'' provisions for the reserve MGIB programs.
     9.  Extend the post-service usage period for the MGIB.
    10.  Repeal the $1200 payroll reduction for active duty service 
entrants.

Total Force Montgomery GI Bill for the 21st Century

     MOAA believes that the first priority in creating a more effective 
MGIB is to evaluate proposals against the principle of aligning 
benefits with the length and type of duty performed by members of our 
Nation's armed forces team--active duty, National Guard and Reserve. In 
short, a ``total force'' approach to the MGIB is needed.
    In achieving this objective--an objective we believe is essential 
to better accomplish recruitment, reenlistment, and readjustment 
purposes--MOAA strongly recommends that the Committee endorse the 
following approach to updating the MGIB.
    First, all active duty and reserve MGIB programs would be 
consolidated under title 38. DoD and the Services would retain 
responsibility for cash bonuses, MGIB ``kickers'', and other 
enlistment/reenlistment incentives. Second, MGIB benefit levels would 
be structured according to the level of military service performed.
    The Total Force MGIB would restructure the MGIB as follows:

      Tier one, the Active Duty MGIB (chapter 30, title 38)--
initially, no statutory change. Individuals who enter the active armed 
forces would earn MGIB entitlement unless they decline enrollment.
      Tier two, the Selected Reserve MGIB (chapter 1606, 10 
U.S.C.)--MGIB benefits for a 6-year enlistment or reenlistment in the 
Guard or Reserve. Chapter 1606 would transfer to title 38. Congress 
should consider adjusting benefit rates to restore the originally 
intended relationship to the active duty program. Historically, 
Selected Reserve benefits have been 47-48 percent of active duty 
benefits (vs. today's 29 percent).
      Tier three, Reserve Educational Assistance Program 
(chapter 1607, 10 U.S.C.)--MGIB benefits for mobilized members of the 
Guard/Reserve on ``contingency operation'' orders. Chapter 1607 would 
transfer to title 38 and be amended to provide mobilized servicemembers 
1 month of ``tier one'' benefits (currently, $1101 per month) for each 
month of activation after 90 days active duty, up to a maximum of 36 
months for multiple call-ups.

    A servicemember would have up to 10 years to use remaining 
entitlement under Tier One or Tier Three programs upon separation or 
retirement. A Selected Reservist could use remaining Second Tier MGIB 
benefits only while continuing to serve satisfactorily in the Selected 
Reserve. Reservists who qualify for a reserve retirement or are 
separated/retired for disability would have 10 years following 
separation to use their benefits. In accordance with current law, in 
cases of multiple benefit eligibility, only one benefit could be used 
at one time, and total usage eligibility would extend to no more than 
48 months.
Guard and Reserve Warriors Denied Earned Veterans' Benefits Under REAP
    Third-tier benefits are earned by mobilized reservists who serve 
the Nation on active duty for at least 90 days during a national 
emergency under ``contingency operation'' orders. The REAP (Chapter 
1607, 10 Code) benefit package was cobbled together with little 
consultation/coordination with the Departments of Defense and Veterans 
Affairs, and other stakeholders. For example, the benefit rate 
structure is based on an administratively cumbersome percentage of 
active duty MGIB Chapter 30 benefits. Ironically, substantial benefits 
are awarded after 90 days service, but no post-service access to those 
benefits is authorized.
    Clearly, the principle of scaling benefits proportional to service 
performed was not used in fashioning REAP.
    The Total Force MGIB would address these concerns by establishing 
in law month-for-month entitlement to active duty MGIB benefits 
(Chapter 30). With enactment of a portability feature for earned REAP 
benefits (the same 10 years established since WWII for non-Reserve 
active duty veterans), the program ultimately would be fairer to all 
members of the force and serve as an incentive for continued service in 
the Guard or Reserves.
    A restructured REAP would support DoD policy of calling up the 
``operational reserve'' for 1-year tours every 5 or 6 years. The 
proposal would enable a G-R member potentially to acquire full MGIB 
entitlement after 36 months aggregate service on contingency operation 
orders. DoD reports that more than 142,000 members of the Guard and 
Reserve already have served two or more tours of active duty.
    Presently, however, Chapter 1607 benefits are awarded only for a 
single tour of active duty. Additional benefits cannot be earned for 
additional active duty service performed. This becomes a built-in 
disincentive for continued service and can only hurt the morale of 
operational reservists.

    A key feature of the total force MGIB proposal is that reservists 
mobilized for at least 90 days under federal contingency operation 
orders would have access to their remaining REAP benefits for up to 10 
years after separation. That is, they would be entitled to post-service 
readjustment benefits under the MGIB.
    America's volunteer military--active duty and reserve component--
become veterans when they complete their active duty service 
agreements. When mobilized reservists return from an active duty call-
up (under contingency operation orders) they become veterans of the 
Armed Forces, and no American would dispute that fact. Why then should 
they be treated as second-class citizens for purposes of the MGIB? If 
an active duty member who serves 2 years on active duty and no Iraq 
service may use MGIB benefits for up to 10 years after leaving service, 
do we not owe equal treatment to a Guard or Reserve member who serves 2 
or more years in Iraq over a period of 6 or 8 years of Guard/Reserve 
service?
    Some argue that allowing post-service use of MGIB benefits earned 
on active duty would discourage continued service. If that were 
actually true, the government would never have approved post-service 
use of MGIB benefits for active duty service men and women, whether 
their commitment is 2 years or more. Moreover, the DoD survey of 
reserve component members (DoD Status of Forces Survey, November 2004) 
indicates that ``education'' is not a key component in extension or 
reenlistment decisions. Moreover, a reenlistment or extension decision 
enables a servicemember to retain original Reserve MGIB benefits 
(currently, Chapter 1606) as well as the potential to earn more active 
duty MGIB entitlement through successive call-ups.
    Reservists who elect to continue their service in the Guard/
Reserve, and are subsequently activated, would earn 1 month of active 
duty MGIB benefits for every month mobilized, up to 36 months of 
benefits. In short, there is a built-in incentive to continue serving 
in the Selected Reserve because of the potential to earn more MGIB 
entitlement under the proposal.

    MOAA strongly recommends that the Committee and House leadership 
ensure that in negotiations with the Senate over the National Defense 
Authorization Act (H.R. 1585), the House insist upon final passage of 
Section 525 to recodify the MGIB in title 38; and, section 676 of the 
Senate bill, to establish a 10-year post-service readjustment benefit 
for MGIB benefits earned on active duty by reservists.

    Below is a summary of MOAA's top ten priorities for updating the 
MGIB, along with other MGIB initiatives that we respectfully ask the 
Subcommittee to consider. The summary is tied to legislation that has 
been introduced in both chambers in this session.

      Transfer reserve MGIB programs from title 10 to title 38. 
(Section 525, H.R. 1585). (See Total Force MGIB discussion, above). 
MGIB jurisdiction is split between the Veterans Affairs Committees 
(title 38), who handle traditional GI Bill benefits for active force 
members and the Armed Services Committees (title 10) who handle Guard/
Reserve GI Bill programs. title 38 benefits have been increased 
significantly in recent years, but Guard/Reserve benefits have not. 
Because of the growing proportional benefit gap and the dramatic surge 
in duty requirements of our Guard/Reserve members, the total GI Bill 
program is no longer structured to match the nation's military policy 
for the operational integration of our active and reserve forces. 
Benefits should be structured to match the length and type of duty 
performed by active duty and reserve component service men and women. 
The House took an essential first step by favorably voting Section 525 
as a provision in the FY 2008 Natl. Defense Authorization Act, H.R. 
1585. Section 525 is cost-neutral. (Section 525, H.R. 1585, S. 644)

      Establish a readjustment benefit (post-service use) 
eligibility period under the MGIB (Chap. 1607, 10 Code) for Guard and 
Reserve veterans of the War on Terror. (See Total Force MGIB 
discussion, above). Regular active-force members have 10 years after 
leaving service to use their GI Bill--regardless of any deployment 
experience. But Guard/Reserve members who have been mobilized for 
multiple tours in can't use their mobilization-related GI Bill benefits 
once they complete their service obligation and separate. Post-service 
access to benefits earned on active duty in defense of the Nation is 
the only veterans' benefit denied returning Guard and Reserve veterans. 
It is MOAA's understanding that CBO informally has scored the cost of 
10-year portability of such benefits at $50 million in 2008, $165 
million over 5 years and $235 million over 10 years. The cost could be 
reduced by changing the effective date until 1 October 2008 (FY 2009) 
(retroactive to Sept. 11, 2001 and adjusting the post-service usage 
period to 5 years for each 12 months served on active duty (the DoD 
call-up policy)). (H.R. 1102, S. 644)

      Raise MGIB monthly rates to cover the cost of education 
at the average 4-year public college/university. (See Total Force MGIB 
discussion, above.) The present monthly rate for full-time study for 
active duty veterans is $1101 (Chapter 30, 38 U.S. Code), which covers 
about 75 percent of the current cost of education for books, fees, and 
expenses at the average 4-year public college or university according 
to Dept. of Education data. The Partnership for Veterans Education has 
long sought benchmarking MGIB rates to track with the average cost at a 
4-year public college or university. S. 22, S. 1409 would accomplish 
this objective but would use differing metrics to achieve it.

      Authorize cumulative month-for-month credit under the 
MGIB (Chapter 30, 38 Code) for reservists who serve on active duty in a 
contingency operation. (See Total Force MGIB discussion, above). 
Operational reserve policy requires Guard and Reserve members to expect 
activation for 12 months at a time every 5 or 6 years. Since 9/11, 
132,000+ Guard and Reserve members have been activated two or more 
times. Under the ``total force MGIB'' concept sponsored by the 
Partnership for Veterans Education, reservists should be able to 
aggregate multiple periods of active duty for MGIB entitlement up to 
the maximum allowable in law, 36 months. Currently, a Guard/Reserve 
member's benefit is based on the longest single period of mobilization. 
A member who has had two separate 1-year mobilizations gains no added 
education benefit for the second mobilization. (H.R. 1102, S. 644, H.R. 
81, S. 22)

      Restore proportional parity between basic reserve MGIB 
(Chapter 1606, 10 Code) rates and the active duty program. (See Total 
Force MGIB discussion, above). The basic reserve MGIB rate was set at 
47 percent of the active duty program in 1984 and retained that ratio 
for 15 years from 1985-1999. Subsequent increases in active duty 
program benefit levels, combined with static reserve benefit levels, 
mean reserve MGIB rates have now dropped to less than 29 percent of the 
active duty program's, at a time when Guard and Reserve recruiting is 
under enormous strain. If proportional parity were restored in 1 year, 
basic reserve rates for full-time study would increase from $309 to 
$505 per month. Stairstep increases would lower the cost over a 3 to 5 
year period. (H.R. 81)

      Repeal the 14-year in-service limitation for basic 
reserve benefits (Chapter 1606). As an incentive to continued service 
in the National Guard and Reserve, the 14-year limit on in-service use 
of basic reserve MGIB benefits should be repealed. Reservists who 
remain in the Selected Reserve could use such benefits until they are 
exhausted. S. 1261 and H.R. 1330 would repeal the 14-year limitation 
for in-service usage. H.R. 1330 also would permit 10-years post-service 
access to Chapter 1606 benefits, a provision which DoD and the 
Partnership for Veterans Education oppose. To clarify, the Partnership 
supports post-service use of mobilization-related GI Bill benefits, but 
not for the basic reserve MGIB benefits.

      Expand the scope of programs that can offer accelerated 
payments under the MGIB for designated training, education, and 
licensure/certification programs. The law permits accelerated payments 
under the MGIB for programs leading to employment in the ``high 
technology'' industry. To support veterans' readjustment and employment 
opportunities, expansion of the accelerated payment authority is 
needed. (S. 1293, H.R. 1824, S. 526, S. 1278)

      Authorize ``buy up'' provisions for the reserve MGIB 
programs. Under ``buy up,'' active duty servicemembers may invest $600 
of their own money in their MGIB accounts in $20 increments to yield an 
additional $150 per month in MGIB benefits above their basic 
entitlement. Reservists have no such option. (S. 1293)

      Extend the post-service usage period for the MGIB. 
Congress wisely enacted a change in law in recent years to permit 
survivors of those killed in the War on Terror to have 20 years to use 
their Survivors and Dependents Educational Assistance Benefits (Chapter 
35, 38 U.S. Code). Veterans themselves face daunting challenges in 
readjusting to civilian life. Overcoming PTSD and employment challenges 
often takes years, leaving insufficient time to use the MGIB. (S. 22, 
S. 1261)

      Repeal the $1200 payroll reduction for active duty 
service entrants. The MGIB should be an automatic entitlement for 
service entrants. Federal student loan applicants obtain generous loans 
with no obligation of national service and no up front costs; yet, 
armed forces recruits must forego $100 per month of their first year's 
pay for the privilege of serving their country. S. 723 would require 
reimbursement of the payroll reduction to War on Terror servicemembers 
and allow those who previously declined MGIB participation to enroll. 
H.R. 81 would reimburse the pay reduction for MGIB participants who 
extend their service beyond the initial MGIB qualifying contract.

      Permit active duty servicemembers who entered on/after 
Sept. 11, 2001 and made ``an election not to receive'' educational 
benefits under the MGIB_i.e., chose to disenroll_a one-time opportunity 
to enroll. Service men and women are bearing the brunt for the Nation 
in the war on terror. They should not be penalized for youthful 
decisions to withdraw from MGIB eligibility especially since such 
decisions often were made in the face of financial debt and family 
obligations during the early, stressful days of military service. S. 
723

      Exempt the value of MGIB benefits in the calculation of 
annual gross income for the purposes of applying for federal student 
loans. Veterans are disadvantaged in applying for such loans because 
the value of their MGIB benefits is used against them (counted as 
income) in determining the amount of federal loans they may qualify 
for. H.R. 100

      Allow active duty servicemembers who were eligible for 
but declined enrollment in the Post-Vietnam Era Veterans' Educational 
Assistance Program (VEAP) (Chap. 32, 38 Code) to enroll in the MGIB 
prior to discharge/retirement. The VEAP was a low-value program that 
allowed enrolled members to defer making their qualifying deposits 
until they were ready to use the benefit, and many education counselors 
recommended against enrollment. Congress subsequently enacted changes 
in law that permitted VEAP participants to enroll in the MGIB for a 
$2700 late-enrollment penalty. But those who declined participation in 
the VEAP program upon entrance (often based on being told it wasn't a 
good program) were never made eligible for MGIB. Currently serving men 
and women who declined VEAP at service entry should be afforded the 
same one-time MGIB enrollment opportunity as those who enrolled but 
made no deposit.

      Amend the MGIB transfer authority to permit all service 
participants to transfer up to half of their entitlement to dependents 
at the 12th-14th year of service in return for a reenlistment 
agreement. Current law gives each Service Secretary the authority to 
use ``MGIB transferability to dependents'' as a reenlistment incentive 
in critical skills at the 6th year of service. Members may transfer up 
to half of their unused MGIB benefit, and benefits may be accessed by 
eligible dependents at the 10th year of service. MOAA has long 
maintained that transferability should be used in conjunction with 
career reenlistment programs, but present rules hardly favor military 
families. A limited USAF test of transferability under current rules 
yielded disappointing results. The Army is currently offering 
transferability to family members in conjunction with a reenlistment 
contract, but requires the servicemember to forfeit a substantial 
portion of a cash reenlistment bonus. Not surprisingly, the number of 
``takers'' has been very low to date. The law should be modified to 
provide greater access to the transfer option for military families 
(but only as a full-career service incentive) for members who are 
motivated to provide for their spouse's or children's education. (H.R. 
81)

      Cover the full cost of tuition, fees, and expenses for 
education and training programs at any public or private institution_a 
World War II-style GI Bill. In one form or another, ``World War II-
style'' GI Bill legislation has been around for years. What's new is 
that unlike the citizenry of that era, only a minute fraction of the 
population--1 percent--is defending the other 99 percent in the war on 
terror, a conflict which has no known conclusion. To address the 
enormous strain on military recruitment and to support the readjustment 
to civilian life of the few who defend the many, Congress should 
consider a comprehensive GI Bill of educational benefits, recognizing 
that history shows the return value to America of the WWII program (in 
terms of increased productivity, increased career earnings, and 
increased tax revenue realized) far exceeded the original program's 
cost to the government. (S. 22, S. 1409)

      Establish a stipend for living expenses associated with 
full-time education/training programs. Many veterans are married with 
one or more dependent children or are single parents when they separate 
from military service. Economic, employment and family responsibilities 
work together to discourage use of MGIB benefits. A cost of living 
stipend would enable more veterans to use their earned benefits, 
leading to more productive lives, higher incomes, and greater tax 
revenues for the nation. (S. 22)

      Permit active duty and reserve component officers who 
graduated from a Service Academy or a SROTC scholarship program an 
enrollment opportunity in exchange for a service extension agreement. 
Officers from these commissioning programs are ineligible for the MGIB, 
based on the argument that the government already funded their 
bachelor's degrees. This is a short-sighted rationale, given that the 
services typically require their officers to obtain advanced degrees 
for promotion. Further, the Army and its reserve components are 
severely understaffed in the grade of captain (03). Fill rates range 
from about 50-60 percent. In addition, the Army is offering Service-
funded ``tuition assistance'' to officers in designated career fields. 
Paired with the MGIB, this program would have greater potential to 
reduce company grade officer shortages.

      Refund the $1200 payroll reduction for active duty 
servicemembers who entered service on/after Sept. 11, 2001. In 
recognition of the service and sacrifice of those who continue to serve 
the Nation in the war on terror, the MGIB enrollment ``tax'' on their 
first year pay should be refunded. S. 723

         MYTHS AND REALITIES re: the TOTAL FORCE MGIB PROPOSAL

    Myth. Current MGIB benefits for activated reservists are more 
generous than the ``total force'' proposal.

    Reality. The Total Force Montgomery GI Bill proposal ultimately 
would result in fairer and more generous benefits in two significant 
ways. First, benefits earned on active duty could be used for up to 10-
years following honorable separation. That is not the case today. 
Second, benefits would accrue for multiple activations. That is also 
not the case today. Under current statutory interpretation, Chapter 
1607, 10 U.S.C. entitlement is restricted to a single tour of active 
duty. Yet, national policy calls for ``operational reservists'' to 
expect to be activated for 12 months every 5 or 6 years. Reservists 
also can't access their mobilization benefits after honorable service 
is completed. Thus, even though it would appear that very short 90 day 
activations would result in greater benefits, they come with huge 
disincentives that hurt morale and don't match continued service and 
sacrifice. The Total Force approach is more consistent with service 
call-up policies, fairer to the active duty and reserve forces, and 
ultimately more generous. The following table compares Total Force 
proposal benefits to current-law benefit calculations:


                                              6-Yr SELRES Contract
----------------------------------------------------------------------------------------------------------------
                                                                       REAP--Chap 1607          Total Force
                                             Chap 1606 (no change)        (current)              (proposed)
----------------------------------------------------------------------------------------------------------------
Enlistment                                              ($11,124)                     NA              ($11,124)
----------------------------------------------------------------------------------------------------------------
15 mos. AD Call-up                                             NA            60 percent Chap 3$1101 x 15 mos. =
                                                                               $23,781**             $16,515***
----------------------------------------------------------------------------------------------------------------
2d Call-up, 12 mos AD                                          NA                     $0             $13,212***
----------------------------------------------------------------------------------------------------------------
Chap 1606 Remainder                                                 12 mos. 1606: $3708*                $3,708*
----------------------------------------------------------------------------------------------------------------
Total                                                                            $27,489                $33,435
----------------------------------------------------------------------------------------------------------------
*Assumes continued service in the SELRES: if all Chap. 1607 exhausted, revert to 12 mos. of any remaining Chap.
  1606 entitlement. At separation, may access remaining Chap. 1606 immediately for ``length of one activation,
  plus 4 months''
**All REAP entitlement forfeited at separation
***10-year post-service use of accrued REAP (only) using month-for-entitlement formula = $29,727 for full-time
  study.


    In short, the total force proposal tracks with operational reserve 
policy and affords greater benefits consistent with the length and type 
of duty performed; and, unlike REAP, allows activated reservists to 
access earned benefits upon honorable completion of their service.

    Myth: Allowing post-service use of the MGIB for service on active 
duty by reservists would harm retention.

    Reality: If the government really believed that, DoD and Congress 
never would have authorized 10 years of post-service benefit use for 
people who complete regular active duty service. No one argues that GI 
Bill benefits entice regular servicemembers to leave service, so it 
makes no sense to argue that it would have any such enticement for 
Guard and Reserve members.
    The Total Force MGIB proposal recognizes and rewards continued 
service in the reserve forces by allowing reservists to accrue 
additional MGIB entitlement under Chapter 1607 during successive call-
ups, matching benefits to service performed. Basic reserve MGIB 
benefits (Chapter 1606) are available for enlistment and reenlistment. 
If the retention value of the MGIB were of concern, benefit rates would 
have kept pace with the 48 percent historic ratio of reserve-to-active 
duty benefits. But those rates have dropped to 29 percent of active 
duty rates since September 11, 2001, devaluing them for recruitment and 
retention purposes. Manpower planners rely on targeted cash bonuses to 
reach retention goals and these have proven to be successful for that. 
Finally, the DoD's own Status of Forces Survey (2004) of Guard and 
Reserve personnel indicates that ``education'' ranks far down the list 
of reasons why Guard/Reserve men and women remain in service or 
separate.

    Myth: The MGIB overall is functioning well and ``there are no 
significant shortcomings'' according to DoD.

    Reality. MGIB reimbursement rates account for only 75 percent of 
the cost of education at the average 4-year public college/university. 
Moreover, basic reserve benefits have dropped far below their historic 
ratio of 48 percent of active duty rates to 29 percent today. Finally, 
``operational reservists'' have no post-service access to benefits 
earned on active duty, nor may they accrue entitlement for more than 
one tour of active duty. In comparison to its historic antecedents--the 
WWII, Korean war, and Vietnam War era GI Bill programs--the MGIB has 
not kept pace with the cost of education. Those programs generally paid 
all or nearly all of the costs of education/training as a readjustment 
benefit. MOAA recognizes that benefits for an All Volunteer Force 
should be structured to help meet DoD manpower and quality needs as 
well as effective readjustment outcomes. Thus, a MGIB that meets more 
or all of the cost of education with no ($1200) payroll reduction 
``tax'' would be a more effective tool for recruiters. Armed Forces 
demographics in the 21st century also point to the need for a better 
MGIB. That's because service men and women serve much longer tours on 
average than conscript-era servicemembers did, and more than 60 percent 
of separating men and women are married or have dependent children. A 
MGIB that doesn't cover basic education costs increases the prospect 
that veterans with economic, skill or education deficits won't take 
advantage of the MGIB.

    Myth. The Total Force MGIB proposal would transfer responsibility 
for MGIB ``kickers'' from DoD to the Department of Veterans Affairs.

    Reality. Section 525 of the House-passed National Defense 
Authorization Act (H.R. 1585) transfers the reserve MGIB programs to 
title 38 and retains within the Armed Services Committees' jurisdiction 
the authority to fund and oversee MGIB kickers for the active duty and 
reserve forces. Under Section 525, DoD and the Services would continue 
to determine eligibility for reserve MGIB programs and the VA would 
continue responsibility for administration and payment of all MGIB 
benefits to eligible participants. Funding responsibility would 
transfer from the National Guard and Reserve Personnel Accounts to the 
VA. (The VA has been responsible for active duty MGIB funding since 
1984 based on Service enlistment/enrollment information.)
Conclusion
    The Military Officers Association of America commends the 
Subcommittee on Economic Opportunity for holding this hearing on the 
Montgomery GI Bill. In passing its version of the defense authorization 
bill for FY2008, the House adopted a provision to recodify the reserve 
MGIB programs into title 38. Importantly, the House also adopted a 
``sense of the Congress'' provision that activated reservists should 
have a readjustment period to use earned benefits at the completion of 
their service agreement or retirement. MOAA respectfully but strongly 
recommends that House leaders insist on these upgrades as essential 
first steps in restructuring the MGIB for our 21st century troops and 
veterans.

                                 
      Prepared Statement of Ronald F. Chamrin, Assistant Director,
                  Economic Commission, American Legion
    Madam Chairwoman and Members of the Subcommittee:
    Thank you for this opportunity to present The American Legion's 
views on Veterans' Education Benefits.
    The American Legion is proud of its history in helping to pass the 
Servicemen's Readjustment Act 1944, also known as the GI Bill of 
Rights. The American Legion commends the Subcommittee for holding a 
hearing to discuss these very important and timely issues.
The need for major enhancements of the All-Volunteer Force Education 
        Assistance Program, better known as the Montgomery GI Bill 
        (MGIB)
    The Office of the Deputy Under Secretary of Defense (Military 
Community and Family Policy) reported in its 2005 Demographics Report 
of the military that: ``Few (4.1 percent) enlisted members (active 
duty) have a Bachelor's or higher degree, while most (94.1 percent) 
have a high school diploma and/or some college experience. In the past 
15 years, the percent of Active Duty members who have a Bachelor's and/
or an advanced degree has decreased for officers (from 89.6 percent in 
1990, to 86.2 percent in 2005) but has increased for enlisted (from 2.5 
percent in 1990, to 4.1 percent in 2005).'' They continue to report 
that only 7.9 percent of enlisted members of the Selected Reserve have 
an advanced education above a high school diploma or GED equivalent.
    Some 78 million baby boomers will begin to retire starting in 2010; 
within just 10 years, 47.3 million people will be over 65. (ILO 
Institute). The National Association of Manufacturers forecasts a 
shortage of approximately 13 million to 15 million skilled workers by 
2020. In addition, those entering the workforce have outdated or 
inadequate skills for many of the high-demand jobs. In fact, around 60 
percent of all new jobs in the 21st Century will require skills 
possessed by only 20 percent of the existing workforce. Competent, 
educated, and capable individuals must replace these people in order to 
assure the United States retains its competitive edge in the world. 
Veterans are these people and have a remarkable chronicle of work and 
have proven their worth. It is a good financial investment to better 
equip veterans and military members with a secondary education. In 
turn, highly skilled veterans with advanced degrees can be emplaced in 
the workforce to ensure the county's competitive edge in the global 
market in the not so distant future.
    Accordingly, The American Legion supports passage of major 
enhancements to the current All-Volunteer Force Education Assistance 
Program, better known as the Montgomery GI Bill (MGIB). The current 
make up of the operational military force requires that adjustments be 
made to support all armed forces members. The American Legion supports 
legislation that will allow members of the Reserve components to earn 
credits for education while mobilized, just as active-duty troops do, 
and then use them after they leave military service. One of the top 
priorities of any veterans' education legislation is equity and 
portability of benefits. However, it is clear that the current dollar 
value of benefits must be increased to meet the demands of today's 
higher education fees.
    In the 20 years since the MGIB went into effect on June 30, 1985, 
the nation's security has changed radically from a fixed Cold war to a 
dynamic Global War on Terrorism. In 1991, the Active-Duty Force (ADF) 
of the military stood at 2.1 million; today it stands at 1.4 million. 
Between 1915 and 1990 the Reserve Force (RF) was involuntarily 
mobilized only nine times.
    The Department of Defense (DoD) has reported that in the support of 
Operation Iraqi Freedom (OIF) and Operation Enduring Freedom (OEF):

      2.4 million deployment events;
      1.6 million servicemembers have been deployed;
      540,000 servicemembers have more than one deployment;
      443,000 National Guard and Reservists have been deployed 
to Iraq or Afghanistan since 2001, for an average of 18 months per 
mobilization;
      Out of 540,000 servicemembers with more than one 
deployment, 103,909 are members of the Reserve components;
      Stop-loss (a policy that prevents troops whose enlistment 
end date has arrived from leaving) has been imposed on over 50,000 
troops.

    The DoD considers two or more deployment events with overlapping 
participation dates a single deployment. Breaks between deployments or 
``dwell times'' of less than 21 days are considered to be a single 
deployment.
    There is now a continuum of service for military personnel, 
beginning with those who serve in the Reserve component only, extending 
through those in the Reserve components who are called to active-duty 
for a considerable period of time, and ending with those who enlist in 
the ADF and serve for a considerable period of time.
    As of August 31, 2007, 275,981 troops are deployed in support of 
OIF/OEF. The October 10, 2007 report indicates that 90,822 members of 
the Reserve components are currently called to active duty. The DoD 
states that ``At any given time, services may mobilize some units and 
individuals while demobilizing others, making it possible for these 
figures to either increase or decrease.''
    Despite this, both the MGIB-AD and the MGIB-SR fail to meet the 
actual cost of education in this country. Reserve component members 
rarely served on active duty when the original educational benefits 
were created. It is important that the increase in reliance on Reserve 
troops is met with an equitable increase in educational benefits.
    According to the Fiscal Year (FY) 2008 MGIB pay rates, troops who 
serve on active-duty three or more years can collect up to $1,101 a 
month for 36 months as full-time students totaling $39,636. Active duty 
servicemembers currently have up to 10 years after their separation of 
service to utilize their MGIB benefits, while members of the Selected 
Reserve must forfeit ALL of the educational benefits they have earned 
once they do so. It is an injustice that members of the Selected 
Reserve are unable to utilize these benefits after separation.
    Members of today's Selected Reserve are so busy training and 
deploying that they have little time to actually use their MGIB 
benefits. Their ability to use the benefits while serving is curtailed 
because of repeated deployments and denied entirely once they finish 
their service. This is unfair treatment for servicemembers who have 
seen more combat than most MGIB-eligible veterans prior to OIF/OEF.
    A January 2007 study by the National Organization of Research, 
Chicago, shows just how unpredictable Reserve service can be:

        ``An illustrative example of this complexity is the experience 
        of the respondent whose public identifier is 8224. He reported 
        exiting the military in week 45 of 1998. He was then employed 
        every week from week 46 in 1998 to week 13 of 2000. He returned 
        to the military from week 14 of 2000 to week 29, and returned 
        to employment from week 30 of 2000 to week 50. He returned to 
        the military in week 51 of 2000, and stayed until week 12 of 
        2001. He was employed from weeks 13 to 44 for 2001, and then 
        was out of the labor force from week 45 to week 48 of 2001. 
        This was followed by a spell of unemployment from week 49 of 
        2001 to week 40 of 2002. The respondent was then out of the 
        labor force for 10 weeks, and then was employed from week 52 of 
        2002 to week 49 of 2004.''

    Reserve and Guard personnel can earn percentages of the full-time 
active-duty rate depending on length of their mobilization. If they are 
mobilized for 18 months, the current average length of deployment since 
2001, and then go to school full-time they can only receive up to a 
maximum of $23,760 (FY 2008 rates) using their Reserve Education 
Assistance Program (REAP) benefits. However, they can collect only if 
they remain in a Guard or Reserve unit. If they go into the inactive 
Reserve (Individual Ready Reserve) or complete their service contract, 
they are no longer eligible for education benefits.
    Under current law, members of the Reserve component face many 
challenges in using the MGIB-SR benefits. Since September 11, 2001, the 
utilization of the Reserve components to augment the Active Duty Force 
(ADF) present complications for those members of the Guard and Reserves 
enrolled in college programs. The uncertainty associated with unit 
activations, lengthy activations, individual deactivations, and 
multiple unit activations makes utilization of educational benefits 
extremely difficult. Decisions such as whether to enroll for a 
semester, long-range planning for required courses, or whether to 
finish a semester are among the challenges confronted by these 
servicemembers. Problems affecting these servicemembers include accrued 
student loan debt, falling behind peers in studies, and limbo status 
due solely to military indecision regarding military schools, annual 
training, and mobilizations.
    Cpl. David Tedford Holt, a Tennessee enlisted Reservist currently 
on active duty states:

        ``With the high operational tempo of my unit, and with that 
        many of our Soldiers are deployed for more than 18 months 
        during their initial 6-year contract with the United States 
        Army Reserve, it has become virtually impossible to support a 
        family, develop as a Soldier and member of the Army Reserve, 
        and obtain a 4-year degree using the GI Bill benefits that are 
        lost the moment the Soldier leaves the Army Reserve. While many 
        Soldiers enter the Army Reserve without families or financial 
        obligations and are thus able to attend school full-time when 
        not in military training, the Global War on Terrorism has 
        stirred the patriotism of more and more men and women who are 
        choosing to take a leave of absence from their jobs and 
        families in order to serve. These important Soldiers and 
        leaders are far less able to take advantage of the GI Bill 
        benefits that are offered to them during the term of their 
        enlistment, and many do not even consider using them, because 
        they would be forced to pay for the latter portion of their 
        education on their own, while returning to their jobs and 
        familial obligations.''

    An officer that works closely with Cpl. Holt, but asked to remain 
anonymous stated that, ``he had no idea that enlisted soldiers lose 
their GI Bill benefits when they leave the Reserves.'' He continued to 
state, ``I wonder how many officers actually know the reality of the 
situation? I bet that they don't and in turn are harming their 
subordinate enlisted soldiers.''
    With the increased number of activations of the Reserve component 
since September 11, 2001, these same Reservists, who are attending 
colleges and universities around the country, are discovering that 
their actual graduation date may be extended well past their initial 
anticipated graduation date. The College Board, an association composed 
of more than 5,200 schools, colleges, universities, and other 
educational organizations, states that the average public university 
student now takes 6.2 years to finish. They also report that tuition 
and fees represent only a fraction of the total cost of attending 
college. The overall cost (tuition, fees, room, board, books, and other 
expenses) of a typical public college is about $16,400 a year. (College 
Board) Due to the increase in the overall costs to attend college, The 
American Legion recommends that the dollar amount of the entitlement 
should be indexed to the average cost of college education including 
tuition, fees, textbooks and other supplies for commuter students at an 
accredited university, college or trade school for which they qualify 
and that the educational cost index should be reviewed and adjusted 
annually.
Department of Defense Reserve Attrition Rates
    The DoD numbers of the Selected Reserve Enlisted Attrition report 
released by the Office of the Assistant Secretary of Defense (OASD 
Public Affairs) contains the number of losses of the Selected Reserves 
per year since 1991. The FY 2006 losses were 151,878 (18.4 percent 
attrition). The American Legion has estimated previously these numbers 
to be 100,000 per year, of those, 50 percent are veterans who have 
obtained REAP benefits.
    A closer look at the figures reveals that the total number of 
enlisted servicemembers who have departed the Reserve components since 
2002 is 850,750, or an average of 141,792 per year. 443,276 members of 
the Reserve components have deployed in support of OIF/OEF as of August 
31, 2007. We can safely assume that the significant majority (95 
percent) of these Reservists served honorably on active duty for at 
least 90 days, thereby earning them REAP benefits (Chapter 1607) in 
addition to their MGIB--Selected Reserve (SR Chapter/1606 benefits).
    Therefore, deducing that out of the 850,750 members of the Reserve 
components who have departed the military since 2002, we conservatively 
estimate that at least 407,474 veterans have lost earned education 
benefits. Or, at least 50 percent of the force has lost earned 
education benefits that could have been used to increase their earning 
potential. Noting that our figures are of National Guard and Reserve 
servicemembers that were deployed in support of OIF/OEF, there are 
additional Reservists that were called to active duty to CONUS 
(Continental United States) or deployed to other regions of the world. 
Hence, our conservative estimate of 400,000 veterans losing earned 
benefits is more likely than not, much greater.
    The DoD reported that their attrition rates are actually equal and/
or lower in their Reserve components since the Global War on Terrorism 
began. Retorts from the DoD in opposition of extending the delimiting 
date for fear of harming retention are hard to explain given their 
recent recruitment and retention rates.
    The Department of Defense announced that it met or exceeded their 
Active Duty recruiting and retention goals for FY 2007.

    Active Duty Recruiting Fiscal Year 2007. All Services met or 
exceeded their recruiting goals for FY 2007.


----------------------------------------------------------------------------------------------------------------
               Annual--End of Fiscal Year 2007                    Accessions          Goal           Percent
----------------------------------------------------------------------------------------------------------------
Army                                                                   80,407           80,000              101
----------------------------------------------------------------------------------------------------------------
Navy                                                                   37,361           37,000              101
----------------------------------------------------------------------------------------------------------------
Marine Corps                                                           35,603           35,576              100
----------------------------------------------------------------------------------------------------------------
Air Force                                                              27,801           27,801              100
----------------------------------------------------------------------------------------------------------------


    ``Active Duty Retention. Retention remains extremely strong in the 
active force with all Services having met or exceeded their aggregate 
year-to-date targets. The Marine Corps surpassed its overall aggregate 
reenlistment mission (110 percent) allowing them to exceed their FY07 
targeted end strength by a comfortable margin. Air Force final 
information is pending.''

    ``Reserve Forces Accessions Fiscal Year 2007. Four of the six 
Reserve components met or exceeded their accession goals for FY 2007. 
They are still at very high rates of recruitment.''


----------------------------------------------------------------------------------------------------------------
                                                                                 Quantity--YTD
               Annual--End of Fiscal Year 2007                --------------------------------------------------
                                                                  Accessions          Goal           Percent
----------------------------------------------------------------------------------------------------------------
Army National Guard                                                    66,652           70,000               95
----------------------------------------------------------------------------------------------------------------
Army Reserve                                                           35,734           35,505              101
----------------------------------------------------------------------------------------------------------------
Navy Reserve                                                           10,627           10,602              100
----------------------------------------------------------------------------------------------------------------
Marine Corps Reserve                                                    7,959            7,256              110
----------------------------------------------------------------------------------------------------------------
Air National Guard                                                      9,975           10,690               93
----------------------------------------------------------------------------------------------------------------
Air Force Reserve                                                       7,110            6,834              104
----------------------------------------------------------------------------------------------------------------


    ``Reserve Retention. Losses in all Reserve components are within 
acceptable limits. We expect September 2007 to continue at the current 
trend. (Note: This indicator lags by 1 month)''

    Respectfully, and with support of the aforementioned data, The 
American Legion opposes the DoD position that extending the delimiting 
date and allowing members of the Reserve components to use their 
benefits after service would harm retention. Honorably serving veterans 
have been placed in a financial disadvantage when trying to look for 
alternative ways to pay for college. The American Legion strongly 
supports measures that create portability of benefits. These measures 
must also be retroactive to protect those veterans who have already 
lost REAP and MGIB-SR benefits, and must occur immediately.
Recommendations For The Enhancement Of Veteran Education Benefits
     1.  The American Legion recommends that activated Reservists get 1 
month of benefits, at the active-duty rate, for each month of 
mobilization up to 36 months and there should be no delimiting date for 
use of the benefits from the last date of Active or Reserve service.
     2.  The American Legion recommends that Congress move Montgomery 
GI Bill-Selected Reserve (MGIB-SR) from title 10, U.S.C., to title 38, 
U.S.C., and that VA have administrative authority for both the MGIB and 
the MGIB-SR. We recommend that the annual appropriations for the MGIB 
and the MGIB-SR become one annual appropriation within the VA.
     3.  The American Legion supports the termination of the current 
military payroll contribution ($1,200) required for enrollment in MGIB.
     4.  The American Legion supports eliminating the 10-year 
delimiting period for veterans to use Montgomery GI Bill educational 
benefits and supports legislation that would allow all Reservists and 
National Guard members to use their MGIB-SR benefits for up to 10 years 
after separation.
     5.  The American Legion supports an MGIB-SR participant 
reimbursement rate adjusted for time spent on Federalization 
activation, State activation, and normal service for a period not to 
exceed 36 months.
     6.  The American Legion recommends that the dollar amount of the 
entitlement should be indexed to the average cost of college education 
including tuition, fees, textbooks and other supplies for commuter 
students at an accredited university, college or trade school for which 
they qualify and that the educational cost index should be reviewed and 
adjusted annually.
     7.  The American Legion supports a monthly tax-free subsistence 
allowance indexed for inflation as part of the educational assistance 
package.
     8.  The American Legion believes that if a veteran enrolled in the 
MGIB program acquired educational loans prior to enlisting in the Armed 
Forces, MGIB benefits may be used to repay existing educational loans.
     9.  The American Legion supports that enrollment in the MGIB shall 
be automatic upon enlistment. However, benefits will not be awarded 
unless eligibility criteria have been met. If a veteran enrolled in the 
MGIB becomes eligible for training and rehabilitation under Chapter 31 
of title 38, U.S.C., the veteran shall not receive less educational 
benefits than otherwise eligible to receive under MGIB.
    10.  The American Legion supports that any veteran with 6 years of 
service will be qualified to transfer education entitlements upon re-
enlistment for 4 years and to amend title 38, U.S.C., to restore the 
reimbursement rate for correspondence and distance learning training to 
90 percent of tuition.
    11.  The American Legion supports the transfer of Montgomery GI 
Bill benefits from veterans to their immediate family members if the 
veteran elects to do so.
Accelerated Payments for MGIB
    The American Legion supports granting veterans the option to 
request an accelerated payment of all monthly educational benefits upon 
meeting the criteria for eligibility for MGIB financial payments. The 
selection of courses veterans undergo remain exclusively the decision 
of the individual veteran, and all earned veterans' education benefits 
should be made available to veterans in support of their endeavors. 
Accelerated education payments allow veterans to achieve education 
goals in the manner that they decide.
    The American Legion supports the expansion of Public Law 107-103 to 
include but not limited to be:

     1.  Survivors and Dependents Educational Assistance (DEA, or 
Chapter 35)
     2.  Post-Vietnam Era Veterans' Educational Assistance Program 
(VEAP, or Chapter 32)
     3.  Reserve Educational Assistance Program (REAP, or Chapter 1607) 
options for some veterans.
Department of Veterans Affairs Administration of Benefits
    The American Legion commends the Department of Veterans Affairs 
(VA) Education Service and Director Keith Wilson for constantly 
increasing the capacity, lowering the processing time, increasing 
accuracy, introducing a web-based service, and helping veterans receive 
their education benefits. As The American Legion advocates for 
increased veteran education benefits, this division must always be 
supported to ensure the best assistance possible.
    State Approving Agencies are instrumental in the education process. 
The American Legion fully supports all efforts to maintain and enhance 
veterans' education benefits and recommends that State Approving 
Agencies remain funded at $19 million in FY 2008.

                          SELECTED LEGISLATION

H.R. 1102, ``Total Force Educational Assistance Enhancement Act and 
        Integration Act of 2007'' (The Total Force GI Bill)
    The American Legion supports the Total Force GI Bill. This bill 
solves many problems, most significantly the inequities of benefits of 
the members of the Reserve components as compared to their full time 
active duty counterparts. Servicemembers called to active service 
perform duties at an equal rate to their full time counterparts and 
should be treated as such. One major selling point of this proposal is 
the portability of education benefits; this legislation will allow 
Reservists to earn credits for education while mobilized, just as 
active-duty troops do, and then use them after they leave military 
service.
    The Total Force MGIB plan calls on Congress to combine statutory 
authority for both MGIB-AD and MGIB-SR programs under the VA (chapter 
30 of title 38, U.S.C.). This would mean moving MGIB-SR and REAP 
programs from the DoD (chapters 1606 and 1607 of title 10, U.S.C.) and 
shifting oversight responsibility to VA.
    Funding the program through appropriations to the VA for a veteran-
specific benefit would also be beneficial.
    The plan also calls for simplifying MGIB benefit levels and 
features into three tiers.
    Tier One would be MGIB-AD. Benefits for full time students are 
currently $1101 a month for 36 months of college or qualified 
vocational training.
    Tier Two would be MGIB-SR for drilling members who enlist for 6 
years. For years, Congress adjusted the MGIB-SR in lock step with MGIB-
AD, staying at 47 percent of active duty rates. Since 1999, the 
Committees on Armed Services and Defense officials have failed to 
adjust the rates. As a result, the current MGIB-SR benefit for full 
time students is $317 a month, or just 29 percent of MGIB-AD. Those who 
enlist or re-enlist in the Selected Reserve for 6 years are eligible 
for 36 months of benefits at a pro-rated amount of the active duty rate 
(currently 29 percent). Increases in these benefits would be codified 
so that any time Congress raises the active duty rate, Chapter 1606 
benefits would go up by the same percentage increase. Eligibility for 
benefits would be forfeited once they separate from service.
    Tier Three would be MGIB benefits for activated Reservists, but 
with changes to the Reserve Education Assistance Program (REAP) that 
Congress enacted in 2004. REAP can provide extra earned MGIB benefits 
to Reservists mobilized for 90 days or more since September 11, 2001. 
Payments are 40, 60 or 80 percent of MGIB-AD, depending on length of 
activation. As with MGIB-SR, REAP provides 36 months of benefits, but 
they end if the Reservist leaves military service.
    Under Total Force MGIB, activated Reservists would be in receipt of 
REAP benefits at a rate (40, 60 and 80 percent of the active duty 
payment rate) corresponding to their length of mobilization up to 36 
months. Members would have up to 10 years to use active duty or 
activated Reserve benefits (tiers one and three) from the last date of 
separation from the Ready Reserve. A Reservist could also use any 
remaining MGIB-SR benefits (tier two), but only while in drill status 
or for up to 10 years after separation if the separation is for 
disability or qualification for retirement.
    A memorandum from the DoD, Office of Special Counsel (OSC) (May 22, 
2007) to the Chairmen of the Senate Armed Services Veterans Affairs 
Committees attempts to dissuade Congress from passing the Total Force 
GI Bill. We strongly disagree. The American Legion disagrees with the 
OSC finding that changing the REAP benefit calculation would be 
detrimental to Reservists.
    The American Legion agrees with the Veterans Advisory Committee on 
Education/DoD/VA Working Group on the Total Force GI Bill proposal 
recommendation and assertion that the Total Force GI Bill would benefit 
veterans and aid the Armed Forces in retention and recruitment needs.
    The American Legion supports the Total Force GI Bill. Enactment of 
this legislation will greatly benefit veterans.
H.R. 2702, ``The Post-9/11 Veterans Educational Assistance Act of 
        2007''
    The American Legion has concerns regarding the eligibility 
requirement of this proposed legislation. We fully support the intent 
of this bill to provide additional educational benefits for full time 
active duty servicemembers and those individuals who are ordered to 
active duty as members of Reserve components of the Armed Forces. The 
bill will also aid in the recruitment and retention of members of the 
Armed Forces, and provide enhanced educational benefits more in line 
with today's needs. Efforts to ensure veterans are afforded education 
benefits that would include payment of tuition, books and fees as well 
as a $1000 a month stipend are supported by The American Legion.
    The American Legion is concerned for those veterans that complete 
their tours honorably, do not serve an aggregate of 2 years, and do not 
meet the other requirements of eligibility. These veterans have served 
their country honorably yet are excluded from earned benefits. The 
eligibility requirement as proposed by H.R. 2702 requires a 
servicemember to serve an aggregate of at least 2 years of honorable 
active duty service in the Armed Forces after September 10, 2001. The 
bill also contains clauses for eligibility for other measures, service-
connected disabilities, pre-existing medical conditions, hardship, and 
a physical or mental condition that was not characterized as a 
disability and did not result from the individual's own willful 
misconduct.
    The American Legion fully recognizes that there are almost one 
hundred thousand members of the Reserve components that have served 
multiple tours and exceed the 2-year minimum requirement, but we 
express that we cannot exempt benefits for those veterans that served 
side by side with full time active duty members at any time. The first 
rotations for OIF had servicemembers deployed for an average of 15-20 
months.
    The current DoD policy states: ``DoD will construct the maximum 
mobilization timeframe to 1 year and the policy objective for 
involuntary mobilization of Guard/Reserve units is a 1-year mobilized 
to 5-year demobilized ratio.'' If these policies hold true many members 
of the Reserve components would not be eligible to receive benefits 
under H.R. 2702 yet they have honorably served their country in the 
Armed Forces.
    Equity would remedy this situation. The American Legion recommends 
a month for month benefit at the full time rate proposed in the 
legislation for those veterans that have served less than 2 years but 
also allow them to use their benefits after completion of a service 
contract. If a servicemember does serve an aggregate of 2 years, due to 
multiple deployments, extensions, or enlistment in the Active Duty 
Force, then they would be in receipt of the full 36 months of benefits 
as proposed in H.R. 2702.
    The American Legion supports the idea that all veterans be treated 
equally regardless of their Reserve/National Guard status in such that 
an individual who was called to duty and served honorably should not 
have to remain in the Selected Reserve to use their earned benefits. As 
the distinction between the active and Reserve forces continues to 
fade, the difference between the active and Reserve forces of the MGIB 
should disappear accordingly. Benefits should remain commensurate with 
sacrifice and service.
    The American Legion agrees with the concept of the Post-9/11 
Veterans Educational Assistance Act of 2007, which is designed to 
provide educational benefits for eligible servicemembers while 
incorporating the new security realities of this current open-ended 
Global War on Terrorism but reiterate, the Total Force military 
operation structure requires equitable benefits for time served.
H.R. 1330, ``Extend Selected Reserve Educational Assistance Time 
        Limit''
    This bill would extend the conditional time limit for the use of 
basic educational assistance by members of the Selected Reserve and 
members of the Reserve components supporting contingency operations and 
certain other operations to 14 years after the date on which the person 
first becomes entitled to such assistance (current law) or 10 years 
after the date on which the person is separated from the Selected 
Reserve or Reserve component.
    The American Legion supports this bill.
H.R. 2385, ``The 21st Century Bill of Rights Act of 2007''
Section 2
    The American Legion objects to the ``deployed overseas'' 
requirement for eligibility of this program. We also object to the 
limitation that this program would be unavailable to those veterans 
seeking a graduate level degree.
    The American Legion supports the provisions that would allow for a 
transfer of the number of remaining months of education benefits (title 
38, U.S.C., chapter 30, and title 10, U.S.C., chapters 1606 and 1607 to 
this new proposed chapter 33 in title 38, U.S.C.)
H.R. 1211, ``The Resuming Education After Defense Service Act of 2007''
    This bill makes eligible for basic educational assistance under the 
MGIB a member of the Selected Reserve who (among other qualifications), 
during the period beginning on September 11, 2001, and ending on 
December 31, 2008, serves on active duty in the Armed Forces for one or 
more periods aggregating not less than 2 years. It also entitles such 
individuals to 1 month of educational assistance for each month served 
on active duty and makes the amount of such assistance equivalent to 
that provided for active-duty personnel who have served a minimum of 2 
years of active duty. However, it does require the basic pay of 
qualifying members to be reduced by $100 for each of the first 12 
months of such active duty service.
    The American Legion supports the aggregatory requirement; however, 
any ending date of qualification should be removed. Furthermore, The 
American Legion opposes any reduction in pay to enroll in a veteran 
education benefit.
H.R. 112, ``GI Advanced Education in Science and Technology Act''
    This bill seeks to amend title 38, U.S.C., to provide for the 
payment of stipends to veterans who pursue doctoral degrees in science 
and technology. This bill would allow for members of the armed services 
and veterans to receive enhanced educational benefits more in line with 
today's needs.
    The American Legion supports this provision, however, we feel that 
a monthly tax-free subsistence allowance indexed for inflation must be 
part of all educational assistance packages.
Conclusion
    Historically, The American Legion has encouraged the development of 
essential benefits to help attract and retain servicemembers into the 
Armed Services, as well as to assist them in making the best possible 
transition back to the civilian community. The Servicemen's 
Readjustment Act of 1944, the ``GI Bill of Rights'' is a historic piece 
of legislation, authored by Harry W. Colmery, Past National Commander 
of The American Legion, that enabled millions of veterans to purchase 
their first homes, attend college, obtain vocational training, and 
start private businesses.
    The legislation discussed today aims to better serve veterans and 
ultimately assists them in financial stability. The American Legion 
commends the Subcommittee for addressing these important issues. We 
appreciate the opportunity to present this statement for the record and 
to continue our proud history of advocating for increased educational 
benefits to members of the Armed Forces.

 FORCE MANPOWER IN SUPPORT OF OPERATIONS IRAQI AND ENDURING FREEDOM AS 
                           OF AUGUST 31, 2007

----------------------------------------------------------------------------------------------------------------
                                                    Number of        Number of                        Number of
                                      Total        Members with     Members with   Total Number of     Members
                                   Deployment        Only One      More Than One     Members Ever     Currently
                                     Events       Deployment \1\   Deployment \2\      Deployed       Deployed
----------------------------------------------------------------------------------------------------------------
Army Active Duty                       715,122          304,329          174,805          479,134       131,643
----------------------------------------------------------------------------------------------------------------
Army National Guard                    226,318          161,078           29,619          190,697        24,203
----------------------------------------------------------------------------------------------------------------
Army Reserve                           134,923           87,558           20,961          108,519        13,230
----------------------------------------------------------------------------------------------------------------
Army Total \3\                       1,076,363          552,965          225,385          778,350       169,076
----------------------------------------------------------------------------------------------------------------
Navy Active Duty                       406,812          177,142           94,898          272,040        37,606
----------------------------------------------------------------------------------------------------------------
Navy Reserve                            37,158           20,521            5,821           26,342         3,699
----------------------------------------------------------------------------------------------------------------
Navy Total \4\                         443,970          197,663          100,719          298,382        41,305
----------------------------------------------------------------------------------------------------------------
Air Force Active Duty                  389,275          132,534           95,979          228,513        25,384
----------------------------------------------------------------------------------------------------------------
Air National Guard                     113,543           28,795           28,203           56,998         2,981
----------------------------------------------------------------------------------------------------------------
Air Force Reserve                       81,171           16,272           16,046           32,318         1,856
----------------------------------------------------------------------------------------------------------------
Air Force Total \5\                    583,989          177,601          140,228          317,829        30,221
----------------------------------------------------------------------------------------------------------------
Marine Corps Active Duty               261,597          103,123           70,295          173,418        32,564
----------------------------------------------------------------------------------------------------------------
Marine Corps Reserve                    31,903           25,143            3,259           28,402         2,557
----------------------------------------------------------------------------------------------------------------
Marine Corps Total \6\                 293,500          128,266           73,554          201,820        35,121
----------------------------------------------------------------------------------------------------------------
DoD Active Duty Total                1,772,806          717,128          435,977        1,153,105       227,197
----------------------------------------------------------------------------------------------------------------
DoD National Guard Total               339,861          189,873           57,822          247,695        27,184
----------------------------------------------------------------------------------------------------------------
DoD Reserve Total                      285,155          149,494           46,087          195,581        21,342
----------------------------------------------------------------------------------------------------------------
DoD Total                            2,397,822        1,056,495          539,886        1,596,381       275,723
----------------------------------------------------------------------------------------------------------------
Coast Guard Active Duty                  3,412            2,425              411            2,836           257
----------------------------------------------------------------------------------------------------------------
Coast Guard Reserve                        230              206                9              215             1
----------------------------------------------------------------------------------------------------------------
Coast Guard Total \7\                    3,642            2,631              420            3,051           258
----------------------------------------------------------------------------------------------------------------
Active Duty Total                    1,776,218          719,553          436,388        1,155,941       227,454
----------------------------------------------------------------------------------------------------------------
National Guard Total                   339,861          189,873           57,822          247,695        27,184
----------------------------------------------------------------------------------------------------------------
Reserve Total                          285,385          149,700           46,096          195,796        21,343
----------------------------------------------------------------------------------------------------------------
Total                                2,401,464        1,059,126          540,306        1,599,432       275,981
----------------------------------------------------------------------------------------------------------------
\1\ Two or more deployment events with overlapping participation dates are considered a single deployment.
\2\ For purposes of counting ``deployments'' by member, location is not considered. Breaks between deployments
  or ``dwell times'' of less than 21 days are considered to be a single deployment in CTS. This is done in order
  to account for legitimate breaks in a deployment such as R&R or emergency leave.
\3\ Army Source: Joint Personnel Theater Database (JPTR), Deployed Theater Accountability System (DTAS) &
  Defense Finance and Accounting Service (DFAS) submissions for members earning Combat Zone Tax Exclusion (CZTE)
  or Imminent Danger Pay (IDP).
\4\ Navy Source: Individual Tempo (ITEMPO) & DFAS submissions for members earning CZTE or IDP.
\5\ Air Force Source: Deliberate Crisis Action Planning & Execution Segment (DCAPES) & DFAS submissions for
  members earning CZTE or IDP.
\6\ Marine Corps Source: Marine Corps Total Force System (MCTFS) Crisis File & DTAS
\7\ Coast Guard Source: DFAS submissions for members earning CZTE or IDP

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
        Prepared Statement of Eric A. Hilleman, Deputy Director,
 National Legislative Service, Veterans of Foreign Wars of the United 
                                 States
    MADAM CHAIRWOMAN AND MEMBERS OF THIS COMMITTEE:
    On behalf of the 2.3 million members of the Veterans of Foreign 
Wars of the U.S. (VFW) and our Auxiliaries, I would like to thank you 
for your invitation to testify at today's important hearing on the GI 
Bill and education benefits legislation.
    In 1944, President Franklin Roosevelt signed into law the 
Serviceman's Readjustment Act known as the GI Bill of Rights. This bill 
helped millions of Americans realize the American dream. Nearly 12 
percent of Americans served in uniform between 1945 and 1956 and more 
than 8 million returning veterans received debt-free college 
educations, low-interest home mortgages and small-business loan 
assistance. In 1947, half of the nation's college students were 
veterans. For many, they were the first in their families to further 
their education beyond high school. Today the WWII GI Bill is credited 
with creating the middle class.
    Subsequent wartime GI Bills were not nearly as robust as the WWII 
bill. The Vietnam-era GI Bill was a scaled down version from the WWII 
style bill. Despite this, nearly 6.8 million veterans out of 10.3 
million eligible veterans used their benefit. Education benefits during 
the Vietnam era, despite popular beliefs, dramatically aided veterans 
in their transition from active duty to civilian life.
    It is time for a new GI Bill. It is time to revitalize the American 
dream; invest in the overall health of our slowly depleting military 
force; expand the socioeconomic makeup of the military; and provide the 
ONE PERCENT of our population that dons the uniform a life-changing 
benefit.
    The VFW has long advocated for the creation of a GI Bill for the 
21st Century in the fashion of the original WWII bill. We envision:

      A GI Bill that increases military recruitment efforts, 
broadening the socioeconomic makeup of the military, and strengthening 
our National security.
      A powerful transition assistance program allowing 
veterans to readjust to civilian life, improve their ability to care 
for themselves and their families, and to become the leaders of 
tomorrow.
      A GI Bill that recognizes the sacrifices of the hundreds 
of thousands of Guard and Reserve members who have served in Iraq, 
Afghanistan, the Horn of Africa, and during Katrina.

    We are not a Nation at war; we are a Nation with a military at war. 
The majority of Americans have not been asked to sacrifice anywhere 
near that of the seven-tenths of one percent now serving in uniform or 
their families. Many troops have been to Iraq and/or Afghanistan 
multiple times. Some Guard and Reserve units are serving their second 
or third tours in country. Now is the time to honor their service with 
a GI Bill for the 21st Century, providing them with opportunities to 
become future leaders of our Nation.
    Pause for one moment and consider the quality of life that WWII GI 
Bill recipients passed on to their children and grandchildren. We as a 
Nation need to recognize the indirect benefits our families received 
thanks to the education, housing and small business investment benefits 
given to the Greatest Generation.
    Many in Congress have recognized the importance of these issues and 
have introduced bills to improve this key program. We urge you to 
examine these bills with an eye toward their enactment:
H.R. 2702, the Post-9/11 Veterans Education Assistance Act of 2007
    This legislation would enhance military strength while providing an 
educational benefit that equips a generation of veterans to face the 
challenges of tomorrow. The VFW has long advocated a GI Bill in the 
spirit of the original WW II bill, which would cover tuition at the 
highest State institution, housing, fees, books, and provide a cost-of-
living stipend. This legislation would accomplish these goals and more. 
It recognizes the tens of thousands of Guard and Reserve members who 
have actively served an aggregate of 24 months defending our Nation. It 
lengthens the post-service usage period from 10 to 15 years from the 
date of discharge and establishes a post-service benefit for the Guard 
and Reserve. The VFW enthusiastically supports this bill.
H.R. 1102, Total Force Educational Assistance Enhancement and 
        Integration Act of 2007
    We support this vital legislation, which addresses the inequity 
between active duty GI Bill and reserve GI Bill education benefits. 
H.R. 1102 would reward Guard and Reserve members with an equitable 
education benefit. For every month they serve on Active Duty, they 
would receive 1 month's Active Duty GI Bill benefit, usable within 10 
years from their date of discharge. This bill also eases the 
administration of education benefits, simplifying U.S. Code, and giving 
the Department of Veterans Affairs the responsibility of administering 
the benefit as they currently do with the Active Duty GI Bill.
H.R. 2247, the Montgomery GI Bill for Life Act of 2007
    The Montgomery GI Bill (MGIB) has opened the door to higher 
education for millions of Americans. This bill seeks to eliminate time 
limits that often prevent servicemembers from using a life-altering 
benefit when they need it the most. H.R. 2247 would eliminate the post-
service 10-year time limit for the active duty MGIB and the in-service 
14-year time limit for Guard and Reservists. Time limits prevent 
servicemembers from seeking training and education later in life or at 
mid-career milestones. The VFW supports the lifelong career approach to 
the benefit. If a servicemember has earned the benefit, why prevent 
them from using it?
    Many servicemembers seek education and retraining later or at mid-
career. This helps them adapt to the ever-changing economy, 
transitioning from fields that may offer more job security. Also, many 
younger veterans and servicemembers have family obligations that 
prevent them from seeking an education early in life. The VFW supports 
H.R. 2247 and the repeal of time limits on the GI Bill.
H.R. 2385, the 21st Century GI Bill of Rights Act of 2007
    We support H.R. 2385 extending eligibility to Active Duty troops 
and National Guard and Reserve members who serve an aggregate of 2 
years on active duty. This bill would pay tuition, books, fees, room 
and board over the course of 4 years of full-time education. It lifts 
the $1,200 buy-in fee. It further exempts veterans from paying loan 
fees, enhances access to low-interest loans through the Veterans 
Affairs Home Loan Guaranty Loan program, and increases the cap on the 
veterans' home loan program from $417,000 to $625,000. This legislation 
also establishes a veteran's micro-loan program, providing no-money-
down micro loans for entrepreneurial ventures up to $100,000 and 
capping interest at 2\1/2\ percent.
    Ms. Chairwoman and Members of the Committee, this concludes the 
VFW's testimony, I would be happy to answer any of your questions. 
Thank you.

                                 
               Prepared Statement of Richard F. Weidman,
         Executive Director for Policy and Government Affairs,
                      Vietnam Veterans of America
    Good afternoon, Madame Chairwoman, Ranking Member Boozman and 
distinguished Members of the Subcommittee. Thank you for giving Vietnam 
Veterans of America (VVA) the opportunity to offer our comments 
regarding the GI Bill for education activities that could, if put in 
place, materially enhance the lives of the men and women returning to 
civilian lives from today's wars. The founding principle of Vietnam 
Veterans of America is that ``Never again shall one generation of 
American veterans abandon another generation.'' It is our duty as 
Vietnam veterans, the last major cohort of wartime veterans prior to 
today's returning veterans, to do all that we can to try and ensure 
that what happened to us does not happen to them. They have earned far 
better treatment than we got 35 to 40 years ago when we returned. You 
now have a historic opportunity at this watershed in the history of 
veterans' affairs to make a real and lasting difference for the current 
generation of returnees by taking steps to meet the very real and 
pressing need to update and upgrade the Montgomery GI Bill for a new 
generation of veterans.
    When my generation returned from Southeast Asia, the educational 
benefits for which we were eligible under the GI Bill paled in 
comparison to the very generous benefits our fathers and mothers 
received when they came home after achieving victory in World War II. 
That GI Bill, passed in 1944 with the guidance and support of World War 
I veterans, helped fuel the expansion of a real middle class in 
America, which led directly to an unprecedented era of economic growth 
and prosperity.
    A WWII veteran who desired to attend a school of higher learning 
had all of his expenses paid--tuition (up to a certain ceiling), books, 
fees, room and board. And GIs flocked to the schools in droves.
    Fast-forward 20 years. When the GI Bill for veterans returning from 
Vietnam was authorized, it was at the rate of $100 per month in toto 
for all expenses, the exact rate that the benefits for Korean veterans 
had stopped, a decade earlier. Clearly it was inadequate to assist many 
veterans to afford any school, much less a private college.
    When I returned from military service, I began a career as an 
educator, serving on the teaching faculty of the Humanities Division 
and as an administrator at Johnson State College in Vermont. Many 
veterans found out that I was also a veteran, and came to me for 
assistance with the registrar, business office, the VA Regional Office 
(VARO) in White River Junction, Vermont, housing, and multiple other 
problems (including just trying to ``fit in'' with a student body that 
was younger and in comparison to them and what they had experienced, 
naive fellow students).
    A group of students, with encouragement from me, asked the 
President of the college for space and Federal Work Study program funds 
to start a veterans' office on campus. After one semester, we 
approached the Governor with a proposal for Comprehensive Employment & 
Training Act (CETA) funds. We asked for less than $40,000, but they 
gave us more than $300,000, so we opened a veterans' office on every 
campus in Vermont, under the title Project to Advance Veterans; 
Employment (PAVE). I served as one of the founders, and chairman of the 
board of this 501(c) 3 Vietnam veterans' community based organization. 
The original Vermont project on campuses became one of several 
prototypes for the offices created by the Veterans' Cost of Instruction 
Program (VCIP), which funded such offices on campuses across America.
    A man by the name of Stewart Feldman, who was then Special Advisor 
to John Gardner, head of the Conference of Mayors, put together a 
report on disparities in the utilization of the GI Bill for education 
by Vietnam veterans. What he found was that there was a direct inverse 
correlation between the cost of public higher education and utilization 
of the GI Bill by Vietnam veterans. There was also a direct correlation 
between the cost of public higher education and the drop out rate. In 
other words, places with free tuition for public higher education at 
the time, such as the California State colleges and the City University 
of New York (CUNY), had very high utilization rates, and relatively low 
drop-out rates. Vermont had the highest State university in-state 
tuition in the Nation and the highest state college in-state tuition in 
the nation, Vermont also ranked 50 out of 50 in percentage of 
utilization of the GI Bill, and highest in drop-out rates as a result 
of the relatively high cost.
    While this report, and lobbying by the National Association of 
Collegiate Veterans (NACV) (which several years later changed their 
name to National Association of Concerned Veterans when their leaders 
started to graduate), the amount paid by the VA for these benefits went 
up substantially, but it was never enough to take the cost of public 
education off of the table as a major determinant of the utilization 
and completion rates. The utilization rate, and the completion rates 
for Vietnam veterans never came close to that of World War II veterans, 
as a result.
    In the first 50 years following initial enactment in 1944, more 
than twenty million veterans received further training or education as 
a result of the GI Bill. Of those, 49 percent received vocational 
training or on-the-job training. It enabled some 46 percent of these 
men and women to attend college.
    Thanks to the late G.V. ``Sonny'' Montgomery, former Chairman of 
this Committee, and the hard work of his colleagues and loyal staff 
(particularly Ms. Jill Cochran), the Montgomery GI Bill was created for 
a new generation of veterans. As a result of a broad coalition of 
organizations there were significant increases to the amount paid by 
the Montgomery GI Bill in the past decade.
    While VVA testified in favor of those increases at the time, we 
made it abundantly clear then and we reiterate now that VVA favors a 
``back to the future'' model of educational benefits that accords this 
newest generation of American veterans the same GI Bill that my 
father's generation received when they came back from World War II.
    Today, a veteran who returns from Southwest Asia or anywhere the 
United States has a military presence in the Global War on Terror 
(GWOT) receives a much-reduced stipend in comparison to that accorded 
WW II veterans. That monthly amount has to pay for books, fees, and 
living expenses as well as tuition. Not surprisingly, many veterans do 
not avail themselves of the opportunity to further their education.
    Now, Congress is considering increasing educational benefits for 
the latest generation of American soldiers. All we can say is: It's 
about time.
    There are several bills in the Senate--S. 723, S. 1261, and S. 1719 
to mention but a few--and a number in the House--H.R. 1969, H.R. 2247, 
H.R. 2417, and H.R. 3082, also to name a few--that aim to enhance or 
expand or otherwise improve the delivery of educational benefits to 
qualified veterans. Most recognize that the educational provisions that 
comprise the Montgomery GI Bill are far from adequate. Active-duty 
troops must pay into the program if they think they are going to attend 
an institution of higher learning when their stint in the military is 
over. The benefits, however, hardly cover the basics and, we believe, 
most newly minted veterans do not take advantage of this relatively 
meager assistance.
    VVA is on record as having endorsed the bill introduced by freshman 
Senator Jim Webb on his first day in office this past January. VVA 
holds that enactment of S. 22, with the addition of the provisions from 
Senator Blanche Lincoln's bill to include individuals serving in the 
National Guard and Reserves, (beyond being the right thing to do for 
men and women who have put their lives on the line for us) is in the 
nation's vested self interest on at least two counts: first, it would 
train a new generation of leaders who would be freed to go as far as 
their drive, discipline, intelligence and ambition takes them without 
being limited by family finances; and, second, those young people 
considering enlisting today need to know that America values them 
enough to not only take care of their health and recovery where they 
have been lessened by military service, but that the Nation has enough 
confidence in them to invest in a new middle class by affording them 
every opportunity to ``Be All They Can Be'' in civilian life. We 
invested many tens or hundreds of thousands preparing them to be 
warriors. Surely we can invest a similar amount to prepare them to be 
civilians, and to help us ``Win the Peace.''
    The Post-9/11 Veterans Educational Assistance Act of 2007, S. 22, 
would, if enacted into law, direct the Secretary of Veterans Affairs to 
pay ``to each individual entitled to educational assistance . . . who 
is pursuing an approved program of education [funds] to meet the 
expenses of such individual's subsistence, tuition, fees, and other 
educational costs for pursuit of such program of education.'' 
Assistance would include a monthly stipend of $1,000. Now, this is a 
real GI Bill.
    The United States military is still the largest and arguably the 
most effective training institution in America. Skills are taught 
ranging from computer programming to meteorology to flying to allied 
healthcare professions to language proficiency to public relations to 
virtually anything that one can think of as a type of work or skill 
that would be required in any facet of our society. They do what they 
do very well indeed. Servicemembers are able to acquire extraordinary 
proficiencies and skills even in a short military career.
    Furthermore, a new GI Bill must take into account the OJT, and 
other so-called not traditional classroom forms of training that is 
non-credit training, whether it be for a particular skilled trade, or 
entrepreneurial training offered through a Small Business Development 
Center (SBDC), or other vehicle that take into account the way adults 
learn in the 21st century. So flexibility must be built into the law 
while protecting veterans (and the public treasury) against 
unscrupulous operators who would try to secure tuition without 
delivering value to the veteran.
    Madame Chairwoman and distinguished Members of this Subcommittee 
that concludes VVA's formal statement. I welcome your comments, and 
will be pleased to answer any questions you may have. Again, on behalf 
of VVA National President John Rowan, the VVA National Board of 
Directors, and our membership, we thank you for allowing VVA to appear 
here today to share our views.

                                 
            Prepared Statement of Steve Francis Kime, Ph.D.,
                   Former Vice President (2003-2005),
American Association of State Colleges and Universities, and on behalf 
               of the Partnership for Veterans Education
    In addition to the American Association of State Colleges and 
Universities, five of the national presidential higher education 
associations are members of the Partnership for Veterans Education, and 
support the Total Force GI Bill proposal.
    There has been little progress in GI Bill benefits for the Guard 
and Reserve. The GI Bill has not kept pace with national military 
strategy and force deployment policies. The Nation is in need of a 
Total Force Montgomery GI Bill that equalizes benefits.
    The evolution of Chapters 30, 1606, and 1607 has led to inequities 
in educational benefits. There is confusion among veterans and 
administrators.
    Contemporary Adult and Continuing Education and the concept of 
lifelong learning apply to the entire Total Force structure. Provisions 
for accelerated payments, high-tech programs, delimiting dates, etc. 
need a comprehensive new look.
    The administration of the current patchwork of laws is inflexible, 
needlessly cumbersome and inefficient:

      Support of veteran administrators at academic 
institutions is weak.
      All GI Bill funding and administration belong in the 
Department of Veteran Affairs where veterans are the first priority.
      An outdated administrative culture dominates GI Bill 
management. Veterans are micromanaged--the consequences of this 
management style are high administrative costs and low morale for 
Veterans.
      Requirements of an inordinate amount of information, 
coupled with lack of state-of-the-art computer expertise and equipment, 
result in backlogs in veteran's receiving benefits.

    The current management of the GI Bill needs comprehensive, ongoing 
reform. The proposed Total Force GI Bill is a rare management 
opportunity to reform and integrate the GI Bill to render better, 
fairer educational benefits for those who have served their country.
    It is time for one unified and GI Bill, administered and funded by 
one Cabinet Department, to replace the patchwork that now exists. There 
is a historic opportunity at hand to produce a new ``Total Force'' GI 
Bill that can be seen by all to be clear, fair, well administered, and 
in synchronization with national strategy and force deployment 
policies.
    Thank you Chairwoman Herseth Sandlin, Ranking Member Boozman, and 
Members of the Committee. I am here today as an educator and a veteran. 
I speak on behalf of the American Association of State Colleges and 
Universities in cooperation with other national higher education 
associations that participate in the Partnership for Veterans' 
Education.
    AASCU and five national presidential higher education associations 
have supported Servicemembers Opportunity Colleges in its advocacy of 
education for servicemembers and veterans for a third of a century. As 
members of the Partnership for Veterans' Education, they have strongly 
supported improvements to the GI Bill and support the Total Force GI 
Bill proposal. My testimony today is similar to the testimony I 
provided to the Full Committee on March 22, 2006.
    The higher education associations in the Partnership for Veterans' 
Education include the American Association of Community Colleges 
(AACC), the American Association of Collegiate Registrars and 
Admissions Officers (AACRAO), the American Association of State 
Colleges and Universities (AASCU), the American Council on Education 
(ACE), the National Association of Independent Colleges and 
Universities (NAICU), the National Association of State Approving 
Agencies (NASAA), the National Association of State Universities and 
Land Grant Colleges (NASULGC), and Servicemembers Opportunity Colleges 
(SOC).
    Thank you for considering improvements to MGIB. They are much 
needed and long overdue--especially for our National Guard and Reserve 
servicemembers.
    Thousands of Guard and Reserve servicemembers, many of them college 
students or aspiring students, are serving on active duty without fair 
access to GI Bill benefits commensurate with their service. The fact is 
that the GI Bill has not kept pace with national military strategy and 
force deployment policies.
    Our nation's active duty National Guard and Reserve forces are 
operationally integrated under the Total Force policy but their 
educational benefits are not structured equitably. Our Nation needs a 
Total Force MGIB.
    AASCU and the Partnership support a Total Force MGIB that will:

      Benchmark MGIB to the cost of attendance at public 4-year 
institutions. While Congress has attempted to keep pace with college 
costs in regards to benefits, for this school year, Chapter 30 benefits 
will cover approximately 75 percent of the cost of attendance at the 
average 4-year public institution.

          For this school year the projected average cost of attendance 
        at a 4-year institution is $13,145, while the benefit is 
        $9,909.

      Consolidate active duty and reserve MGIB programs in 
title 38 and align benefit rates with type of length of service.
      Close the growing benefit gap between chapter 1606--the 
Reserve MGIB--and the active duty program.
      Transfer chapter 1607 to title 38 and adjust the rate 
formula to provide 1 month of active duty benefits under Chapter 30 for 
every month mobilized.
      Authorize the use of reserve MGIB benefits earned during 
a mobilization for a period of 10 years after leaving service--equal to 
current portability for active duty members.

    In addition, we need to address other inequities and administrative 
issues that affect our veteran-students:

    1.  Other inequities in educational benefits:
          The MGIB and MGIB-SR do not pay for the same training. They 
should.
          Attempts have been made, with mixed results, to adjust the 
various versions of the active duty GI Bill to contemporary Adult and 
Continuing Education and the concept of lifelong learning. These modern 
trends in higher education apply to all servicemembers in the Total 
Force structure. Provisions for accelerated payment, high-tech 
programs, delimiting dates, etc. need a fresh, comprehensive new look 
in a single GI Bill that has appropriate access for all types of 
servicemembers.

    2.  There is confusion among veterans and administrators.
          Understandable confusion exists concerning the relationship 
between the kind of service rendered and educational benefit provided 
by current legislation.
          The three ``tiers'' in the Total Force GI Bill concept 
clearly and fairly provide educational benefits commensurate with kind 
of military service rendered.

    3.  The administration of the current patchwork of laws is 
inflexible, needlessly cumbersome and inefficient:
          Support of veteran administrators at academic institutions is 
weak. Veterans benefit from the strongest possible counseling and 
administrative structure at the academic institution level. The Veteran 
Educational Opportunity Program, funded by the Department of Education, 
helped support veteran administrators at colleges but was allowed to 
lapse a decade ago. The fee that is paid for veteran certifications 
($7) has not been updated since the seventies. Veteran administrators 
on campuses are partners and, with stronger support, can improve the 
veteran's educational experience as well as the administration of the 
GI Bill.
          Government structure has changed since the original GI Bill: 
there are now two Cabinet-level Departments. Strategy, war fighting and 
maintenance of a combat-ready force rightly occupy the Department of 
Defense. GI Bill funding and administration belong, under title 38, in 
the Department of Veteran Affairs where veterans are the first 
priority.
          An outdated administrative culture dominates GI Bill 
management. Veterans are micromanaged with consequences that result in 
low morale among veterans and high administrative costs that probably 
exceed the dollar costs of their benefit.
          Requirements of an inordinate amount of information, coupled 
with a lack of state-of-the-art computer expertise and equipment, 
causes major backlogs in veterans receiving their earned benefits.

    The current management of the GI Bill needs comprehensive, ongoing 
reform. Consolidation and clarification of current laws could serve as 
a basis for management reform and simplification. The proposed Total 
Force GI Bill is a rare management opportunity to reform and integrate 
the GI Bill to render better, fairer educational benefits for those who 
have served their country.
    It is time for one unified GI Bill, administered and funded by one 
Cabinet Department, to replace the patchwork that now exists. There is 
an historic opportunity at hand to produce a new ``Total Force'' GI 
Bill that can be seen by all to be clear, fair, well administered, and 
in synchronization with national strategy and force deployment 
policies.

                                 
      Prepared Statement of David A. Guzman, Legislative Director,
        National Association of Veterans Program Administrators
    Chairwoman Herseth, Ranking Member Boozman, Members of the 
Subcommittee, you honor us by inviting NAVPA to testify here today on 
behalf of America's most important resource, the American 
Servicemember, past and present, who preserve the freedoms we so much 
enjoy though their selfless contributions to this great nation.
    For the past several years NAVPA has developed a legislative agenda 
outlining the many program enhancements to veterans' educational 
benefits that we see as necessary in order for veterans to keep pace 
with the ever increasing need for an educated workforce. We have long 
touted the concept that the school certifying official is at the 
business end of VA educational programs
    The delivery of veterans promised benefits have fallen short or at 
best have been diluted by the concept that we must ``PAY-GO'', that is, 
find off-sets to pay for these education benefits.
    Our government has a history of finding dollars for the bullets and 
bombs, but when it comes time for bandages and band-aids we seem to 
limit our liability. Veterans deserve better. NAVPA has proposed that 
appropriations for war contain a set-aside for medicine and benefits 
for when the servicemember returns and becomes one of our veterans of 
war.
    NAVPA fully supports the Total Force GI Bill proposal. We would 
like to see an equitable education program for all veterans for all 
periods of active service, especially for those who put their life on 
the line in combat. The National Guard and Reservists are pulling their 
share of active deployments yet their educational benefits lag well 
behind the active duty Montgomery GI Bill (Ch 30) benefits. They fight 
alongside their fellow active duty companion yet receive much less in 
compensation.
    NAVPA advocates administrative-like changes to the MGIB that would 
expand the student work-study program, clean up the financial aid 
dilemma that includes MGIB benefits in the financial aid formula and 
excludes many veterans in need from receiving federal financial 
assistance when needed. We advocate the elimination of the 10-year 
delimiting date in favor of the lifelong learning concept, and urge the 
VA to embrace electronic processing for all claims, all programs of 
education, for all veterans and their dependents.
    We also advocate for the combat veterans who receive general 
discharges under honorable conditions who currently are denied benefits 
although they have paid into the MGIB. Perhaps if this small group of 
veterans were able to receive education or training under the MGIB they 
too would become better citizens, gain meaningful employment and 
contribute to society in a positive manner. These veterans do receive 
other VA benefits, services and medical benefits.
    NAVPA also would like to see an increase in compensation for 
schools and businesses that administer veterans education and training 
programs. When the Vietnam Era GI Bill was in existence the schools 
were responsible for the administration of two VA educational programs; 
today they are responsible for the accurate administration of 7 major 
education programs and 4 others which are either pilot, test, hostage 
relief or restored entitlement, bringing the total to 11 programs, with 
no change in the $7.00 per student compensation in over 25 years. The 
result is that Schools are slowly eliminating the stand-alone office of 
veterans' affairs and placing enrollment certification responsibilities 
in other offices with additional duties lessening training 
opportunities and placing a burden on the program administrator to 
maintain compliance with federal and state laws resulting in lessening 
of the service to our veterans. The program should include full funding 
not only for the veteran but also for the administration of the many 
veterans' educational programs at all levels from the Department of 
Veterans Affairs to the school or agency administering the programs.
    Veterans' educational benefits, be they active duty benefits, 
benefits for guard and reservists, vocational rehabilitation, OJT and 
apprenticeship or survivors' benefits, actually cost little to nothing 
to the American citizen because, as history has proven, the return on 
investment will pay back up to sevenfold. Legislation for veterans' 
education and training must continue to adjust to fit changes in 
America's society.
    An educated society is less likely to be involved in crime, will 
pay taxes, buy a home and contribute to the community. To me it is a no 
brainer to upgrade the education and training opportunities of our 
servicemembers and veterans and give them a meaningful benefit that 
will, in turn, be right for America and the right thing to do for our 
veterans.
    Again, I thank you for this opportunity to testify. Although I have 
distributed the NAVPA Legislative Agenda for 2007, which I mentioned 
earlier, to Members of Congress during my February 2007 visit, I will 
leave two copies for this Committee.
    I now stand ready for any questions you may have. Thank you.

                                 
             Prepared Statement of Charles Rowe, President,
  National Association of State Approving Agencies, and Chief, State 
  Approving Agencies, New Jersey Department of Military and Veterans 
                                Affairs
Introduction
    Chairwoman Herseth Sandlin, Ranking Member Boozman, and Members of 
the Subcommittee on Economic Opportunity, I am pleased to appear before 
you today on behalf of the National Association of State Approving 
Agencies (NASAA) to provide NASAA's view on the current state of the 
MGIB-AD and MGIB-SR, to make recommendations to update the MGIB, and to 
recommend possible legislation to be considered by the Subcommittee.
Remarks:
1. Current State of the MGIB-AD
    The fundamentals of the active duty GI Bill remain essentially 
sound. The recent changes allowing flexibility in MGIB utilization for 
accelerated payments and payments for Licensing and Certification have 
been viewed positively by benefit recipients, and annual COLA 
readjustments are important in the effort to keep pace with the rising 
cost of an education.
    Of course, it is widely known that the cost of an education in this 
country has out stripped the inflation rate by a wide margin for a 
number of years, and as a result the educational benefits provided to 
our MGIB recipients under its various Chapters continue to fall far 
short of actually paying for all of a college education, and in fact 
are paying for an increasing smaller and smaller percentage of that 
education.
    We find it very unfortunate that the increased benefits rates for 
Apprenticeships and Other On-the-Job Training (OJT) are being allowed 
to lapse back to their previous rates on the first of the year in 2008. 
The increased rates of 85 percent for the first six (6) months, 65 
percent for the next six (6) months, and 45 percent for the remainder 
of the training was viewed as a good step toward equity with those 
veterans who are receiving benefits because they are able to choose 
either educational or vocational objectives at Institutes of Higher 
Learning or Non-College Degree programs.
    The return to a lower reimbursement rate for those in the OJT and 
Apprenticeship programs will mark the first time most of us have had 
the experience of watching an MGIB benefit decrease, and we know, by 
way of feedback from the field, that this benefit reduction is not 
being greeted with a great deal of enthusiasm.
    Additionally, from NASAA's perspective, we remain convinced that 
the members of active military who choose to use the MGIB while still 
in the active service should not be penalized by the having the 
entitlement reduction calculations made differently from those eligible 
veterans who have already left the service.
    The speed of benefit payment for benefit recipients enrolled in 
schools, particularly after the initial waiting period for the first 
semester, seems to have improved because of the implementation of 
VAONCE.
    At the same time the delays encountered for the payments of 
benefits to those benefit recipients receiving either Apprenticeship or 
OJT remain exceeding slow. The initial wait for OJT benefits, for 
instance, is routinely in the six (6) to eight (8) month timeframe.
    As an example many Police Officers will receive their first benefit 
check while still attending an eight (8) week academy, while the same 
veteran easily waits six (6) months before receiving his or her first 
request for hours worked under OJT or Apprenticeship.
2. Current State of the MGIB-SR
    As you know, the MGIB-SR (Chapter 1606) had traditionally been pro-
rated to the MGIB-AD (Chapter 30). The SR rate was historically about 
47 percent of the benefit amount paid to the AD component. Ironically, 
about the same time the rates for AD and SR became decoupled, and the 
SR payment rates decreased to its historical low of about 29 percent, 
roughly where it remains today, the operational tempo for the Selected 
Reserve component increased to its historical high, roughly where it 
also remains today.
    This decoupling of the historical benefit ratios between AD and SR 
benefits took place because the two sides of the MGIB, AD and SR, are 
respectively located in two different titles of the U.S. Code, title 38 
for the AD component, and title 10 for the SR component.
    The effort to redress this decreased benefit and increased usage of 
the SR component resulted in REAP, the Reserve Educational Assistance 
Program, or Chapter 1607 by which it is also known. REAP has been well 
received, but continues to have its own issues. The first of these is 
that in some parts of the country REAP is either not widely known and/
or not widely understood by the Selected Reservists themselves.
    Additionally, as currently constructed, the REAP benefit ceases as 
soon as the member leaves the service, even after honorably completing 
his or her six (6) years of obligated service. Moreover, even members 
of the Guard or Reservists who have successfully completed an entire 
career in their respective service, and who may have recently been 
deployed to Iraq and/or Afghanistan find it shocking when they are 
informed that they do not have educational benefits due them when they 
retire. More frequently they are denied educational benefits they were 
lead to believe they had, when they first apply to the VA for those 
education benefits.
    The experience of our members in NASAA has been that the Selected 
Reserve members themselves generally have a poor understanding of the 
MGIB-SR benefits that they actually have, and most of the time they 
thought the educational benefits were significantly more than they 
turned out to be, and a large portion of them were completely unaware 
of the reality that their educational benefits were entirely lost when 
they finished their obligation, particularly surprised are those who 
retire after a career of service.
    Another unpleasant surprise for members of the Guard and Reservists 
returning from a second overseas deployment is that REAP, as currently 
configured, provides the educational benefit for the longest of the two 
(2) deployments, and is not based on the cumulative sum of months 
deployed, which effectively guarantees that for educational benefit 
purposes, one of the deployments, ``doesn't count.''
    Finally, the requirement for the DoD and VA to interact on 
eligibility issues, and the fact that the St. Louis RPO is responsible 
for handling the Chapter 1606 and Chapter 1607 benefit payments for 
Flight Training, Correspondence programs, Apprenticeship and Other On-
the-Job Training (OJT) adds another level of complexity and delay to a 
system already stressed.
3. Recommendations to Update the MGIB
    NASAA stands 100 percent behind the concept of a ``Total Force GI 
Bill'' and that issue is, and has been for some time, the #1 item on 
NASAA's Legislative Agenda (attached). As stated in our Legislative 
Agenda, ``Replace Chapters 30, 1606 and 1607 with A TOTAL FORCE GI 
BILL. This would provide MGIB reimbursement rate levels based on an 
individual's service in the Armed Forces, including the National Guard 
and Reserve.
    There are number of excellent reasons to adopt the concept of a 
Total Force GI Bill:

    1.  Portability--The dramatically increased, and ever-increasing, 
utilization of the Selected Reserve component of our Armed Services led 
to the creation of the REAP benefit. That in turn has had two (2) 
unintended, but nonetheless, adverse consequences for SR component 
members entitled to both Chapter 1606 and Chapter 1607 benefits.
          The first is that a member of the Guard who knows his or her 
unit is due for deployment will refrain from using his Chapter 1606 
benefits while he or she is drilling, and might otherwise have been in 
a position to use his or her benefits, because he or she knows that if 
(s)he gets deployed (s)he will not be able to finish his or her 
studies, and may even be forced to withdraw during the semester 
resulting in an overpayment issue.
          The second is that he or she may decide instead to wait to 
attend school, based on the notion that his/her educational benefits 
will increase as a result of his/her deployment. Unfortunately, when 
(s)he returns and finally has the opportunity to use those Chapter 1607 
benefits, in many cases, (s)he finds out that those increased 
educational benefits aren't available because, either through 
completion of obligation or retirement, he or she is no longer 
drilling.
          The Total Force GI Bill resolves these issues because of its 
feature that replaces Chapter 1607 with its month of educational 
benefit for month of active service and portability provisions.

    2.  Fairness--The common notions of fairness require equal benefit 
for equal service. The concept of having educational benefits 
commensurate with sacrifice is at the heart of our preferred update to 
the MGIB, the Total Force GI Bill.
          At a time when the Selected Reservists are asked to sacrifice 
like never before, to risk life and limb in the same arduous and 
hostile environments as the active forces, there is no realistic way to 
defend the current MGIB's benefit discrepancies to the those warriors 
who have served together on those dangerous deployments.
          As discussed above, many of the SR members actually assume 
that equity is built into the MGIB, and are gravely disappointed when 
they discover that the current complex system is really three (3) 
separate Chapters which reward service at varying, seemingly arbitrary 
levels.
          In many cases the educational benefits are simply 
incomprehensible to them.

       a.  For instance, should a member of the Guard receive the same 
benefit for 91 days or 364 days of service?
       b.  If he or she is lucky enough to have been deployed for 366 
days, should his or her educational benefits be increased by 50 percent 
(40 percent to 60 percent) for those 2 extra days?
       c.   Should one Selected Reservist miss out on educational 
benefits because that member has only 6 months of obligated service 
left? While at the same time another member of the same unit who was 
deployed with him or her and who has four (4) years of obligated 
service remaining will receive those educational benefits.
       d.  Should a Master Sergeant with decades of service, and 
multiple deployments find out either just before he or she retires, or 
soon thereafter that (s)he has absolutely no educational benefit 
whatsoever, after all of that dedicated and dangerous service to our 
country?

          The Total Force GI Bill resolves these issues because of its 
feature that replaces Chapter 1607 with its month of educational 
benefit for month of active service and portability provisions.

    3.  Administration--The complexities in the administration of the 
various Chapters of the MGIB are legendary. The current configuration 
of the MGIB which forces endless interactions between DoD and the VA, 
with separate, and often incompatible, IT support systems unnecessarily 
places burdens on all parties reliant on the in-place administrative 
architecture of the MGIB.
          The Total Force GI Bill by shifting most responsibilities 
into title 38, by recommending state of the art and integrated IT 
systems, by recommending simplified educational benefit and payment 
schemes, by streamlining claims processing, and by reducing 
administrative redundancies the actual understanding of and payment of 
benefits will be simplified.

    4.  Legislative Action
          NASAA feels strongly that the hard won increase of benefits 
which were provided to those utilizing the Apprenticeship and OJT 
benefits, which increased to monthly benefit rate by 10 percent across 
the board, should not be allowed to lapse. We strongly support any 
legislation which would seek to prevent that drop in the benefit rate.
          We believe that a host of irregularities which arise under in 
the current MGIB educational benefit structure will only be solved by 
adopting the new structure provided by the Total Force GI Bill. The 
three (3) separate MGIB Chapters 30, 1606, 1607 at various times 
control and/or conflict when determining payment to an eligible benefit 
recipient.
          For instance, a veteran who has not used any of his or her 
educational benefits, and who is now also an active reservist, and has 
just returned from deployment, faces a series of decisions regarding 
how and when to use which of his or her available educational benefits. 
The complexities and lack of understanding regarding these various 
options is staggering, and as a result the entire system is not being 
served well.
          It is NASAA's position that key to resolving a constellation 
of troublesome issues, is to place the MGIB-AD and MGIB-SR into title 
38, U.S.C. This one move will then force the real integration of the 
MGIB to reflect the actual integration which has already taken place 
within the Armed Services. We fully support any legislation which seeks 
to accomplish that goal.
Summary
    NASAA wholeheartedly supports the Total Force GI Bill. We believe 
the events have overtaken the original 1985 edition of the MGIB. Our 
experiences today are leading us strongly to the conclusion that a 
major overhaul of the MGIB is now overdue.
    Once the Selected Reservists were seen as part of the total force 
structure, and certainly once they started being utilized as an 
integral part of a total force which has been our collective experience 
for over six (6) years now, then surely it is time for a GI Bill which 
reflects the concept of the total force, a Total Force GI Bill.
Closing
    In closing, Mrs. Chairwoman, I would like to thank you for 
providing me with the opportunity to present NASAA's views on these 
vital issues. Thank you also for efforts that you and your Committee 
have been putting forth to improve to the educational and training 
benefits for those who wear the uniform of this nation's military. I 
would be happy to respond to any questions you may have.

                               __________
                           Legislative Agenda
                Adopted By the Association July 19, 2006
                         Major Recommendations
 1.  Recommendation--Replace Chapters 30, 1606 and 1607 with a Total 
        Force GI Bill. This Bill would provide MGIB reimbursement rate 
        levels based on an individual's service in the Armed Forces, 
        including the National Guard and Reserve.
      A.  The first tier--similar to the current Montgomery GI Bill, 
Active Duty (MGIB-AD) 3-year rate--would be provided to all who enlist 
for active duty. Service entrants would receive 36 months of benefits 
at the AD Rate.

      B.  The second tier or level would be for all who enlist or re-
enlist in the Selected Reserve (SelRes) for 6 years, and this would 
entitle them to 36 months of benefits at a pro-rata amount of the 
active duty rate (initial ratio in 1985 was 47 percent.)

      C.  The third tier would be for members of the SelRes and 
Inactive Ready Reserve (IRR) who are activated for at least 90 days. 
They would receive 1 month of benefit for each month of activation, up 
to a total of 36 months, at the active duty rate. These months of full 
benefits would replace, month-for-month, any SelRes entitlements at the 
second tier. The maximum benefit a member of the SelRes could receive 
under this provision would be the equivalent of 36 months at the active 
duty rate. (Note: Maximum benefit is without consideration to multiple 
entitlements.)
            An individual would have up to 10 years to use the active 
duty or activated-service benefit from their last date of active/
activated duty or reserve service, whichever is later. A Selected 
Reservist could use remaining second tier MGIB benefits as long as he/
she were satisfactorily participating in the SelRes, and for up to 10 
years following separation from the reserves in the case of separation 
for disability or qualification for a reserve retirement at age 60.
            All provisions (e.g. additional contributions), and 
programs (e.g. accelerated payments, approved test fee reimbursement, 
etc.) eligible for payment under the current MGIB-AD program would be 
available under all three levels. Under this plan DoD would continue to 
be able to provide Recruitment and Retention incentives such as loan 
repayment, kickers for ``college'', and enlistment bonuses.
            Rationale: A major reason for this recommendation is equity 
for members of the Selected Reserve and Ready Reserve who are called to 
active duty service--equal programs and opportunities for equal service 
to country.
            The proposal also provides an additional recruitment 
incentive to the Selected Reserve Forces since the new program would 
include a transition and readjustment provision for members who are 
activated for more than 90 days.
            Placing the Total Force GI Bill within title 38 U.S.C. will 
greatly simplify the administration of the (GI Bill) educational 
assistance program for all members of the armed services, both Active 
Duty and Reserve Forces, as well as ensure that all future benefits are 
upgraded equitably.
            The GI Bill has traditionally been viewed as a grateful 
Nation's way of showing its appreciation for the sacrifices of service, 
separation, and combat. The new Total Force GI Bill reflects the new 
realities which have transformed this nation's security environment 
since the second week of September '01.
 2.  Recommendation--Continue to expand the readjustment purpose of the 
        Veterans' educational assistance programs to permit continuous 
        training, retraining, re-licensing and enrollment in skill 
        improvement courses. For example, revise Section 3452(c) of 
        Title 38, U.S. Code to provide for the use of VA educational 
        assistance benefits for enrollment in any unit course or 
        subject, or combination of courses or subjects (title 38 
        terminology) necessary to obtain, maintain, or advance in a 
        profession or vocation.
         Rationale: In today's society the concept of lifelong learning 
has risen to a new level of importance. Very few occupations or 
professions remain static; there is the constant requirement for 
workers to upgrade their knowledge and skills in order to remain 
competitive. The current educational earned benefit programs for 
veterans and other eligible persons generally require the VA 
beneficiary to be enrolled in a full-scale program of education; i.e., 
one that leads to a traditional degree, diploma or certificate. 
Although recent legislation provides more flexibility, there is still 
the need to permit even greater use of benefits for enrollment in 
short-term learning experiences that will help a veteran to maintain a 
level of expertise commensurate with the ongoing demands of their 
chosen occupation or profession. A key phrase that expresses the intent 
of this recommendation already is embedded in law--education and 
training that qualifies the eligible person ``to enter into, maintain 
or advance in employment in a predetermined and identified vocation or 
profession''.
         As stated, the law already provides for limited use of 
benefits for course(s) ``to fulfill requirements for the attainment of 
a license or certificate . . . in a high technology occupation''. The 
specific example expands the provision to all professions and 
vocations/occupations; recognizes that a single unit course or subject 
may be all that a veteran needs to obtain, maintain, or advance in a 
profession or vocation; and, provides for the use of benefits while 
enrolled in a subject or a combination of subjects without requiring a 
connection to a license or certificate.
 3.  Recommendation--Continue the rate of educational assistance 
        benefits currently in place for veterans enrolled in 
        Apprenticeship and other On-the-Job Training programs.
         Rationale: The law was changed, effective October 1, 2005, to 
increase the rate of benefits received by veterans and other eligible 
persons who are enrolled in apprenticeship and OJT programs. The rate 
is now 85 percent of the full time institutional rate for the first 6 
months, 65 percent for the second 6 months of training and then 45 
percent for the third and any succeeding period of time. This increase 
is for a limited period of time--it expires on September 30 of 2007. It 
is too early to know for sure, but early indications are that the 
increases have had a positive effect on the ability of veterans to use 
this way of gaining knowledge and skills for the occupations or 
professions of their choice. In combination with extensive outreach 
activities, there has been a 39.9 percent increase in the number of 
approved and active training establishments from 1997 to 2003, and a 
53.8 percent increase in the number of program approval actions at job 
training establishments from 1997 to 2005. We anticipate continual 
growth in the use of job training programs.
           Legislative Agenda, Part 2--Other Recommendations
   Adopted By the Association July 19, 2006 (unless otherwise noted)
 4.  Recommendation--Rescind $1200 pay reduction for MGIB, Chapter 30, 
        eligibility.
         Rationale: This requirement for MGIB eligibility is not 
consistent with the true intent of a grateful Nation to provide a GI 
Bill to those who serve in its defense. It also is not consistent with 
most past GI Bills that we have enacted. It is time to rescind this 
requirement.
 5.  Recommendation--Provide an ``open window'' to Chapter 32 period 
        servicemembers to enroll in the MGIB and for other active duty 
        servicemembers to withdraw their election to not enroll in the 
        MGIB.
         Rationale: There are still many servicemembers on active duty 
who did not participate in or who withdrew their contributions to the 
Veterans' Educational Assistance Program (VEAP). Equally important is 
the fact that some other active duty servicemembers are not eligible 
for the MGIB. Many of these have served and will continue to serve ``on 
the frontlines'' in the defense of our Nation. All current 
servicemembers should have access to the same education and training 
opportunities as their counterparts who are eligible for benefits under 
Chapter 30.
 6.  Recommendation--Revise the method by which entitlement is charged 
        to servicemembers who use their GI Bill while serving on active 
        duty so that the charge is the same as that applied to all 
        other VA benefit eligible persons.
         Rationale: Servicemembers who use their GI Bill while serving 
on active duty should not be penalized for doing so. Current law 
reduces the servicemember's entitlement 1 month for each month of 
enrollment regardless of the rate of pursuit and benefits received. We 
believe that this practice is totally unfair and unjustifiable.
 7.  Recommendation--Revise Section 3014A to allow accelerated payment 
        of basic educational assistance for education leading to 
        employment in industries other than ``high technology'' and 
        place limitations on the length of such programs for use of the 
        provision. Additionally, revise the section to allow the VA to 
        use only the MGIB ``base rate'' as the basis for the 
        accelerated payment 200 percent calculation, not the base rate 
        plus ``kickers'', optional contributions, etc., as currently 
        factored into the ``otherwise payable benefit''.
         Rationale: Even with the recent increases in the monthly 
benefit amount, some veterans find it cost prohibitive to enroll in an 
institutional program that will provide the knowledge and skills 
necessary for them to reach their occupational or professional 
objective. Removing the current restriction that requires enrollment in 
a program that leads to employment in a high technology industry would 
allow greater opportunities for more veterans to use their GI Bill 
benefits. Additionally, revise the law to limit the length of a program 
that qualifies for accelerated payment to 2 years. The discussions that 
led up to the enactment of the original legislation centered on short 
term high technology courses. The language that was enacted does not 
impose any limitations on length, therefore all high technology 
programs, including many 4 year degree programs, qualify.
         The recommendation regarding the use of the ``base rate'' is 
offered because veterans who take advantage of the $600.00 buy-in, are 
34/30 conversions, have kickers, or any combination of these programs 
can be penalized by having their additional monthly payment amount 
disqualify them for accelerated payment under the current calculation 
method.
 8.  Recommendation--Revise the period of operation (two year) rule to 
        exempt certain non-degree programs. The programs would be ones 
        that are offered by (1) an accredited, degree granting, 
        proprietary for profit or not for profit educational 
        institution or (2) a degree offering branch of such 
        institutions when the institution has at least one degree 
        program already approved for GI Bill purposes.
         Rationale: The intent of Congress when it revised the period 
of operation rule in 1996 can be found in several documents issued 
during 1995 and 1996. The following excerpt taken from the Explanatory 
Statement on S. 1711, As Amended, summarizes that intent. ``Section 201 
of H.R. 3673 would: (a) remove the two year rule restriction on all 
degree granting institutions, including branch campuses (but not on 
non-degree granting institutions) . . .'' Changing the rule in 
accordance with the Recommendation would affect branch locations since 
in most, if not all, cases the parent campus will have been in 
operation for two years before attaining accreditation. The change also 
would be consistent with the determinations that already have been made 
about the quality and integrity of the degree programs offered by the 
institution and the capacity of the institution to fulfill its 
commitment to students.
 9.  Recommendation--Revise certain sections of Title 38, U.S. Code 
        that pertain to Correspondence courses; specifically Section 
        3672(e) by reducing the six month requirement to complete the 
        program or course to three months, Section 3686(a)(1) by 
        increasing the educational assistance allowance payable from 55 
        percent to 60 percent of reimbursable costs, and Section 
        3686(b) by reducing the ten day enrollment affirmation period 
        to five days.
         Rationale: The law governing the administration of 
correspondence courses was written in a time before there was 
widespread use of computers and the internet. Technology is such today 
that it provides instantaneous interaction between the student and 
instructor. The need to ensure that ample time for ``mail to arrive'' 
is no longer a factor. A five day affirmation period and a three month 
learning experience are both supported by communication standards of 
the day and in line with the changing learning environments of the 21st 
Century. Condensed, short term programs of education are offered by 
various institutions and can fulfill the needs of many veterans as they 
pursue their occupational or professional goals.
10.  Recommendation--Revise Section 3680A(a)(4) by adding a new 
        subpart, ``or (C) remedial or deficiency courses required by an 
        accredited institution of higher learning for entrance into one 
        of their approved postsecondary programs of education''.
         Rationale: The law currently provides for the payment of VA 
educational assistance benefits for enrollment in remedial and 
deficiency courses required for successful entrance and completion of a 
degree, diploma or certificate program of education if required by the 
postsecondary educational institution in which the veteran is seeking 
to enroll. These types of courses are currently offered by 
postsecondary institutions as a traditional classroom experience or 
through technology as online education. This change would provide 
veterans with opportunities to use their benefits when enrolled in 
either delivery mode; online course enrollments are currently 
prohibited.
11.  Recommendation--Revise Section 16162(c)(3) of Chapter 1607 of 
        title 10, U.S. Code to eliminate the further reduction of 
        benefits for veterans enrolled in flight training and 
        correspondence programs by including the word ``not'' in the 
        last phrase of the sentence which constitutes the section. [``. 
        . . that rate shall not be further adjusted by the applicable 
        percent specified in paragraph (4).''] (This recommendation 
        accepted September 14, 2006)
         Rationale: Under the current wording of the law, a member of 
the Selected Reserve who is activated and qualifies for the Chapter 
1607 program would receive less in GI Bill benefits for flight and 
correspondence programs than a Chapter 1606 eligible member who is not 
activated. This is due to the multiple calculations required by Section 
16162(c)(3) of Chapter 1607 of title 10. At a minimum, the law should 
be revised to the extent that it provides at least the same level of 
benefits to a chapter 1607 eligible person as it does for those who 
qualify for chapter 1606.
12.  Recommendation--Remove veterans' educational assistance benefits 
        from all calculations for determining eligibility for title IV, 
        Student Financial Aid.
         Rationale: GI Bill benefits are intended to be an entitlement 
to which all who serve in the Armed Forces of our Nation are eligible. 
Moreover, it has always been the intent of Congress that the GI Bill be 
the premier program in our Nation to help our citizens to further their 
education and training. Inclusion of GI Bill benefits in any formula 
for determining the amount of student financial aid available under 
other federal programs is not consistent with these goals nor the 
sacrifices made by those who protect the freedoms that we all so 
thoroughly enjoy.
13.  Recommendation--Reinstate the Veterans Education Outreach Program.
         Rationale: For many years the Veterans Education Outreach 
Program (VEOP) and its predecessor, the Veterans Cost of Instruction 
Program, were very successful in reaching out and providing assistance 
to veterans. A campus-based program, VEOP helped to inspire and build 
confidence in those who were hesitant to use their GI Bill educational 
assistance benefits. External services ranged from general outreach 
activities such as public service announcements and the production of 
information documents to participation in local and statewide career 
fairs. Internal services included career and personal counseling and 
assistance with the completion of documents associated with the 
enrollment in a program of education as well as those for the GI Bill 
benefits for which the veteran was entitled. The Montgomery GI Bill has 
been in existence since 1985 and although veterans have $1,200 of their 
own money invested, usage of the program remains relatively low. It is 
time for this once proven effective program to be reinstated with 
appropriate provisions to ensure its success within the context of its 
intended purpose so as to maximize the opportunities for cooperation 
between and contributions by educational institutions, the Department 
of Veterans Affairs and State Approving Agencies.

                                 
              Prepared Statement of Allison Jones, Member,
           Advisory Committee on Student Financial Assistance
    U.S. Department of Education, and Assistant Vice Chancellor for 
         Accademic Affairs, California State University System
    Chairwoman Herseth Sandlin and Members of the Subcommittee on 
Economic Opportunity:
    On behalf of the Advisory Committee on Student Financial Assistance 
(Advisory Committee) Chairperson, Judith Flink, and other Committee 
Members, thank you for the opportunity to provide testimony on the 
Montgomery GI Bill education benefits (MGIB) and title IV federal 
financial aid. My name is Allison Jones, and I am testifying as a 
member of the Advisory Committee. As Assistant Vice Chancellor for 
Academic Affairs, Student Academic Support for the California State 
University System, I am also involved in the California Troops to 
College initiative and an ardent supporter of efforts to increase 
veterans' access to postsecondary education.
    The Advisory Committee was authorized by Congress in the 1986 
amendments to the Higher Education Act. For more than 20 years, we have 
provided independent and objective advice and counsel to Congress and 
the Secretary of Education on federal student aid policy. Our most 
important legislative charge is to make recommendations that maintain 
and improve college access and persistence for low- and moderate-income 
students. In fulfilling that charge, we have played an active role in 
keeping federal, state, and institutional student aid policy focused on 
access and persistence, thereby protecting the best interests of our 
Nation's low- and moderate-income students. Although we have 
traditionally worked most closely with the House Committee on Education 
and Labor and the Senate Committee on Health, Education, Labor, and 
Pensions, we appreciate this opportunity to share our knowledge of 
financial aid programs with you and your Subcommittee in order to 
assist our Nation's veterans.
    Your letter requests that testimony be offered in the following 
three areas:

      the current state of the MGIB for Active Duty and 
Selected Reserve,
      recommendations to update the MGIB,
      legislative action that might be considered by your 
Subcommittee in relation to title IV.

    Given the Advisory Committee's previous work and expertise in 
federal student aid, my testimony will be limited to your third 
request: legislative action that might be considered in relation to 
title IV. More specifically, I will explain the interaction between the 
MGIB and title IV federal student financial aid programs. The question 
I will be addressing is whether MGIB restricts in any way eligibility 
for need-based title IV student aid. I would note that my statements 
are not directed at whether MGIB education benefits are an adequate 
reward for the service of our brave men and women.
Background
    Students receive financial aid from various sources, including the 
federal government (i.e., Pell grant, campus-based aid, federal student 
loans), State governments, institutions, and private sources. In 2005-
06, nearly $135 billion dollars of financial aid from all sources was 
distributed to students.\1\ The federal government represents the 
largest share of student aid from all sources, approximately 70 
percent.
---------------------------------------------------------------------------
    \1\ College Board. 2006. Trends in Student Aid 2005-06. Washington, 
DC.
---------------------------------------------------------------------------
    Although there are various sources and types of aid, my testimony 
will focus on the relationship between the MGIB and need-based title IV 
aid, including Pell grants, loans, and campus-based aid. My testimony 
is based on four sources: the knowledge and experience of our members; 
a review of guidelines and regulations published by the Office of 
Federal Student Aid, U.S. Department of Education; discussions with 
financial aid administrators across the country; and an analysis of the 
2002 Government Accountability Office report on Veterans' education 
benefits.\2\
---------------------------------------------------------------------------
    \2\ Government Accountability Office. 2002. Veterans Education 
Benefits: Comparison of Federal Assistance Awarded to Veteran and 
Nonveteran Students. Report to the Ranking Member, Committee on 
Veterans' Affairs, U.S. Senate. Washington, DC.
---------------------------------------------------------------------------
Effect of MGIB on Title IV Student Aid
    A student's eligibility for need-based federal aid depends on his 
or her ability to contribute to college expenses--the expected family 
contribution (EFC). To determine EFC, the Department of Education (ED) 
requires financial aid applicants to submit the Free Application for 
Federal Student Aid, commonly referred to as the FAFSA. This form 
requests information on the previous year's income, taxes, and assets 
(excluding the value of the student's home), and uses the federal need 
analysis formula to make an assessment of what a student can contribute 
financially to college expenses.\3\ The formula also takes into account 
whether the student is married or has dependents. The EFC is used to 
determine two key amounts:
---------------------------------------------------------------------------
    \3\ Students must reapply for student aid by submitting the FAFSA 
form annually. All veterans are treated as independent students for the 
purposes of the FAFSA.

      a student's Pell grant award,
      a student's total need for student aid (cost of 
attendance minus EFC).\4\
---------------------------------------------------------------------------
    \4\ Cost of attendance (COA) includes all tuition, fees, and living 
expenses. A student's total need is determined by subtracting COA from 
EFC.

    In addition, title IV prohibits an over award: the sum of EFC and 
---------------------------------------------------------------------------
aid from all sources cannot exceed the cost of attendance (COA).

    Effect of MGIB on EFC and Pell. For Veterans, the monthly MGIB he 
or she receives is reported on the FAFSA, but that amount is not used 
in the calculation of the EFC. That is, the amount of MGIB does not 
affect how much the student is expected to contribute to college 
expenses. Consequently, since the EFC is used to determine the 
student's Pell grant award, the amount of MGIB a Veteran receives does 
not affect the Pell grant award to which he or she is entitled.\5\ 
Also, since MGIB benefits do not affect the EFC, they do not affect a 
student's total need (COA minus EFC).
---------------------------------------------------------------------------
    \5\ The amount of Pell grant a student is eligible for is equal to 
the maximum Pell grant amount, currently $4,310, minus the EFC.

    Effect of MGIB on Student Loans. While the effect of MGIB on Pell 
grant and EFC is straightforward, the effect of MGIB on eligibility for 
loans is complicated and depends on the category of benefit, the type 
of loan, the year of enrollment, and the student's EFC.
    The Federal Stafford Loan program provides subsidized loans 
(government pays interest while you are in school) and unsubsidized 
loans (the student pays all the interest, but payments can be deferred 
until after college graduation) to students. To receive a subsidized 
loan, the student must demonstrate financial need. Briefly:

      for Active Duty personnel, MGIB does not affect the 
amount of subsidized Stafford loan the student is eligible to receive.
      for Selected Reservists, MGIB does limit, and can 
eliminate, the student's eligibility for subsidized Stafford loans.
      for both Active Duty and Selected Reserve, MGIB benefits 
do affect unsubsidized Stafford loans.\6\
---------------------------------------------------------------------------
    \6\ Eligibility for unsubsidized Stafford loans is determined by 
subtracting the EFC and all sources of financial aid from the total 
cost of attendance of the institution of higher education in which the 
student enrolls.

    Effect of MGIB on Other Student Aid. There are three campus-based 
programs that allocate funds to each college to distribute to eligible 
students: \7\
---------------------------------------------------------------------------
    \7\ Campus-based aid programs are administered by the university. 
The federal government provides the university with a fixed annual 
allocation, which is awarded to needy students by financial aid 
administrators. Because the pool of available funds is fixed, not all 
eligible students receive aid.

      the Federal Supplementary Educational Opportunity Grant 
(FSEOG),
      the Perkins Loan, and
      Federal Work-Study.

    While MGIB benefits do not affect a student's Pell grant, EFC, or 
total need, they can affect awards under campus-based aid programs 
because of the prohibition against overawards. For example, if a 
student's EFC, Pell grant, and MGIB equal or exceed COA, awards under 
these other programs can be eliminated. However, an exception is 
allowed for subsidized Stafford loans, which can offset MGIB. Only in 
cases where the veteran's full need (COA minus EFC) is fully met by 
Pell grant, State grants, MGIB, other resources, and subsidized loans 
can the prohibition against over awards limit campus-based awards. Even 
in this case, aid administrators can exercise their discretion to 
disburse campus-based aid up to the amount of subsidized Stafford loans 
that offset MGIB. Also, the student can borrow an amount equal to EFC 
in unsubsidized loans, Graduate PLUS loans (if a graduate student), and 
state-sponsored or private loans.\8\
---------------------------------------------------------------------------
    \8\ Unsubsidized and Graduate PLUS loans are provided by the 
federal government. State-sponsored loans vary according to state; 
private loans vary according to the lending entity.
---------------------------------------------------------------------------
    More research is needed to assess the interaction of MGIB on other 
sources of aid, including federal tax incentives, the Academic 
Competitiveness Grant (ACG) and National SMART Grant, and State grant 
aid.\9\
---------------------------------------------------------------------------
    \9\ There are different types of tax incentive programs, including 
the HOPE and Lifetime Learning credits. These credits are non-
refundable and the amount of the credits can vary depending on family 
circumstances and cost of tuition, among other factors. These credits 
are not legislated by title IV, but are actually a part of the U.S. Tax 
Code.
---------------------------------------------------------------------------
Potential Legislative Actions
    Three potential changes in title IV might be considered:

      First, Selected Reserve benefits could be treated like 
Active Duty benefits in the consideration of subsidized Stafford loans. 
This benefit would improve parity between the two GI Bill programs--for 
Active Duty and Selected Reserve--and increase access to the subsidized 
loan program for Reservists.
      Second, the exception that allows for campus-based aid to 
be distributed up to the amount of subsidized Stafford loans, might be 
required, rather than discretionary. This benefit would increase 
Veterans' access to the campus-based aid programs.
      Third, an exclusion for unsubsidized loans similar to the 
one for subsidized loans, could be implemented. This benefit would 
allow Veterans to borrow additional funds to cover educational 
expenses.

    Whether such changes are necessary or desirable--including an 
assessment of unintended consequences--requires a thorough review by 
your Committee, relevant education Committees in the House of 
Representatives and Senate, the Department of Veterans Affairs, 
Department of Education, and the financial aid community.
    On behalf of Advisory Committee members, thank you again for this 
opportunity to testify before you today. We look forward to continuing 
to provide you with technical assistance on the matters discussed 
today.

                                 
             Prepared Statement of James Bombard, Chairman
 Veterans Advisory Committee on Education, U.S. Department of Veterans 
    Affairs, and Chief, New York State Division of Veterans Affairs,
                      Bureau of Veterans Education
Introduction
    Chairwoman Herseth Sandlin, Ranking Member Boozman and Members of 
the Subcommittee on Economic Opportunity, I am pleased to appear before 
you today on behalf of the Department of Veterans Affairs (DVA) 
Secretary's Veterans Advisory Committee on Education (VACOE) to provide 
the Committee's views on the current state of the MGIB-AD and MGIB-SR; 
recommendations to update the MGIB; and possible legislative action 
that should be considered by the Subcommittee
State of MGIB-AD-SR

     Seamless Transition Program Flexibility and Claims Processing

    It is the Advisory Committee's (VACOE) view that program 
flexibility and efficient claims processing are the keys to a veteran's 
seamless transition of providing earned education benefits to eligible 
participants. It should also be noted that in the past the Committee 
made a number of recommendations designed to increase program 
flexibility, i.e. accelerated payment without restriction, expansion of 
test reimbursement, removing or extending the delimiting date, 
equalizing the benefit for OJT/Apprentice programs in relation to IHL 
and NCD education/training programs, and removing restrictions on wage 
progression for municipal employees.
    The reason seamless transition is difficult to accomplish is that 
when the Montgomery GI Bill was created by legislation in 1984, it was 
both similar and different from previous GI Bills. It was similar in 
that it provided a benefit for veterans who chose to enroll in an 
educational program at an approved education or training institution. 
Like the previous programs the maximum benefit was payable to veterans 
training full-time, with prorated amounts available for veterans 
training three-quarters time, half time, or less than half time. The 
level of benefits also depended on whether a veteran was attending a 
traditional degree-granting institution or was enrolled in on-the-job 
training, apprenticeship, or cooperative training programs. It was 
different because previous Education Programs (EP), special rules 
provided higher benefit levels for persons having eligibility for the 
prior Vietnam-era EP, with lower benefits authorized for persons 
enlisting for a period of less than 3 years. Another unique feature of 
the Montgomery GI Bill (MGIB) was that it authorized benefits for those 
in the Selected Reserve (Chapter 1606 program), although the maximum 
monthly benefit was much lower than the Active Duty rate. Additionally, 
the MGIB authorized ``kickers'', or additional monthly benefits for 
certain veterans in certain military occupations and ``buy-ups'' for 
veterans seeking higher monthly benefits.
    In addition to the aforementioned features which add substantial 
complexity to eligibility and payment amount determinations, other 
provisions made the MGIB more complicated than previous EPs. The 
inadequacies of EPs which preceded the MGIB led to legislation 
authorizing persons eligible for earlier EPs to choose to become 
eligible for the MGIB. Special ``top-off'' tuition assistance benefits 
and ``accelerated'' or licensing and certification benefits were also 
authorized. Most recently, a new ``Chapter 1607'' EP was created for 
``Reserve Component Members Supporting Contingency Operations and 
Certain Other Operations''. The eligibility rules and benefit rates for 
these servicemembers are different than those for persons who enlist 
for 2 or 3 years in the Active-Duty program or who enlist in the 
regular Selected Reserve.
    To further compound the issue, the adoption of the Total Force 
structure, made the reserve/guard an integral part of the active duty 
force. Hence, some veterans became eligible for multiple programs i.e. 
Chapter 1606, 1607 and 30.
    Congress, although well meaning, tends to create new initiatives 
designed to shore up existing deficiencies in the current MGIB; without 
dealing with the administrative problems inherent in trying to 
integrate new program components in the established MGIB. As a result 
of the proliferation of eligibility categories and benefit levels fewer 
educational claims are straightforward. The complexities of a number of 
new GI Bill opportunities have resulted in a cumbersome data management 
system that does not timely respond to the needs of veterans and other 
GI Bill eligible recipients.
    The existing array of supplemental GI Bill programs, coupled with 
multiple program eligibility, suggest a strong need for a comprehensive 
GI Bill program as outlined in the VACOE letter to the Secretary on 
July 8, 2005 entitled Total Force GI Bill.
    It is the Committee's belief that the DVA Education Service, in 
conjunction with Congress, can create an effective, efficient claims 
processing system by adopting the following:

    1.  Restructure the GI Bill; i.e., Total Force, thus streamline 
claims processing.
    2.  Create a synergistic relationship with Congress in order to 
ensure feasibility and support for any additional programs associated 
with the GI Bill
    3.  Improve information exchange between DoD and DVA. The need for 
constant communication between DoD and DVA would be minimal with 
restructure of GI Bill.
    4.  Invest in state-of-the-art IT systems
    5.  Hire additional staff to do claims processing or at a minimum 
maintain budget direct FTEs
Recommendations

                              Total Force

    The Advisory Committee, after nearly 2 years of studying the 
Montgomery GI Bill (MGIB), recommended a fundamental change to the 
structure of the MGIB; and also put forth the framework for a new GI 
Bill that reflects the realities of the Total Force policy.
    It is the Committee's belief that this restructuring is necessary 
to incorporate program flexibility, ease of administration and equity 
of service rendered.
    Both the Active Duty and Selected Reserve (SelRes) programs share 
the same name and are part of the same legislation, but they have 
different purposes. The Active Duty (AD) program revolves around 
recruitment and transition/readjustment to civilian status while the 
SelRes program is designed to promote recruitment and retention, with 
no regard for readjustment or transition.
    The current GI Bill programs did not consider DoD's use of the 
SelRes for all operational missions. Under this policy the SelRes and 
some members of the Individual Ready Reserve (IRR) are considered 
integral members of the Total Force. Reserve members who are faced with 
extended activations require similar transition and readjustment 
benefits as those available to separating AD service men and women. 
Although the new reserve GI Bill educational benefits program 
authorized under Chapter 1607 of title 10, U.S. Code attempts to 
address this issue, it remains primarily a retention tool, requiring 
continued reserve service.
    For these reasons we recommend replacing the separate GI Bill 
programs for veterans and reservists with one program that consolidates 
all GI Bill programs under one umbrella (title 38, Code). This would 
include enrolling all currently eligible personnel in Chapters 30, 1606 
and 1607 in the new Total Force GI Bill. This approach will add value 
to the Montgomery GI Bill (MGIB) as a recruitment and retention tool 
for the Armed Forces, including National Guard and Reserve; establish 
equity of benefits for returning Guard and Reserve members; support 
Congress' intent for the MGIB (see Attachment C); and potentially save 
taxpayer money through improved administration.

                               Background

    In the 20 years since the Montgomery GI Bill went into effect on 
June 30, 1985 the nation's security environment has changed radically 
from a fixed Cold war to a dynamic ``Global War on Terror.'' In 1991 
the Active Duty Force (AF) of the Military stood at 2.1 million; today 
it stands at 1.4 million.
    Since 9/11 more than 480,000 members of the 860,000 Selected 
Reserve (SelRes) have been activated. Today approximately 40 percent of 
troops in are Guardsmen or Reservists.
    Despite this, the Montgomery GI Bill (MGIB) and the Montgomery GI 
Bill--Selected Reserve (MGIB--SR) still reflect the situation that 
existed in 1984. Then the members of the Selected Reserve rarely served 
on active duty. The idea that any projection of power would require the 
activation of at least some reservists was never considered in creating 
these programs.
    Because most reservists have both careers and families which are 
embedded in towns and cities across the country, these activated 
citizen-soldiers--mayors, police chiefs, firefighters, and small 
businessowners--face additional burdens as financial and career 
obligations mount, while their families, employers, and communities 
frequently face significant sacrifices and hardships as well.
    This has led to inequitable situations. First, Selected Reserve 
members and members of the Individual Ready Reserve (IRR) may be called 
to active duty for considerable periods, but less than 2 years. When 
they return to civilian life, what is available to help them readjust? 
They have nothing at all if their active duty is at the end of their 6-
year commitment to the Selected Reserves.
Legislation

                      Proposed Total Force GI Bill

    In the face of these dramatic changes in the nature of Reserve 
Force (RF) usage, and recognizing that the Active and Reserve Forces 
have become inextricably integrated as a Total Force, the Committee is 
proposing an updated GI Bill which accepts the new security realities 
of the open-ended Global War on Terror, the recruiting and retention 
issues which arise from it, and the expanded role that the RF plays in 
this modern era. The current members of the RF are being asked to 
perform in a manner literally unprecedented since WWII.
    As the distinctions between the active and reserve force continue 
to diminish the difference in treatment between the active and reserve 
forces in the GI Bill should decline accordingly. Benefits need to 
remain commensurate with sacrifice/service.
    From 1985 through 1990, a period of relative quiescence for the RF, 
Reservists, under Chapter 1606 of Title 10 U.S.C., were receiving 47 
percent of the educational benefit of active force Montgomery GI Bill 
participants. That 47 percent rate remained in effect until roughly the 
turn of this century when the MGIB was significantly enhanced for the 
Active Force.
    Since 1990 the percentage of educational benefit for reservists has 
declined from 47 percent to 29 percent of the active force educational 
benefit, and this decline took place during a period when the 
involuntary mobilization of reservists had begun to accelerate 
significantly.
    VACOE has focused on consolidating veterans' education benefit 
programs into a single Total Force structure placing them in the 
department where veterans advocacy is the first priority and ensuring 
that a fair framework for providing benefits commensurate with the 
nature of military service is established and maintained.
    The architecture of any future GI Bill is very important. Shifting 
funding out of title 10 and placing responsibility for all GI Bill 
administration in the proper cabinet department (DVA) is the key of any 
future efforts to improve the administration and the fundamental 
fairness of the GI Bill.
    This concept would provide MGIB reimbursement rate levels based on 
an individual's service in the Armed Forces, including the National 
Guard and Reserve: a MGIB active duty 3-year rate, a pro rata SelRes 
rate, and a SelRes activated rate which is equivalent to the active 
duty rate on a month-to-month basis after 90 days service.
    See Attachment A for additional detail concerning the proposed 
Bill.
    Chapters 35 and 31 remain as before.

                        Benefits of New GI Bill

    We anticipate a number of positive effects from this new GI Bill:

      The additional educational benefit for active duty 
service provides a necessary one-to-one equity for arduous time served 
by individuals in uniform whether AF or RF.
      Under the current Chapter 1606, reservists have 14 years 
from the beginning date of eligibility to use their benefits in 
service. As a result many reservists reach the delimiting date while 
they are still serving in the Selected Reserve. A provision in the 
proposal would extend the time frame during which reservists could 
utilize the education benefit.
      A provision allowing reservists ten (10) years from the 
last active/activated duty to utilize their educational benefit adds a 
transition and readjustment element to the traditional recruiting and 
retention elements of the Reserve component of the GI Bill. This is 
precisely what is now needed since the extended arduous duty of the 
reservist requires transition and readjustment very similar to active 
forces.
      Placing the Total Force GI Bill within title 38 U.S.C. 
will simplify the administration of GI educational benefit for all 
members of the Armed Services both AF and RF, and ensure all future 
benefits are upgraded equitably. (See Attachment B)
      The GI Bill also has traditionally been viewed as a 
grateful nation's way of showing its appreciation for the sacrifices of 
service, separation, and combat. The new GI Bill reflects the new 
realities which have transformed this nation's security environment 
since the second week of September '01.
Conclusion
    No amount of skill compensates for a lack of manpower. In order to 
continue to deter actual and potential adversaries now and in the 
future, we must continue to attract the finest among the willing and 
capable. It is imperative that the forces continue to attract and 
retain high quality men and women to assure the nation's collective 
security.
    The famed risk-reward ratio follows the same natural calculus as 
the supply and demand curve. No one in this country can honestly say 
that the risks for our reservists have not increased of late. This 
proposed Total Force GI Bill seeks to address at least part of the 
reward scheme for those reservists who are being asked to risk the 
most.
    During a period when a significant portion of those who sign up for 
duty, whether in the active force or in the reserve force, say that 
they do so, specifically, for the educational benefits, it is important 
to boost recruitment as much as possible by means of this proven 
approach.
    By allowing Reserve Force (RF) retirees to utilize the benefit for 
ten (10) years following retirement, we are both boosting retention as 
well as rewarding the rigors of activation and mobilization.
    Because the reserve component has come to more closely resemble the 
active component, it is time that the educational benefits for the 
reserve component come to more closely resemble those of the active 
component. That, in short, is what our proposal, the Total Force GI 
Bill, seeks to do.
    If implemented, we envision wins for the individual Selected 
Reservist, a win for the Armed Services, and a win for our national 
security.

                                             Summary of Differences
----------------------------------------------------------------------------------------------------------------
                          Current MGIB                                          Total Force GI Bill
----------------------------------------------------------------------------------------------------------------
Different Title                                                                                       One title
----------------------------------------------------------------------------------------------------------------
Confusing                                                                                       Straightforward
----------------------------------------------------------------------------------------------------------------
Multiple Committees                                                                         Half the Committees
----------------------------------------------------------------------------------------------------------------
Costly redundancies                                                                Savings through Efficiencies
----------------------------------------------------------------------------------------------------------------
Different Benefits for same Risks                                                   Same benefit for same Risks
----------------------------------------------------------------------------------------------------------------
Delimiting date inequities                                                                Fair delimiting dates
----------------------------------------------------------------------------------------------------------------
Modest retention incentive                                                        Increased retention incentive
----------------------------------------------------------------------------------------------------------------
No SelRes readjustment benefit                                                      SelRes Readjustment benefit
----------------------------------------------------------------------------------------------------------------
Differing Rules for Recruiters                                                    Same Rules for all Recruiters
----------------------------------------------------------------------------------------------------------------
Inequitable Upgrades                                                                         Equitable Upgrades
----------------------------------------------------------------------------------------------------------------
Recipients confused                                                                   Simplified for Recipients
----------------------------------------------------------------------------------------------------------------
Staff Training Complexities                                                           Staff Training Simplified
----------------------------------------------------------------------------------------------------------------


    This Total Force proposal provides a unique opportunity to create a 
comprehensive GI Bill that is both fair and simple. Its eloquence is 
its equity and simplicity.
    The question always raised by Congress when considering the GI Bill 
is can we afford it. Well, I don't think we can afford not to.

                              Attachment A

A Total Force GI Bill
    This Bill would provide MGIB reimbursement rate levels based on an 
individual's service in the Armed Forces, including the National Guard 
and Reserve.

    1. The first tier--similar to the current Montgomery GI Bill--
Active Duty (MGIB-AD) 3-year rate--would be provided to all who enlist 
for active duty. Service entrants would receive 36 months of benefits 
at the AD Rate.
    2. The second tier or level would be for all who enlist or re-
enlist in the SelRes for 6 years, and this would entitle them to 36 
months of benefits at a pro-rata amount of the active duty rate (the 
suggested rate is 35 percent of the MGIB-AD rate).
    3. The third tier would be for members of the SelRes/IRR who are 
activated for at least 90 days. They would receive 1 month of benefit 
for each month of activation, up to a total of 36 months, at the active 
duty rate. The intent is to provide the same level of benefit as the 
active duty rate for the same level of service.
    3a. These months of full benefits would replace, month-for-month, 
any SelRes entitlements at the second tier.
    3b. The maximum benefit a member of the SelRes could receive under 
this program would be the equivalent of 36 months at the active duty 
rate.
    An individual would have up to 10 years to use the active duty or 
activated-service benefit from their last date of active/activated duty 
or reserve service, whichever is later. A Selected Reservist could use 
remaining second tier MGIB benefits as long as he/she were 
satisfactorily participating in the SelRes, and for up to 10 years 
following separation from the reserves, in the case of separation for 
disability or qualification for a reserve retirement at age 60.
Additional Provisions:
    All provisions (e.g. additional contributions) and programs (e.g. 
accelerated payment, approved test reimbursement, etc.) eligible for 
payment under the current MGIB-AD would be available under all three 
levels.
DoD Incentives:
    Under this plan DoD would continue to be able to provide 
Recruitment and Retention incentives such as loan repayment, kickers-
college fund, and enlistment bonuses.

                              Attachment B

Total Force GI Bill Program
    The following improvements would accrue to GI Bill program 
administration by adopting the new Total Force GI Bill:

      The MGIB and the MGIB-SR do not pay for the same training 
although there is no logical reason why they shouldn't. This is the 
result of having funding of MGIB-SR the responsibility of DoD, while 
the funding of basic MGIB is VA's responsibility. Thus, bills affecting 
MGIB-SR are referred to the Senate and House Armed Services Committees 
(SASC and HASC) while bills affecting MGIB are referred to the House 
and Senate Veterans Affairs Committees (HVAC and SVAC).
      These problems could be addressed by replacing the 
separate GI Bill programs (Chapters 30, 1606 and 1607) with one 
consolidated program under title 38, U.S. Code. This new bill would 
have a continuum of benefits that matched the continuum of possible 
service.
        It would provide monthly benefits for activated 
Selected Reservists and reservists from the Individual Ready Reserve 
with no prior service qualifying for MGIB that is proportionate to 
their actual active duty.
        It would put funding for the benefits for those in the 
Selected Reserve with VA.
        It would make the types of training uniform for all in 
the Armed Forces who would be eligible for this GI Bill.
      One set of rules covering one GI Bill would allow for 
better understanding of the program by recruiters, beneficiaries, 
stakeholders and program managers.
      Training new claims examiners and processing claims would 
be easier and more efficient as there would be one set of rules.
      Systems costs would be lower for the new program as the 
other systems would no longer be required.
      Since there would be one program and one set of rules, 
there would not be inconsistent and inequitable structuring of benefit 
levels.
      VA would be responsible for all basic benefit payments, 
and would be reimbursed by the agency concerned for any additional 
payments made through ``kickers''. Currently, the selected reserve 
basic payment is reimbursed to VA and managed either by DoD or DHS. The 
benefit is that no ``basic'' award would have to be managed outside of 
and reimbursed to VA, but the agency concerned would maintain the 
flexibility to channel critical specialties provided under the current 
programs.

                              Attachment C

                           United States Code

                      Title 38--Veterans' Benefits

              Part III--Readjustment and Related Benefits

     Chapter 30--All-Volunteer Force Educational Assistance Program

                  Subchapter I--Purposes; Definitions

    Sec. 3001. Purposes
    The purposes of this Chapter are--

    (1)  to provide a new educational assistance program to assist in 
the readjustment of members of the Armed Forces to civilian life after 
their separation from military service;
    (2)  to extend the benefits of a higher education to qualifying men 
and women who might not otherwise be able to afford such an education;
    (3)  to provide for vocational readjustment and to restore lost 
educational opportunities to those service men and women who served on 
active duty after June 30, 1985;
    (4)  to promote and assist the All-Volunteer Force program and the 
Total Force Concept of the Armed Forces by establishing a new program 
of educational assistance based upon service on active duty or a 
combination of service on active duty and in the Selected Reserve 
(including the National Guard) to aid in the recruitment and retention 
of highly qualified personnel for both the active and reserve 
components of the Armed Forces;
    (5)  to give special emphasis to providing educational assistance 
benefits to aid in the retention of personnel in the Armed Forces; and
    (6)  to enhance our Nation's competitiveness through the 
development of a more highly educated and productive workforce.

                                 
         Prepared Statement of Major General Larry W. Shellito,
               Adjutant General, Minnesota National Guard
    As I begin my testimony today I need you to know that I am not here 
simply as the Adjutant General from Minnesota, nor as a combat veteran, 
or even as the chief administrator of a State bureaucracy, but rather 
as a veteran educator with 31 years of experience in postsecondary 
teaching and administration. As a Nation we continually call for access 
to quality education and state that our Nation's success is tied to how 
successful we are in educating our citizens. As a military, we take 
that call seriously and for decades have provided various educational 
funds as a core benefit to our servicemembers. I myself used these 
benefits following my return from combat in Vietnam; having access to 
those benefits helped shape who I have become. So today I am here to 
fight for the education support that our warrior citizens have earned 
through their loyal and dedicated service; a fight that will allow them 
the same life changing experience afforded me upon my return from 
combat.
    In order to convey the scope of this challenge but yet maintain 
focus on what we see as its resolution, I have divided this document 
into three sections:

    1.  Statement of the Situation
    2.  The Human Factor--A Soldier's Story
    3.  Shaping the Future
1. Statement of the Situation:
    Summary: Minnesota contends that all members of the 1/34th Brigade 
Combat Team (BCT) have achieved the intent of the Montgomery GI Bill 
(MGIB) Chapter 30 benefits, irrespective of the duration stipulated on 
individual orders. We ask that all soldiers of the 1/34th BCT receive 
the VA education benefits they earned through a 22 month mobilization 
of which 16 continuous months were served in combat. The decision to 
grant these men and women their earned benefits needs to occur quickly 
in order for them to make important life decisions. As a key tool in 
building and maintaining a total Army force, we as military leaders 
also need this to occur as it is fundamental to sustaining a ready and 
capable Reserve component force.

    Request: It is essential that these soldiers receive their benefits 
quickly so that they are able to make timely educational decisions 
prior to the start of the 2008 spring term. Therefore, we ask the 
Subcommittee to take any and all actions that are reasonable to help 
correct this situation in an expedient manner.
    To explain the breadth of this situation I offer the following 
facts:

      1162 Minnesota National Guard soldiers were deemed 
ineligible for the MGIB Chapter 30 benefit due to the variability in 
duration of their tour of duty as listed on their extension orders.
      Of the 2447 Minnesotans who deployed as part of the BCT, 
approximately 53 percent had orders that listed a duration which 
qualified them for Chapter 30 benefits (730 days), while other 
soldiers' orders were listed with a lower number of days (e.g. 729, 
725, 718).
      We estimate that approximately 700 additional soldiers 
from other states, territories, and the Army Reserves may be affected 
by this orders issue.
      When Minnesota soldiers and our estimate of those 
affected are combined, the monetary impact to the approximately 1800 
soldiers is $15 million in lost benefits.
      Moreover, while all soldiers are eligible for education 
benefits, the MGIB Chapter 30 benefit offers a 10 year portability 
option. Those who receive the Chapter 30 benefit and leave the military 
can still use the funds; however their ``battle buddy'' who served with 
them through a 22 month deployment can use their lower level of benefit 
only if they remain in the Reserve components.

    Actions: Attached to this testimony is a document which chronicles 
the key events and actions related to our identification of the 
disparity and subsequent efforts to redress and quickly resolve the 
issue. The document is labeled ``CH 30 MGIB Timeline''.

    Discussion of Impact: The BCT is headquartered in MN; soldiers from 
37 States and Territories, the USAR and the IRR participated in the 
deployment (see list below). This deployment stood out from a GI Bill 
perspective because of its length.

      The initial mobilization orders for units comprising this 
BCT were approximately 608 days; they were then amended to include an 
additional 125 days to support the ``Troop Surge''.
      In about 53 percent of the cases orders were amended to a 
full 730 days, or 2 years. In most other cases, orders were amended for 
either 729, 725 or 718 days.

    When Soldiers' obligated period of service is 2 years, and serve a 
minimum of 20 continuous months on active duty, they are given the 
opportunity to make an irrevocable election between the Reserve 
Educational Assistance Program, Chapter 1607 and the Montgomery GI Bill 
Chapter 30 program, so long as their release from active duty was 
honorable and due to ``convenience of the government'' which was the 
case in this situation.
    Soldiers with amended orders that read ``NTE 730 days'' (NTE means 
`not to exceed') who were counseled at Ft. McCoy were given until 
November 30th, 2007 to make an irrevocable election between Chapter 
1607 and Chapter 30.

      Soldiers choosing Chapter 30 are eligible for the ``less 
than 3 year'' full-time rate of $873 per month. The standard $1,200 
contribution and optional $600 Plus Up contributions apply.
      Those choosing the Chapter 1607 benefit received the 60 
percent rate at $645 per month.
      Chapter 30 not only provides a higher benefit rate but it 
also has 10-year portability; soldiers must remain in an active 
drilling status to receive Chapter 1607.

    States represented in the 1/34th BCT (as per Major Troy M. Gipps, 
National Guard Bureau GI Bill Programs Manager):


----------------------------------------------------------------------------------------------------------------
                   State/Territory                         Number Assigned      Estimated 47\1/2\ percent impact
----------------------------------------------------------------------------------------------------------------AL-----------------------------------------------------------------------   4---                1.9
----------------------------------------------------------------------------------------------------------------
AZ                                                                          1                   0.475
----------------------------------------------------------------------------------------------------------------
CA                                                                          7                   3.325
----------------------------------------------------------------------------------------------------------------
CO                                                                          4                   1.9
----------------------------------------------------------------------------------------------------------------
FL                                                                          3                   1.425
----------------------------------------------------------------------------------------------------------------
GA                                                                          6                   2.85
----------------------------------------------------------------------------------------------------------------
IA                                                                        606                 287.85
----------------------------------------------------------------------------------------------------------------
ID                                                                         17                   8.075
----------------------------------------------------------------------------------------------------------------
IL                                                                          1                   0.475
----------------------------------------------------------------------------------------------------------------
IN                                                                          1                   0.475
----------------------------------------------------------------------------------------------------------------
KS                                                                        102                  48.45
----------------------------------------------------------------------------------------------------------------
KY                                                                         73                  34.675
----------------------------------------------------------------------------------------------------------------
LA                                                                          3                   1.425
----------------------------------------------------------------------------------------------------------------
MA                                                                          2                   0.95
----------------------------------------------------------------------------------------------------------------
ME                                                                          1                   0.475
----------------------------------------------------------------------------------------------------------------
MI                                                                          1                   0.475
----------------------------------------------------------------------------------------------------------------
MN                                                                       2447                1162.325
----------------------------------------------------------------------------------------------------------------
MT                                                                          3                   1.425
----------------------------------------------------------------------------------------------------------------
NC                                                                          7                   3.325
----------------------------------------------------------------------------------------------------------------
ND                                                                          1                   0.475
----------------------------------------------------------------------------------------------------------------
NE                                                                        257                 122.075
----------------------------------------------------------------------------------------------------------------
NJ                                                                        157                  74.575
----------------------------------------------------------------------------------------------------------------
NY                                                                          8                   3.8
----------------------------------------------------------------------------------------------------------------
OH                                                                          2                   0.95
----------------------------------------------------------------------------------------------------------------
OK                                                                          3                   1.425
----------------------------------------------------------------------------------------------------------------
OR                                                                          1                   0.475
----------------------------------------------------------------------------------------------------------------
PA                                                                          6                   2.85
----------------------------------------------------------------------------------------------------------------
PR                                                                          1                   0.475
----------------------------------------------------------------------------------------------------------------
RI                                                                          3                   1.425
----------------------------------------------------------------------------------------------------------------
SD                                                                          2                   0.95
----------------------------------------------------------------------------------------------------------------
TN                                                                          7                   3.325
----------------------------------------------------------------------------------------------------------------
UT                                                                          7                   3.325
----------------------------------------------------------------------------------------------------------------
VA                                                                          1                   0.475
----------------------------------------------------------------------------------------------------------------
VT                                                                          6                   2.85
----------------------------------------------------------------------------------------------------------------
WA                                                                         15                   7.125
----------------------------------------------------------------------------------------------------------------
WI                                                                         21                   9.975
----------------------------------------------------------------------------------------------------------------
WY                                                                          3                   1.425
----------------------------------------------------------------------------------------------------------------
USAR                                                                       22                  10.45
----------------------------------------------------------------------------------------------------------------
IRR                                                                       141                  66.975
----------------------------------------------------------------------------------------------------------------
TOTAL                                                                    3953                1877.675
----------------------------------------------------------------------------------------------------------------


    Minnesota's Present Actions: Secretary of the Army Geren indicated 
that the Army Board of Corrections for Military Records (ABCMR) will 
review the situation and with his guidance execute the appeal process. 
We interpreted his comments as a statement of desire to expedite this 
appeal. Accordingly, we understood that his office would seek any 
necessary appeals to accomplish this task.
    The ABCMR declined to review the packet submitted by Minnesota. Our 
appeal treated all 1,162 affected soldiers as a ``class action''; the 
ABCMR states they do not have the legal authority to address a 
collective action, but that each soldier must initiate this appeal. 
Minnesota's challenge now is in reaching our soldiers and getting them 
to complete individual applications. This task is both time-consuming 
and cumbersome:

      At the October 12-14 ``Beyond the Yellow Ribbon'' 
Reintegration Training Weekend in Minnesota, we began to implement 
supplemental guidance from National Guard Bureau (NGB); we need to 
complete an appeal packet for each individual soldier.

        27 percent of the individual applications require 
additional follow up prior to submission to the ABCMR.
        Each soldier's submission requires 11 pages of 
documentation.

    Thousands of man-hours and resources would be saved if we could 
address this issue as a collective whole. Minnesota originally 
submitted a 43 page document to the ABCMR so as to treat our soldiers 
in a fair and timely manner; however we now need to send an estimated 
three Army footlockers full of eleven page documents for all 1,162 
soldiers. Add in the other 700 soldiers who may be impacted and you can 
include another two footlockers full of documentation that the ABCMR 
will review and process. We are working to comply with the requirements 
for individual submissions, but the possibility to have soldiers slip 
through the cracks is great and the administrative burden on our 
soldiers and their leaders is excessive.
Recommendation:
    a.  We request that the ABCMR accepts Minnesota's original 
submission and that it acts favorably on our request to redress this 
issue.
    b.  We encourage all civil and military leaders to encourage our 
Soldiers, Sailors, Airmen and Marines to not delay enrollment in 
education programs.
    c.   We ask that, as the National Guard is an Operational Force and 
no longer a Strategic Reserve, eligibility for benefits be updated to 
reflect the dynamic nature of today's conflicts and the role our 
Reserve components are playing in the cause of freedom, Homeland 
Defense, and service as Warrior Citizens.
2. The Human Factor--A Soldier's Story:
    It is my pleasure to introduce Sergeant Benjamin Lee Hatton of 
Company C, 1st Battalion, 194th Armor. Sergeant Hatton is not in 
uniform today because as you will hear in the following story he 
rapidly went from completing his advanced individual training, to war. 
His Class A uniform fits a 160 pound private and is not suitable for a 
physically fit, 205 pound combat-tested and proven Sergeant.
    Sergeant Hatton joined the Minnesota National Guard in 2003 as a 
seventeen year old junior in Long Prairie/Grey Eagle High School. He 
attended basic training between his junior and senior year of high 
school and completed his advanced individual training after his senior 
year. He was qualified as an armor soldier and as a tank crew member, 
graduating fifth in his class of 200 soldiers. He was looking forward 
to going to college as he would be the first member of his family to 
achieve this goal.
    Sergeant Hatton was advanced to Private First Class after AIT and 
was promoted to Specialist a year after that. Shortly after his 
promotion he was mobilized as part of the 1/34th Brigade Combat Team 
and traveled with his unit to Camp Shelby, Mississippi to train for a 
deployment in Support of Operation Iraqi Freedom. After 6 months of 
training, he deployed with his unit, Company C, 1-194 Armor to Tallil, 
Iraq. Sergeant Hatton served as a driver for the first months of his 
deployment. His leadership and warrior proficiency earned him the 
respect of his peers and leadership. He assumed increasing 
responsibility within his platoon and was pinned as a Sergeant in 
December 2006. With the rank of Sergeant came increased responsibility; 
he often served as the Truck Commander or as the Gunner for the Platoon 
Sergeant's vehicle.
    During December he received his first wound and his first Purple 
Heart when he was shot in the arm. He returned to duty with his unit 
but in February, 2007 he was injured again and earned his second Purple 
Heart when an IED exploded on his vehicle which resulted in facial 
wounds. At this point he was given the option to take a desk assignment 
or stay on the road with his troops. As a combat troop leader, he opted 
to stay with his soldiers and his team.
    During the late stages of his 16 month deployment in Iraq he served 
as the Truck Commander of the lead Armored Scout Vehicle on numerous 
occasions for convoy escort missions. Finally he was the second in 
command of a Radio Relay Point and responsible for a segment of a route 
during his last month in Iraq. Sergeant Hatton was recognized for his 
service with the following Awards:

      2 Purple Hearts,
      2 Army Commendation Medals (ARCOM)
      1 Army Achievement Medal (AAM)
      The Army Good Conduct Medal
      The National Defense Service Medal
      The Global War on Terror Service Medal
      The Campaign Medal
      The Iraq Combat Action Badge
      The Combat driver badge with wheeled vehicle clasp.

    Sergeant Hatton served 6 months at Camp Shelby, MS on title 10 
active duty prior to deploying and then served 16 months in Iraq with 
the 1/34th Brigade Combat team--the longest serving unit of any 
military organization in Operation Iraqi Freedom. These 22 months of 
title 10 active duty, with 16 months in continuous combat, more than 
meet the requirements to qualify for the Chapter 30 GI Bill.
    Sergeant Hatton served with his Brigade from its mobilization 
through its release from Active Duty and was wounded twice during the 
course of his deployment; however, inexplicitly he and 1,161 of his 
brethren failed to receive their just benefits. Unlike the 1,360 other 
Minnesota 1/34th Red Bull soldiers, he will not receive the Chapter 30 
GI Bill.
3. Shaping the Future:
    The challenge we face is larger than fixing the current issue with 
the Chapter 30 GI bill; the real issue is changing how the National 
Guard and Reserves are used by the Services and this country. Prior to 
this century and certainly during the Cold War the Reserve components 
were largely used as a Strategic Reserve. It was an asset funded at a 
moderate level with promised funding increases in the event of a world-
spanning conflict. This was a prudent measure based on the expected 
threat model and the size and composition of the Active Component. 
Following the end of the Cold War, the size of the Active Component was 
reduced by approximately one-third but yet the level and tempo of 
deployments has dramatically increased. This shift intensified our 
Nation's reliance on the Reserve components in a new and fundamentally 
different way.
    Since September 11th 2001, the tempo and use of National Guard and 
Reserve units has continued to expand. The ARFORGEN (Army Force 
Generation) and the AEF (Air Expeditionary Force) models both fully 
integrate and presume planned readiness and deployment of major 
National Guard and Reserve troop formations on a repeated basis thus 
fully entrenching the National Guard as an Operational Force on par 
with Active Component units.
    These planned and repetitive readiness/deployment cycles require a 
different funding and benefits package than was used in the `Cold War' 
model when the Reserve component was a strategic reserve for this 
country. Many of the changes in full-time manning, facility investment, 
training readiness, and equipping levels fall outside of this Committee 
but are critically important to ensuring our National Guard and reserve 
are ready to answer the ongoing call to this nation.
    House Veterans' Affairs is heavily vested in some of the benefit 
changes that are required to sustain a vital and valid Reserve 
component for the United States of America. I highlight several below:

      The Yellow Ribbon Reintegration Program (See Attachment 
#1): This program is currently included in the House and Senate 
versions of the National Defense Authorization Act of 2008. The Yellow 
Ribbon Reintegration Program builds the structure to sustain the force 
after military deployments and mitigates the impact of deployment on 
the servicemembers, their families, and their communities.
        This program provides staff authorizations, personnel 
funding, and a proven model of program execution to provide for the 
reintegration of reserve component servicemembers to their homes and 
back into their communities after a military deployment.
        The practical reality is that most reserve component 
military members and their families live hundred of miles form the 
nearest active duty base; the programs available to active component 
servicemembers is greatly diminished by simple geography. For example 
Minnesota has no active component military bases.
        This program engages state and local government, 
private, and non/not-for-profit groups to supplement the programs 
available through the federal government and the military service 
components.
      Presently, there are numerous legislative initiatives to 
address the issues created by the 1/34th BCT orders situation. 
Moreover, these initiatives look to amend The Total Force GI Bill 
Program. We encourage this Committee to explore these legislative 
proposals in order to provide the best service options to our warrior-
citizens.

    In conclusion, our Nation's reliance on the Reserve components is 
fundamentally different than it was prior to September 11th, 2001. We 
strongly believe:

      The Reserve components are an integral part of the 
current war fight; this requires enhanced funding and resources to 
ensure we remain both an effective fighting force and still meet our 
historic role in support of our citizens here at home.
      Soldiers, Airmen, Marines, and Sailors continue to step 
forward in remarkable numbers to serve their country. Servicemembers 
continue to stay in boots to serve multiple deployments while balancing 
the needs of their family, career, and community.
      This dedication and committed service to the country 
needs greater incentives, reward, and legal protection than provided 
under a Cold war benefits package.
Attachments:
    1. Timeline--MGIB CH 30
    2. Questions and Answers
    3. Yellow Ribbon Reintegration Program--Legislation


                                               CH 30 MGIB Timeline
----------------------------------------------------------------------------------------------------------------
                   DATE                                                   EVENT(S)
----------------------------------------------------------------------------------------------------------------
10 Jan 07                                   The President announced the surge of forces for OIF; 1/34th BCT was
                                                                                        included in this surge.
----------------------------------------------------------------------------------------------------------------
24 Jan 07                                     Minnesota began to receive specific extension information by Unit
                                                                                     Identification Code (UIC).
----------------------------------------------------------------------------------------------------------------
Jun-Jul 07                                    1/34th BCT arrives at Ft. McCoy, WI and undergoes demobilization
                                                                                                      training.
----------------------------------------------------------------------------------------------------------------
18 Jul 07                                       MN Army National Guard Education Services Officer (MNARNG ESO)
                                            receives information from the National Guard Professional Education
                                           Center (PEC) GI Bill team at Ft. McCoy that the issue exists. GI Bill
                                               Managers from Washington State, Iowa and Minnesota augmented the
                                            team. During this 15-day operation, the team provided one-on-one GI
                                            Bill counseling to 2,703 Soldiers, in addition to providing a daily
                                                                                    30-minute GI Bill briefing.
----------------------------------------------------------------------------------------------------------------
19 July 07                                       Minnesota Congressional Delegation informed of emerging issue.
----------------------------------------------------------------------------------------------------------------
20 Jul 07                                   The Adjutant General (TAG-MN) signs a position paper in response to
                                            WCCO media inquiries: MN will seek to redress what appears to be an
                                                   ``administrative error'' which denied benefit eligibility to
                                                                                                      soldiers.
----------------------------------------------------------------------------------------------------------------
23 Jul 07                                  TAG-MN sends a letter to all affected MNARNG Soldiers informing them
                                            of the issue and the actions MN is taking to correct the situation.
----------------------------------------------------------------------------------------------------------------
3 Aug 07                                   MNARNG notifies all MN National Guard full-time unit leaders of this
                                             developing issue (Officers in Charge at each unit location in MN).
                                                                  Congressional Delegation updated on the issue
----------------------------------------------------------------------------------------------------------------
8 Aug 07                                   MNARNG ESO contacts the National Guard Bureau Army Manpower Division
                                                    (NGB-ARM) to ask for a nation-wide ESO announcement of this
                                                                                              developing issue.
----------------------------------------------------------------------------------------------------------------
10 Aug 07                                       Minnesota Delegation Congressional letter to Secretary of Army.
----------------------------------------------------------------------------------------------------------------
14 Aug 07                                  NGB--Judge Advocate contacts The Department of the Army Office of the
                                           Judge Advocate General (OTJAG) and suggested a timely and reasonable
                                           solution by way of amending orders using ``administrative error'' as
                                                                                                 justification.
----------------------------------------------------------------------------------------------------------------
15 Aug 07                                         NGB-ARM approves and nationally disseminates an Education and
                                               Incentives Operations Message (07-44) to all State and territory
                                                                   Education Services Officers and TA Managers.
----------------------------------------------------------------------------------------------------------------
5 Sep 07                                   NGB-ARM asks MNARNG to verify the Unit Identification Codes (UICs) of
                                             all units affected by this apparent discrepancy in anticipation of
                                                                                      producing amended orders.
----------------------------------------------------------------------------------------------------------------
6 Sep 07                                   The Department of Veterans Affairs (DVA) confirms in writing that if
                                              CH 30 eligibility is determined, soldiers can easily migrate from
                                                                                        1607 to Ch 30 benefits.
----------------------------------------------------------------------------------------------------------------
7 Sep 07                                                     Congressional Delegation informed of DVA position.
----------------------------------------------------------------------------------------------------------------
27 Sep 07                                 OTJAG concludes ``administrative error'' cannot be justified to amend
                                            orders; staff level options for timely resolution end and the issue
                                                                                                   is elevated.
----------------------------------------------------------------------------------------------------------------
28 Sep 07                                   Secretary of the Army Geren publicly announces the issue; he refers
                                            it to the Army Board of Correction for Military Records (ABCMR) for
                                                                                expedient ``group'' resolution.
----------------------------------------------------------------------------------------------------------------
1 Oct 07                                       On behalf of the affected soldiers, the TAG-MN submits a ``class
                                           action'' ABCMR request, copies furnished to the Director of the Army
                                            National Guard (DARNG), Chief National Guard Bureau (CNGB), and the
                                                                                         Secretary of the Army.
----------------------------------------------------------------------------------------------------------------
3 Oct 07                                   ABCMR chair passes the action to NGB-ARH (Human Resources). The basis
                                           of this referral is ABCMR's claim that the law does not provide for a
                                               ``class action'' type of submission; each soldier must submit an
                                                                                             individual appeal.
----------------------------------------------------------------------------------------------------------------
4 Oct 07                                        ABCMR chair responds to TAG-MN indicating that action cannot be
                                                                                            handled as a group.
                                              H.R. 3741 introduced for the relief of certain members of the 1st
                                                                             Brigade Combat Team of the 34th ID
                                            The National Guard and Reserve Educational Benefits Fairness Act of
                                                                                  2007 introduced in the Senate
----------------------------------------------------------------------------------------------------------------
8 Oct 07                                          MNARNG receives guidance from ARH regarding the submission of
                                             individual Ch 30 appeals to the ABCMR; ARH will surge resources to
                                                         support an expedited delivery of appeals to the ABCMR.
----------------------------------------------------------------------------------------------------------------
11 Oct 07                                     MNARNG requested Additional Duty for Special Work funds (ADSW) to
                                             hire additional military support staff to build 1100+ packets, NGB
                                                                                   sent three Majors to assist.
----------------------------------------------------------------------------------------------------------------
13-14 Oct 07                               MNARNG begins to implement ARH guidance during reintegration training
                                                    to access soldiers and begin individual packet preparation.
----------------------------------------------------------------------------------------------------------------

                     Q & A--VA Committee Testimony
     1. How many Minnesotans does this affect?
         1,162 Soldiers of the MNARNG.

     2. How many in the 1BCT are affected?
          Not able to identify, but by extrapolation . . . more 
than 700 soldiers from 38 other States, Territories, the Army Reserve 
and the IRR.
          It is also important to consider and acknowledge the 
countless other RC servicemembers from all branches (Army, Navy, Air 
Force, Marines, Coast Guard) of the Armed Forces across the Nation 
affected by the inequity in MGIB benefits, who do not have a Joint Task 
Force Headquarters to champion their cause.

     3.  When did the Guard discover that 1,162 Minnesotans were 
getting a reduced MGIB benefit?
          On approximately 18 Jul 07 the MN Army National Guard 
Education Services Officer received information from the National Guard 
Professional Education Center GI Bill team at Ft. McCoy that the issue 
exists.

     4.  What steps did MN take to solve this educational benefit 
issue?
         Notified soldiers,
         Notified NGB Manpower Division
         Notified MN Governor
         Notified MN Congressional Delegation
         Work with NGB ARM to define the problem and identify 
possible solutions
          Work with the Federal VA to identify courses of 
action and a timely resolution
         Delivered appeal to ABCMR

     5.  Who did MN contact to resolve the issue with the REFRAD 
orders?
          NGB Manpower Division who further contacted NGB Judge 
Advocate and the Army Office of the Judge Advocate General

     6. What was the response of NGB?
          NGB provided counsel, verbal support, and is trying 
to help devise a means to expedite individual requests.

     7. What was the response of DA?
          On 28 Sep 07 Secretary of the Army Geren publicly 
announced the issue; he referred it to the Army Board of Correction for 
Military Records (ABCMR) for expedient ``group'' resolution.
          1 Oct 07 On behalf of the affected soldiers, the TAG-
MN submits a ``class action'' ABCMR request, copies furnished to the 
Director of the Army National Guard (DARNG), Chief National Guard 
Bureau (CNGB), and the Secretary of the Army.
          3 Oct 07 ABCMR chair passes the action to NGB-ARH 
(Human Resources). The basis of this referral is ABCMR's claim that the 
law does not provide for a ``class action'' type of submission; each 
soldier must submit an individual appeal.
          4 Oct 07 ABCMR chair responds to TAG-MN indicating 
that action cannot be handled as a group.

     8.  How much time has gone by since these soldiers left active 
duty ISO OIF?
          Close to 3000 soldiers demobilized in July 07, 3 
months ago.

     9.  If the 1,162 Minnesotans with 729 or fewer deployed days on 
their orders do not become eligible how much in total benefits will be 
lost?
         $9,537,696.
          $15,414,624 is the total approximate loss of benefits 
for the estimated 1878 total soldiers (all states) possibly affected by 
this orders situation.
         Lost portability of their educational benefit.

    10.  Does Minnesota have a program to bridge the monetary 
difference?
          No, there is no state offset to a federal benefit.

    11.  Just how many states are affected by the orders disparity?
          Thirty-seven states provided National Guard soldiers 
to the BCT with an additional 141 IRR soldiers from various states. As 
MN experienced approx. 47\1/2\ percent impact rate we would expect this 
same impact to other states as well.

    12.  Why is this an issue now, it has never come up in the 6 years 
since deployments began post 9-11?
          The 1/34th BCT mobilized and deployed to Iraq for an 
unprecedented 22 months of consecutive service, with 16 of those months 
served in combat. No other reserve component unit served as long as the 
BCT so therefore this issue never arose.

    13. Is this isolated to the units that were extended?
          Within MN, yes, but we do not know how it affects 
reserve component members across the nation.

    14.  How many MN Army National Guard soldiers utilize MGIB?
          This data is maintained by the VA and not the 
Minnesota National Guard.

    15.  Should we amend law/regulation so that our reserve component 
forces become eligible for the same benefits as AC?
          RC members are already eligible for this benefit as 
long as the eligibility criteria are met.
          However, as the NG is now an Operational Force rather 
than a Strategic Reserve, we need to align benefits and eligibility 
criteria to meet the changing nature of our reserve components.
          As the RC has many soldiers on their second or third 
tour, the cumulative nature of their combat service should elevate 
their status to a higher level of benefit. For example, an RC member 
with two combat tours and 10 years of service has fewer educational 
benefits than an AC soldier who didn't deploy and left active duty 
after his/her first enlistment.

    16.  Did the Army intentionally deny this benefit?
          We do not believe our soldiers are being 
intentionally denied this benefit. We believe they are victims of a 
very complex process of mobilizing and deploying soldiers, and the 
extension simply complicated it even more.
          The system has a process by which we can properly 
correct what we believe to be an error; however it has not operated in 
a manner that is timely when considering the negative impact to 
soldiers and their personal life decisions.
          We are not able to address all other RC members, but 
the situation is such that we expect other soldiers throughout the 
Nation are negatively impacted by this situation.

    17.  Didn't the President/Secretary of Defense extend your unit?
          The basis of the extension was as part of the 
Presidential directed Troop Surge.
          Minnesotans served proudly and with distinction and 
would have done so regardless of who ordered the troop surge.
          We believe the Troop Surge is simply the trigger to 
an unprecedented situation and we are not looking to identify the cause 
or whose fault it is, but we are focused on finding solutions as we 
collectively take care of our soldiers.

    18.  Why is the law written the way it is for RC personnel?
          We believe the RC is operating in a way that is not 
how it was envisioned when many laws were written. A servicemember 
chooses to serve in the RC over the AC and knows the difference in 
benefit levels; we as Reserve component soldiers know and accept this.
          However, we believe that when called to serve in an 
AC capacity, the benefits available should equal that of other soldiers 
who perform the same duty for the same duration.

    19.  Why can't the ABCMR action MN's submission as a collective 
whole?
          We submitted a group application in accordance with 
our understanding of the Secretary of the Army's guidance and our 
interpretation of the regulatory provisions; but when done it was 
passed to NGB for review based on the Board's claim that they do not 
have legal authority to review a ``class action'' type submission.
          We believe the ABCMR can review a group submission, 
by our interpretation of applicable law and regulation. I realize that 
DA's legal opinion prepared by OGC differs from mine and that of my 
staff.

    20.  The law calls for 2 years (730 days) ordered to Active Duty to 
be eligible for MGIB CH 30. None of your soldiers served that long. So 
what's the problem?
          The salient issue is not the number of days on 
orders, but the 20 consecutive months which this BCT exceeded. Dates on 
orders are largely immaterial to actual service performed.

    21.  Why the AC benefit if not in AC status? The eligibility is 
defined different than enlistment.
          The law states that they must serve for 20 months, 
under an Active Duty order of 2 years' duration minimum, and that if 
they are released earlier than 2 years (not less than 20 months 
continuous service) for convenience of the government, they're still 
eligible.
          My soldiers did the hard part--the 20 months' 
service. The piece of paper is obviously the easy part and needs to be 
looked at from a practical standpoint. I have countless soldiers who 
got on and off the bus together, and served shoulder-to-shoulder for 20 
months or longer, and now one gets the benefit and the other does not.

    22.  Why are you objecting to the ABCMR requirement for individual 
submissions?
          Because I don't believe that is what the law requires 
in its spirit.
          The law gives Secretary Geren the authority and 
responsibility to establish the ABCMR's procedures; he has the 
authority to change or update these procedures as he deems appropriate. 
We interpreted his comments as a statement of desire to expedite this 
appeal. We understood that his office would seek any necessary appeals 
to expedite this process.
          If I can pay, promote, and deploy a soldier without 
his signature, I should not need it for this either.
          Bottom line: I am appealing to you to cut the red 
tape and pave the way for your Nation's heroes to get the benefits they 
have earned. The VA is enthusiastic in their support of this national 
change and has demonstrated the commitment and support to veterans that 
every government agency should.

    23.  Why should we make change?
          National media and the American people have been led 
to believe that the government is ``working on it.'' High-level 
military leaders have been on national television and proclaimed and 
promised quick resolution. It has already been 3 months.
          RC soldiers had their education plans interrupted, 
not just delayed. The purposes of the MGIB Ch 30 program are clear in 
title 38 United States Code. My veterans fit the criteria.

    24.  If you've been assured quick resolution by the Army and by 
NGB, then why are you insisting on the group submission?
          Speed and preservation of our credibility. When 
issues languish in administrative quagmire, the situation gets worse 
over time. NGB has already established a 7-month window (now through 
March 2008) for submission of applications for these soldiers who 
returned in July 2007 and many of whom started school in September 
2007. This window does not include board processing time or output 
mechanisms, so I cannot even estimate for any soldier when it will be 
resolved, or which semester to plan on for enrollment in Ch 30.
          One application takes one board to convene; the 
decision is based on the merit of the entire affected class.
          From our experience, ABCMR actions take 3-6 months to 
complete. We cannot afford to tell our soldiers--or the media and the 
public--that we're expecting resolution by October 2008, and that they 
will thus be without the Ch 30 benefits they earned for at least two 
more semesters of college after the one they're in now.

    25.  What specifically do you want us to accomplish?
          2 things:
          1.  We ask the Subcommittee to take any and all actions that 
are reasonable to help correct this situation in an expedient manner 
with particular emphasis on my desire to have it completed before 
Christmas 2007.
          2.  Review the current law and legislation for efficacy as we 
look for continued use of the reserve components as an operational 
force.

    26.  It is worth noting that Reserve component members who served 
on active duty in support of a contingency operation for one continuous 
year qualify for an educational benefit of approximately $660 per month 
(for a full-time student) under the Reserve Educational Assistance 
Program (REAP), isn't this enough?
          This is not in question and is an appropriate benefit 
given a certain set of conditions. Eventually a benefit plan that 
recognizes the Reserve component change from Strategic Reserve to an 
Operational Force will need to be implemented.

    27.  The gross difference between the REAP benefit and the MGIB 
benefit is approximately $228, which isn't all that great.
          This is a lot of money for a college student.
          The true gross difference is based on a number of 
factors, however for the sake of discussion, if we use $228 per month 
the cumulative difference over the length of the benefit is $8,208, or 
enough money to allow soldiers discretion in which college or program 
to attend.
          In addition, the REAP benefit is only available to 
the SM while in the RC whereas the Ch 30 benefit is available for up to 
10 years after leaving the service.

    28.  Are you asking for Reserve component members who serve as few 
as 20 months on active duty to receive the same benefit as active duty 
members have to serve 36 months on active duty?
          These are two very distinct issues: reaching 
eligibility for the veteran's education benefit is not the same as a 
term of enlistment.
          A term of enlistment may extend to 36 months, however 
a soldier becomes eligible for the Ch 30 benefit after 20 months of 
continuous active/mobilized service; this is all that MN is asking for, 
to receive the same benefit after achieving this eligibility benchmark 
while serving on active duty.

    29.  MN's claims that 1/34th BCT achieved the benchmark of at least 
20 month continuous service, one of the requirement of the Ch 30 
eligibility, is this a combination or orders which address state and 
federal duty?
          Orders for these soldiers were title 10 (12302, 
Partial Mobilization) throughout the duration of the BCT's deployment.
          There was no aggregation of title 32 and title 10 
service.

                               __________
     SEC. 516. National Guard Yellow Ribbon Reintegration Program.
    (a) ESTABLISHMENT.--The Secretary of Defense, in coordination with 
the Chief of the National Guard Bureau, shall establish a National 
Combat Veteran Reintegration Program to provide National Guard members 
and their families with sufficient information, services, referral, and 
proactive outreach opportunities throughout the entire deployment 
cycle. This program shall be known as the Yellow Ribbon Reintegration 
Program. The Secretary may also use funds made available to carry out 
this section to support reintegration programs for members of the Army 
Reserve, Marine Corps Reserve, Navy Reserve, and Air Force Reserve and 
their families.
    (b) PURPOSE.--The Yellow Ribbon Reintegration Program shall consist 
of informational events and activities for reserve component members, 
their families, and community members through the four phases of the 
deployment cycle:
        (1) Pre-deployment.
        (2) Deployment.
        (3) Demobilization.
        (4) Post-deployment-reconstitution.
    (c) CONSULTATION.--The National Guard Bureau Chief shall consult 
with the following parties during establishment of the program:
         (1) The Adjutant General of the Minnesota National Guard and 
officials associated with the State's ``Beyond the Yellow Ribbon'' 
Reintegration Program, the Adjutant General of New Hampshire, the 
Adjutant General of Oregon, and the Adjutant General of Washington.
         (2) Adjutants General of the remaining States and territories.
    (d) ORGANIZATION.--
         (1) EXECUTIVE AGENT.--The Secretary shall designate the 
National Guard Bureau as the Department of Defense executive agent for 
the Yellow Ribbon Reintegration Program.
         (2) ESTABLISHMENT OF THE OFFICE FOR REINTEGRATION PROGRAMS.--
           (A) IN GENERAL.--The National Guard Bureau shall establish 
the Office for Reintegration Programs within the National Guard Bureau 
Joint Staff. This office shall administer all reintegration programs in 
coordination with State National Guard organizations. The office shall 
be responsible for coordination with existing National Guard family and 
support programs. The Directors of the Army National Guard and Air 
National Guard may appoint liaison officers to work with the permanent 
office staff. The office shall closely coordinate with the Army 
National Guard and Air National Guard Directorates for Manpower and 
Personnel with respect to existing family support structure, 
mobilization schedules, training schedules, training plans and 
programs, and any other personnel issues.
           (B) ESTABLISHMENT OF A CENTER FOR EXCELLENCE IN 
REINTEGRATION.--The Office for Reintegration Programs shall establish a 
Center for Excellence in Reintegration within the office. The Center 
shall collect and analyze ``lessons learned'' and suggestions from 
State National Guard organizations with existing or developing 
reintegration programs. The Center shall also assist in developing 
training aids and briefing materials and training representatives from 
State National Guard organizations. Representatives from State National 
Guard organizations with successful reintegration programs may augment 
the Office staff.
         (3) ADVISORY BOARD.--
           (A) APPOINTMENT.--The Chief of the National Guard Bureau 
shall appoint an advisory board to analyze and report areas of success 
and areas for necessary improvements. The advisory board shall include, 
but is not limited to, the Director of the Army National Guard, the 
Director of the Air National Guard, the Assistant Secretary of Defense 
for Reserve Affairs, an Adjutant General on a rotational basis as 
determined by the Chief of the National Guard Bureau, the Director of 
the National Guard Bureau Manpower and Personnel Directorate (J-1), and 
any other Department of Defense, Federal Government agency, or outside 
organization as determined by the Chief of the National Guard Bureau. 
The members of the advisory board may designate representatives in 
their stead.
           (B) SCHEDULE.--The advisory board shall meet on a schedule 
as determined by the Chief of the National Guard Bureau.
           (C) INITIAL REPORTING REQUIREMENT.--The advisory board shall 
issue internal reports as necessary and shall submit an initial report 
to the Committees on Armed Services not later than 180 days after the 
end of a 1-year period from establishment of the Office for 
Reintegration Programs. This report shall contain--
             (i) an evaluation of the reintegration program's 
implementation by State National Guard organizations;
             (ii) an assessment of any unmet resource requirements;
             (iii) an assessment of the reintegration program's further 
inclusion of other reserve component members and the necessity for 
further expansion to incorporate all the reserve components; and
             (iv) recommendations regarding closer coordination between 
the Office of Reintegration Programs and State National Guard 
organizations.
           (D) ANNUAL REPORTS.--The advisory board shall submit annual 
reports to the Committees on Armed Services of the Senate and House of 
Representatives following the initial report by the first week in March 
of subsequent years following the initial report.
         (4) STATE DEPLOYMENT CYCLE SUPPORT TEAMS.--The Office for 
Reintegration Programs shall employ personnel to administer the Yellow 
Ribbon Reintegration Program at the State level. The Chief of the 
National Guard Bureau shall assign State Deployment Cycle Support team 
members based on State need, geographical dispersion, and military 
population. The Office for Reintegration Programs is encouraged to 
employ wounded service members and returning combat veterans whenever 
possible. The nary function of team members shall be--
           (A) developing and managing the reintegration curriculum;
           (B) contracting and recruiting for necessary service 
providers; and
           (C) ensuring that providers' skills adapt to the unique 
military nature of the reintegration program.
    (e) PROGRAM.--
         (1) IN GENERAL.--The Office for Reintegration Programs shall 
analyze the demographics, placement of State Family Assistance Centers 
(FAC), and FAC resources before a mobilization alert is issued to 
affected State National Guard organizations. The Office of 
Reintegration Programs shall consult with affected State National Guard 
organizations following the issuance of a mobilization alert and 
Implement the reintegration events in accordance with the Reintegration 
Program phase model.
         (2) PRE-DEPLOYMENT PHASE.--The pre-deployment phase shall 
constitute the time from first notification of mobilization until 
deployment of the mobilized National Guard unit. Events and activities 
shall focus on providing education and ensuring the readiness of 
service members, families, and communities for the rigors of a combat 
deployment.
         (3) DEPLOYMENT PHASE.--The deployment phase shall constitute 
the period from deployment of the mobilized National Guard unit until 
the unit arrives at a demobilization station inside the continental 
United States. Events and services provided shall focus on the 
challenges and stress associated with separation and having a member in 
a combat zone. Information sessions shall utilize State National Guard 
resources in coordination with the Employer Support of Guard and 
Reserve Office, transition Assistance Advisors, and the State Family 
Programs Director.
         (4) DEMOBILIZATION PHASE.--
           (A) IN GENERAL.--The demobilization phase shall constitute 
the period from arrival of the National Guard unit at the 
demobilization station until its departure for home station. In the 
interest of returning members as soon as possible to their home 
stations, reintegration briefings during the demobilization phase shall 
be minimized. State Deployment Cycle Support Teams are encouraged, 
however, to assist demobilizing members in enrolling in the Department 
of Veterans Affairs system using form l040EZ during the Demobilization 
Phase. State Deployment Cycle Support Teams may provide other events 
from the initial reintegration activity as determined by the State 
National Guard organizations. Remaining events shall be conducted 
during the post-deployment-reconstitution phase.
           (B) INITIAL REINTEGRATION ACTIVITY.--The purpose of this 
reintegration program is to educate service members about the resources 
that are available to them and to connect members to service providers 
who can assist them in overcoming the challenges of reintegration.
        (5) POST-DEPLOYMENT-RECONSTITUTION PHASE.--
           (A) IN GENERAL.--The post-deployment reconstitution phase 
shall constitute the period from arrival at home station until 180 days 
following demobilization. Activities and services provided shall focus 
on reconnecting service members with their families and communities and 
providing resources and information necessary for successful 
reintegration. Reintegration events shall begin with elements of the 
Initial Reintegration Activity program that were not completed during 
the demobilization phase.
           (B) 30-DAY, 60-DAY, AND 90-DAY REINTEGRATION ACTIVITIES.--
The State National Guard organizations shall hold reintegration 
activities at the 30-day, 60-day, and 90-day interval following 
demobilization. These activities shall focus on reconnecting service 
members and family members with the service providers from initial 
reintegration activity to ensure service members and their families 
understand what benefits they are entitled to and what resources are 
available to help them overcome the challenges of reintegration. The 
reintegration activities shall also provide a forum for service members 
and families to address negative behaviors related to combat stress and 
transition.
           (C) SERVICE MEMBER PAY.--Service members shall receive 
appropriate pay for days spent attending the Reintegration Activities 
at the 30-day, 60-day, and 90-day interval.
           (D) MONTHLY INDIVIDUAL REINTEGRATION PROGRAM.--The Office 
for Reintegration Programs, in coordination with State National Guard 
organizations, shall offer a monthly reintegration program for 
individual service members released from active duty or formerly in a 
medical hold status. The program shall focus on the special needs of 
this service member subset and the Office for Reintegration Programs 
shall develop an appropriate program of services and information.

                                 
                 Prepared Statement of Thomas L. Bush,
   Acting Deputy Assistant Secretary of Defense for Reserve Affairs 
          (Manpower and Personnel), U.S. Department of Defense
        Prepared Statement of Curtis L. Gilroy, Ph.D., Director,
    Accession Policy, Office of the Under Secretary of Defense for 
                               Personnel
 and Readiness (Military Personnel Policy), U.S. Department of Defense
    Good afternoon Madam Chairwoman and Members of the Subcommittee. We 
are pleased to appear before you today, on behalf of the Department of 
Defense (DoD), to testify about the educational assistance programs 
available to active duty members, National Guard and Reserve members, 
and veterans. For today's hearing, you asked the Department to comment 
on four areas:

    1.  What specific issues should the Subcommittee address to meet 
the needs of today's servicemembers and veterans?
    2.  Has the Department identified any problems in the current MGIB 
or MGIB-SR?
    3.  Does the Department have any recommendations to streamline or 
simplify the MGIB or MGIB-SR?
    4.  Should the Subcommittee be concerned about specific MGIB or 
MGIB-SR related legislation that is pending before Congress?

    Before turning to these specific questions, we would like to give a 
brief overview of the current educational assistance programs--the 
Montgomery GI Bill (MGIB), which provides educational assistance 
benefits to active duty members and veterans, and the Montgomery GI 
Bill for the Selected Reserve (MGIB-SR) and the Reserve Educational 
Assistance Program (REAP), which provide educational assistance 
benefits to National Guard and Reserve members.

                         THE MONTGOMERY GI BILL

    The MGIB program is a cornerstone of our active duty military 
recruiting efforts. There is little doubt that the MGIB has met or even 
exceeded the expectations of its sponsors when it was enacted and has 
been a major contributor to the success of the All-Volunteer Force. The 
original ``GI Bill of Rights,'' created at the end of World War II, 
gave returning servicemembers a comprehensive package of benefits to 
compensate for opportunities lost while in the military, and to ease 
their transition back into civilian life. The noted economist Peter 
Drucker described that GI Bill by saying, ``Future historians may 
consider it the most important event of the 20th century.'' Perhaps the 
most far-reaching provision of the GI Bill was the financial assistance 
it made available for veterans to attend college. The GI Bill offered 
returning Soldiers, Sailors, Marines and Airmen payment of tuition, 
fees, books, and supplies, along with a living stipend, at the 
educational institution of the veteran's choice.
    Today's MGIB traces its lineage directly to this milestone program, 
with one important change. While all earlier GI Bill programs were 
designed to ease the transition to civilian life from a conscripted 
military force, since 1973 we have defended this Nation with a 
volunteer force. Thus, as codified in title 38, United States Code, the 
MGIB has as one of its purposes, ``to promote and assist the All-
Volunteer Force program and the Total Force Concept of the Armed Forces 
by establishing a new program of educational assistance based upon 
service on active duty or a combination of service on active duty and 
in the Selected Reserve to aid in the recruitment and retention of 
highly qualified personnel for both the active and reserve components 
of the Armed Forces.''
    In assessing the current MGIB program it is important to note that 
education benefits are vital to our recruiting efforts. ``Money for 
college'' consistently ranks among the major reasons young men and 
women give for enlisting. Enrollment in the active-duty MGIB program 
has risen from only 50 percent in its first year, 1985, to nearly 97 
percent today. A total of 2.8 million men and women, from an eligible 
pool of 3.8 million, have chosen to participate in the MGIB since its 
implementation on July 1, 1985. Such enrollment rates demonstrate the 
attractiveness of the MGIB.
    The current MGIB program continues to serve the Active Components 
of the military well. It is our belief that there are no significant 
shortcomings to the program.
Value of the MGIB Stipend
    In the initial year of the program--School Year 1985-86--the MGIB 
offset 70 percent of the average cost of total expenses at a public 4-
year university. Total expenses include tuition, fees, room, and board. 
This offset steadily declined until the early nineties when the MGIB 
monthly benefit was increased from $300 per month to $400 per month. 
Since 1993, the benefit has been adjusted annually for inflation. The 
current rate of $1,101 this school year covers approximately 73 percent 
of the average total expenses at a public 4-year university.
    In addition to the basic MGIB benefit, three of the four Services 
offer an increased benefit, called a ``kicker,'' targeting enlistments 
in certain critical or hard-to-fill skills and for extended periods of 
initial service. The Army, Navy, and Marine Corps use this incentive to 
annually steer about 12,000 high-quality youth into the skills 
necessary for efficient force management. The statutory limit for the 
kicker is $950 per month. The basic MGIB benefit plus the kicker make 
up the Service College Funds. This year, the maximum benefit of the 
Service College Funds covers about 136 percent of the estimated average 
total expenses at a public 4-year university.
    There is no doubt that the MGIB serves as a key recruiting 
incentive. As I indicated earlier, young men and women consistently 
rank ``money for college'' as the major reason they enlist. Today, the 
Services are facing stiff challenges to recruiting. The number of 
graduates who are pursuing postsecondary education right out of high 
school is at an all-time high, and young people are finding that 
financial assistance to attend college is available from many sources. 
While few of those sources match the benefits of the MGIB, neither do 
these sources require young men and women to delay their education for 
a term of military service and the possibility of entering into 
``harm's way.'' The MGIB benefit should be sufficient to offset the 
commitment and sacrifices associated with military service.
    While many may look at the benefit level of the MGIB as it relates 
to readjustment and transition to civilian life, we must be mindful of 
its effect on military force management. The potential benefits of a 
higher benefit level to recruiting must be carefully evaluated in light 
of the difficulties some of the Services are currently experiencing in 
the recruiting market. Attracting qualified recruits using large, 
across-the board basic benefits incurs the risk that many who enter for 
the benefits will leave as soon as they can to use them. If so, lower 
first term retention could both reduce the number of experienced NCOs 
and Petty Officers available to staff the force, and put added pressure 
on the recruiting market as additional accessions are required to 
replace the members who leave. The Department of Education, National 
Center for Education Statistics states the average monthly cost of 
education (tuition, fees, room, and board) for School Year 2006-2007 
was $1,450 (adjusted for inflation). We posit that the negative 
retention impact starts to outweigh the positive impacts on recruiting 
when the monthly benefit is higher than the total cost of education.

              MONTGOMERY GI BILL FOR THE SELECTED RESERVE

    Since the inception of the program in 1986 through fiscal year 
2006, 1,500,000 members of the Selected Reserve have entered into 
service agreements to gain eligibility for benefits under the 
Montgomery GI Bill for the Selected Reserve. Of those who committed to 
service in the Selected Reserve for MGIB-SR benefits, 639,516, or 42 
percent, have applied for educational assistance. This indicates that 
educational assistance plays an important role in the decision to join 
the National Guard or Reserve. As of August 2007, slightly under 40 
percent of members currently serving in the Selected Reserve are 
eligible for MGIB-SR benefits. We also have another 10 percent of 
currently serving Selected Reserve members who are now beyond the 14-
year MGIB-SR delimiting period.
    To illustrate the importance of the MGIB-SR program to our 
recruiting and retention efforts, just under 50 percent of members 
serving in the Selected Reserve today are within their 8-year military 
service obligation. Among those who have a remaining service 
obligation, they have the option of transferring to the Individual 
Ready Reserve at any time unless they have a contractual Selected 
Reserve service obligation based on receiving an incentive (such as the 
MGIB-SR). Thus, incentives are an important tool in staffing our 
reserve units.
    To sustain the All-Volunteer Force, particularly in the Guard and 
Reserve where the majority of Selected Reserve members may quit at any 
time, we need every tool available to recruit and retain members in the 
Selected Reserve. The MGIB-SR program helps us do that by requiring a 
member to commit to 6 years of service in the Selected Reserve to gain 
eligibility for MGIB-SR benefits and remain in the Selected Reserve to 
retain eligibility.

                 RESERVE EDUCATIONAL ASSISTANCE PROGRAM

    The new Reserve Educational Assistance Program (REAP) was developed 
to reward National Guard and Reserve members who served in support of a 
contingency operation, and National Guard members who performed 
federally funded state duty at the request of the President or 
Secretary of Defense to respond to a national emergency by offering an 
incentive to continue to serve following a mobilization when pressure 
to separate may be strong. A member who serves as few as 90 consecutive 
days is eligible for $440 a month in educational assistance for up to 
36 months. The benefit increases for members who serve longer, with a 
member who serves for at least one continuous year eligible for a 
benefit of $660 a month and a member who serves for at least 2 
continuous years eligible for a benefit of $880 per month. The only 
requirement is that the member continues to serve in the Selected 
Reserve, or Ready Reserve if the member was serving in the Individual 
Ready Reserve when he or she was ordered to active duty. As of 
September 2007, 41,388 Reserve component members have used the REAP 
program.

              NEEDS OF TODAY'S SERVICEMEMBERS AND VETERANS

    The most recent survey data on Reserve Educational Assistance 
Program show that 17 percent of respondents were pursuing an education 
of which 42 percent were using the MGIB-SR benefit, 14 percent were 
using the MGIB-AD benefit and 15 percent were using the REAP benefit. 
We also asked how satisfied members were with their educational 
benefits. Seventy-four percent responded that they were satisfied or 
very satisfied. Another 14 percent responded that they were neither 
satisfied nor dissatisfied, with 8 percent dissatisfied and 4 percent 
very dissatisfied. This feedback indicates that the programs are 
working well. Although as noted below, there are areas where we believe 
program improvements are warranted.
    Moreover, for the programs that are under the jurisdiction of the 
Department of Defense--the Montgomery GI Bill for the Selected Reserve 
and the Reserve Educational Assistance Program--we must look at these 
recruiting and retention incentives through the lens of force 
management. We know that there are different factors or incentives that 
motivate an individual to join the military and to remain in the 
military. So we must determine if the incentives we offer are achieving 
our force management objectives. We also must balance priorities that 
are competing for limited resources.
    As previously noted, the current percent of the force that has 
gained eligibility for the Montgomery GI Bill for the Selected Reserve 
is only slightly below the historic level--2 percent. This is an 
indication that members still value the program. One area we have 
specifically looked at is the benefit rate. While the law provides for 
an annual rate adjustment based on the Consumer Price Index, there has 
been concern that benefit level has not kept up with the rising cost of 
education or increases to the MGIB programs. Therefore, we asked the 
DoD Actuary to develop a cost projection to increase the MGIB-SR 
benefit rate to 50 percent of the 3-year MGIB benefit level, which 
would bring the rate for a full-time student to $550 compared to the 
current rate of $317. The Actuary projected that this $233 or 75-
percent increase in the benefit would cost just over $1B over the next 
5 years.
    Another possible change the Department is considering is an 
increase in the MGIB-SR kicker, which currently has a maximum limit of 
$350 a month. Adjusting the kicker rate would help the Services achieve 
force-shaping objectives by providing a richer kicker benefit to 
members who agree to serve in a skill designated as critically short. 
Unlike a general rate adjustment, this would help the Department 
relieve some of the stress on the force by providing an additional 
retention incentive for members who are currently in or will retrain 
into a critically short skill or specialty.

                    PROBLEMS IN THE CURRENT PROGRAMS

    As stated earlier, the current MGIB program continues to serve the 
Active Components of the military well and we see no significant 
problems with the program.
    We do have a concern with both the Montgomery GI Bill for the 
Selected Reserve and the Reserve Educational Assistance Program. 
Initiatives to reset the force and the drawdown of forces in the Air 
Reserve components could lead to some members losing eligibility to 
either or both programs.
    Therefore, this year the Department submitted legislation that 
would renew the MGIB-SR drawdown provision of the 1990's. This would 
allow a member to retain MGIB-SR eligibility for up to 10 years 
following separation from the Selected Reserve provided the reason for 
separating from the Selected Reserve was a result of force-shaping 
initiatives associated with Base Closure and Realignment (BRAC) action. 
We are pleased that the Senate-passed version of the National Defense 
Authorization Act for Fiscal Year 2008 (2008 NDAA) (section 675 of H.R. 
1585) included this provision.
    The Department also proposed an amendment to REAP which would allow 
a member of the Selected Reserve who incurs a break in Selected Reserve 
service, but remains in the Individual Ready Reserve or Inactive 
National Guard during that break, to continue to receive educational 
assistance payments for up to 90 days provided the member retains in 
the Individual Ready Reserve. If the break extends beyond 90 days, 
benefit payments would be suspended, but the member would not lose 
eligibility for the REAP benefit. Currently, the Selected Reserve 
member retains eligibility for REAP up to 90 days with no benefit 
payments, but loses all eligibility after 90 days. The change proposed 
by the Department would allow for a short period of uninterrupted 
benefits for members who transition between units or components and 
allow a member who has earned a benefit to retain the benefit 
indefinitely provided the member remains in the Ready Reserve. 
Regrettably, this proposal was included in neither the House nor Senate 
passed versions of the 2008 NDAA.

                 STREAMLINING OR SIMPLIFY THE PROGRAMS

    This past year, there has been considerable interest in changing 
the two Reserve educational assistance programs--primarily to allow a 
member to use the benefit after voluntarily separating from the 
Service. The reason typically cited for this change is that Reserve 
component members are now being called up to perform operational 
missions rather than to just train; therefore, it is only fair that 
they are allowed to use their educational assistance benefits after 
they leave the service--just like active duty members.
    There have been two approaches proposed to accomplish this. The 
first is to consolidate the three separate educational assistance 
programs into a ``Total Force GI Bill'' in title 38 of the U.S. Code. 
The second approach is simply recodify the two reserve educational 
assistance programs into title 38. In fact legislation is pending that 
would move both the MGIB-SR and REAP programs to title 38. While the 
Department strongly supports changes to the reserve educational 
assistance programs that help sustain the Reserve components and the 
All-Volunteer Force, we do not support consolidating the three 
educational assistance programs or transferring responsibility for the 
reserve educational assistance programs to the Department of Veterans 
Affairs.
    The concept of a ``Total Force GI Bill'' was to create a single 
program drawing from the best attributes of all three educational 
assistance programs. But if the programs are to continue to serve the 
purposes for which they were designed, it may be difficult to truly 
have one program. The calls for a single program simply views military 
service as the pathway to an education benefit, not a program to retain 
members. All the ``Total Force'' proposals we have reviewed do not 
integrate the three programs; they simply remain three separate and 
distinct stand-alone programs that would be codified with some slight 
modifications in title 38.
    Moving the two reserve educational assistance programs to title 38 
would place military force management programs under the jurisdiction 
of this committee and have them administered by the Secretary of 
Veterans Affairs. This neither streamlines nor simplifies the programs. 
Nor does it fit with the purpose for which these programs were 
created--recruiting and retention. These are force management functions 
that belong to the Department of Defense, not the Department of 
Veterans Affairs. The Department of Veterans Affairs provides benefits 
and services to veterans and their families. The mission of DoD is to 
provide a fit, ready force to defend this nation. To do that, we need a 
range of incentives to help us manage, sustain and shape the force. 
Moving the two reserve programs to the Department of Veterans Affairs 
does not help us do that.
    Moreover, Reserve component members can and do earn MGIB-AD 
benefits. In fact, nearly 50 percent of all currently serving members 
of the Selected Reserve are already eligible for MGIB-AD benefits by 
virtue of prior active duty service. And a member who serves for 2 
continuous years in support of a contingency operation qualifies for 
both MGIB-AD and REAP, which have nearly identical benefit payment 
amounts. The member has the choice of which benefit he or she would 
like to use.
    Some commonality among all of the programs makes sense. They should 
all provide assistance for the same education programs so, other than 
the amount paid, use of any program is transparent to the student and 
educational institution. This can be achieved by linking the benefits 
available in the title 10 programs to the benefits provided in the 
title 38 programs, just as we did when we linked the benefit rates for 
the title 10 REAP program to the title 38 MGIB rate. In doing this, 
when a program is added under the MGIB program, it would automatically 
be added to the MGIB-SR and REAP programs.

                          PENDING LEGISLATION

    Finally, the Subcommittee asked if there is any legislation that 
the Subcommittee should be concerned about that is currently pending in 
the Congress.
    There are a number of proposals to enhance the current Montgomery 
GI Bill. Most of these affect the Department of Veterans Affairs, which 
has the responsibility for administering and funding the Active Duty 
Montgomery GI Bill program. However, there is one bill (S. 22) that has 
received much attention that would have an effect on active duty force 
management.

    S. 22 (as revised), the Post-9/11 Veterans Educational Assistance 
Act of 2007, offers a ``World War II-like'' GI Bill educational 
assistance benefit. If enacted, a veteran would be paid the full cost 
of a college education up to the maximum charges of the highest cost 
public institution in the State, as well as a $1,000 monthly stipend. 
This legislation is correct in stating that the Montgomery GI Bill 
(MGIB) was primarily designed for a ``peacetime force.'' However; as 
previously stated, the current MGIB program for active duty is 
basically sound and serves its purpose in support of the All-Volunteer 
Force. While it may warrant some changes at the margin, there is no 
need for the kind of sweeping (and expensive) changes offered in S. 22.
    The average cost of a public 4-year institution this past school-
year was about $1,450/month. Adding a $1,000 monthly stipend would 
bring a monthly benefit to about $2,450. The Department is concerned 
that a benefit of this amount would have long-term negative impacts on 
force management. It would be an enlistment incentive, to be sure; but 
it would be a larger reenlistment disincentive. Additionally, we are 
concerned that this Bill offers no provision for ``kickers,'' which, as 
stated earlier, are used by the Services to channel high quality youth 
into hard-to-fill and critical skills.
    There are also a number of bills that would make changes to the 
MGIB-SR and REAP programs. The Department's concern with many of the 
changes being proposed is that they affect the Reserve service 
obligation. Unlike individuals who have an obligation to serve on 
active duty, many Reserve component members are under no obligation to 
serve in the Selected Reserve. Unless an individual commits to Selected 
Reserve service because he or she receives a bonus, receives student 
loan repayments, or commits to Selected Reserve service for the MGIB-SR 
benefits, a Guard or Reserve member makes a choice to continue to 
participate each time he or she reports for a drill weekend.
    This is why we are so interested in retaining the retention aspect 
of the two reserve educational assistance programs. If we still had a 
conscripted force, then retention would not be as much of a concern. 
But we have an All-Volunteer Force and we need incentives that 
encourage Guard and Reserve members to continue to serve, rather than 
providing incentives that encourage them to leave the force.
    As previously noted, the legislation proposed by the Department is 
designed to improve REAP for the member and help the Department meet 
its force management objectives. This is in stark contrast to many of 
the sweeping changes in bills currently pending before Congress.

    H.R. 1585 (Section 525), the National Defense Authorization Act for 
Fiscal Year 2008 (as passed by the House) and S. 644, the Total Force 
Educational Assistance Enhancement and Integration Act of 2007, would 
both recodify chapter 1606 (MGIB-SR) and chapter 1607 (REAP) of title 
10, as a new chapter in title 38. As previously described, these 
provisions would place primary responsibility for managing two critical 
DoD recruiting and retention incentive programs with the Secretary of 
Veterans' Affairs. While the amendments proposed in both bills would 
for the most part leave these two programs as currently structured in 
title 10--recruiting and retention incentives--it has been widely 
publicized that the intent of placing the Reserve educational 
assistance programs in title 38 is to provide a post-service benefit. 
This will have a detrimental effect on retention.
    A preliminary assessment by a federally funded research and 
development center (FFRDC) projects that modifying the REAP program to 
provide a post-service benefit could increase attrition by 10 percent 
among members who are not already eligible for MGIB benefits. If this 
change is enacted, it will impose an additional cost to DoD while 
transferring the cost of the current program to the Department of 
Veterans Affairs as direct spending--thus increasing the total cost to 
government. There is little doubt that such a change will increase 
attrition. Therefore, in order for DoD to sustain the same force level, 
the Department will incur a new replacement costs created when members 
who would otherwise remain in the Guard or Reserve in order to use 
these benefits separate. On a per capita basis, it will cost the 
Department $17,400 to recruit a replacement and train that replacement 
to an entry skill level. Furthermore, in the current recruiting 
environment, the Reserve components are offering accession incentives 
ranging from $10,000 to $20,000. This will bring the total cost to 
replace each individual to between $27,400 and $37,400, depending on 
the accession incentive involved. Using the average incentive cost of 
$15,000, an increase in attrition as little as one percent would cost 
DoD an additional $518M over the next 5 years to maintain the current 
force level.
    Finally, the Administration has worked with Congressional Budget 
and Appropriation Committees to ensure that the true cost of manpower 
is reflected in the budget of all agencies. Reserve education benefits 
are recruiting and retention incentives and, for this reason, they were 
funded on an actuarial basis in the DoD budget at the inception of the 
MGIB. Transferring responsibility for these two programs to DVA 
dismantles this funding mechanism with the programs then being budgeted 
as direct spending, which is contrary to transparent and responsible 
budgeting.

    H.R. 1585 (Section 676), the National Defense Authorization Act for 
Fiscal Year 2008 (as passed by the Senate) would allow a member who 
completes the required period of contingency service and any other 
contractual service obligation to retain REAP eligibility for 10 years 
after separating from the Selected Reserve. As noted previously, most 
Selected Reserve members are not obligated to serve in the Selected 
Reserve. If enacted, this provision would take away one of our 
retention incentives. This would provide a post-service benefit for a 
member who serves as few as 90 days on active duty, compared to the 
eligibility criteria to qualify for the MGIB-AD benefit, which requires 
the member to serve at least 2 continuous years on active duty. 
Further, this would impose the same cost to the Department as just 
described for transferring the two reserve educational assistance 
programs to DVA.

    H.R. 1585 (Section 674), the National Defense Authorization Act for 
Fiscal Year 2008 (as passed by the Senate) and S. 1293, the Veterans' 
Education and Vocational Benefits Improvement Act of 2007, would 
provide authority, beginning October 1, 2008, for accelerated payment 
of educational assistance for certain high-cost programs of education 
under the MGIB-SR and REAP programs. Section 674 and S. 1293 would also 
amend REAP to allow Reserve component members who served an aggregate 
of 3 years or more of qualifying duty to receive an educational 
assistance allowance at the highest benefit level authorized under this 
program (80 percent of the 3-year MGIB-AD rate). Currently, the service 
requirement is for continuous years of qualifying service. Finally, 
section 674 and S. 1293 would authorize a program, similar to the MGIB-
AD program, that allows a member to ``buy up'' his or her REAP benefit 
by making after-tax contributions of up to $600 to augment the monthly 
amount of basic educational assistance the member receives during the 
36 months of entitlement to educational assistance payments.
    The maximum 5-year cost for providing accelerated payments would be 
$35M ($4M per year for MGIB-SR and $3M per year for REAP). The 
preliminary 5-year cost estimate to allow reserve component members to 
``buy-up'' their REAP benefit is $15M. The preliminary 5-year cost 
estimate of allowing members who serve an aggregate of 3 years to 
receive benefit payments at the 80 percent level is $11M. The estimated 
total 5-year cost to DoD is $61M. This modest investment would provide 
Reserve component members with additional options for using their 
educational assistance benefits while supporting DoD's retention 
efforts.
    Allowing a member to accumulate periods of service in order to 
qualify for the highest level of benefit payments under REAP would 
support the Secretary's force utilization policy, which is to limit 
mobilizations to no more than 1 year and the Department's continuum of 
service construct, which is to facilitate varying levels of service as 
the member's situation allows.
    Therefore, the Department supports Section 674 and those provisions 
of S. 1293, which would provide for accelerated payments under the 
MGIB-SR and REAP programs, allow Reserve component members who serve 
for 3 cumulative years to qualify for the highest benefit level under 
the REAP program and permit members to ``buy up'' their benefit level--
like the option available under the MGIB-AD program--by contributing up 
to $600.

                               CONCLUSION

    Today, the volunteer military stands ready, willing, and able to 
defend our great nation, as well as its values and principles. Credit 
for our success in attracting high-quality people to serve in uniform 
belongs in large measure to the Congress for providing military members 
with the benefits embodied in the educational assistance programs. Few 
areas, if any, are more important to DoD than recruiting and retention. 
We recognize our duty to man the All-Volunteer Force with high-quality, 
motivated, and well-trained men and women. The MGIB and REAP 
educational assistance programs have been a major contributor to 
recruiting and retention achievements for more than 20 years. As we 
move through the 21st Century, we must continue to build upon the 
remarkable legacy of the visionaries who crafted preceding versions and 
improvements in the GI Bill. I thank the Subcommittee for its dedicated 
support to the men and women who currently serve, and those who have 
served, our great nation.

                                 
  Prepared Statement of Keith M. Wilson, Director, Education Service,
  Veterans Benefit Administration, U.S. Department of Veterans Affairs
    Good afternoon Chairwoman Herseth Sandlin, Ranking Member Boozman 
and members of the Subcommittee. I am pleased to be here today to 
discuss the current state of the Montgomery GI Bill (MGIB) and 
potential ways to improve upon its success and the success of the other 
educational assistance programs administered by the Department of 
Veterans Affairs (VA). My testimony will address areas in which the 
MGIB could be updated, streamlined, and simplified. In addition, I will 
comment on selected bills which have been introduced in the 110th 
Congress and certain concepts and provisions within those bills in 
which we find merit, as well as areas which could potentially be 
problematic. VA defers to the Department of Defense on how the various 
legislative proposals would affect title 10 education benefit programs 
whose primary objectives are force recruitment and retention. However, 
I will comment on how the selected bills will affect program 
implementation and costs.
    We are pleased to report that in fiscal year 2007, we paid an 
estimated $2.8 billion in benefits to approximately 500,000 trainees. 
These benefits covered chapters 30, 32, and 35 of title 38, and 
chapters 1606 and 1607 of title 10. Payments are made for studies in 
educational, vocational, on-the-job training and apprenticeship 
programs, completion of licensing and certification exams, and flight 
training. In fiscal year 2007, we processed original claims in 32.4 
days and supplemental claims in 13.2 days. This represents an 
improvement of approximately 7 days from our FY06 processing times of 
40.1 and 19.8 days. The reduction in our processing times also met or 
exceeded the performance goals set forth for FY07.
    VA's education benefit programs have been very successful in 
helping servicemembers in their successful readjustment to civilian 
life. Education benefits are frequently identified as a primary reason 
that individuals enlist in the armed forces.
    Recent congressional actions have addressed areas that we see as 
essential to the continued vitality of our educational benefit 
programs. For example, VA supports in principle the proposal in S. 
1293, for the expansion of accelerated payment, although we do have 
concerns arising from the potential inequities created by the annual 
payment limits mentioned in this bill. Another proposed bill, H.R. 797, 
would extend certain provisions of the Work Study program through June 
30, 2012. VA believes these provisions of the Work Study program serve 
a valuable purpose, and we agree they should be extended.
    The programs we administer, including MGIB-Active Duty, MGIB-
Selected Reserve, and the Readjustment Educational Assistance Program 
(REAP), in their current forms are a complex group of programs with 
complicated benefit eligibility criteria. VA appreciates Congress's 
strong interest in streamlining the education benefits available to 
veterans and servicemembers; however many of the proposals currently 
under consideration by Congress not only create additional eligibility 
categories but, in the process, also include retroactive eligibility 
criteria with amendments otherwise effective on the date of enactment. 
A multitude of programs and eligibility criteria create confusion for 
veterans, our partners in the Department of Defense (DoD), and for our 
Department, as well. This also works against our efforts to further 
improve program participation and understanding. We share your desire 
to improve education benefits available to veterans; however, we 
believe it should be done with the goal of streamlining existing 
programs versus adding new programs and additional layers of complexity 
associated with administering them. Further, many of the current 
proposals would expand benefit amount and/or eligibility; we cannot 
support any costly expansion of benefit without identified offsets.
    Two proposals which have garnered a great deal of attention would 
create a chapter 33 benefit, a new program for post September 11, 2001 
servicemembers and veterans (S. 22 and S. 1409/H.R. 2385). These 
proposals are prohibitively costly. Further, under the current benefits 
structure, many individuals find themselves potentially eligible under 
one or more of the three VA-administered programs that I previously 
mentioned. Those individuals are tasked with comparing payment rates 
and impact on kickers to determine which program would be most 
advantageous in their individual circumstances. Incorporating a new 
chapter 33 program, the extent of entitlement to which would require 
factoring in length of service and previous benefits usage, would make 
the process even more complex and difficult for individuals to 
understand.
    Finally, I note additional concerns with certain other pending 
legislation. Senate bills 723, 1719, and 698 and House bills 112 and 
1102 raise issues of equity in providing benefits to veterans and 
servicemembers. For example, these bills contain provisions that would 
give preference to one period of service or benefit program over 
another. S. 723 proposes to reimburse the payroll reduction required 
for MGIB enrollment to members of the Armed Forces who served after 
November 16, 2001, through the date of termination of Executive Order 
13235. Many individuals bravely served our country during periods that 
do not coincide with these dates; these individuals would be 
disadvantaged merely because of their dates of service. Both S. 1409 
and H.R. 2385 include provisions that would exclude graduate programs 
from eligibility. Today, many individuals enter the service with at 
least some amount of post-secondary education. Disallowing graduate 
training would limit the eligible person's choices and the ability to 
use the maximum entitlement earned, as well as create an inequity among 
those eligible to receive the benefit.
    Additionally, Senate bills 22, 1409, 1719, and 644 and House bill 
1102 pose significant logistical obstacles by requiring substantial 
changes to entitlement determinations and payment methods. These new 
payment methods would require extensive enhancements to existing 
payment systems with significant attendant costs, implementation delay, 
and impact on current claims processing. Our continued concern is 
limiting the impact on beneficiaries and ensuring timely receipt of 
payments.
    In closing, I reiterate that VA is dedicated to providing the most 
beneficial education programs to veterans and their dependents. We 
believe that changes made to enhance these benefits must not create an 
extra burden on the beneficiaries by making the programs more complex.
    This concludes my statement. I appreciate the opportunity to 
testify before the Subcommittee and would be pleased to address any 
questions you or other Members of the Subcommittee may have.

                                 
       Statement of James Kendzel, MPH, SPHR, Executive Director,
             National Organization for Competency Assurance
    The National Organization for Competency Assurance (NOCA) 
appreciates the opportunity to submit testimony to the House Committee 
on Veterans' Affairs Subcommittee on Economic Opportunity regarding its 
hearing on updating the Montgomery GI Bill, the nation's primary 
educational benefit for military personnel and veterans.
Maximize Use of Montgomery GI Benefits
    NOCA was an active participant in working with Members of Congress 
and the veterans' community to expand the use of Montgomery GI benefits 
toward paying for the cost of obtaining an occupational certification 
or license. Upon enactment of this new benefit,\1\ NOCA actively 
encouraged NOCA member certification boards to apply for approval from 
the Department of Veterans Affairs (VA) \2\ to speed the reimbursement 
process for veterans applying for reimbursement after taking their 
particular certification test. A large number of certifications meet 
the VA standards and are now reimbursable.\3\
---------------------------------------------------------------------------
    \1\ Pub. L. 106-419, Sec. 122, 114. Stat. 1833 (Nov. 1, 2000).
    \2\ Available at http://www.noca.org/portals/0/vatest.doc.
    \3\ The Department of Veterans Affairs WEAMS database allows a 
search of approved certifications. Available at: http://
inquiry.vba.va.gov/weamspub/buildSearchLCCriteria.do.
---------------------------------------------------------------------------
    NOCA continues to believe that the program is an essential element 
of the benefits returned to our veterans for their service to country 
and that this specific benefit enhances veterans' marketability in a 
competitive workforce by demonstrating competency in a particular 
occupation. NOCA has noted, however, that there has been a significant 
decrease in the use of the benefit since its inception. For example, 
from FY2004 to FY2006, the number of payments for certification and 
licensure tests dropped from 5,123 (FY2004) to 2,899 (FY2006). The 
amount paid out in certification and licensure reimbursements dropped 
from $1,433,768 (FY2004) to $1,062,852 (FY2006). However, the average 
payment increased from $280 to $367 during the same time period.\4\
---------------------------------------------------------------------------
    \4\ Data reported by a VA staff member at the July 21, 2006 minutes 
of the Professional Certification and Advisory Committee (PCLAC).
---------------------------------------------------------------------------
    The Professional Certification and Licensure Advisory Committee 
(PCLAC) has reviewed the decreasing numbers and suggested that the VA 
step up its outreach efforts to ensure awareness of the certification 
and licensure reimbursement benefit. NOCA supports this role for the 
VA. In years previous, staff from VA regularly attended and exhibited 
at the NOCA Annual Conference, the nation's largest gathering of 
certification bodies, in order to increase knowledge of the 
certification and licensure reimbursement benefit. The PCLAC sent a 
letter in 2006 to the Secretary of Veterans Affairs expressing their 
concerns about the VA's lackluster outreach efforts for the last few 
years in this area.
    NOCA continues to encourage its member certification boards to 
become approved by the VA. In addition, military websites such as Army 
Credentialing Opportunities On-Line (COOL) \5\ and Navy Credentialing 
Opportunities On-Line (COOL) \6\ provide information about using 
Montgomery GI benefits to pay for the cost of taking a certification or 
licensure examination. Likewise, Defense Activity for Non-Traditional 
Education Support (DANTES),\7\ a NOCA organizational member, provides 
similar information for veterans. However, more can be done to promote 
this important benefit. NOCA will continue to encourage its individual 
member certification boards to promote their VA approval to potential 
certificants. These efforts, long envisioned and encouraged by NOCA, 
are now essential building blocks for a regime of commitment to our 
veterans. We also encourage the VA to redouble its outreach efforts to 
both veterans and the certification community to raise awareness of 
Montgomery GI benefits.
---------------------------------------------------------------------------
    \5\ Available at https://www.cool.army.mil/.
    \6\ Available at https://www.cool.navy.mil/.
    \7\ http://www.dantes.doded.mil/Dantes_web/DANTESHOME.asp
---------------------------------------------------------------------------
    NOCA also recommends that the certification and licensure benefit 
be expanded to help pay for the costs of test preparation courses. Many 
such specialized courses can cost hundreds, if not thousands of 
dollars, for classroom instruction as well as practice tests, books, 
and other preparatory materials. They are essential in many instances 
to the successful preparation of otherwise qualified applicants, and we 
urge Congress to give this proposal a serious look.
    The current Montgomery GI benefit for paying for certification and 
licensure exams has a 10 year window in which the veteran may access 
these benefits. There has been discussion about eliminating the 10 year 
time period as well as allowing veterans to transfer their benefits to 
their dependents. NOCA strongly supports these measures as they would 
build more flexibility into the education and training system for 
veterans, making the benefit even more attractive. This format would 
acknowledge an asset-based benefit that veterans will have every 
incentive to earn and utilize for themselves or their dependents.
    Service to our country must and should have very specific and 
lasting rewards. For the men and women who enter the armed services, 
theirs is an expectation of support, and the ability to transfer skill 
sets learned in service to private sector enterprises. What more 
logical investment in the future of our veterans and the fields that 
they choose to enter after service than tangible pathways to engaging 
professions and trades afterward.
About the National Organization for Competency Assurance (NOCA)
    NOCA, the oldest and largest organization representing 
certification agencies, testing companies, and consulting firms and 
individuals involved in professional certification, was created in 1977 
as the National Commission for Health Certifying Agencies (NCHCA) with 
federal funding from the Department of Health and Human Services. Its 
mission was to develop standards for quality certification in the 
allied health fields and to accredit organizations that met those 
standards. With the growing use of certification in other fields, 
NCHCA's leaders recognized that what is essential for credible 
certification of individuals in the healthcare sector is equally 
essential for other sectors. With this vision, NCHCA evolved into the 
National Organization for Competency Assurance. NOCA is a non-profit, 
501(c)(3) organization, committed to serving the public interest by 
ensuring adherence to standards that ensure the highest competence of 
certification programs.
    NOCA's membership is composed of more than 380 organizations 
responsible for certifying specific skill sets and knowledge bases of 
professions and occupations at the national and international level. 
Through certification, NOCA members represent more than 15 million 
individuals around the world and include certification programs of some 
150 professions and occupations, including 60 healthcare professions. 
NOCA members certify individual skills in fields as diverse as 
construction, healthcare, automotive, and finance. A current roster of 
NOCA members is included in the appendix.
    NOCA also brings the expertise of its internationally recognized 
accrediting arm, the National Commission for Certifying Agencies 
(NCCA). NCCA uses a peer review process to evaluate adherence to its 
standards by certification programs and grants accreditation to those 
programs that have met those standards. These standards exceed the 
requirements set forth by the American Psychological Association and 
the U.S. Equal Employment Opportunity Commission and thus help to 
protect the health, safety, and welfare of the public. NCCA is the 
national accreditation body that provides this service for private 
certification organizations in all disciplines.
    NOCA's mission is to promote excellence in competency assurance for 
individuals in all occupations and professions. No other organization 
has the presence in or commits the resources to the field of 
certification. NOCA is proud of its position as the international 
leader in competency assurance for certification programs, as well as 
its role in promoting excellence in competency assurance for 
practitioners in all occupations and professions.

            Respectfully Submitted,
                                           James Kendzel, MPH, SPHR
                                                 Executive Director

                               __________
                               APPENDIX I
NOCA Organizational Members
    NOCA's Organizational Members consist of the following 
associations, certifying organizations, customer groups, and government 
agencies:

AACE International
Academy of Ambulatory Foot and Ankle Surgery
Academy for Certification of Vision Rehabilitation and Education 
Professionals
Academy of Lactation Policy and Practice
Accrediting Bureau of Health Education Schools
Accreditation Council for Accountancy and Taxation
Advocis
Aerobics and Fitness Association of America
Alliance of Information and Referral Systems
American Academy of Healthcare Providers in the Addictive Disorders
American Academy of Nurse Practitioners
American Academy of Micropigmentation
American Academy of Pain Management
American Academy of Wound Management
American Association for Medical Transcription
American Association for Respiratory Care
American Association of Clinical Coders and Auditors
American Association of Colleges of Nursing
American Association of Critical-Care Nurses Certification Corporation
American Association of Medical Assistants
American Association of Medical Audit Specialists
American Association of Physician Specialists
American Association of Poison Control Centers
American Board for Certification in Orthotics and Prosthetics, Inc.
American Board for Certification of Teacher Excellence, Inc.
American Board for Occupational Health Nurses
American Board of Cardiovascular Perfusion
American Board of General Dentistry
American Board of Genetic Counseling
American Board of Industrial Hygiene
American Board of Lower Extremity Surgery
American Board of Multiple Specialties in Podiatry
American Board of Nursing Specialties
American Board of Opticianry
American Board of Pain Medicine
American Board of Registration of Electroencephalographic and Evoked 
Potential Technologists, Inc.
American Board of Surgical Assistants
American Board of Transplant Coordinators
American Board of Veterinary Practitioners
American Certification Agency for Healthcare Professionals
American Chiropractic Board of Radiology
American Chiropractic Board of Sports Physicians
American Chiropractic Neurology Board
American Chiropractic Registry of Radiologic Technologists
American Clinical Board of Nutrition
American College of Sports Medicine
American College of Veterinary Ophthalmologists
American Construction Inspectors Association
American Council on Exercise
American Fitness Professionals and Associates
American Health Information Management Association
American Hospital Association Certification Center
American Institute of Certified Public Accountants
American Indoor Air Quality Council
American Manual Medicine Association
American Medical Massage Association
American Medical Technologists
American Midwifery Certification Board
American Nurses Credentialing Center Commission on Certification
American Occupational Therapy Association
American Optometric Association Commission on Paraoptometric 
Certification
American Organization for Bodywork Therapies of Asia
American Physical Therapy Association
American Registry for Diagnostic Medical Sonographers
American Registry of Magnetic Resonance Imaging Technologists
The American Registry of Radiologic Technologists
American Society for Association Executives
American Society for Metabolic and Bariatric Surgery
American Society for Clinical Pathology
American Society of Anesthesia Technologists and Technicians
American Society of Military Comptrollers
American Speech-Language-Hearing Association
American Staffing Association
American Veterinary Chiropractic Association, Inc.
American Veterinary Medical Association
APICS--The Association for Operations Management
Aquatic Exercise Association, Inc.
Architectural Woodwork Institute
Art Therapy Credentials Board
ASIS International
Association for Death Education and Counseling
Association for Investment Management and Research
Association of Christian Alcohol and Drug Counselors
Association of Government Accountants
Association of Regulatory Boards of Optometry
Association of State and Provincial Psychology Boards
Association of Surgical Technologists, Inc.
Association of Water Technologies, Inc.
Axiom Resource Management, Inc.
Banfield, The Pet Hospital
Behavior Analyst Certification Board
Biofeedback Certification Institute of America
Board for Certification in Clinical Anaplastology
Board for Certification of Addiction Specialists
Board for Certification in Pedorthics
Board for Orthotist/Prosthetist Certification
Board of Canadian Registered Safety Professionals
Board of Certification for Emergency Nursing
Board of Certification in Professional Ergonomics
Board of Certification of Medical Illustrators
Board of Certified Safety Professionals
Board of Environmental, Health & Safety Auditor Certifications
Board of Pharmaceutical Specialties
Board of Registered Polysomnographic Technologists
Breining Institute
California Association for Alcohol and Drug Educators
California Association of Alcoholism and Drug Abuse Counselors (CAADAC) 
and the California Certification Board of Alcohol and Drug Counselors 
(CCBADC)
California Association of Drinking Driver Treatment Programs
California Certifying Board for Medical Assistants
California-Nevada Section, American Water Works Association
California Water Environment Association
Canadian Alliance of Physiotherapy Regulators
Canadian Board for Respiratory Care, Inc.
Canadian Chiropractic Examining Board
Canadian Council of Professional Engineers
Canadian Nurses Association
Center for Credentialing and Education
Certification Board for Music Therapists
Certification Board for Radiology Practitioner Assistants
Certification Board for Sterile Processing and Distribution
Certification Board for Infection Control and Epidemiology
Certification of Disability Management Specialists Commission
Certified Financial Planner Board of Standards, Inc.
Certified Fund Raising Executive International
Certified General Accountants Association of Canada
Certified Mine Safety Professional Certification Board
Certifying Board for Dietary Managers
Chartered Realty Investor Society
College and Association of Registered Nurses of Alberta
College of Massage Therapists of Ontario
College of Medical Laboratory Technologists of Ontario
College of Medical Radiation Technologists of Ontario
College of Occupational Therapists of Ontario
College of Pharmacists of British Columbia
College of Physiotherapists of Ontario
College of Respiratory Therapists of Ontario
Commission for Case Manager Certification
Commission for Certification in Geriatric Pharmacy
Commission on Dietetic Registration of the American Dietetic 
Association
Commission on Graduates of Foreign Nursing Schools
Commission on Rehabilitation Counselor Certification
Competency and Credentialing Institute
Convergys
The Cooper Institute
Council of Landscape Architectural Registration Boards
Council on Certification of Health, Environmental, and Safety 
Technologists
Council on Certification of Nurse Anesthetists
Council on Licensure, Enforcement and Regulation
Council on Professional Standards for Kinesiotherapy
Crane Operator Certification Authority
CFA Institute
CSI Global Education
Defense Activity for Non-Traditional Education Support
Dental Assisting National Board
Department of Environment and Labor Province of Nova Scotia
Entertainment Technician Certification Program (ETCP-ESTA)
Esthetic Skin Institute
Examination Board of Professional Home Inspectors
Financial Planning Standards Board
Financial Planners Standards Council
Financial Planning Association of Australia
Florida Certification Board
Florida Nursery, Growers & Landscape Association
Fundacao Luis Eduardo Magalhaes
Hand Therapy Certification Commission, Inc.
The Healing Oasis Wellness Center
Healthcare Compliance Certification Board
Healthcare Financial Management Association
Healthcare Information and Management Systems Society
Healthcare Quality Certification Board
Human Resource Certification Institute
Illinois Department of Financial & Professional Regulation
Infocomm International
International Medical University of Natural Education (IMUNE)
Indian Alcoholism Commission of California
Infusion Nurses Certification Corporation
Institute for Safety and Health Management
Institute for the Certification of Pharmacy Technicians
Institute of Certified Construction Financial Professionals
Institute of Certified Management Accountants
Institute of Hazardous Materials Management
Institute for Supply Management
International Accounts Payable Professionals, Inc.
International Air Filtration Certifiers Association
International Alliance for Fitness Professionals
International Association for Colon Hydrotherapy
International Association of Eating Disorders Professionals Association
International Association of Forensic Nurses
International Association of Healthcare Central Service Materiel 
Management
International Board of Lactation Consultant Examiners
International Code Council
International Executive Housekeepers Association, Inc.
International Fitness Association
International Foundation for Retirement Education
International Lactation Consultant Association
International Pilates Certification
International Society for Clinical Densitometry
International Society of Arboriculture
International Society for Performance Improvement
Irrigation Association
ISA, The Instrumentation, Systems, and Automation Society
Joint Commission on Allied Health Personnel in Ophthalmology
Kassian Dyck & Associates
Knowledge Assessment Calculator (formerly American Payroll Association)
Lamaze International
Marketing Research Association
Medical Massage National Certification Board
Michigan Institute for Health Enhancement
NAA Education Institute
NAADAC--The Association for Addiction Professionals
National Academy of Sports Medicine
National Alliance Wound Care
National Assistant at Surgery Council
National Association of Medical Staff Services
National Association for Health Professionals
National Association of Boards of Pharmacy
National Association of Certified Valuation Analysts
National Association of College Stores
National Association of Federal Credit Unions
National Association of Forensic Counselors
National Association of Legal Assistants
National Association of Mortgage Brokers
National Association of Social Workers
National Association of State Contractors Licensing Agencies
National Asthma Educator Certification Board, Inc.
National Athletic Trainer's Association Board of Certification
National Board for Certification in Hearing Instrument Sciences
National Board for Certification of Hospice and Palliative Nurses
National Board for Certification of Orthopaedic Technologists
National Board for Certification in Occupational Therapy
National Board for Certification of Orthopedic Physician Assistants
National Board for Certified Counselors
National Board for Professional Teaching Standards
National Board for Respiratory Care
National Board of Certification for Community Association Managers, 
Inc.
National Board of Chiropractic Examiners
National Board of Examiners in Optometry
National Board of Nutrition Support
National Board of Orthodontics, U.S.
National Board of Surgical Specialists
National Board of Surgical Technology and Surgical Assisting
National Business Aviation Association
National Center for Competency Testing
National Certification Board for Diabetes Educators
National Certification Board for Therapeutic Massage and Body Work
National Certification Commission for Acupuncture and Oriental Medicine
National Certification Corporation for the Obstetric, Gynecologic, and 
Neonatal Nursing Specialties
The National Commission for Health Education Credentialing
National Commission for Certification of Continuing Medical Education 
Professionals
National Commission for the Certification of Crane Operators
National Concrete Masonry Association
National Contact Lens Examiners
National Council for Interior Design Qualification
National Council for Therapeutic Recreation Certification, Inc.
National Council of Architectural Registration Boards
National Council of Examiners for Engineering and Surveying
National Council of State Boards of Nursing, Inc.
National Council on Strength and Fitness
National Credentialing Agency for Laboratory Personnel
National Dental Hygiene Certification Board
National Enrichment Teachers Association
National Examining Board of Ocularists
National Exercise Trainers Association (NETA)
National Exercise and Sports Trainers Association (NESTA)
National Federation of Professional Trainers
National Fitness Professionals Association
National Ground Water Association
National Healthcareer Association
National Institute for Automotive Service Excellence
National Institute for Certification in Engineering Technologies
National Institute for Metalworking Skills
National Kitchen and Bath Association
National League for Nursing
National Occupational Competency Testing Institute
National Paramedical for Technician and Assistants
Natonal Recreation and Parks Association
National Registry of Emergency Medical Technicians
National Registry of Food Safety Professionals
National Strength and Conditioning Association (NSCA) Certification 
Commission
Natural Therapies Certification Board
Nephrology Nursing Certification Commission
North American Board of Certified Energy Practitioners
North American Registry of Midwives
North Carolina Substance Abuse Practice Board
The Nuclear Medicine Technology Certification Board
Oncology Nursing Certification Corporation
Ontario College of Pharmacists
Ontario College of Social Workers and Social Service Workers
Ophthalmic Photographers' Society, Inc. Board of Certification
Pediatric Nursing Certification Board
Petrofac Training International
Pharmacy Examining Board of Canada
Pharmacy Technician Certification Board
Pilates Method Alliance, Inc.
Private Trainers Association
Professional Golfers' Association of America
Professional Healthcare Institute of America
Professional Landcare Network
Professional Photographers of America
Psychiatric Rehabilitation Certification Program
Radiology Coding Certification Board
Registry of Interpreters for the Deaf, Inc.
Rehabilitation Engineering and Assistive Technology Society of North 
America
Rocky Mountain Masonry Institute
School Nutrition Association
Society of Actuaries
Society of American Foresters
Society of Cable Telecommunications Engineers
Society of Certified Senior Advisors
The Society of the Plastics Industry
Society of Tribologists and Lubrication Engineers
Software Engineering Institute
Southern California Crane and Hoisting Certification Program
Transportation Professional Certification Board, Inc.
Turnaround Management Association
UCSD--Center for Criminality Addiction Research, Training, and 
Application (CCARTA)
Universal Public Purchasing Certification Council
U.S. Green Building Council
Veterinary Hospital Managers Association
The Wedding Planning Institute
Wound, Ostomy, and Continence Nurses Certification Board

                                 

          POST-HEARING QUESTIONS AND RESPONSES FOR THE RECORD
                                     Committee on Veterans' Affairs
                               Subcommittee on Economic Opportunity
                                                    Washington, DC.
                                                   October 23, 2007

Robert Norton
Deputy Director, Government Relations
Military Officers Association of America
201 N. Washington Street
Alexandria, VA 22314

Dear Col. Norton:

    In reference to our House Committee on Veterans' Affairs 
Subcommittee on Economic Opportunity hearing on ``Updating the 
Montgomery GI Bill'' on October 18, 2007, I would appreciate it if you 
could answer the enclosed hearing questions by the close of business on 
November 23, 2007.
    In an effort to reduce printing costs, the Committee on Veterans' 
Affairs, in cooperation with the Joint Committee on Printing, is 
implementing some formatting changes for material for all full 
committee and subcommittee hearings. Therefore, it would be appreciated 
if you could provide your answers consecutively on letter size paper, 
single-spaced. In addition, please restate the question in its entirety 
before the answer.
    Due to the delay in receiving mail, please provide your response to 
Ms. Orfa Torres by fax at (202) 225-2034. If you have any questions, 
please call (202) 225-3608.

            Sincerely,
                                          Stephanie Herseth Sandlin
                                                         Chairwoman
                               __________
                                      Military Officers Association
                                                    Alexandria, VA.
                                                   October 31, 2007

Honorable Stephanie Herseth Sandlin,
Chairwoman, Subcommittee on Economic Opportunity, HVAC
Room 334 Cannon House Office Building
U.S. House of Representatives
Washington, DC 20515

Dear Madam Chairwoman:

    Thank you again for the opportunity to testify before your 
Subcommittee on October 18 in behalf of the Military Officers 
Association of America on the Montgomery GI Bill (MGIB).
    The current MGIB framework is a product of the Cold war. MGIB 
components are not optimized according to the realities of military 
policy and the needs of our Nation's veterans in the 21st century. In 
our view, the MGIB should be restructured under the principle that 
benefits should match the length and type of duty performed by all 
members of our armed forces. By doing this, the MGIB can be a better 
tool for military recruitment and retention programs, and improve 
readjustment outcomes for our veterans, as Congress intended.
    MOAA would prefer a comprehensive overhaul for the MGIB, but we 
recognize the challenges of competing priorities and the realities of 
PAYGO. From this perspective, MOAA's ``top five'' priorities for 
updating and improving the MGIB are:

    1.  Recodify reserve MGIB programs with the active duty MGIB in 
Title 38. (Section 525, H.R. 1585, House National Defense Authorization 
Act for FY 2008).
    2.  Establish a 10-year readjustment benefit--as authorized for 
active force members--for National Guard and Reserve veterans called to 
active federal service (Chap. 1607, 10 U.S.C.)
    3.  Raise MGIB monthly rates to cover the average cost of a 4-year 
public college/university education. Government data indicate the MGIB 
covers about 75 percent of such costs.
    4.  Authorize cumulative month-for-month entitlement under the MGIB 
(Chapter 30, 38 U.S.C.) for reservists who serve on multiple active 
duty tours in contingency operations.
    5.  Restore proportional parity between basic reserve MGIB rates 
(Chapter 1606, 10 U.S.C.) and the active duty program (Chapter 30).

The enclosure goes into greater detail on these priorities and is taken 
from my Statement for the Record for the 18 October hearing.

            Sincerely,
                                           Colonel Robert F. Norton
                              Deputy Director, Government Relations
Enclosure

                               __________
        Questions from the House Committee on Veterans' Affairs
                  Subcommittee on Economic Opportunity
               Hearing on Updating the Montgomery GI Bill
                            October 18, 2007
What are the top 5 things your organization [Military Officers 
        Association of America] would like to see in a new GI Bill? 
        Please list items by order of priority.
Answer:
    1.  Transfer reserve MGIB programs from title 10 to title 38. 
(Section 525, H.R. 1585). MGIB jurisdiction is split between the 
Veterans Affairs Committees (title 38), who handle traditional GI Bill 
benefits for active force members and the Armed Services Committees 
(title 10) who handle Guard/Reserve GI Bill programs. Over time, title 
38 benefits increased significantly, but Guard/Reserve benefits have 
not. Because of the growing proportional benefit gap and the dramatic 
surge in duty requirements of our Guard/Reserve members, the total GI 
Bill program is no longer structured to match the nation's military 
policy for the operational integration of our active and reserve 
forces. Benefits should be structured to match the length and type of 
duty performed by active duty and reserve component service men and 
women. The House took an essential first step by favorably voting 
Section 525 as a provision in the FY 2008 Natl. Defense Authorization 
Act. The provision is cost-neutral and retains jurisdiction for reserve 
(and active duty) MGIB ``kickers'' within DoD. (Section 525, H.R. 1585, 
H.R. 1641, S. 644)

    2.  Establish a readjustment benefit (post-service) eligibility 
period under the MGIB (Chap. 1607, 10 U.S. Code) for Guard and Reserve 
veterans serving on active duty in contingency operations. Regular 
active-force members have 10 years after leaving service to use their 
GI Bill--regardless of any deployment experience. But Guard/Reserve 
members who have been mobilized for multiple tours in Iraq can't use 
their mobilization-related GI Bill benefits once they complete their 
service obligation and separate. Post-service access to benefits earned 
on active duty in defense of the Nation is the only veterans' benefit 
denied returning Guard and Reserve veterans. The recent experience of 
the Minnesota Guard illustrates the problem. A 2-year ``REAP'' benefit 
(Chap. 1607) is the same as to a 2-year MGIB enlistment contract in the 
active armed forces ($880 per month for full-time study). What's 
missing is that returning Guard and Reserve troops have no readjustment 
(post-service) access to their benefits earned under REAP. CBO has 
informally scored the cost of 10-year portability of such benefits at 
$50 million in 2008, $165 million over 5 years and $235 million over 10 
years. The cost could be reduced by changing the effective date until 1 
October 2008 (FY 2009) (retroactive to Sept. 11, 2001 and adjusting the 
post-service usage period to 5 years for each 12 months served on 
active duty (the DoD call-up policy). (Section 626, H.R. 1585--Senate, 
and Section 530 ``Sense of Congress'' provision in H.R. 1585, House; S. 
644)

    3.  Raise MGIB monthly rates to cover the cost of education at the 
average 4-year public college/university. The present monthly rate for 
full-time study for active duty veterans is $1101 (Chapter 30, 38 U.S. 
Code), which covers about 75 percent of the current cost of education 
for books, fees, and expenses at the average 4-year public college or 
university according to Dept. of Education data. The Partnership for 
Veterans Education has long sought benchmarking MGIB rates to track 
with the average cost at a 4-year public college or university. (H.R. 
2385, S. 1409, H.R. 2702, S. 22)

    4.  Authorize cumulative month-for-month credit under the MGIB 
(Chapter 30, 38 U.S. Code) for reservists who serve on active duty in a 
contingency operation. Operational reserve policy requires Guard and 
Reserve members to expect activation for 12 months at a time every 5 or 
6 years. Since 9/11, 142,000+ Guard and Reserve members have been 
activated two or more times. Under the ``total force MGIB'' concept 
reservists should be able to aggregate multiple periods of active duty 
for MGIB entitlement up to the maximum allowable in law, 36 months. 
Currently, a Guard/Reserve member's benefit is based on the longest 
single period of mobilization. A member who has had two or more 
activations gains no added education benefit for subsequent call-ups. 
The inequity is illustrated in the Army's (19 October 2007) 
announcement to activate seven National Guard Brigade Combat Teams. Two 
of the BCTs are second activations since Sept. 11, 2001, but under 
current law they will not be authorized to accrue additional MGIB 
entitlement. (H.R. 81, S. 644)

    5.  Restore proportional parity between basic reserve MGIB (Chapter 
1606, 10 U.S. Code) rates and the active duty program. The basic 
reserve MGIB rate was set at 47 percent of the active duty program in 
1984 and retained that ratio for 15 years from 1985-1999. Subsequent 
increases in active duty program benefit levels, combined with static 
reserve benefit levels, mean reserve MGIB rates have now dropped to 
less than 29 percent of the active duty program's, at a time when Guard 
and Reserve recruiting is under enormous strain. If proportional parity 
were restored in one year, basic reserve rates for full-time study 
would increase from $317 to $517 per month for full-time study. 
Stairstep increases would lower the cost over a three to five year 
period. (H.R. 81)

                                 

                                     Committee on Veterans' Affairs
                               Subcommittee on Economic Opportunity
                                                    Washington, DC.
                                                   October 23, 2007

Ronald F. Chamrin
Assistant Director
Economic Commission
The American Legion
1608 K Street, NW.
Washington, DC 20006

Dear Mr. Chamrin:

    In reference to our House Committee on Veterans' Affairs 
Subcommittee on Economic Opportunity hearing on ``Updating the 
Montgomery GI Bill'' on October 18, 2007, I would appreciate it if you 
could answer the enclosed hearing questions by the close of business on 
November 23, 2007.
    In an effort to reduce printing costs, the Committee on Veterans' 
Affairs, in cooperation with the Joint Committee on Printing, is 
implementing some formatting changes for material for all full 
committee and subcommittee hearings. Therefore, it would be appreciated 
if you could provide your answers consecutively on letter size paper, 
single-spaced. In addition, please restate the question in its entirety 
before the answer.
    Due to the delay in receiving mail, please provide your response to 
Ms. Orfa Torres by fax at (202) 225-2034. If you have any questions, 
please call (202) 225-3608.

            Sincerely,
                                          Stephanie Herseth Sandlin
                                                         Chairwoman
                               __________

                                                The American Legion
                                                    Washington, DC.
                                                   October 30, 2007

Honorable Stephanie Herseth-Sandlin, Chairwoman
Subcommittee on Economic Opportunity
Committee on Veterans' Affairs
U.S. House of Representatives
335 Cannon House Office Building
Washington, DC 20515

Dear Chair Herseth Sandlin:

    Thank you for allowing The American Legion to participate in the 
Subcommittee hearing on Updating the Montgomery GI Bill (MGIB) on 
October 19, 2007. I am pleased to respond to your specific question 
concerning that hearing:
    What are the top five things your organization would like to see in 
a new GI Bill? Please list items by order of priority.
    The American Legion is proud to list its recommendations for 
improving veterans' education benefits. We strongly feel that all of 
our recommendations should be enacted into law; however, the top five 
recommendations should be enacted immediately:

    1.  The American Legion recommends that Congress move the 
Montgomery GI Bill-Reserve Education Assistance Program (REAP, Chapter 
1607) and the Montgomery GI Bill-Selected Reserve (MGIB-SR, Chapter 
1606) and from Title 10, United States Code (U.S.C.), to Title 38, 
U.S.C., and that the Department of Veterans Affairs (VA) have 
administrative authority for both the MGIB and the MGIB-SR benefits. We 
recommend that the annual appropriations for the MGIB and the MGIB-SR 
become annual mandatory appropriations within VA.
    2.  The American Legion recommends that Federally activated Reserve 
component members get one month of benefits, at the active-duty rate, 
for each month of mobilization up to 36 months.
    3.  The American Legion recommends that the dollar amount of the 
entitlement should be indexed to the average cost of college education 
including tuition, fees, textbooks and other supplies for commuter 
students at an accredited university, college or trade school for which 
they qualify and that the educational cost index should be reviewed and 
adjusted annually.
    4.  The American Legion supports eliminating the ten-year 
delimiting period for veterans to use MGIB educational benefits and 
allow all Reserve component members to use their MGIB benefits for up 
to ten years after separation or completion of a service contract.
    5.  The American Legion supports the termination of the current 
military payroll contribution ($1200) required for enrollment in MGIB.

    Thank you once again for all of the courtesies provided by you and 
your capable staff. The American Legion welcomes the opportunity to 
work with you and your colleagues on many issues facing veterans and 
their families throughout this Congress.

            Sincerely,
                                    Ron Chamrin, Assistant Director
                                       National Economic Commission

                                 

                                     Committee on Veterans' Affairs
                               Subcommittee on Economic Opportunity
                                                    Washington, DC.
                                                   October 23, 2007

Eric A. Hilleman
Deputy Director
National Legislative Service
Veterans of Foreign Wars of the United States
200 Maryland Ave, SE.
Washington, DC 20002

Dear Mr. Hilleman:

    In reference to our House Committee on Veterans' Affairs 
Subcommittee on Economic Opportunity hearing on ``Updating the 
Montgomery GI Bill'' on October 18, 2007, I would appreciate it if you 
could answer the enclosed hearing questions by the close of business on 
November 23, 2007.
    In an effort to reduce printing costs, the Committee on Veterans' 
Affairs, in cooperation with the Joint Committee on Printing, is 
implementing some formatting changes for material for all full 
committee and subcommittee hearings. Therefore, it would be appreciated 
if you could provide your answers consecutively on letter size paper, 
single-spaced. In addition, please restate the question in its entirety 
before the answer.
    Due to the delay in receiving mail, please provide your response to 
Ms. Orfa Torres by fax at (202) 225-2034. If you have any questions, 
please call (202) 225-3608.

            Sincerely,
                                          Stephanie Herseth Sandlin
                                                         Chairwoman
                               __________
             Veterans of Foreign Wars of the United States
        Questions from the House Committee on Veterans' Affairs
                  Subcommittee on Economic Opportunity
               Hearing on Updating the Montgomery GI Bill
                           September 6, 2007
    Question: What are the top 5 things your organization would like to 
see in a new GI Bill? Please list items by order of priority.

    Response: The VFW strongly believes in the GI Bill for the 21st 
Century.

    As we have stated in our testimony the GI Bill for the 21st Century 
would be in the style of the original GI Bill, covering the full cost 
of education and providing a stipend to allow the student veteran to 
focus solely on school.
    Our GI Bill priorities are as follows:
    Primarily, the GI Bill would cover the full cost of education: 
tuition, room, board, fees, and provide a cost-of-living stipend. 
Second, the bill would fairly compensate all of the National Guard and 
Reservists activated to supplement our active duty military--providing 
1 month of full time active duty benefit for each month activated. 
Third, it would allow all servicemembers to utilize earned benefits 
throughout the duration of their lives, removing the 10 delimiting 
date. Fourth, strengthen DoD's retention by allowing members of the 
military that reenlist to apportion their GI Bill benefit to 
dependents. Finally, all laws and rules prohibiting veterans from 
accessing college financial aid due to military service income and/or 
GI Bill benefits would be removed.
    Thank you, I welcome any questions and look forward to working with 
the Committee to achieve substantive improvements to the GI Bill.

                                 

                                     Committee on Veterans' Affairs
                               Subcommittee on Economic Opportunity
                                                    Washington, DC.
                                                   October 23, 2007

Rick Weidman
Executive Director for Policy and Government Affairs
Vietnam Veterans of America
8605 Cameron St., Suite 400
Silver Spring, MD 20910

Dear Mr. Weidman:

    In reference to our House Committee on Veterans' Affairs 
Subcommittee on Economic Opportunity hearing on ``Updating the 
Montgomery GI Bill'' on October 18, 2007, I would appreciate it if you 
could answer the enclosed hearing questions by the close of business on 
November 23, 2007.
    In an effort to reduce printing costs, the Committee on Veterans' 
Affairs, in cooperation with the Joint Committee on Printing, is 
implementing some formatting changes for material for all full 
committee and subcommittee hearings. Therefore, it would be appreciated 
if you could provide your answers consecutively on letter size paper, 
single-spaced. In addition, please restate the question in its entirety 
before the answer.
    Due to the delay in receiving mail, please provide your response to 
Ms. Orfa Torres by fax at (202) 225-2034. If you have any questions, 
please call (202) 225-3608.

            Sincerely,
                                          Stephanie Herseth Sandlin
                                                         Chairwoman
                               __________
                                        Vietnam Veterans of America
                                                 Silver Spring, MD.
                                                   November 2, 2007

Honorable Stephanie Herseth Sandlin, Chairwoman
Subcommittee on Economic Opportunity
Committee on Veterans' Affairs
U.S. House of Representatives
335 Cannon House Office Building
Washington, DC 20515

Dear Madam Chairwoman,

    On behalf of Vietnam Veterans of America (VVA), I thank you for the 
strong leadership you continue to exhibit on the vital economic issues 
so essential to America's veterans. VVA salutes you and Ranking Member 
Boozman for the bipartisan manner in which you approach all issues 
before the Subcommittee, only asking what is the very best that we can 
do together in this time and this place for veterans, particularly for 
today's returning veterans, and most especially for disabled veterans, 
given the resources at immediate hand.
    I am compelled to reiterate for the record that VVA is strongly 
committed to two propositions: First, that caring for veterans, 
including paying for readjustment benefits such as educational 
benefits, is part of the cost of war and of the defense of our Nation, 
as should be treated as such in the Federal budget process, and not 
pitted against needed domestic programs; and, second, that the newest 
generation of veterans should be accorded the same ``real GI Bill for 
education'' as that accorded to the World War II generation.
    Having stated the above, which stems directly from the founding 
principle of Vietnam Veterans of America (VVA) that ``Never again shall 
one generation of American veterans abandon another'' and our 
determination that we not allow what happened to Vietnam veterans to 
happen to these fine young Americans returning from the military today, 
I know that you and Mr. Boozman want to know what can be done right now 
to improve the basic Montgomery GI Bill that we have today.
    VVA is a member of the Partnership for Veterans Education that has 
formally endorsed these priorities:

    1.  Integrate Montgomery GI Bill elements into Title 38 (this is 
only administrative but helps to set the architecture in place for a 
balanced approach to the MGIB going fwd).
    2.  Establish a readjustment benefit for Guard and Reserve members 
who are activated for service in Operation Iraqi Freedom and Operation 
Enduring Freedom (OIF & OEF) veterans that is commensurate with active 
duty benefits, as both are subject to the same hardships and face the 
same enemy fire.
    3.  Upgrade the Montgomery GI Bill (MGIB) rates to at least pay for 
the average cost of a four-year public college/university education.
    4.  Change REAP (chap 1607, 10 U.S.C.) rate formula to a month-for-
month Chap 30 entitlement, under Title 38, U.S.C., and allow for 
accrual of benefits over multiple call-ups.
       As to the fifth item noted below, which has not been formally 
endorsed by the aforementioned ``Partnership'' as such, VVA urges:
    5.  That Congress move to restore proportional parity between basic 
reserve MGIB benefits (Chap 1606) and the active duty MGIB (Chap 30).

    It's all a matter of equity and a matter of investing in the future 
of America by properly investing in the education of our newest 
veterans, whether they served in a so-called active duty unit or in a 
National Guard or Reserve unit.
    I hope this quick answer proves to be helpful to you and your 
distinguished colleagues in your deliberations.

            Sincerely,
                                                       Rick Weidman
                 Executive Director for Policy & Government Affairs

                                 

                                     Committee on Veterans' Affairs
                               Subcommittee on Economic Opportunity
                                                    Washington, DC.
                                                   October 23, 2007

Steve Kime, Ph.D.
American Association of State Colleges and Universities
1307 New York Ave, NW 5th floor
Washington, DC 20002

Dear Dr. Kime:

    In reference to our House Committee on Veterans' Affairs 
Subcommittee on Economic Opportunity hearing on ``Updating the 
Montgomery GI Bill'' on October 18, 2007, I would appreciate it if you 
could answer the enclosed hearing questions by the close of business on 
November 23, 2007.
    In an effort to reduce printing costs, the Committee on Veterans' 
Affairs, in cooperation with the Joint Committee on Printing, is 
implementing some formatting changes for material for all full 
committee and subcommittee hearings. Therefore, it would be appreciated 
if you could provide your answers consecutively on letter size paper, 
single-spaced. In addition, please restate the question in its entirety 
before the answer.
    Due to the delay in receiving mail, please provide your response to 
Ms. Orfa Torres by fax at (202) 225-2034. If you have any questions, 
please call (202) 225-3608.

            Sincerely,
                                          Stephanie Herseth Sandlin
                                                         Chairwoman
                               __________
            American Association of State Colleges and Universities
                                                    Washington, DC.
                                                   October 24, 2007

The Honorable Stephanie Herseth Sandlin
House Veterans' Affairs Subcommittee on Economic Opportunity
335 Cannon House Office Building
Washington, D.C. 20515

Dear Chairwoman Herseth Sandlin:

    This letter is in response to your question during the House 
Committee on Veterans' Affairs: Subcommittee on Economic Opportunity 
hearing, ``Updating the Montgomery GI Bill'', on October 18th 2007. The 
American Association of State Colleges and Universities recommends four 
priorities for a new GI Bill.

    Question: What are the top five things your organization would like 
to see in a new GI Bill? Please list items by order of priority.

    1.  Update the legal, political and budgetary architecture of the 
GI Bill.
         Current GI Bill legislation is far out of step with 
the division of responsibility in the modern U.S. Cabinet. This is our 
first priority because there is little hope of effective, lasting 
modernization of the GI Bill if this basic conceptual issue is not 
confronted.
         War fighting is the business of Department of Defense. 
Veterans are the responsibility of Department of Veterans Affairs. 
Confusing these areas of responsibility and advocacy causes unfairness, 
conflicting policies, and failure to meet the nation's 
responsibilities.

    Recommendations:
         Place all GI Bill funding and administration in the 
Department of Veterans Affairs where veterans are first priority and 
advocacy for veterans does not compete with war fighting 
considerations.
         Structure GI Bill legislation to enable the Department 
of Veterans Affairs to function as the exclusive Cabinet-level advocate 
for veterans.
         Address DoD/DVA turf issues in Congress related to the 
GI Bill. The two Cabinet Departments cannot resolve the mixed-mission 
problems in education benefits (or disability) if the Senate and House 
do not make changes.

    2.  Update the GI Bill to reflect national military strategy and 
force deployment policies.
         A Total Force Strategy has evolved. Force structure 
and deployment policies have changed to fit the revolution in the 
strategy that has occurred. Selection of which American servicemembers 
go in harm's way, and how often they are deployed, have changed 
radically along with national strategy.
         Policy is trapped in grossly outdated images of 
Reserve and Active Duty Forces. Policies that are at the root of the 
inequities that are now coming to light are based on outdated images of 
``weekend warriors'' and how they should be controlled and managed. 
Efforts to address this problem (separate Reserve GI Bills) have only 
added confusion and perpetuated the false images.

    Recommendations:
         Pass the Total Force GI Bill to make educational 
benefits commensurate with the service that military men and women 
perform.
         Place Total Force GI Bill funding and administration 
in the Department of Veterans Affairs where veterans are first 
priority.

    3.  Ensure that the GI Bill can pay for college.
         Pay-Go will make it difficult to identify radically 
increased educational benefits. What the Congress needs is a reasonable 
and fair GI Bill entitlement that is appropriate to the nation's 
promise to servicemembers.
         The Partnership for Veterans' Education established a 
reasonable and fair benchmark: the average cost of a 4-year education 
at a public institution. Based on data from the U.S. Department of 
Education, the benchmark projected for the FY 2007--08 academic year is 
$13,145 for a full-time resident student. Current Chapter 30 benefits 
are at $9,909 for a full-time student.

    Recommendations:
         Recognize a clear and fair goal: Benchmark the MGIB to 
the average cost of attendance at public 4-year institutions. A mandate 
is not required, but there should be annual reports to document 
progress toward meeting the goal.
         Proceed toward the benchmark with incremental raises 
to the GI Bill over a period of 3 years, as was done with GI Bill 
increases a few years ago.

    4.  Streamline and modernize the administration and management of 
the GI Bill for optimal service to veterans.
         Contemporary Adult and Continuing Education theory and 
the concept of lifelong learning should be applied to the entire Total 
Force structure. A comprehensive and cohesive Total Force GI Bill needs 
to include provisions for accelerated payments, high-tech programs, 
delimiting dates, and similar ideas.
         Support of veteran administrators at academic 
institutions is weak.
         An outdated administrative culture dominates GI Bill 
management. Incorporating modern communication techniques and 
information technology advancements will increase efficiency, optimize 
resources, and enhance service to veterans.

    Recommendations:
         In a new Total Force GI Bill, ensure that provisions 
that recognize the needs of the adult student, such as accelerated 
payments for high cost or short programs and longer delimiting dates, 
are applied to all veteran-students equally.
         Improve services to veterans at colleges and 
universities by increasing assistance to veterans on campuses.
         Promote modernization of management of the GI Bill:
           Reduce the amount of reporting and information 
required of veterans.
           Consider ``management by exception'' in managing 
fraud.
           Update and streamline computerized recordkeeping.
           Consider modern methods of managing credit and debt 
using new credit/debit card technologies for managing the educational 
entitlement.

    Thank you for the opportunity to testify and to provide a follow up 
response. Please also find enclosed with this letter documentation 
comparing the average cost of attendance at a public 4-year college and 
the Montgomery GI Bill benefits.

            Sincerely,
                                          Steve Francis Kime, Ph.D.
                                  Former Vice President (2003-2005)

               Average Cost of Attendance (COA) for Resident Students at Public Four-Year Colleges
----------------------------------------------------------------------------------------------------------------
                                                                             MGIB Monthly       Percent of Cost
                                     Baseline COA      MGIB Ann. Benefit        Benefit             Covered
----------------------------------------------------------------------------------------------------------------
2006-07*                                    $12,762             $ 9,675             $ 1,075               75.8%
----------------------------------------------------------------------------------------------------------------
                                                   COAMGIB Ann. Benefit        MGIB Monthly         Percent of Cost
                                        percent/yr)                                 Benefit                    Covered
----------------------------------------------------------------------------------------------------------------
2007-08*                                    $13,145             $ 9,909             $ 1,101               75.4%
----------------------------------------------------------------------------------------------------------------
2008-09*                                    $13,539             $10,236             $ 1,137               75.6%
----------------------------------------------------------------------------------------------------------------
2009-10*                                    $13,945             $10,571             $ 1,175               75.8%
----------------------------------------------------------------------------------------------------------------
                                                   COAMGIB Ann. Benefit        MGIB Monthly         Percent of Cost
                                        percent/yr)                                 Benefit                    Covered
----------------------------------------------------------------------------------------------------------------
2007-08*                                    $13,527             $ 9,909             $ 1,101               73.3%
----------------------------------------------------------------------------------------------------------------
2008-09*                                    $14,339             $10,236             $ 1,137               71.1%
----------------------------------------------------------------------------------------------------------------
2009-10*                                    $15,199             $10,571             $ 1,175               69.6%
----------------------------------------------------------------------------------------------------------------
NOTES: Cost of attendance includes in-state tuition, required fees, and resident student room and board.
Tuition and fees were weighted by the number of full-time-equivalent undergraduates.
Room and board are based on full-time students. Enrollment projections by NCES were used for all 2006-07
  calculations.
2006-07 and 2007-08 MGIB are actual amounts; * refers to all other projected data.
MGIB calculated at 3.3 percent/year increase from 2007-08 onward using Social Security 2007 COLA.


              Average Cost of Attendance (COA) for Off-Campus Students at Public Four-Year Colleges
----------------------------------------------------------------------------------------------------------------
                                                                             MGIB Monthly       Percent of Cost
                                     Baseline COA      MGIB Ann. Benefit        Benefit             Covered
----------------------------------------------------------------------------------------------------------------
2005-06                                     $12,265             $ 9,306             $ 1,034               75.9%
----------------------------------------------------------------------------------------------------------------
                                                   COAMGIB Ann. Benefit        MGIB Monthly         Percent of Cost
                                        percent/yr)                                 Benefit                    Covered
----------------------------------------------------------------------------------------------------------------
2006-07**                                   $13,000             $ 9,675             $ 1,075               74.4%
----------------------------------------------------------------------------------------------------------------
2007-08*                                    $13,390             $ 9,909             $ 1,101               74.0%
----------------------------------------------------------------------------------------------------------------
2008-09*                                    $13,792             $10,236             $ 1,137               74.2%
----------------------------------------------------------------------------------------------------------------
2009-10*                                    $14,206             $10,571             $ 1,175               74.4%
----------------------------------------------------------------------------------------------------------------
                                                   COAMGIB Ann. Benefit        MGIB Monthly         Percent of Cost
                                        percent/yr)                                 Benefit                    Covered
----------------------------------------------------------------------------------------------------------------
2006-07**                                   $13,000             $ 9,675             $ 1,075               74.4%
----------------------------------------------------------------------------------------------------------------
2007-08*                                    $13,780             $ 9,909             $ 1,101               71.9%
----------------------------------------------------------------------------------------------------------------
2008-09*                                    $14,607             $10,236             $ 1,137               70.1%
----------------------------------------------------------------------------------------------------------------
2009-10*                                    $15,483             $10,571             $ 1,175               68.3%
----------------------------------------------------------------------------------------------------------------
NOTES: Cost of Attendance (COA) defined by IPEDS as ``total price for in-state students living off campus (not
  with family).''
**Projected 6 percent increase over 2005-06 used for 2006-07 off-campus COA since final IPEDS data not
  available; 6 percent from College Board Trends 2006.
NCES data used for all 2005-06 baseline COA calculations.
Tuition and fees were weighted by the number of full-time-equivalent undergraduates.
2006-07 MGIB and 2007-08 MGIB are actual amounts; * refers to all other projected data.
MGIB calculated at 3.3 percent/year increase from 2007-08 onward using Social Security COLA.


                                 

                                     Committee on Veterans' Affairs
                               Subcommittee on Economic Opportunity
                                                    Washington, DC.
                                                   October 23, 2007

David Guzman
Legislative Director
National Association of Veterans
Program Administrators
2020 Pennsylvania Ave, NW., Suite 1975
Washington, DC 20006

Dear Mr. Guzman:

    In reference to our House Committee on Veterans' Affairs 
Subcommittee on Economic Opportunity hearing on ``Updating the 
Montgomery GI Bill'' on October 18, 2007, I would appreciate it if you 
could answer the enclosed hearing questions by the close of business on 
November 23, 2007.
    In an effort to reduce printing costs, the Committee on Veterans' 
Affairs, in cooperation with the Joint Committee on Printing, is 
implementing some formatting changes for material for all full 
committee and subcommittee hearings. Therefore, it would be appreciated 
if you could provide your answers consecutively on letter size paper, 
single-spaced. In addition, please restate the question in its entirety 
before the answer.
    Due to the delay in receiving mail, please provide your response to 
Ms. Orfa Torres by fax at (202) 225-2034. If you have any questions, 
please call (202) 225-3608.

            Sincerely,
                                          Stephanie Herseth Sandlin
                                                         Chairwoman
                               __________
                                   National Association of Veterans
                                             Program Administrators
                                                    Washington, DC.
                                                   November 1, 2007

The Honorable Stephanie Herseth Sandlin
Chairwoman, House Committee on Veterans' Affairs
Subcommittee on Economic Opportunity
335 Cannon House Office Building
Washington, DC 20515

Dear Chairwoman Herseth,

    Thank you for the opportunity to submit the top five issues NAVPA 
would like to see in legislation addressing a new GI Bill. NAVPA is the 
only organization representing colleges and university Veteran Program 
Administrators. Our members are truly at the ``business end'' of the GI 
Bill in that we interact, face-to-face, with the beneficiaries of these 
programs, at their place of study, and certify them for their benefit.

    1.  Equity for Activated Guard/Reserve in MGIB payments for pursuit 
of education/OJT and apprenticeship: Guard and Reserve members who 
fight along side active duty members do not receive the same level of 
MGIB benefit as their Chapter 30 counter-parts. We would support 
incorporating MGIB benefits under title 10, Ch 1607, into the VA Total 
Force proposal submitted by the Partnership for Veterans Education. 
This would be a first step toward achieving equity for (equal) service 
in support of deployments. Further, equity in all aspects of the 
delivery of the MGIB should be a goal of legislation; an example of 
another inequity: Active duty members are currently paid at the ``less-
than-half-time'' rate, which means that they only receive the amount of 
tuition and fees rather than the monthly rate paid for the same 
training time for a Chapter 30 MGIB veteran. What's more, their monthly 
rate is recalculated based on the amount of tuition and fees which in 
most cases reduces their months of entitlement at a much faster rate. 
Example: a servicemember is enrolled in a 4-month course which costs 
$200.00, their monthly rate would be recalculated to $50.00 per month 
and they would receive $200.00 and be charged 4 months of entitlement; 
a veteran enrolled in less than half time, would receive the half time 
rate of $550.00 per month for a total payment of $2,202.00 and would be 
charged 2 months of entitlement. Funding seems to be the barrier to a 
truly beneficial GI Bill program; NAVPA's position is that history of 
the GI Bill has proven that the return on investment by America is 
sevenfold (7:1) and that while a Pay-Go requirement exists it should 
not be applied to the Montgomery GI Bill because we will realize a 
better educated, working, tax paying, productive member of society who 
will return $7 dollars for every dollar invested in the MGIB. And, with 
the exception of a severely injured veteran, an educated and/or trained 
veteran is less likely to be dependent on other benefits and services, 
freeing up dollars intended for those who have no alternative.

    2.  Compensation to schools and agencies (OJT-Apprenticeship) who 
certify veterans to the DVA for certification of enrollment in higher 
education or appropriate training and apprenticeship programs: 
Currently the DVA pays an annual reporting fee of $7.00 per student for 
certification of enrollment, the same compensation paid 30 years ago 
when schools were responsible for certifying two programs. Today 
schools and agencies are responsible for the accurate certification and 
proper administration of 13 programs, 11 in higher education and 2 for 
agencies (OJT and Apprenticeship) yet are paid the same $7.00 per 
student.
          The lack of adequate funding for schools has been cause for 
many offices of Veterans Affairs on campus to be realigned to other 
programs such as financial aid, counseling, admissions and the business 
office as an additional duty. Veterans have lost the direct support on 
campus needed in order to maintain their academic standing--that is, 
they have lost a caring and concerned program administrator who 
advocated on their behalf. In addition, the program administrators are 
expected to adhere to the many State and federal laws governing these 
programs. The DVA funds the State Approving Agency (Association) to 
ensure that educational institutions adhere to federal laws and state 
rules governing these programs, but falls short of funding even one 
program administrator's training. Funding for veterans education 
benefits must include funding for the administration of these programs 
at all levels.

    3.  Modernize the GI Bill to address 21st century workforce 
requirements and societal changes by expanding opportunities for 
veterans and servicemembers to maximize their earned benefit through 
elimination the MGIB delimiting date: Many veterans delay entering 
school or training because of family and or financial obligations. When 
veterans are finally in a position to pursue an education or advanced 
training they find that they either are up against their delimiting 
date with insufficient months remaining to complete their program or 
their delimiting date has expired. Some veterans who do complete a 
degree after service do not always use the entire 36 month benefit 
because of completing some college or training while in service. Later, 
when it comes time to upgrade or update their skills for career 
enhancement their unused remaining benefit has expired because of the 
delimiting date. NAVPA believes that the delimiting date is a barrier 
to the concept of life long learning, a concept that is prevalent in 
our society.

    4.  Expand the student work-study program: Under current rules, 
veteran students enrolled at a minimum \3/4\ training time are only 
allowed to work in the office of veterans affairs on campus thereby 
limiting their exposure in the word-of-work. NAVPA has long argued for 
an expanded student work-study program that would allow veterans in 
school to work in departments across campus and gain valuable work 
experience. Veterans who work in academic department would be able to 
work in laboratories within their discipline and earn valuable insight 
into their program as well build a creditable work experience resume. 
For many veterans the work-study program supplements their income and 
for others it is their only income. The veterans' work ethic would be 
invaluable to any campus office or department. Limiting employment to 
only one department on campus severely limits the veterans' opportunity 
for employment as well as the experience that is necessary to compete 
in the civilian work place.

    5.  Eliminate the requirement to count VA Educational Benefits in 
the ``needs assessment formula'' when computing Federal Financial Aid: 
The Montgomery GI Bill benefit is considered in the Federal Financial 
Aid formula as a resource and thus deducted from the total financial 
aid award or cost of attendance dollar for dollar. Not taken into 
consideration in this formula is the initial $1,200.00 pay reduction 
servicemembers had withheld from their basic pay to enroll in the MGIB, 
nor is there any consideration for the months of military service, 
personal sacrifices, family separations, irregular duty hours and 
conditions or the protections and freedoms afforded this Nation which 
we all enjoy. No servicemember or veteran should be penalized or denied 
benefits they would otherwise be eligible to receive for using a paid 
into and earned benefit.

    Finally, NAVPA feels very strong about a need for Congress and the 
DVA to place greater emphasis on the OJT/Apprenticeship portion of the 
MGIB programs: OJT and Apprenticeship is the most under utilized of the 
MGIB program. Much of this is caused by the lack of adequate 
information conveyed to veterans and users or agencies. Many agencies 
who might be trainers of the OJT/Apprenticeship eligible veteran are 
not aware that such a program exists. NAVPA recommends greater emphasis 
on the OJT/Apprenticeship program be developed to specifically seek out 
and counsel veterans, who do not intend on seeking a college degree, 
about these programs.

            Sincerely,
                                                       D. A. GUZMAN
                                               Legislative Director

                                 

                                     Committee on Veterans' Affairs
                               Subcommittee on Economic Opportunity
                                                    Washington, DC.
                                                   October 23, 2007

Charles Rowe
President
New Jersey State
Department of Military, Veterans' Affairs
State Approving Agency
P.O. Box 340
Trenton, NJ 08625

Dear Mr. Rowe:

    In reference to our House Committee on Veterans' Affairs 
Subcommittee on Economic Opportunity hearing on ``Updating the 
Montgomery GI Bill'' on October 18, 2007, I would appreciate it if you 
could answer the enclosed hearing questions by the close of business on 
November 23, 2007.
    In an effort to reduce printing costs, the Committee on Veterans' 
Affairs, in cooperation with the Joint Committee on Printing, is 
implementing some formatting changes for material for all full 
committee and subcommittee hearings. Therefore, it would be appreciated 
if you could provide your answers consecutively on letter size paper, 
single-spaced. In addition, please restate the question in its entirety 
before the answer.
    Due to the delay in receiving mail, please provide your response to 
Ms. Orfa Torres by fax at (202) 225-2034. If you have any questions, 
please call (202) 225-3608.

            Sincerely,
                                          Stephanie Herseth Sandlin
                                                         Chairwoman
                               __________
                Legislative Priorities for a New GI Bill
                  Submitted by Charles Rowe, President
            National Association of State Approving Agencies
                            November 2, 2007
    1.  Consolidate Chapters 30, 1606 and 1607 under title 38, U.S. 
Code as a Total Force GI Bill. This Bill would provide MGIB 
reimbursement rate levels based on an individual's service in the Armed 
Forces, including the National Guard and Reserve.

       A.  The first tier--similar to the current Montgomery GI Bill, 
Active Duty (MGIB-AD) 3-year rate--would be provided to all who enlist 
for active duty. Service entrants would receive 36 months of benefits 
at the AD Rate.
       B.  The second tier or level would be for all who enlist or re-
enlist in the Selected Reserve (SelRes) for 6 years, and this would 
entitle them to 36 months of benefits at a pro-rata amount of the 
active duty rate as currently is the case with Chapter 1606 (Initial 
ratio in 1985 was 47 percent).
       C.  The third tier would be for members of the SelRes and 
Inactive Ready Reserve (IRR) who are activated for at least 90 days. 
They would receive 1 month of benefit for each month of activation, up 
to a total of 36 months, at the active duty rate. These months of full 
benefits would replace, month-for-month, any SelRes entitlements at the 
second tier. The maximum benefit a member of the SelRes could receive 
under this provision would be the equivalent of 36 months at the active 
duty rate. (Note: Maximum benefit is without consideration to multiple 
entitlements.)
       D.  All provisions (e.g. additional contributions), and programs 
(e.g., accelerated payments, approved test fee reimbursement, etc.) 
eligible for payment under the current MGIB-AD program would be 
available under all three levels. [Note: Under this plan DoD would 
continue to be able to provide Recruitment and Retention incentives 
such as loan repayment, kickers for ``college'', and enlistment 
bonuses.]

    2.  Incorporate a Readjustment or Portability Component--An 
individual would have up to 10 years to use the active duty or 
activated-service benefit from their last date of active/activated duty 
or reserve service, whichever is later. A Selected Reservist could use 
remaining second tier MGIB benefits as long as he/she were 
satisfactorily participating in the SelRes, and for up to 10 years 
following separation from the reserves in the case of separation for 
disability or qualification for a reserve retirement at age 60.

    3.  Expand the readjustment purpose of the Total Force GI Bill to 
permit continuous training, retraining, re-licensing and enrollment in 
skill improvement courses. For example, revise Section 3452(c) of Title 
38, U.S. Code to provide for the use of VA educational assistance 
benefits for enrollment in any unit course or subject, or combination 
of courses or subjects (Title 38 terminology) necessary to obtain, 
maintain, or advance in a profession or vocation.
          In today's society the concept of lifelong learning has risen 
to a new level of importance. Very few occupations or professions 
remain static; there is the constant requirement for workers to upgrade 
their knowledge and skills in order to remain competitive. The current 
educational earned benefit programs for veterans and other eligible 
persons generally require the VA beneficiary to be enrolled in a full-
scale program of education; i.e., one that leads to a traditional 
degree, diploma or certificate. Although recent legislation provides 
more flexibility, there is still the need to permit even greater use of 
benefits for enrollment in short-term learning experiences that will 
help a veteran to maintain a level of expertise commensurate with the 
on going demands of their chosen occupation or profession. A key phrase 
that expresses the intent of this recommendation already is embedded in 
law--education and training that qualifies the eligible person ``to 
enter into, maintain or advance in employment in a predetermined and 
identified vocation or profession''.
          As stated, the law already provides for limited use of 
benefits for course(s) ``to fulfill requirements for the attainment of 
a license or certificate . . . in a high technology occupation''. The 
specific example expands the provision to all professions and 
vocations/occupations; recognizes that a single unit course or subject 
may be all that a veteran needs to obtain, maintain, or advance in a 
profession or vocation; and, provides for the use of benefits while 
enrolled in a subject or a combination of subjects without requiring a 
connection to a license or certificate.

    4.  Recommendation--Continue the rate of educational assistance 
benefits currently in place for veterans enrolled in Apprenticeship and 
other On-the-Job Training programs.
          The law was changed, effective October 1, 2005, to increase 
the rate of benefits received by veterans and other eligible persons 
who are enrolled in apprenticeship and OJT programs. The rate is now 85 
percent of the full time institutional rate for the first 6 months, 65 
percent for the second 6 months of training and then 45 percent for the 
third and any succeeding period of time. This increase is for a limited 
period of time--it expires on September 30 of 2007. It is a too early 
to know for sure, but early indications are that the increases have had 
a positive effect on the ability of veterans to use this way of gaining 
knowledge and skills for the occupations or professions of their 
choice. In combination with extensive outreach activities, there has 
been a 39.9 percent increase in the number of approved and active 
training establishments from 1997 to 2003, and a 53.8 percent increase 
in the number of program approval actions at job training 
establishments from 1997 to 2005. We anticipate continual growth in the 
use of job training programs.

    5.  Recommendation--Revise the method by which entitlement is 
charged to servicemembers who use their GI Bill while serving on active 
duty so that the charge is the same as that applied to all other VA 
benefit eligible persons.
          Servicemembers who use their GI Bill while serving on active 
duty should not be penalized for doing so. Current law reduces the 
servicemember's entitlement 1 month for each month of enrollment in 
relation to rate of pursuit (full time, \3/4\ time, etc.) regardless of 
the amount of benefits received. We believe that this practice is 
totally unfair and unjustifiable.

                                 

                                     Committee on Veterans' Affairs
                               Subcommittee on Economic Opportunity
                                                    Washington, DC.
                                                   October 23, 2007

Tom Bush
Acting Deputy Assistant Secretary
of Defense for Reserve Affairs
(Manpower and Personnel)
U.S. Department of Defense
1300 Defense Pentagon
Washington, DC 20301

Dear Mr. Bush:

    In reference to our House Committee on Veterans' Affairs 
Subcommittee on Economic Opportunity hearing on ``Updating the 
Montgomery GI Bill'' on October 18, 2007, I would appreciate it if you 
could answer the enclosed hearing questions by the close of business on 
November 23, 2007.
    In an effort to reduce printing costs, the Committee on Veterans' 
Affairs, in cooperation with the Joint Committee on Printing, is 
implementing some formatting changes for material for all full 
committee and subcommittee hearings. Therefore, it would be appreciated 
if you could provide your answers consecutively on letter size paper, 
single-spaced. In addition, please restate the question in its entirety 
before the answer.
    Due to the delay in receiving mail, please provide your response to 
Ms. Orfa Torres by fax at (202) 225-2034. If you have any questions, 
please call (202) 225-3608.

            Sincerely,
                                          Stephanie Herseth Sandlin
                                                         Chairwoman

cc: Dr. Curt Gilroy, Director, Accession Policy, U.S. Department of 
Defense
                               __________
                     Hearing Date: October 18, 2007
                             Committee: HVA
                      Member: Ms. Herseth Sandlin
                           Witness: Mr. Bush
DA amendment order #1231-07

    Question #1: When the Secretary of the Army Pete Green announced on 
Friday September 28, 2007 that he lacked legal basis for amending the 
original DA amendment order #1231-07, what legal basis was he referring 
to?

    Answer: Secretary Green was referring to the advice provided by the 
Department of Defense General Counsel (DoD-GC), the Army Office of 
General Counsel (AOGC) and the Office of the Judge Advocate General 
(OTJAG).
    DoD-GC previously determined that the orders may be amended for 
those individuals ordered to active duty for less than 2 years who are 
still on active duty, but only to correct an administrative error, to 
carry out the Army's original intent, or for other legitimate, mission-
related reasons. The AOGC and OTJAG agreed. The Army further opines the 
soldiers in the 1/34th Brigade Combat Team (BCT) may be extended to 
allow them to take their administrative absence; however, existing 
mobilization orders may not be extended if they are already sufficient 
to allow the soldiers to take their administrative absence. In 
addition, existing mobilization orders should not be extended beyond 
the designated limits applicable to the statutory authority under which 
the soldier was mobilized (i.e., 24 consecutive months for soldiers 
mobilized under title 10, United States Code, section 12302). Finally, 
according to the Army, soldiers must voluntarily agree to have their 
orders extended for this purpose. Otherwise, the only way to remedy 
this situation is through an Army Board for Correction of Military 
Records action.
    While they did not find any statute that prevents the Secretary (or 
the President) from amending orders to give the members of the 1/34th 
BCT eligibility to receive Montgomery GI Bill educational benefits. 
They considered Comptroller General opinions that state orders cannot 
be amended retroactively to increase or decrease entitlements under the 
orders, except to correct an error. The Department of Justice Office of 
Legal Counsel (DOJ-OLC), in an October 16, 2007, Memorandum for William 
J. Haynes II, DoD-GC advised that the Executive Branch is not bound by 
the legal opinions of the Comptroller General although DOJ-OLC 
considers them useful sources in resolving appropriation issues.
Army Board of Corrections for Military Records (ABCMR)

    Question #2: What is the average time it takes a soldier to get 
records corrected through the Army Board of Corrections for Military 
Records (ABCMR)?

    Answer: The Army implemented an expedited process for adjudication 
of claims filed with the ABCMR from servicemembers who served in the 1/
34th Brigade Combat Team. The average ABCMR time to process for those 
claims is 3-5 days.
Amending Guardsmen Orders

    Question #3: How many Guardsmen needed to have their orders amended 
and how many have applied to have their orders amended?

    Answer: The Army has identified 3,538 members of the 1/34th Brigade 
Combat Team whose orders specified an obligated period of service less 
than 24 months. As of November 1, 2007, 585 members had submitted 
applications to the Army Board for Correction of Military Records.
Portable Education Benefit

    Question #4: Should Reserve members be given a portable education 
benefit after they served like their active duty counterparts?

    Answer: Reserve component members who have served the requisite 
period of active duty may, like their active duty counterparts, qualify 
for the Montgomery GI Bill (MGIB) active duty benefit, which provides a 
portable education benefit. In addition, unlike an active duty member, 
a Guard or Reserve member who serves as few as 90 days on active duty 
or full-time National Guard duty in support of certain operations 
qualifies for an educational benefit. And, Selected Reserve members who 
enter into a six-year service agreement qualify for MGIBl-SR benefits, 
which they can begin using immediately after completing initial active 
duty for training. In contrast, active duty members must serve for at 
least 2 years and often for 3 years before they can begin using their 
educational benefit. Also, Reserve component members are not required 
to contribute in order to receive benefits under the Reserve programs. 
To fundamentally change the Reserve programs to provide a post-Service 
education benefit would undermine the purposes of the programs.
    One of the stated purposes for the active duty MGIB benefit is to 
assist members in the readjustment to civilian life after separating 
from military service. But, unlike active duty members, most Reservists 
are not beginning a new career. In fact, most Reservists return to 
their pre-activation civilian job, which is protected by law (chapter 
43 of title 38, United States Code). This is illustrated in the most 
recent Department of Defense survey of Reserve component members in 
which 79 percent of Reservists who were working when they were 
activated reported that they returned to the same employer. For those 
who did not return to the same employer, the top two reasons reported 
for not returning to their pre-activation employer were: (1) found a 
better job and (2) disliked my pre-activation job. While some 
Reservists are changing careers and want to use their education 
benefits to enhance their employment opportunities, serving part-time 
in the Guard or Reserve allows for that.
    The Department believes that attending school and membership in the 
Reserve component have proven over the years to be a compatible and 
desirable combination. The educational assistance programs for Reserve 
members continue to serve their stated purposes well. In light of the 
stresses on the force caused by the Global War on Terror, the 
Department strongly believes it would not be prudent to remove the 
critical retention attributes of those programs.
Total Force Proposals

    Question #5: You state that the Total Force proposals do not 
integrate the three programs. What do you recommend?

    Answer: The Department supports retaining the three separate 
programs. Each program was designed for a different purpose. Attempting 
to consolidate the three programs into a single program undermines the 
various purposes.
    While the purposes of each of the programs remain valid and do not 
necessitate a change, if consolidation is required, the design and 
purpose of the Montgomery GI Bill--Selected Reserve (MGIB-SR) and 
Reserve Educational Assistance Program (REAP) are similar enough that 
it is conceivable that those two programs could be combined.
    There are areas in which closer alignment of the programs would be 
beneficial. The first would be to link covered programs for the two 
Reserve educational assistance programs to the active duty MGIB 
program. For example, if a new education program is authorized under 
the active duty program, the same program then would be automatically 
authorized under the two Reserve programs. Further, as described in 
testimony during the hearing, how the benefit is treated for 
determining eligibility for federal loans is inconsistent. There should 
be one set of rules that applies uniformly to all three programs. 
Conceptually, a student who qualifies and remains eligible under more 
than one program should only have to consider the benefit amount and 
select the assistance program that is most advantageous to him or her. 
This would also make it much easier for school financial assistance 
counselors to advise students and presumably simplify administration of 
the programs within the Department of Veterans Affairs. Finally, there 
is one area in which the MGIB-SR and REAP programs could be closer in 
alignment--the delimiting period. While the REAP benefit has no 
specified delimiting date, the MGIB-SR program currently has a 14-year 
delimiting period. Aligning the MGIB-SR eligibility period with REAP 
would be consistent with the Department's continuum of service, which 
encourages longer periods of service, and a continuum of lifelong 
learning. This would add educational assistance to the menu of 
incentive programs available to more senior Reserve component members.
    These changes would achieve many of the objectives intended in a 
Total Force educational assistance program concept without undermining 
the purpose of, and eligibility criteria for each program.
Transferring GI Bill to VA

    Question #6: You state that transferring the program to VA as 
direct spending would increate the cost to the government. Can you 
explain this statement?

    Answer: The two Reserve educational assistance programs--the 
Montgomery GI Bill for the Selected Reserve (MGIB-SR) and the Reserve 
Educational Assistance Program (REAP)--are designed as incentives for 
continued service in the National Guard or Reserve. If the programs are 
modified to provide for a post-Service benefit, it is only logical that 
attrition will increase. The only reason for transferring the two 
Reserve educational assistance programs into title 38 is to alter the 
purpose of the programs to allow for use of the benefit following 
separation from the National Guard or Reserve, thus fundamentally 
changing the purpose of the programs. If the programs are not modified 
to provide a post-Service benefit, then it makes no sense to place 
programs intended for military recruitment and retention under the 
administration of the Department of Veterans Affairs (VA).
    With respect to cost, the VA will pay the educational assistance 
benefit to the former member who uses the benefit, thus sustaining the 
current cost. However, allowing the benefit to be used by individuals 
who separate will require the Reserve component to recruit and train 
replacements. This will impose a new, additional cost to the Department 
of Defense that it would not have otherwise incurred if the member 
remains to use the benefit. It costs on average $17,400 to recruit and 
train to entry-level standards a new enlisted member. If an enlistment 
or accession bonus is involved, there is an additional cost ($10,000-
20,000 per new accession). Thus, to sustain the same strength level 
achieved with the Reserve educational assistance programs as retention 
incentives, the Department will pay both the original incentive plus 
the cost incurred to recruit and train replacements, as well as the 
additional cost if another incentive is involved in the recruitment 
process.

                                 

                                     Committee on Veterans' Affairs
                               Subcommittee on Economic Opportunity
                                                    Washington, DC.
                                                   October 23, 2007

Curt Gilroy, Ph.D.
Director, Accession Policy
Office of the Under Secretary of Defense for
Personnel and Readiness (Military Personnel Policy)
U.S. Department of Defense
1300 Defense Pentagon
Washington, DC 20301

Dear Dr. Gilroy:

    In reference to our House Committee on Veterans' Affairs 
Subcommittee on Economic Opportunity hearing on ``Updating the 
Montgomery GI Bill'' on October 18, 2007, I would appreciate it if you 
could answer the enclosed hearing questions by the close of business on 
November 23, 2007.
    In an effort to reduce printing costs, the Committee on Veterans' 
Affairs, in cooperation with the Joint Committee on Printing, is 
implementing some formatting changes for material for all full 
committee and subcommittee hearings. Therefore, it would be appreciated 
if you could provide your answers consecutively on letter size paper, 
single-spaced. In addition, please restate the question in its entirety 
before the answer.
    Due to the delay in receiving mail, please provide your response to 
Ms. Orfa Torres by fax at (202) 225-2034. If you have any questions, 
please call (202) 225-3608.

            Sincerely,
                                          Stephanie Herseth Sandlin
                                                         Chairwoman

cc: Tom Bush, Acting Deputy Assistant Secretary of Defense for Manpower 
and Personnel, U.S. Department of Defense.
                               __________
                     Hearing Date: October 18, 2007
                             Committee: HVA
                      Member: Ms. Herseth Sandlin
                          Witness: Dr. Gilroy
GI Bill Benefits Raise

    Question #1: Dr. Gilroy, if we assume $1,400 in benefits are 
distributed to servicemembers, according to your statement more people 
would consider leaving the service. Would you agree that since the GI 
Bill pays only $1,100 per month now, that it could be raised quite a 
lot before becoming, theoretically, a problem for retention? For 
example, if we raised the rate to $1,300 per month, that would give 
recruiters a bigger marketing tool and wouldn't threaten retention. 
Don't you think something like that would help recruiting and 
retention?

    Answer: Yes, we believe that an increase of the monthly Montgomery 
GI Bill benefit for full-time study to $1,300 would have a more 
positive effect on recruitment of high quality youth, rather than a 
negative effect on first-term retention.
MGIB Benefits

    Question #2: Dr. Gilroy, you stated that servicemembers can only 
use their MGIB benefits after separation. Actually, they may use them 
on active duty and many have taken advantage of that. From that 
perspective, considering that we have an All Volunteer Force, raising 
MGIB rates would support professional development through educational 
support and be beneficial to readiness. What are your thoughts on this?

    Answer: While it is true that servicemembers can use their 
Montgomery GI Bill (MGIB) benefits after completing 2 years of active 
duty, Section 3032, title 38, United States Code, places limits on the 
amount that serving members can collect. Active duty servicemembers 
using their MGIB benefits are limited to a monthly amount equal to the 
cost of tuition and fees up to the current maximum rate (currently 
$1,101 per month), but are charged 1 month of entitlement for each 
month they receive these benefits. However, if the tuition and fees are 
lower than the monthly rate, the servicemember is still charged a full 
month of entitlement while receiving less than the full monetary 
benefit. For example, an active duty servicemember who attends college 
on a full-time basis, and whose tuition and fees equal $450 a month, 
would receive that $450 per month and be charged a full month of 
entitlement. Therefore, raising the MGIB monthly rate will not have the 
same impact on active duty usage as it will have on usage by veterans.
DA amendment order #1231-07

    Question #3: When the Secretary of the Army Pete Green announced on 
Friday September 28, 2007 that he lacked legal basis for amending the 
original DA amendment order #1231-07, what legal basis was he referring 
to?

    Answer: Secretary Geren was referring to the advice provided by the 
Department of Defense General Counsel (DoD-GC), the Army Office of 
General Counsel (AOGC) and the Office of the Judge Advocate General 
(OTJAG).
    DoD-GC previously determined that the orders may be amended for 
those individuals who are still on active duty that were originally 
ordered to active duty for less than 2 years, but only to correct an 
administrative error, to carry out the Army's original intent, or for 
other legitimate, mission-related reasons. The AOGC and OTJAG agreed. 
The Army further states that the soldiers in the 1/34th Brigade Combat 
Team (BCT) may be extended to allow them to take their administrative 
absence; however, existing mobilization orders may not be extended if 
the original orders already include sufficient time to allow the 
soldiers to take their administrative absence. In addition, existing 
mobilization orders should not be extended beyond the designated limits 
applicable to the statutory authority under which the soldier was 
mobilized (i.e., 24 consecutive months for soldiers mobilized under 
title 10, United States Code, Section 12302). Finally, according to the 
Army, soldiers must voluntarily agree to have their orders extended for 
this purpose. Otherwise, the only way to remedy this situation is 
through an Army Board for Correction of Military Records action.
    While the AOGC and the OTJAG did not find any statute that prevents 
the Secretary (or the President) from amending orders to give the 
members of the 1/34th BCT eligibility to receive Montgomery GI Bill 
educational benefits, they considered Comptroller General opinions that 
state orders cannot be amended retroactively to increase or decrease 
except to correct an error. The Department of Justice Office of Legal 
Counsel (DOJ-OLC), in an October 16, 2007, Memorandum to William J. 
Haynes II, advised that ``the Executive Branch is not bound by the 
legal opinions of the Comptroller General'' although DOJ-OLC considers 
them useful sources in resolving appropriation issues.
Board of Corrections for Military Records (ABCMR)

    Question #4: What is the average time it takes a soldier to get 
records corrected through the Army Board of Corrections for Military 
Records (ABCMR)?

    Answer: The Army implemented an expedited process for adjudication 
of claims filed with the ABCMR by servicemembers who served in the 1/
34th Brigade Combat Team. The average ABCMR time to process those 
claims is 3-5 days.
Amending Guardsmen Orders

    Question #5: How many Guardsmen needed to have their orders amended 
and how many have applied to have their orders amended?

    Answer: The Army has identified 3,538 members of the 1/34th Brigade 
Combat Team whose orders specified an obligated period of service less 
than 24 months. As of November 1, 2007, 585 members had submitted 
applications to the Army Board for Correction of Military Records.
Portable Education Benefit

    Question #6: Should Reserve members be given portable education 
benefit after they served like their active duty counterparts?

    Answer: Reserve component members who have served the requisite 
period of active duty may, like their active duty counterparts, qualify 
for the Montgomery GI Bill (MGIB) active duty benefit, which provides a 
portable education benefit. Unlike an active duty member, a Guard or 
Reserve member who serves as few as 90 days on active duty or full-time 
National Guard duty in support of certain operations qualifies for an 
educational benefit. And, Selected Reserve members who enter into a 6-
year service agreement qualify for MGIB-SR benefits, which they can 
begin using immediately after completing initial active duty for 
training. In contrast, active duty members must serve for at least 2 
years and often for 3 years before they can begin using their 
educational benefit. Also, Reserve component members are not required 
to contribute in order to receive benefits under the Reserve programs. 
To fundamentally change the Reserve programs to provide a post-Service 
education benefit would undermine the purposes of the programs.
    One of the stated purposes for the active duty MGIB benefit is to 
assist members in the readjustment to civilian life after separating 
from military service. However, unlike active duty members, most 
Reservists are not beginning a new career. In fact, most Reservists 
return to their pre-activation civilian job, which is protected by law 
(Chapter 43 of title 38, United States Code). This is illustrated in 
the most recent Department of Defense survey of Reserve component 
members in which 79 percent of Reservists who were working when they 
were activated reported that they returned to the same employer. For 
those who did not return to the same employer, the top two reasons 
reported for not returning to their pre-activation employer were: (1) 
found a better job and (2) disliked my pre-activation job. Some 
Reservists are changing careers and want to use their education 
benefits to enhance their employment opportunities, and serving part-
time in the Guard or Reserve allows for that.
    The Department believes that attending school and membership in the 
Reserve component have proven to be a compatible and desirable 
combination. The educational assistance programs for Reserve members 
continue to serve their stated purposes well. In light of the stresses 
on the force caused by the Global War on Terror, the Department 
strongly believes it would not be prudent to remove the critical 
retention attributes of those programs.
Total Force Proposals

    Question #7: You state that the Total Force proposals do not 
integrate the three programs. What do you recommend?

    Answer: The Department supports retaining the three separate 
programs. Each program was designed for a different purpose. Attempting 
to consolidate the three programs into a single program undermines the 
various purposes.
    While the purposes of each of the programs remain valid and do not 
necessitate a change, if consolidation is required, the design and 
purpose of the Montgomery GI Bill-Selected Reserve (MGIB-SR) and 
Reserve Educational Assistance Program (REAP) are similar enough that 
it is conceivable that those two programs could be combined.
    There are areas in which closer alignment of the programs would be 
beneficial. The first would be to link covered programs for the two 
Reserve educational assistance programs to the active duty MGIB 
program. For example, if a new education program is authorized under 
the active duty program, the same program then would be automatically 
authorized under the two Reserve programs. Further, as described in 
testimony during the hearing, how the benefit is treated for 
determining eligibility for federal loans is inconsistent. There should 
be one set of rules that applies uniformly to all three programs. 
Conceptually, a student who qualifies and remains eligible under more 
than one program should only have to consider the benefit amount and 
select the assistance program that is most advantageous to him or her. 
This would also make it much easier for school financial assistance 
counselors to advise students and presumably simplify administration of 
the programs within the Department of Veterans Affairs. Finally, there 
is one area in which the MGIB-SR and REAP programs could be closer in 
alignment--the delimiting period. While the REAP benefit has no 
specified delimiting date, the MGIB-SR program currently has a 14-year 
delimiting period. Aligning the MGIB-SR eligibility period with REAP 
would be consistent with the Department's continuum of service, which 
encourages longer periods of service, and a continuum of life-long 
learning. This would add educational assistance to the menu of 
incentive programs available to more senior Reserve component members.
    These changes would achieve many of the objectives intended in a 
Total Force educational assistance program concept without undermining 
purpose of, and eligibility criteria for, each program.
Transferring GI Bill to VA

    Question #8: You state that transferring the program to VA as 
direct spending would increase the cost to the government. Can you 
explain this statement?

    Answer: The two Reserve educational assistance programs--the 
Montgomery GI Bill for the Selected Reserve (MGIB-SR) and the Reserve 
Educational Assistance Program (REAP)--are designed as incentives for 
continued service in the National Guard or Reserve. If the programs are 
modified to provide for a post-Service benefit, it is only logical that 
attrition will increase. The only reason for transferring the two 
Reserve educational assistance programs into title 38 is to allow for 
use of the benefit following separation from the National Guard or 
Reserve, thus fundamentally changing the purpose of the programs. If 
the programs are not modified to provide a post-Service benefit, then 
it makes no sense to place programs intended for military recruitment 
and retention under the administration of the Department of Veterans 
Affairs (VA).
    With respect to cost, the VA will pay the educational assistance 
benefit to the former member who uses the benefit, thus sustaining the 
current cost. However, allowing the benefit to be used by individuals 
who separate will require the Reserve component to recruit and train 
replacements. This will impose a new, additional cost to the Department 
of Defense that it would not have otherwise incurred if the member 
remains to use the benefit. It costs on average $17,400 to recruit and 
train a new enlisted member to entry-level standards. If an enlistment 
or accession bonus is involved, there is an additional cost ($10,000-
20,000 per new accession). Thus, to sustain the same strength level 
achieved with the Reserve educational assistance programs as retention 
incentives, the Department will pay both the original incentive plus 
the cost incurred to recruit and train replacements, as well as the 
additional cost if another incentive is involved in the recruitment 
process.

                                 

                                     Committee on Veterans' Affairs
                               Subcommittee on Economic Opportunity
                                                    Washington, DC.
                                                   October 23, 2007

Keith Wilson
Director, Education Service
Veterans Benefits Administration
U.S. Department of Veterans Affairs
810 Vermont Ave. NW
Washington, DC 20240

Dear Mr. Wilson:

    In reference to our House Committee on Veterans' Affairs 
Subcommittee on Economic Opportunity hearing on ``Updating the 
Montgomery GI Bill'' on October 18, 2007, I would appreciate it if you 
could answer the enclosed hearing questions by the close of business on 
November 23, 2007.
    In an effort to reduce printing costs, the Committee on Veterans' 
Affairs, in cooperation with the Joint Committee on Printing, is 
implementing some formatting changes for material for all Full 
Committee and Subcommittee hearings. Therefore, it would be appreciated 
if you could provide your answers consecutively on letter size paper, 
single-spaced. In addition, please restate the question in its entirety 
before the answer.
    Due to the delay in receiving mail, please provide your response to 
Ms. Orfa Torres by fax at (202) 225-2034. If you have any questions, 
please call (202) 225-3608.

            Sincerely,
                                          Stephanie Herseth Sandlin
                                                         Chairwoman
                               __________
                        Questions for the Record
          The Honorable Stephanie Herseth Sandlin, Chairwoman
                  House Committee on Veterans' Affairs
                  Subcommittee on Economic Opportunity
                            October 18, 2007
                    Updating the Montgomery GI Bill
    Question 1: You state that the programs need to be simplified. Is 
the application process complex? What would be the best way to simplify 
the process?

    Response: The application process itself is not complex. However, 
to determine which program(s) the applicant is eligible for requires a 
substantial amount of information, and the application form has 
therefore grown to six pages in length. Because there are overlapping 
eligibility criteria that make some servicemembers and veterans 
eligible for more than one program, selection of the program that would 
result in the most advantageous use of an individual's benefits can be 
complex. We continue to expand our outreach efforts, providing 
educational benefits information to servicemembers on induction and at 
various points while they are on active duty. We also cover the 
eligibility criteria and program differences in the transition 
assistance program briefings we conduct for separating servicemembers 
and reservists.
    A shorter, simplified application process would be a natural result 
of a simplified GI Bill program.

    Question 2: Does VA have an ``ideal'' GI Bill program or 
suggestions on how to best update current criteria, eligibility, and 
payment methods?

    Response: VA does not have an ``ideal'' GI Bill program. A joint 
Department of Defense (DoD) and Department of Veterans Affairs (VA) 
working group was tasked with analyzing the various education programs 
in view of the recommendations of the Secretary's advisory Committee on 
education for a ``Total Force GI Bill.'' The working group concluded 
that a total force approach should incorporate the following 
principles:

      A single proposal should fulfill the critical purposes of 
the current programs--recruitment, retention, and readjustment.
      The benefit amounts should be commensurate with levels of 
military service.
      Converting to a total force program should disadvantage 
no one, if at all possible.

    The working group presented the results of their study to the VA/
DoD Joint Executive Council. The changes studied by the working group 
had a very high cost and could potentially have serious implications 
for DoD in the recruitment and retention of servicemembers and 
reservists.
    There is a very difficult balance between meeting the recruitment 
and retention needs of the Armed Forces and providing a simplified 
program of readjustment benefits that meets the needs of our service 
men and women today and in the future. VA looks forward to continuing 
to work with Congress and DoD to address this issue.

    Question 3: What are the VA's top five recommendations for updating 
the GI Bill?

    Response: Because of the complexity of the interrelationships 
between the education program purposes of recruitment, retention, and 
readjustment, we are unable to provide specific recommendations for 
updating the GI Bill at this time.

                                 
