[Senate Hearing 112-446] [From the U.S. Government Publishing Office] S. Hrg. 112-446 IMPROVING EDUCATIONAL OUTCOMES FOR OUR MILITARY AND VETERANS ======================================================================= HEARING before the FEDERAL FINANCIAL MANAGEMENT, GOVERNMENT INFORMATION, FEDERAL SERVICES, AND INTERNATIONAL SECURITY SUBCOMMITTEE of the COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS UNITED STATES SENATE ONE HUNDRED TWELFTH CONGRESS FIRST SESSION __________ SEPTEMBER 22, 2011 __________ Available via the World Wide Web: http://www.fdsys.gov Printed for the use of the Committee on Homeland Security and Governmental AffairsU.S. GOVERNMENT PRINTING OFFICE 72-482 PDF WASHINGTON : 2012 ----------------------------------------------------------------------- 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 HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS JOSEPH I. LIEBERMAN, Connecticut, Chairman CARL LEVIN, Michigan SUSAN M. COLLINS, Maine DANIEL K. AKAKA, Hawaii TOM COBURN, Oklahoma THOMAS R. CARPER, Delaware SCOTT P. BROWN, Massachusetts MARK L. PRYOR, Arkansas JOHN McCAIN, Arizona MARY L. LANDRIEU, Louisiana RON JOHNSON, Wisconsin CLAIRE McCASKILL, Missouri ROB PORTMAN, Ohio JON TESTER, Montana RAND PAUL, Kentucky MARK BEGICH, Alaska JERRY MORAN, Kansas Michael L. Alexander, Staff Director Nicholas A. Rossi, Minority Staff Director Trina Driessnack Tyrer, Chief Clerk Joyce Ward, Publications Clerk and GPO Detailee ------ SUBCOMMITTEE ON FEDERAL FINANCIAL MANAGEMENT, GOVERNMENT INFORMATION, FEDERAL SERVICES, AND INTERNATIONAL SECURITY THOMAS R. CARPER, Delaware, Chairman CARL LEVIN, Michigan SCOTT P. BROWN, Massachusetts DANIEL K. AKAKA, Hawaii TOM COBURN, Oklahoma MARK L. PRYOR, Arkansas JOHN McCAIN, Arizona CLAIRE McCASKILL, Missouri RON JOHNSON, Wisconsin MARK BEGICH, Alaska ROB PORTMAN, Ohio John Kilvington, Staff Director William Wright, Minority Staff Director Deirdre G. Armstrong, Chief Clerk C O N T E N T S ------ Opening statements: Page Senator Carper............................................... 3 Senator Brown................................................ 6 Prepared statements: Senator Carper............................................... 47 Senator Brown................................................ 49 WITNESSES THURSDAY, SEPTEMBER 22, 2011 Hon. Jim Webb, A U.S. Senator from the State of Virginia......... 1 Curtis L. Coy, Deputy Under Secretary for Economic Opportunity, Veterans Benefits Administration, U.S. Department of Veterans Affairs; accompanied by Keith Wilson, Director of the Education Service, Veterans Benefits Administration, U.S. Department of Veterans Affairs............................................... 6 Theodore L. Daywalt, President, VetJobs.......................... 23 Ryan M. Gallucci, Deputy Director, National Legislative Service, Veterans of Foreign Wars of the United States.................. 25 Russell S. Kitchner, Vice President for Regulatory and Governmental Relations, American Public University System...... 27 Greg Von Lehmen, Provost and Chief Academic Officer, University of Maryland University College................................. 29 Alphabetical List of Witnesses Coy, Curtis L.: Testimony.................................................... 6 Prepared statement........................................... 51 Daywalt, Theodore L.: Testimony.................................................... 23 Prepared statement........................................... 56 Gallucci, Ryan M.: Testimony.................................................... 25 Prepared statement........................................... 67 Kitchner, Russell S.: Testimony.................................................... 27 Prepared statement........................................... 72 Von Lehmen, Greg: Testimony.................................................... 29 Prepared statement........................................... 83 Webb, Hon. Jim: Testimony.................................................... 1 APPENDIX Questions and responses for the Record from: Mr. Coy...................................................... 89 Mr. Daywalt.................................................. 95 Mr. Gallucci................................................. 97 Mr. Kitchner................................................. 100 Mr. Lehmen................................................... 106 Statement of Hollister K. Petraeus, Assistant Director, Office of Servicemember Affairs, Consumer Financial Protection Board..... 110 Letters referenced by Senator Carper............................. 115 Chart referenced by Mr. Kitchner................................. 129 IMPROVING EDUCATIONAL OUTCOMES FOR OUR MILITARY AND VETERANS ---------- THURSDAY, SEPTEMBER 22, 2011 U.S. Senate, Subcommittee on Federal Financial Management, Government Information, Federal Services, and International Security, of the Committee on Homeland Security and Governmental Affairs, Washington, DC. The Subcommittee met, pursuant to notice, at 1:34 p.m., in Room SD-342, Dirksen Senate Office Building, Hon. Thomas R. Carper, Chairman of the Subcommittee, presiding. Present: Senators Carper and Brown. Senator Carper. I was going to say this hearing should come to order, but this is about the quietest crowd I have seen, Senator Webb, in quite a while. I think we are just going to lead off here and we will forego our opening statements and just come right to you. Thank you so much for being here with us today. Thanks a lot for your service to our country all those years, and for your service today. It is just an honor to be your colleague. Thank you for coming today. TESTIMONY OF HON. JIM WEBB, A UNITED STATES SENATOR FROM THE STATE OF VIRGINIA Senator Webb. Thank you very much, Mr. Chairman, and I want to say I appreciate your taking the time to hold this hearing. I think you and I both, as military veterans, got a good bit of our own education taken care of by Uncle Sam and we know how valuable that can be in terms of building the rest of somebody's professional life. We are here today to try to make sure that the GI Bill that we passed can continue in the form that we passed it and still address some of these issues that are now challenging the program. I understand one of the primary purposes of this hearing is to examine the 90/10 rule in place for for-profit schools and how it would be modified or could be modified to better serve veterans and active duty military students. I would like to commend you and Senator Harkin for your focus on that issue and look forward to the outcome of this hearing. This year marked the second anniversary of the implementation of the Post-9/11 GI Bill. I introduced this legislation on my first day in office, starting with a simple concept, having spent 4 years of my earlier life as committee counsel in the House Veterans Committee, and that was that we owe those people who have served since September 11, 2001 the same type of quality educational benefits that those who served in World War II received, which was to have their tuition paid for, their books bought, and to receive a monthly stipend which is a much more generous benefit than those who served in Vietnam had received. I am very proud to say that we were able to do that and it continues to be a great investment in the future of our country through the people who have served, and as of August the 1, our GI Bill had helped to educate 587,000 beneficiaries. I am very proud of that statistic. And as the Chairman will remember, the passage of this legislation was not a simple process, but I think it has turned out to be a very, very good thing for the country and for our veterans. When we look at World War II, for every dollar that was spent on the World War II GI Bill, $7 were generated for our economy because of the successful careers that people were able to have after they had gone through more schooling. I am here today to ensure that we continue that concept. For-profit schools, by statistics that have been given to me by my staff, have collected more than one-third of all of these Post-9/11 GI Bill benefits over the 2009 to 2010 school year. But they train one-quarter of our veterans. We have all received letters from Veterans of Foreign Wars (VFW), Amvets, Paralyzed Veterans, Student Veterans of America, Blue Star Families, VetFirst, Military Association of America, all stating their concern about this trend line, and if they have not been entered in the record, I would ask that they be entered into the record during this hearing. Senator Carper. They will be. Senator Webb. The World War II GI Bill, history shows, had a similar problem. In 1951, a Government Accountability Office (GAO) report found that a 1,700,000 veterans had enrolled in courses offered by for-profit schools, 5,000 of which sprang up after the creation of the GI Bill, and about 20 percent of the people who had gone to those schools had completed their course. There was, to quote from that report, no information available as to the number of graduates who actually were able to be placed in jobs for which they had been trained. Congress, at that time, responded to concerns of waste, fraud, and abuse by establishing specific standards for on-the- job training programs and made them subject to State education approving agencies. But the abuses of the World War II program, especially among for-profit vocational schools, led to follow-on restrictions of that program and to even stricter restrictions under the program established after the Korean Conflict, and then eventually to the somewhat parsimonious GI Bill given to those who served during the Vietnam War, which began with a $50 a month straight stipend, at its height reached $340 a month just straight stipend, no tuition paid for, no books, none of the things that the people who came back from World War II had and none of the things that people in our Post-9/11 GI Bill now have. Data we have been given shows that eight out of the top 10 recipients of Post-9/11 GI Bill benefits in 2010-2011 were for- profit education companies. These eight for-profit education companies, out of a larger pool of for-profits, collected a billion dollars, 24 percent of all the benefits. For-profits at large collected 37 percent of GI Bill funds, according to the data given to my office, and they trained only 19 percent of the veterans. I would like to point out that this problem is not necessarily the growth of the for-profit sector. There are for- profit institutions that are providing our non-traditional population a great service, but with this amount of Federal dollars being spent in this sector, we owe it to the taxpayers and to our veterans to carefully monitor and provide adequate oversight. Money that goes to a for-profit for tuition does not really go to the veteran. It enables the veteran to get an education. So fixing this problem is not taking anything away from the veteran. In fact, it is ensuring the continuation of the program. My goals are first to ensure that we are providing a high quality education to our veterans, and giving them access to critical information that will help them make their own informed decisions. Total cost of program, transferability of credits, default rates, graduation rates, job placement rates upon graduation are a few ways to ensure transparency. Second and most important, I hope we can look more closely at the role that our State Approving Agencies (SAA) play in approving educational programs in order to ensure that the Department of Veterans Affairs (VA) is being aggressive in their own executive capacity to further strengthen these requirements. I believe this is, at bottom, a leadership issue that can be best addressed through the structure of the Department of Veterans Affairs and I hope you will encourage that process during your hearing. I know you will be receiving testimony today from many who are knowledgeable about the 90/10 rule and these other issues, and I again thank you for holding this hearing and for allowing me to testify. Thank you, Mr. Chairman. Senator Carper. Not at all. Thank you for being the author of the Post-9/11 GI Bill and for working with us and providing really great leadership to try to make sure that the promise, the potential of that GI Bill and preparing folks when they come back from Iraq and Afghanistan or some other place---- Senator Webb. Thank you very much. Senator Carper [continuing]. Have the opportunity to actually complete their education, get a job, become productive members of our society. So thank you so much. With that, I am going to invite the next panel to come forward, and as you come forward, I am going to go ahead and begin an opening statement. OPENING STATEMENT OF SENATOR CARPER Senator Carper. As we hold this hearing, our Nation's debt stands at over $14.6 trillion. Ten years ago, it stood at less than half that amount, around $5.7 trillion. If we remain on our current course, our debt may double again by the end of this decade. Currently, the Joint Select Committee on Deficit Reduction is working to provide us with a roadmap to reduce our cumulative Federal deficits over the next decade by more than $1.2 trillion. I believe that it's imperative that we do better than that, and we have had, as recently as last year, a couple of different deficit commissions, including one led by Erskine Bowles and Alan Simpson who provided what I thought was a pretty good roadmap to get us on the right path out of this fiscal morass. In the end, I hope that it is the roadmap that we will still end up using. With that goal in mind, the Subcommittee repeatedly has asked the question. Is it possible to get a better result for less money in almost every Federal program, or at least a better result for the same amount of money. Oftentimes I have said in this hearing room that Americans believe that we operate under a culture of spendthrift here in Washington, and those people are not entirely wrong. We need to establish a different kind of culture--a culture of thrift. We need to look in every nook and cranny of Federal spending: defense program, domestic spending, tax expenditures, and find places where we can do more with less or more with the same amount of money. This Subcommittee has spent the last 6 years under Democrat and under Republican leadership, to explain this mission. Most of us in this room today, however, understand that we simply cannot cut our way out of debt, tax our way out of debt, or save our way out of debt. We must also grow our way out of debt, and we can do so, in part, by making investments, smart investments in research and development, in infrastructure, and also in education, investments in education that will enable Americans to become more productive workers so we can compete with the rest of the world. For years, the GI Bill helped us to achieve this goal by raising the skill levels of hundreds of thousands of Americans who have served in our military and were returning to civilian life. Senator Webb alluded to the fact that he has received help from taxpayers to get an education. I went to Ohio State University as a Navy ROTC Midshipman to get my undergraduate education after the Vietnam War. Came back to the United States and moved from California to Delaware, got an M.B.A. at the University of Delaware on the GI Bill, and as he suggested, it was not a lot of money. I was happy to have every dime of it. But I think we received about 200 bucks a month at that point in time. And when you compare that with the GI Bill benefits that are enured to those coming home from Iraq or Afghanistan today, it is a whole lot different, and I think it is a change for the better. But for years, the GI Bill helped us to achieve this goal by raising the skill levels of hundreds of thousands of Americans who are coming home from serving abroad and returning to civilian life. However, in 2008, it became clear to Congress that after years of multiple tours of duty in Iraq and Afghanistan, the modern day military needed a modern day GI Bill to ease our troops' transition into civilian life. That is where Jim Webb, newly elected Senator, came in and that is why we passed the Post-9/11 GI Bill that he authored, which pays for the tuition and housing costs of any member of the military who served more than 90 continuous days on active duty since September 10, 2001, and who has accrued some 36 total months of active duty service. Since passing this bill, $11.5 billion have been spent to send veterans back to school under this program. However, recent reports show that too many veterans have been subjected to highly questionable recruiting practices by some schools, subjected to deceptive marketing and substandard education instruction. Not in all, but in some of the schools that they attend, including some for-profit schools. And, I might add, some public schools and some private schools. These problems highlight a key flaw in our higher education system. Currently, the incentives that some schools, for- profits, non-profits, privates, but especially the for-profits, I think are just misaligned. These institutions are rewarded for enrolling more students--especially veterans with a fully paid for education-- but these schools have too little incentive to make sure that their graduates are prepared to join the workforce and begin productive careers and productive lives. Having said that, let me say as clearly as I can, that this is not an issue solely at for-profit schools. There are many public schools and some private colleges and universities that experience similar issues with extremely low degree completion rates, high default rates, and a poor record of serving our veterans. And to be fair, there are also a number of for-profit institutions that offer a quality education and schools that have a history of success with placing students in well-paying jobs. We are here today because I believe that we have a moral imperative to ensure that these abusive practices, where they do occur, wherever they occur, are stopped so that those who have sacrificed for our country can obtain an education that will equip them with the skills that will enable them to find a good job, repay any college loans that they have incurred, and go on to live productive lives as productive citizens, both in the workforce and in their communities. Today's hearing will focus on how we can fix this problem by better incentivizing schools to deliver a high quality education to our military and to our veteran population. We will examine what efforts have improved educational outcomes and enhanced the ability of veterans and our military to receive good-paying jobs upon the completion of their education. We will also examine what has not worked and why flawed Federal policies might encourage schools to continue with practices that do not serve students well. We have, I think, a terrific line-up of witnesses here today who I will introduce shortly. We look forward to a productive hearing, to a hearing more about this issue, and to learning more about this issue. First I want to turn to a fellow who has just joined us at my right and that is Senator Scott Brown for any comments that he would like to add. Thank you. OPENING STATEMENT OF SENATOR BROWN Senator Brown. Thank you, Mr. Chairman. I apologize for being late. We have been running around dealing with some issues back in the home district. I do have a statement. I will just offer it for the record due to my being tardy. I want to hear what the witnesses have to say. So I would submit my opening statement for the record. Senator Carper. OK, thanks so much. Our first witness is Curtis Coy and he is the Deputy Under Secretary for Economic Opportunity in the Department of Veterans Affairs. In this role, Mr. Coy oversees all education benefits, loan guarantee services, and vocational rehabilitation and employment services for America's veterans. Prior to his current position, Mr. Coy served, I believe, as Acting Deputy Commissioner, Chief Financial Officer (CFO) of the Food and Drug Administration (FDA). Another great job. Additionally, from 2002 to 2009, Mr. Coy held the position of Deputy Assistant Secretary for Administration at the Department of Health and Human Services (HHS). Mr. Coy also served as an officer in the United States Navy, and before that, I believe he was an enlisted member of the U.S. Air Force. He retired from the Navy in 1994 with the rank of Commander, and as a retired Navy Captain, my favorite rank in the Navy was Commander, Commander Coy, Commander Carper. Those were good days. We have asked Mr. Coy to discuss how the Department of Veterans Affairs prevents against abuse of the Post-9/11 GI Bill and how we can better incentivize the provision of high quality education to our Nation's students. Mr. Coy, we thank you for being here. And I believe accompanying you today is Keith Wilson. Mr. Wilson, are you also going to testify? Mr. Wilson: I will. Senator Carper. Oh, good. Well, then once Mr. Coy has completed his comments, I will come to you and I will give an introduction for you as well. But, Mr. Coy, please proceed. Your entire testimony will be made part of the record and you are welcome to summarize if you wish. TESIMONY OF CURTIS L. COY,\1\ DEPUTY UNDER SECRETARY FOR ECONOMIC OPPORTUNITY, VETERANS BENEFITS ADMINISTRATION, U.S. DEPARTMENT OF VETERANS AFFAIRS ACCOMPANIED BY KEITH WILSON, DIRECTOR OF THE EDUCATION SERVICE, VETERANS BENEFITS ADMINISTRATION, U.S. DEPARTMENT OF VETERANS AFFAIRS Mr. Coy. Yes, sir, thank you. Good afternoon, Chairman Carper, Ranking Member Brown. I appreciate the opportunity to appear before you today to discuss the Post-9/11 GI Bill and educational outcomes for Veterans and military students. I am accompanied today by Mr. Keith Wilson, as you indicated, who is the Director of the Department of Veterans Affairs Education Service. My full written statement has been submitted for the record. --------------------------------------------------------------------------- \1\ The prepared statement of Mr. Coy appears in the appendix on page 51. --------------------------------------------------------------------------- From August 1, 2009 to June 15, 2011, the VA paid approximately $4.4 billion in tuition and fees and Yellow Ribbon program payments under the Post-9/11 GI Bill to institutions of higher learning. This amount does not include the monthly housing allowances and the books and supplies stipends paid directly to Post-9/11 GI Bill beneficiaries.During this period, approximately $1.6 billion was paid to private, for-profit schools on behalf of more than 145,000 students. Students attending private, for-profit schools made up approximately 23.8 percent of the beneficiaries, while 36.4 percent of the tuition and fee dollars are paid on their behalf. Under the 90/10 rule, proprietary institutions may not receive more than 90 percent of their revenue from funds under Title IV of the Higher Education Act (HEA) of 1965. While VA defers to the Department of Education (ED) on the 90/10 calculation, there is an argument for including the Post-9/11 GI Bill in the 90 percent limit on Federal funding or related proposals. Under the present structure, some institutions may be targeting Veterans because of the Federal education benefits they received and are treated the same way as private funds in the 90/10 calculation. VA believes Veterans should not be aggressively recruited by institutions, principally because of financial motives, and that Federal and State statutes and VA's oversight activities provide a strong monitoring in this area. Modifications to the 90/10 rule could, however, provide additional tools to assist in this area. However, such a change could cause some schools to exceed the 90 percent threshold and be at risk of losing eligibility to receive Federal student aid. To ensure that Veterans are not adversely affected, the manner in which such a change would be implemented is important. VA would welcome the opportunity to work collaboratively with the Department of Education and the Subcommittee as it consider changes in this area. VA is aware of concerns raised regarding for-profit institutions and fraudulent activities. Under existing VA statutes, for-profit institutions are held to the same standards and criteria as non-profit institutions for the purpose of approval for use of VA education benefits. VA believes veterans and their eligible dependents should be able to use and choose to use their education benefits at the academic institution--public, private, non-profit, or private for-profit--that best meets their specific needs and is approved by the State Approving Agency of jurisdiction. As of August 1, 2011, standard degree programs offered at accredited public and private not-for-profit schools are deemed approved for VA educational benefits without separate SAA approval per Public Law (PL) 111-377. In other cases, SAAs evaluate programs offered by each academic institution to determine whether their quality and offerings are similar to other programs offered in the State. If they are not, the SAA will not approve the program. This takes into account compliance with State and VA statutes, including those pertaining to misrepresentation or deceptive marketing. Additionally, Public Law 111-377 expanded VA's authority to utilize SAAs for oversight of programs and institutions. VA will begin to use the SAAs for compliance reviews for this authority in fiscal year 2012. A primary focus of these SAA reviews will be to conduct compliance reviews and increased oversight for for-profit schools. It is important for vets and their eligible dependents to make informed decisions concerning their VA benefits. VA provides free consulting services and assists veterans in determining their aptitudes, interests, and abilities in locating an appropriate educational program. Mr. Chairman, this concludes my statement. We look forward to working with the Subcommittee to provide the very best support possible to our veterans and beneficiaries as they pursue their educational goals. I would be pleased to answer any questions you or Senator Brown may have. Thank you, sir. Senator Carper. Not at all. Thank you very much for that testimony. Mr. Wilson, I understand that you are not here to testify, but you are here to respond to any questions? Mr. Wilson. That is correct and I apologize for any confusion. I will not be providing testimony. Senator Carper. That is OK. We are glad that you are here. Mr. Wilson, just a real quick, little bio on you. I understand you are the Director of Education Service at the Department of Veterans Affairs. Is that correct? Mr. Wilson. That is correct, Mr. Chairman. Senator Carper. And as Director there, I understand that you provide executive level oversight in development of policy, of planning, and integration of educational programs that are administered by the Veterans Benefit Administration. And there are approximately half a million veterans, servicemembers, and other dependents pursue educational opportunities annually under the programs that Mr. Wilson administers. And I think you have been at the VA for about, what, 20 years and worked all over, actually, in a number of places around the country. And also a Navy veteran and served 8 years, I am told, as an operational specialist. We thank you for that service and for being here today and your willingness to answer questions for us. Since Senator Brown was good enough to not give a statement and to go right to the witnesses, I am going to give him the opportunity, if he would like to, to just lead off with the questions. Senator Brown. Senator Brown. Thank you, Mr. Chairman. So probably for both of you, I would think, as the lead agency on the GI Bill, it is the VA's special responsibility to ensure that post- service military benefits are used effectively. Obviously we would not be here today if these programs were serving all of our servicemembers and veterans effectively as they should be. In previous hearings, and obviously today, we have had veterans groups, and we have some in our next panel, and they will highlight some of the concerns regarding the poor oversight and lack of counseling services, et cetera. In your opinion--I will start with you, Mr. Coy--what do think the VA could do better, No. 1? And how long would it take to implement the changes you would suggest? And then, what type of support do you need from us? Mr. Coy. Thank you, Senator Brown. We take any of these allegations that our student vets are somehow being misrepresented or being charged inappropriately or any abuse that is there. I think one of the things that we are most proud of is, we have revamped our compliance and survey program for our State Approving Agencies. Keith has some very specific details on the length and breadth and scope of that program, but we look--you had asked what we can do and how long it would take. We would very much look forward to working with the Subcommittee, the Department of Education, Department of Defense (DOD) for their tuition assistance program to implement any of these changes that the Committee may deem appropriate. Senator Brown. Mr. Wilson, do you have anything to add? Mr. Wilson. A few comments, yes. Thank you. We have had a long-standing relationship with our State Approving Agencies since 1948, actually. It has been a very effective relationship. The State Approving Agencies, on many fronts, are essentially the boots on the ground when it comes to the GI Bill at the State level. As occurs over time, we would like more. We would like more flexibility, additional resources, et cetera. And we were able to achieve additional efficiencies and more flexibility in terms of how we can use those State Approving Agencies under Public Law 111-377. We are now able to use those State Approving Agencies for full-blown compliance surveys, much as we currently have been doing with our VA employees. And what that does is give us more resources to actually go into areas that we have concerns or want to provide additional oversight and take some good deep dives into these areas. Our goal, beginning fiscal year 2012, is to provide a compliance survey at every for-profit institution every year. We have completed a large part of the training with the State Approving Agencies to do that, and come October 1, they will begin doing those compliance surveys in conjunction with our own staff, and then begin doing their work on their own. Senator Brown. According to some, and in Mr. Ryan Gallucci's testimony, the VFW has found that many of the SAAs are undermanned and under-trained. In one State, there is only one employee to carry out this function. They do it as collateral duty, not as a primary mission. And other States only have a handful of staff. What I have heard from veteran students is that there seems to be a disconnect from the time that they actually apply and then get the funding, making sure the funding is properly credited, and they get the other benefits they are entitled to. Why does there seem to be kind of a disproportionate amount of oversight from one State to another and one system to another? How do you resolve that? How do you do it better? Mr. Coy. I will let Keith elaborate, but our budget for the SAA contracts that we do every year is about $19 million and that is in statute. There is a formula that is used to allocate those funds across the States and territories. Keith is more than willing to talk about how we go about doing that allocation. He is certainly the expert there. Mr. Wilson. The funding amount available for the SAAs is set by statute. Over the last several years, it has gone up from about $12 million to the current level of about $19 million. We have about 62 State Approving Agencies we contract with. Some States organizationally are split up separate so we will have more than one contract in some of the States. The allocation of that money is divided up by active institutions essentially within the State. So basically, the number of schools that have active GI Bill participants will govern the amount of funding that they receive under those benefits. If I could loop back and just touch on your comment about delays and benefits, et cetera, we are very proud of what we have been able to accomplish over the last couple of years in terms of standing up the Post-9/11 GI Bill. We are very current right now on processing claims. Largely processing of claims is unrelated to work in the SAA area. We are processing enrollments in about 10 days right now for the fall enrollment. We have received about 350,000 enrollments for students, about 320,000 of those are already paid. So, but of course, that is one step. In order to make sure that our veterans are succeeding, the first thing we focused on is the necessity to make sure they are in school, they are being paid dependably, accurately, timely. We believe they are there. We want to continue to increase our work on making sure that the outcomes, as a result of those enrollments, do occur. Senator Brown. So if somebody actually has problems that maybe you are not aware of, what is the best way for the individual student, veteran, to deal with it? Mr. Coy. Problems academically or problems from---- Senator Brown. No, just the things we were talking about, the flow of the registration, the pay, the benefits, just implementation thereof. Mr. Coy. There is a variety of different areas. We have an 800 number that students can call. Senator Brown. Do you have it handy? Maybe at some point you can get it and we can just announce it because some people watch this, do they not? Mr. Wilson. I would be happy to announce it. Senator Brown. OK. Mr. Wilson. 1-888-GIBILL1. Senator Brown. OK, good. Mr. Wilson. And individuals can also e-mail us directly from our Web site which is gibill.va.gov. Senator Brown. Great. Well, I have another round, but I will just defer to you, Mr. Chairman. Senator Carper. Before I ask my question, I am just going to try to make real clear what I am trying to do here, what I think we are trying to do here. We have a huge budget deficit, as we know, $1.3 trillion this year, huge increase--a decade ago we had a balanced budget and a surplus. And here we are with these huge deficits and deficits as far as the eye can see. And we know if want to be competitive with the rest of the world, which is getting tougher, they are different competitors these days. And it sort of like at the end of World War II or the end of the Vietnam War. But if we want to be competitive, we have to specialize, that is to say we have to out-educate, out-innovate, out-compete everybody else. And part of doing that is making sure we do a better job in research and development that can be commercialized and turned into products we can sell around the world. Part of that is making sure we have an infrastructure, not just roads, highways and bridges, but rails, port, water, sewer, all kinds of infrastructure including broadband. And the third is to make sure we have a workforce. Students coming out of our schools not just colleges and universities, but out of our high schools who can read, write, think, do math, familiar with technology. We have to do all those things. And we don't have a lot of money to spare given the size of our budget deficit, so we want to get a better result, a better result for the same amount of money, and hopefully maybe a better result for less money in terms of our workforce preparedness. I think one of our next witnesses for our next panel, Ted Daywalt, who is the President of VetJobs, a fellow you know, stated in his testimony that veterans need to have better information available to them in order to make more informed decisions about which schools to attend. I think you may have mentioned in your testimony, Mr. Coy, that the Department of Veterans Affairs offers counseling and guidance on your Web site about the options available to veterans. Let me just ask you, any idea, is this somehow required reading for all veterans seeking to use their GI Bill benefits? And to your knowledge you have exit counseling that the Department of Defense requires military personnel to participate in while transitioning to veteran status. I remember when my squadron came home at the end of the Vietnam War to come back to California, and then when I separated in the middle part of 1973, as I am sure somebody, somebody said something to me about veterans benefits because I knew I was eligible for some financial aid through the GI Bill and I knew that we were eligible for like dental benefits of some kind for the first year or two. But I do not recall really a kind of structured debriefing or a structured briefing with materials that we should take with us and commit to memory. I do not know. Maybe it is different today. Give us some idea of how does it work today and the stuff that is on your Web site on counseling and guidance, obviously it is available to veterans. Do we have any idea if they actually look at it and understand it? Mr. Coy. Yes, sir. We are very concerned about making sure that our veterans choose the right school. Keith and his organization send out letters at least twice a year, I believe, to veterans and they reference choosing the right school. In fact, Mr. Wilson here is the author of Choosing the Right School that is on the Web site and has received quite a bit of acclaim for doing just that. With respect to sort of monitoring and watching students as they progress through, we do that through a number of different ways. Most certainly the schools' certifying officers and officials have a feel for that. This past June we started having schools report to us graduations and success rates and students that are on academic probation. We have a program that we can get counseling as soon as we know a student is having any difficulties or problems, whether it be in payments, whether it be in academics, and we can offer them that counseling through some of our Chapter 36 counseling. In addition to that, we have started a pilot program at eight schools. We plan on expanding to another nine this coming year. That is called VetSuccess on Campus. In the program, we have put a full-time counselor on campus to provide any sort of counseling or help with respect to those vets that are on there. It is been very successful and very, very well-received at the schools and by our veteran students. Senator Carper. So those are schools like brick-and-mortar schools as opposed to those that are available maybe over the Internet? Mr. Coy. Yes, sir. There are eight pilot schools right now. Senator Carper. How many schools in the whole universe of schools where GI's can go? Mr. Coy. For Post-9/11 Bill, the latest numbers I have seen is about 6,000 schools. Is that correct, Keith? Mr. Wilson. Yes. Senator Carper. So in terms of the meaningfulness of 8 or 17, that is just a drop in the bucket, isn't it? Mr. Wilson. Absolutely, yes, sir. And it is a pilot program and we are putting it out there and we are looking at ways to, in fact, expand that program across-the-board. Mr. Coy. I guess finally to answer your other question directly, as you probably know, the President has called for a joint DOD and VA task force to take a look at the entire transition process and employment issues across the board. Both Keith and I have been asked to serve on that and, in fact, we left the task force meeting at an offsite to come here to testify. So there are a number of different things that are being worked right now. We are looking at a number of things in the future with respect to providing that sort of support to our vets on campus. Senator Carper. Good. Mr. Wilson, do you want to add anything? Mr. Wilson. Just a couple points. We could not agree with you more concerning the veterans, servicemembers also, needing the right information to make decisions on schools. Our approach is early intervention and redundancy. We do direct mailings to individuals beginning one year into active service. We direct mail to every individual once they have been on active duty. We do that again at 2 years, we do that at the 6- month mark prior to graduation, and then we do that again at separation, in addition to providing them the specifics on how to choose schools, questions that they should ask during the transition assistance briefing. So we want to reach the individuals while they are still servicemembers because a lot of times, that is really when they are making the decisions on where they could potentially go to school. Just from a personal level, I have an interest in that. My son, Noah, is with the 82d Airborne. Senator Carper. What is his name? Mr. Wilson. Noah Wilson. Senator Carper. Noah? Mr. Wilson. Yes, sir. Senator Carper. Like, Noah, I think it is starting to rain? Mr. Wilson. Absolutely, yes. He has heard that once or twice. The important thing, though, is reaching those individuals while they are on active duty because that is where they are forming their opinions on where they want to go to school. So we want to get that information to them early and often. Senator Carper. Good, all right. Senator Brown. Senator Brown. Thank you, Mr. Chairman. So I want to turn for a minute to the consumer education piece of what we are doing to ensure that veterans and servicemembers are, in fact, informed consumers. In your statement, you state that the VA is significantly expanding their engagement with students throughout their educational experiences, but I did not here any specific examples. What are you doing in terms of expanding the services and how you are doing it and what has the response from the students been? If you could just walk us through that, I will start with you, Mr. Coy. Mr. Coy. Absolutely. We are very concerned about---- Senator Brown. If somebody walks in, Hi, I just completed a tour of duty, I am eligible for benefits, what do you tell them on the way in? Mr. Coy. In the transition phase or on campus? Senator Brown. Transition and on campus. Mr. Coy. In the transition phase, as I indicated earlier, Senator, we are in the process of editing the entire transition process. Senator Brown. What happens now, though? Because during the during the transition you are doing something. Mr. Coy. Right now during the transition, we do a 4-hour presentation for departing servicemembers with respect to all of their benefits that they are eligible for within the VA. And so, that is a 4-hour presentation. We have another 2 hours of what we call DTAP, or transition assistance, for our disabled veterans so that adds on another 2 hours. And it lays out all of their educational benefits for each of the departing servicemembers. Senator Brown. Do they get a handout? Do they get a breakdown, a physical breakdown or is this just an in-class presentation, they have to take notes? Mr. Coy. Well, they get a copy of the presentation. There are a number of brochures that are given. Keith, can you be specific about the exact brochures? Senator Brown. Well, let me just kind of tell you what I am getting at. So I am in the Guard, and we have a pretty good educational program in Massachusetts for State schools and the like. And when our soldiers come home from doing their duty, they actually go through an out-processing or a demobilization where it is A to Z, mental health, physical, financial, et cetera, educational benefits and the like. We not only give them that type of presentation, but we give them a packet with the actual hardcore numbers and a breakdown, because with all due respect, when the soldier has done his duty, his or her duty, they just want to get home. They want to take off the uniform, they want to have some relaxation time, however they do that, and they are not focused. Then all of a sudden it is coming August and they say, Oh, my gosh, honey, you have to go to school, you have these great opportunities. And like, Oh, I got a nice briefing, but I do not remember a thing. So is there a packet, a presentation that is professionally done and easy to understand that they get? Mr. Coy. I would suggest that we are very much interested in making sure that our vets that are coming back have that information. With respect to the specific packet of information, there is a number of different brochures, as well as on the Web site. But in terms of a specific package that we hand out, I am not so sure that we provide that. Senator Brown. Yes, I would be curious to see whether, in fact, a handout--because I think it is important to know. I mean, the Web site is great, certainly, but how do they even ultimately know to go to the Web site to get that information? So I have noticed that there seems to be a little bit of a disconnect. So once they get on campus, then what? Mr. Coy. Once they get on campus, it depends on which campus they are at, certainly. Senator Brown. Well, the average campus. Mr. Coy. The average campus does not have a VetSuccess on- campus counselor. They have the school certifying official and we have--and the school certifying official is required to sort of keep track of those students. There is also counseling benefits that students are eligible for and we get them in touch with counselors in one of the 57 regional offices the VA has, as well as other counselors that are out-stationed across the board. Keith, do you want to elaborate a little bit more? Mr. Wilson. Just to amplify on a couple points. We mentioned earlier the redundancy in the information we provide veterans. We agree, when they are ready to separate, they want to go home. That is why we try to reach out earlier during the lifetime of their career to provide them GI Bill information earlier. Just to touch on a couple of the things that Mr. Coy mentioned earlier in his testimony, what we have done with the schools is create more of a proactive relationship by having them provide us information that we previously did not have. For instance, we provide information on how to apply for benefits, et cetera, to veterans. What we began requiring schools to report to us this fall are situations where the veteran may be under some type of challenge. Academically, they do not seem to be succeeding. Schools are required now to report to us when a student is placed on academic probation or when they are terminated for academic reasons. What we do with that information is circle back to them once again and make them aware of the Chapter 36 counseling that Mr. Coy talked about earlier. We have the resources to sit down with these veterans, if they choose, and help them determine aptitudes, interests, and abilities, and perhaps recommendations on some type of programs that fit. So if a person chooses a school or a program, they are struggling, we want to try to redirect them into a program that may be a better fit so they can succeed. Senator Brown. And in extension of what the Chairman said about trying to get the best value for our dollar and find out how we can do it better, some of the figures about college loan debt and default rates are pretty alarming. What kind of counseling is the VA doing with veterans about the financial implications of their educational choices, specifically about the amount of in-kind debt that they are taking on? Either one of you. Mr. Wilson. For debt, I am not aware of anything we specifically refer to concerning debt. Senator Brown. The educational choices you just noted, do you have the post--when they are at a point where they are--do you have a pre-enrollment that you, say, sit down with that soldier and say--that veteran, and say, Hey, you really cannot be a cook, but boy, you would be a great engineer? I mean, do you have that? Mr. Wilson. It is not a requirement when one goes through the process. It is a mechanism that is made available to the individuals. Last year we had about 12,000 individuals that we provided this type of what we refer to as Chapter 36 counseling. Senator Brown. I am all set, Mr. Chairman. Thanks. Senator Carper. If I could, I want to go back to one of my earlier questions where we were talking about the guidance or support that is offered to GIs, particularly those that are coming home to return to civilian life. Has any of this guidance or support, is it required for all vets using the GI Bill? Do they have to participate? Do they have to attend? Do they have to acknowledge that they have gone through certain transitioning before they are allowed to participate in the program? Mr. Coy. I will answer that, I guess, a couple different ways. The information that Mr. Wilson talked about in terms of sending the information to those servicemembers while they are still on active duty, so all of them get that information. With respect to the Transition Assistance Program, which is the counseling session that is sponsored by the Department of Labor (DOL), it is a 2\1/2\ to 3-day session with respect to the entire gamut of servicemembers getting out. That is currently not really a mandatory attendance required. The Marines make it mandatory, but the rest of the services do not make it mandatory. Senator Carper. Well, why do you suppose the Marines do and the others do not? Mr. Coy. That would be a subjective judgment, but I think that is how Marines are structured. They want all their troops to go to the Transition Assistance Program and they make it so. Senator Carper. And another part of what we are doing here in this Subcommittee is trying to make sure the Department of Defense actually is able to produce auditable and audited financials, and they do not and they do not even expect to be auditable until like maybe 2017. We always like to say, what you cannot measure, you cannot manage. So we are working on it real hard. Secretary Panetta is providing great leadership there to put a fire under their people. The Marines are actually trying to be first on the beach in that regard as well, and they are trying to lead the way and show the other services how it is done. I hope they are going to be successful because we need that. I am very much encouraged to hear what you say they are doing, and maybe we can look to them to provide a model to the Army, the Air Force, and the rest of their Navy brothers and sisters. A question for Mr. Coy. Maybe for Mr. Wilson. I am going to come back to the issue of the State Approving Agencies. As I understand it, these agencies for each State are the only entity that make firm decisions about whether a veteran can use GI Bill benefits to pay for their tuition for specific school programs, and as I understand, the State Approving Agencies are formed and staffed by State governments, not by the Federal Government, by State governments. Any idea how many programs currently are approved by a State Approving Agency, but are not part of an accredited institution? Any idea there? Mr. Coy. I do not have that information in front of me. Senator Carper. I am going to just ask you to answer that for the record, if you will. How many programs currently are approved by State Approving Agencies, but are not part of accredited institutions, if you would. You may not be able to answer this one either, but I will ask it again. How do State Approving Agencies' certification requirements change from State to State? Can you just help me with that? Mr. Coy. We have recently put out a guide for State approving officials. We also have a VA State Approving Agencies joint peer review process that we meet with them once a year to provide that consistency. Keith, do you want to give a little bit more meat on that? Mr. Wilson. The compliance surveys and the approval criteria that State Approving Agencies apply are actually codified in Federal statute. So in terms of the things that they are looking at from a Federal perspective, it is exactly the same in every State. Now, that would be supplemented by anything the States individually would have codified within State statutes, which the State Approving Agencies, of course, also could enforce. Senator Carper. And do you have a situation where some of these State Approving Agencies are probably doing a pretty good job, well-staffed, people who know what they are doing that are religiously executing their responsibilities and some of them are not? Do we have any idea if that is case? Mr. Wilson. We do. I would say the vast majority of State Approving Agencies are very well-trained, highly motivated individuals that do a superb job. As with any group of individuals, we have those that we really consider our go-to people and people we work with to improve their performance. We conduct an annual performance review on every one of them. Senator Carper. This is a question for both of you, if I could. If I am a veteran coming home using the Post-9/11 GI Bill and I have a complaint about the school, with whom do I address this concern? Is it my regional VA office? Is it the State Approving Agency? How does the VA track these complaints and how do you share them with the Department of Defense and the Department of Education? Any idea of how many complaints you have shared with the DOD and the Department of Ed since the creation of the Post-9/11 Bill? Can you just help me with that outline of questioning, please? Mr. Wilson. Sure. If students have concerns about their school, there are several ways they can reach us. No. 1, they can call us on our 888-GIBILL1 number. No. 2, they can e-mail us. No. 3, when we go out and do compliance surveys at these schools, the schools are required to tell the students, The VA is going to be there, and they can meet face to face with our compliance survey people that go out to the schools. Additionally, beginning in fiscal year 12 our customer satisfaction survey that goes out to every one of our 800,000 students has had additional information in it where they report to us specific responses concerning their experience with their school. Previously, that survey was more on how well we were meeting their needs in terms of timely payment. We have expanded that to begin diving down into their experiences with their school. Senator Carper. Thank you for that. Senator Harkin and I were joined at a press conference earlier this morning on the subject that relates very much to what we are looking at today. A fellow named John Elliott, an Army veteran, an Iraq veteran, he told us about applying for benefits, in this case, at a proprietary school. It ended up the school claimed that they were signed up with the VA and that he could get his education through the school using the GI Bill. It turned out to be not true. And then they ultimately sent him a bill for $9,600 for tuition to pay back for the benefits. But yet, the school said clearly that, ``We work in conjunction with the GI Bill, we work with VA.'' However it was not true, and they ended up dunning him $9,600. The night before this morning's press conference, he got word from the school, proprietary school, that his $9,600 in debt was forgiven. Well, let me just ask you and sort of following onto that, are these State Approving Agencies that we are talking about in charge of cracking down on schools that incorrectly claim, like the one I just described, that incorrectly claim that they are eligible to accept veterans assistance benefits? Whose job is to crack down on an institution like that, whether they are proprietary, public, or private? Mr. Wilson. Yes, Mr. Chairman. Ultimately, it is the VA's responsibility. The State Approving Agencies act as our agents in this area. They do have the enforcement authority by law in this area, but they are acting as our agent, so it is a cooperative relationship. Specifically on the individual you are referring to, I do know about the specifics of that case. I am a little bit reluctant to talk about it obviously publicly, but I would be happy to talk a little bit one-on-one. There are a little bit more issues involved. Senator Carper. Good. Mr. Wilson. But I would be happy to talk to you about that. Senator Carper. All right, appreciate that. Mr. Wilson. But ultimately, it is the State Approving Agency's authority to pull approval when those situations do occur. They do exercise that authority. We have had specifically one situation recently where we have pulled approval. That approval is still under suspense, so we do exercise that authority. Senator Carper. All right. Any idea--and you may have to answer this for the record since the implementation of the Post-9/11 GI Bill, how many schools have been barred from receiving GI Bill payments? And what was the nature, just in general, what was the nature of these violations that may have led to these actions? Mr. Coy. We were just talking. I think this fiscal year we have one school that we barred from getting GI Bill payments. Senator Carper. And tell me again how many schools are there that are eligible for GI Bill reimbursement, how many? Mr. Coy. I think we mentioned about 6,000. Senator Carper. So out of 6,000, one has been barred? Mr. Wilson. If I could amplify a little bit? Senator Carper. Please. Mr. Wilson. We are aware of specifically one case this fiscal year. One of the things that we have recognized is that nationally we didn't do a good job of collecting information. Senator Carper. So you did do a good job or did not? Mr. Wilson. What we did---- Senator Carper. No, no, I just misunderstood what you said. Mr. Wilson. I'm sorry. Senator Carper. I could not tell if you said we did a good job or we did not do a good job nationally. Mr. Wilson. One thing that we did not do a good job nationally on is collecting information at the national level specifically on the compliance, et cetera. Up until this fiscal year, that information was stored, collected independently within each of the States on however they did it within their State. So it made it difficult for us to respond to those type of questions from a national perspective, from a programmatic perspective. We do, beginning this fiscal year 2011, we started collecting that information nationally and the one school that we mentioned is the one that we are specifically aware of in fiscal year 2011. Senator Carper. Well, I would just urge you to look harder. Let us talk for a little bit before we wrap up and move to our second panel about the incentives for veteran recruitment. And as I mentioned earlier, I believe our higher education incentives are misaligned. Too often we incentivize schools to recruit high quantities of students without necessarily incentivizing those same schools to provide a high quality of education. I think that is especially true with our veterans, and I would like to refer to something that Holly Petraeus said in her statement that you also discussed, I think, when you were talking about the 90/10 rule. There is an op-ed that she wrote in today's New York Times. And she is the wife of a veteran, David Petraeus, and the mother of a veteran, Stephen. But Ms. Petraeus stated that, under the 90/10 rule, a for-profit school has to make sure that it obtains at least 10 percent of its overall revenue from a source other than the Department of Education funds. And therefore, no more than 90 percent of a school's revenues contracting can come from Federal student aid, in this case through the Department of Education. However, because revenues from the Post-9/11 GI Bill or the DOD Tuition Assistance Program (TAP), which is assistance that accrues to active duty personnel, military personnel, those are not counted as Federal student aid. And they are treated as other revenues, really equivalent to private dollars. I am going to paraphrase what Ms. Petraeus stated, but something to this effect. For every servicemember that a for- profit college recruits who will be using DOD Tuition Assistance or GI Bill funds, the for-profit college can then go out and enroll nine other students who are using Federal student aid from the Department of Education. This has given some for-profit colleges an incentive to see servicemembers as nothing more than dollar signs in uniform, and they use some very unscrupulous marketing techniques to draw them in. My next question would be, do you agree with this statement by Mrs. Petraeus about the negative incentives that we have created under the current 90/10 rule? Mr. Coy. Thank you. We certainly recognize that an argument could be made to include the GI Bill and Tuition Assistance Programs under the 90 percent rule, and we would be happy to work most certainly with the Subcommittee. I think our most significant concern would be if there was a policy change, a change of this nature, how it would be implemented and what effects it may or may not have on our veterans. Short of that, we would be absolutely delighted to work with the Subcommittee, Department of Education, and Department of Defense to implement such a policy if that is what was decided upon. Senator Carper. Mr. Wilson, do you want to add anything to that? Mr. Wilson. I think that is a very good summary. We are actively engaged with DOD and Department of Education talking specifically about this. Senator Carper. What incentives does the Department, your Department, the Department of Veterans Affairs, have in place to motivate schools not just to recruit veterans, but to provide them with a quality education that leads to good-paying jobs? Mr. Wilson. I am having a little bit of a difficult time getting my head around that because there are so many things at work here. Ultimately, we consider that a school should be honored to be able to train these individuals. These are our best and brightest in the country. I think everybody recognizes that. They deserve the best education this country has to offer. Our experience has been that most institutions have the same philosophy on that. We do have statutes in place that hold all schools to the same level of accountability statutorily. One of the things that we are looking at, as Mr. Coy talked about in the task force, is going beyond. One of the things that we are specifically looking at is how do we identify best practices, where are the schools, what are they doing to maximize the veterans' experience on campus and doing a good job of handing them off to become employable individuals who do become employed. That is core to what we are talking about in this task force. Senator Carper. I think it is important for us to identify best practices. One of the things we try to do on this Subcommittee, as Senator Brown knows, we try to identify best practices. We try to put a spotlight on best practices in the Federal Government from A to Z. And we also try to put a spotlight on worst practices, and in part to use positive reinforcement to encourage worst practice to become better practices and maybe ultimately best practices. In closing my questioning here, I would just say it again. Our country faces huge budget deficits. We are not sure how we are going to get out of it. I think at the end of the day, it has to be a combination of cutting spending, a combination of raising some revenues, a combination of growing the heck out of the economy, in combination of getting better results for less money in every nook and cranny in this government, and that includes in these programs. It includes to make sure that we are getting our money's worth out of Pell grants and out of student loans, out of GI Bill, out of Tuition Assistance. We are spending money here and not getting a very good result, in too many cases where we do not have the money to spend in the first place. We simply borrow it from other countries, borrow it overseas in too many cases. We are wasting it. We are going to hear from some schools here in a few minutes in this second panel where they are, in one case, a for-profit, but they both work all over the country, in fact, around the world providing educational opportunities who actually get a pretty good result. And what we want to do is incentivize a lot more of that. This needs to be, as we used to say in the Navy, all hands on deck. I know I can do a better job here, so can Senator Brown, so can the Members of our Subcommittee making sure that the behavior that is untoward, unethical, that kind of behavior stops. And that we need everybody in the VA, particularly for those that are working with you that are doing the Lord's work on this front in trying to make sure that we get on the right track. I thank you for that. But we need the folks that are on active duty, the people that are doing the transitioning, making sure that the people, when they are leaving the Guard or coming home, the Army, Navy, Air Force, Marines, that they are getting the kind of transitioning and turn over that they needed to make wise decisions. And at the end of the day, there is a moral imperative here. It is not just an economic imperative, like we do not have the money to pay for this and the taxpayers are getting screwed. There is a moral imperative here because we have been saying to people who have been willing to lay down their lives, if they have to, and if they are asked to, that when you come home, you are going to get a GI Bill that Jim Webb and others worked really hard to create that is not worth the paper that it is written on, and that is just morally wrong and we are going to change that. Senator Brown. Senator Brown. Mr. Chairman, one of the reasons I have enjoyed being on this Subcommittee is to try to identify a lot of the things that are actually now being worked on by the Administration and by both parties to try to get more value out of our dollars. So I appreciate you bringing this forward and I look forward to the next hearing as well. Senator Carper. Gentlemen, give us a closing statement, please, just a closing comment, both of you. Mr. Coy. My only closing comment, Mr. Chairman, is aye, aye, we hear you. It is an honor to testify and it has been an honor to work at the VA for those wonderful vets that you just described. Senator Carper. A closing thought, Mr. Wilson. Mr. Wilson. I think it is clear we have the same desire. We want the veterans to get the best education they can and we look forward to working with the Subcommittee to achieve those goals. Senator Carper. Good, thank you both. And we welcome our next panel of witnesses and would ask, as Mr. Coy and Mr. Wilson weight anchor, that our third panel actually come to the table, please. I am going to begin giving a brief introduction of them. Ted Daywalt, the first witness, President and CEO of VetJobs. VetJobs is the leading military jobs board on the Internet. It connects veterans transitioning from the military or completing their post-military education with employers across the country. Mr. Daywalt has worked with veterans of all backgrounds and has helped them to find good paying jobs in successful careers. In addition to his work with VetJobs, Mr. Daywalt served on active duty in the U.S. Navy. There seems to be a recurring theme here, Senator Brown. We have to get some Army guys in here. Mr. Wilson. I object. We need to have more Army guys, Mr. Chairman. Senator Carper. I promise. Mr. Wilson. Pulling rank on me here. Senator Carper. Mr. Daywalt served on active duty in the Navy for 7 years before transitioning to the Naval Reserve Intelligence Program in 1978, and he retired from the U.S. Navy with 28 years of service at the rank of captain. Mr. Daywalt also sits on the board of the College Educators for Veterans in Higher Education, has previously sat on the board of Emory University and the International Association of Employment Web sites (IAEWS) and testified before the President's Commission on the National Guard and Reserves. Thank you for your service as a member of the Navy and for the work that you are doing as a citizen. Ryan Gallucci is the Deputy Director of the National Legislative Service for the Veterans of Foreign Wars. With 2.1 million members nationwide, the VFW is the largest veterans service organization for combat veterans in our country. I am honored to be a life member, and I suspect others on our Subcommittee are as well. Mr. Gallucci served as the education expert for the Veterans of Foreign Wars and is responsible for carrying out the organization's efforts to help transitioning servicemembers and veterans pursue higher education and viable career paths following their military service. Here we go. In addition, Mr. Gallucci served 8 years in the U.S. Army Reserve leaving the military in 2007 as a Civil Affairs sergeant. He was awarded the Meritorious Bronze Star, the Army Commendation Medal, and Combat Action Badge for his actions while deployed to Iraq in 2003 and 2004. We thank you especially for that service. Upon returning statewide, Mr. Gallucci earned a bachelor's degree in journalism and political science from the University of Rhode Island using his GI Bill benefits. Mr. Gallucci, again, we thank you for being here today and for your service. Next is Dr. Russell Kitchner and our third witness, the Vice President for Government Affairs, Regulatory Affairs for the American Public University System (APUS). The American Public University System is the parent organization of two for- profit colleges, the American Public University (APU) and the American Military University (AMU). The American Public University System serves more than 83,000 students with 64 percent of its student population currently serving in the military. Dr. Kitchner is joining us today because by all accounts, American Military University is a for-profit school that does a good job of serving the active duty military personnel of our country. Dr. Kitchner is here today to discuss some of the keys we discussed, describe that his school has adopted on educating our military. Dr. Kitchner, we have talked a little bit about the bad actors in the for-profit education industry, and frankly, in the non-profit and private non-profits, too. But I want to thank you for agreeing to come today and share with us a different perspective, from a school's perspective, a school that appears to be doing it right. And finally Dr. Greg Von Lehmen. Our last witness, but certainly not our least. Greg Von Lehmen, Provost, Chief Academic Officer of the University of Maryland University College (UMUC). The University of Maryland University College is a non-profit public college and one of 11 accredited degree- granting institutions in the University of Maryland system offering courses on 130 military installations across the globe and serving over 90,000 students. The University of Maryland University College is one of the largest distance learning institutions in the world. Prior to becoming Provost, Dr. Von Lehmen worked for the University of Maryland University College's Asia office serving as the Area Development for Japan, I believe, for about 4 years and also spent time in a classroom teaching constitutional administrative law, political philosophy, political administration at Georgia, Southwestern State University and Troy University. Dr. Von Lehmen is here today to talk about the University of Maryland University College service and how the college serves its military and veterans population and the initiatives they have undertaken to improve the education provided to these students. Doctor Von Lehmen, great to see you and thank you for coming before us and for your testimony. Let me just say before we all start, when you think about it, Senator Brown and I have spent a fair amount of our lives and years in uniform. I remember in my 5 years of active duty, 13, I think permanent duty station changes and just a whole lot more of temporary active duty, we will go here or there, all over Southeast Asia and other parts of the world. And it is really hard to get an education when you are doing that. And the idea of being able to do distance learning, it is a great idea, particularly for folks in the military, if it is done right. And at the end of the day, we want to make sure it is done right, not just in a couple States in this country. We want to make sure it is done right all over the world for economic reasons and for moral reasons. Thank you. Mr. Daywalt, your whole testimony will be made part of the record. Please summarize and proceed as you wish. Thank you. TESTIMONY OF TED DAYWALT,\1\ PRESIDENT, VETJOBS Mr. Daywalt. Thank you, sir. Good afternoon, Chairman, Ranking Member Brown, staff of the Subcommittee. Let me first thank you for the opportunity to come before the Subcommittee today to share with you information that is relevant to the Subcommittee's discussions on improving veterans education outcomes. It is an honor to be here. --------------------------------------------------------------------------- \1\ The prepared statement of Mr. Daywalt appears in the appendix on page 56. --------------------------------------------------------------------------- VetJobs has a unique vantage point on these discussions just by the nature of our business. VetJobs deals with veterans and their family members on a daily basis who are pursuing employment, but also the education necessary to obtain meaningful employment. As I mentioned in my written testimony, veteran education prospects have improved greatly with the new Post-9/11 GI Bill, but when one looks at the evidence, the current Post-9/11 GI Bill has truly been usurped by predatory for-profit schools. Note I use the term predatory for-profit schools as not all for-profit schools have engaged in less than ethical behavior. I would not put schools like the University of Phoenix and American Military University in the same category as Kaplan and Education Management Corporation. You may seen the New York Times story that Education Management is being sued by the Department of Justice (DOJ) in four States for $11 billion of fraud. The actions and behaviors of these predatory for-profit schools like Kaplan and Education Management need to be stopped. I first became aware of the issue while working with the veterans who thought they had earned the credible associate or bachelor degree only to learn that their degree was worthless and they had no chance to recover their now lost GI Bill. For example, Stephen Kimball of McComb, Illinois had obtained a bachelor's in business administration from the University Management in Technology while he was on active duty. When he left service, he applied to many graduate schools but was rejected because his degree was not recognized as a legitimate degree. As Stephen told me, in order to go to graduate school, he needs another bachelor's degree, which could take years since he no longer has his GI Bill. Kimball's experience is unfortunately typical of many veterans who have been deceived by the predatory for-profit schools. Besides the deceptive practices used by the predatory for- profit schools, I learned that the fees charge by the predatory for-profit schools are outrageous. A bachelor's degree from the University of Florida costs $24,458, but a bachelor's degree from the predatory for-profit school Everest College in Florida costs $81,680. And the predatory for-profit schools degree are not recognized by the traditional brick and mortar schools. The students who attend these schools---- Senator Carper. I am sorry. Would you just say that again? Mr. Daywalt. You can get a bachelor's degree from the University of Florida as an in-state student for $25,000. It is actually $24,458. The Everest College which is based down in Florida, your bachelor's degree would be $81,680. Senator Carper. OK, thank you. Mr. Daywalt. I could have put both my kids through Emory for that. The students who attend these schools are wasting their GI Bill benefits due to not understanding the system and not receiving guidance from their command educational counselors. And many of the veterans who are snarled in this quagmire are aggressively encouraged to take on more debt by the predatory for-profit schools. This ultimately leads to many veterans and their spouses defaulting on their college notes. Since over 60 percent of companies now run credit checks on prospective employees, it becomes very hard for any of these veterans and their spouses to be able to obtain employment. And that is why VetJobs involves itself in this issue. The predatory for-profit schools are hindering our veterans and their spouses from being able to obtain gainful employment. I have also learned of predatory for-profit schools that target military spouses on bases, setting up a recruiting table at the post exchanges and commissioners. I have been told they have admitted spouses who did not have a high school diploma or an acceptable SAT. But what really bothers me, Chairman, is that after last year's GAO undercover investigation that found 15 predatory for-profit schools had made deceptive or otherwise questionable statements to GAO's undercover applicants, and four schools actually encouraged personnel to falsify their financial aid forms to qualify for Federal aid, the VA and DOD did nothing to decertify the schools or ban them from receiving GI Bill or Tuition Assistance monies. VA continues to allow these predatory for-profit schools to enroll active duty, veterans, and spouses. These predatory for- profit schools continue today to target veterans and their spouses. There obviously is no effective oversight of the educational programs at DOD and VA! As a businessman and a retired senior officer and a taxpayer, I have to ask, how does this situation be allowed to persist, and more importantly, why? To be fair, yesterday there was a report in the Chronicle of Higher Education that DOD is stepping up its oversight of online learning amid growing congressional scrutiny of its tuition benefit program. But I think it is a shame that it took congressional and press pressure to get DOD to do its job. It is obvious to me that many predatory for-profit schools see military students as dollar signs in uniforms. The actions of the predatory for-profit schools need to be stopped. Veterans, the very people who have defended our country and protected our Constitutional Republic and given us the free market society that we in business so dearly enjoy, deserve better treatment. In conclusion, I now want to point out that had DOD and VA provided the proper oversight, we would not be here today, and veterans and their family members would not have been encountering they myriad of problems discussed above. Any solution considered by this Subcommittee and Congress to the above problems must include a way to ensure DOD and VA are held accountable. Thank you for your time, sir. Senator Carper. You bet. And before you start, Mr. Gallucci, thanks for that testimony, very much. Some of you are familiar with the Gainful Employment Rule that the Department of Education has worked on, tried to update and to put in place, and I know we tend to blame in some cases the VA, DOD or whatever. They have been--their efforts to make the meaningful--Gainful Employment Rule meaningful and more rigorous have been, as you may know, not supported, not endorsed, not welcomed here in our Legislative Branch. There have been too many instances, especially I think in the House, strongly opposed. So there is plenty of blame to go around, that none of us is without blame. All of us have to be part of the solution, and my hope is that following today's hearing, we will be more inspired to do that. Mr. Gallucci, thank you. TESTIMONY OF RYAN GALLUCCI,\1\ DEPUTY DIRECTOR, NATIONAL LEGISLATIVE SERVICE, VETERANS OF FOREIGN WARS OF THE UNITED STATES Mr. Gallucci. Thank you. Chairman Carper, Ranking Member Brown, and Members of the Subcommittee staff. On behalf of more than 2 million members of the Veterans of Foreign Wars and our auxiliaries, the VFW would like to thank this Committee for our opportunity to present our views on this critical issue. --------------------------------------------------------------------------- \1\ The prepared statement of Mr. Gallucci appears in the appendix on page 67. --------------------------------------------------------------------------- During tough economic times, military and veterans' education benefits provide a critical tool in ensuring that our Nation's heroes can compete in a cut-throat job market. Unfortunately, certain schools, particularly predatory for- profit, have chosen to prey on those eligible for military and veterans education benefits, failing to deliver a quality education. When schools prey on veterans, they quite literally steal their benefits. For example, a veteran may enroll in a predatory school using up to 2 years of their GI Bill. At this point, the veteran realizes that the program is worthless, withdraws, and seeks education elsewhere. Unfortunately, credits from the predatory school do not count. The veteran must start over. With 4 years of school ahead, but only 2 years of benefits to pay for it, the veteran must now pay out-of- pocket, wasting time and taxpayer dollars, while the predatory school walks away with cash to find their next victim. We are only 2 years into the new GI Bill, so the VFW believes that we have not yet seen the worst of this phenomenon. Some say that this is just the free market at work and that the government should stay out of this fight since only quality for-profits will survive. The VFW disagrees since both quality and the predatory schools have been shown to profit off government benefits regardless of the outcomes for student vets. The VFW equates GI Bill funds to Federal contracts since both are paid for by the taxpayer which is why outcomes are paramount. As an example, when the military contracted to build a new hospital at Fort Belvoir, a for-profit company earned a healthy payday from the taxpayers as a result of the project. However, at Fort Belvoir a new fully functional hospital is serving soldiers. Similarly, when students use the GI Bill, the VFW expects schools to be able to deliver degrees or certificates with which veterans can find jobs. If the school's business model ensures that veterans cannot receive such credentials, the school should not receive further Federal funding. Two rules that attempt to address the free market issue are VA's 85/15 rule and is companion 90/10 rule in the Higher Education Act, which my written remarks explain in detail. These rules set government funding caps for schools at 90 and 85 percent respectively, but operate independently of each other. 90/10 includes only higher education funds, while 85/15 only includes VA and military funds. To the VFW, this creates a perfect storm through which predatory schools can master a complex cycle of compliance. Should they approach the 90 threshold, aggressively targeting military students will ensure compliance, yet revenue still comes entirely from Federal sources. The VFW believes that predatory schools recognize that consumers will not invest in their product so they look for government funds to insure solvency. To protect military and veterans education benefits, the VFW would recommend changing these rules to ensure that all taxpayer-funded programs fall under a single umbrella, as they were intended to do, creating an incentive for schools to deliver a product that can survive at least some free-market scrutiny. As I mentioned before, VFW's primary concern is student outcomes. To some, this means graduation rates. The VFW would not recommend legislating graduation or default rate thresholds to improve outcomes. Rather, the VFW believes that the Department of Education and VA must insist on transparency for institutions to receive taxpayer dollars, providing incentives for schools to do better. The VFW makes several recommendations on how to improve transparency in our written remarks with the help of some for- profits who have chosen to do business the right way. Most notably, we recommend that VA implement specific Memorandums of Understanding (MOU) for schools to be eligible for funding, building on the Department of Defense's model, and ensuring that student veterans have all the information up front to make an informed decision. Unfortunately, the approval process for veterans and academic programs create two more hurdles for those seeking to use GI Bill. First, VA solely verifies eligibility for veterans based on military service. Today veterans are allowed to enroll in programs for which they never satisfied prerequisites, only to rack up bills that VA cannot pay. Given the new pay models for the Post-9/11 GI Bill, the VFW believes that VA could also play a role in verifying a veteran's eligibility to enroll in a program. Second, many State Approving Agencies tasked with ensuring education program compliance are understaffed or inadequately trained. For example, the agent in Rhode Island took on her role as a collateral duty. This is not an isolated incident, with more than 16 States facing similar circumstances and agencies literally screaming for more resources. Approving agencies are the first line of defense against predatory schools and need the right tools to do their jobs. In recent months, discussions over fiscal responsibility have us concerned about the continued viability of the new GI Bill should veterans not receive the educational opportunities they were promised. Our veterans have earned these benefits and it is our duty to ensure that predatory companies cannot exploit them. The VFW looks forward to working with this Subcommittee and the education community on developing solutions to better serve our veterans. Mr. Chairman, this concludes my remarks and I would be happy to answer any questions you may have. Senator Carper. Very good testimony, thank you, Mr. Gallucci. Thanks a lot. Dr. Kitchner, please proceed. TESTIMONY OF RUSSELL S. KITCHNER,\1\ PH.D, VICE PRESIDENT FOR REGULATORY AND GOVERNMENTAL RELATIONS, AMERICAN PUBLIC UNIVERSITY SYSTEM Dr. Kitchner. Mr. Chairman, Senator Brown, please accept my sincere thanks for the privilege of sharing with you and the other members of this Committee our perspectives on the important subject of how institutions of higher education can better serve our Nation's military personnel and their families. --------------------------------------------------------------------------- \1\ The prepared statement of Dr. Kitchner appears in the appendix on page 72. --------------------------------------------------------------------------- If I may, before beginning my formal comments this afternoon, I would like to acknowledge the presence behind me and to over my left shoulder, two members of our APUS Board of Trustees, General Julius Becton and Dr. Kate Zatz. Senator Carper. Would you all raise your hand, please? Good, nice to see you both. Thank you for joining us. Dr. Kitchner. And also our APUS Vice President for Strategic Initiatives, Colonel Phil McNair. Senator Carper. Who is that? OK, thanks. Thanks so much. Dr. Kitchner. I also sit here as a representative of more than 60,000 members of our armed forces and veterans whom we support as students. They have entrusted their educational futures to us as we, in this room, entrust our safety and security to them. Retired Marine Corps Major James P. Etter founded American Military University in 1991 as a graduate school to provide military officers with the opportunity to earn an advanced degree in a discipline associated with their military professions. The American Public University System was chartered in 2002 in response to the educational needs of the public service community, particularly in such fields as criminal justice, public safety, and national security. AMU and APU share a common curriculum, facilities, faculty, and staff, and a common mission which is to provide access to an affordable, high- quality post-secondary education with an emphasis on educating the Nation's military and public service communities. The university is both regionally and nationally accredited. It offers more than 80 associate's, bachelor's, and master's degree programs including many specifically established to respond to the career interests and objectives of military personnel and their families. All of its courses are offered exclusively online in a format that enables students and faculties to interact asynchronously regardless of location or time zone. Today APUS serves more than 90,000 military and public service professionals and other civilians studying from all 50 States and 130 foreign countries. APUS has maintained its historical commitment to monitoring and assessing its performance. Our efforts in this regard have not gone unnoticed and our written testimony points to some noteworthy examples. However, whatever success we have enjoyed in terms of program assessment and evaluation would be of little consequence unless the resulting data were applied to institutional performance as measured by student success. It is due to this dedication and commitment that we are pleased and honored to be present at this hearing and to share this table with representatives of our Nation's servicemembers and the University of Maryland which, as many of us know, is a pioneer in extending educational opportunities to America's military personnel. I would like to offer five straightforward strategies that we have found to be helpful in serving military students and veterans. No. 1, maintain affordable prices and reduce the time to completion by not placing unwarranted limits on a certified or other forms of transfer credit. No. 2, encourage a one-course-at-a-time approach to enrollment, particularly among students studying online for the first time. No. 3, recognize that active duty military are working adults, as are most veterans, and as such, they deserve an appropriate institutional investment in academic counseling and other support services. No. 4, design, develop, and implement courses, curricula, and programs that align with military-related careers and professional vocations outside the military that are relevant to this special population of students. And finally, participate in nationally benchmarked surveys and studies and openly publish institutional metrics that effectively inform prospective students, as well as education service officers and commanding officers. I have been asked to address the relative merits of two proposals relating to the so-called 90/10 rule. One proposal would shift DOD and VA funds to the 90 side of the formula and the other would eliminate it from the formula altogether. The only fundamental difference between these two suggestions is that the impact of the first would be felt sooner. In the end, the effect of 90/10 is that it likely will unnecessarily increase the cost of and access to education options available to our servicemembers. Academic quality and institutional performance are issues that warrant at least as much attention, but at this time I would ask that we consider the chart\1\ that is before you. Note that given equal amounts of Federal financial aid for which a student qualifies, Institution A whose tuition is 50 percent less than Institution B would be out of compliance with 90/10 unless it increases its tuition by slightly over 11 percent. --------------------------------------------------------------------------- \1\ The chart referenced by Mr. Kitchner appears in the appendix on page 129. --------------------------------------------------------------------------- A thoughtful analysis of the actual impact of 90/10 reveals that it does nothing to enhance the prospects for student success, it is not reward operational efficiency, it does not extend access to traditionally under-served populations, and it does not reduce educational costs to students or taxpayers. If anything, it inhibits initiatives that support or have the potential to support those objectives. In a generous spirit expressed by this Subcommittee in calling for this hearing, we would like to work toward meaningful alternatives to 90/10, alternatives that place greater emphasis on institutional performance regardless of funding models. To that end, we would welcome the opportunity to work with the Department of Defense and the Veterans Administration to ensure that America's military personnel have access to high-quality educational programs. And I would emphasize the importance of the concept of cooperative efforts in this regard. Clearly our interests are not mutually exclusive. And we have a duty to do a better job for those whose duty continues to be to serve us and protect us. Thank you, Mr. Chairman, and I do welcome your questions. Senator Carper. Great testimony and thank you for those great and very thoughtful suggestions. Dr. Kitchner. Thank you. Senator Carper. Dr. Von Lehmen, please proceed. TESTIMONY OF GREG VON LEHMEN,\1\ PH.D., PROVOST AND CHIEF ACADEMIC OFFICER, UNIVERSITY OF MARYLAND UNIVERSITY COLLEGE Dr. Von Lehmen. Good afternoon, Chairman Carper. On behalf of our President, Dr. Susan Aldridge, I thank you for the opportunity to appear today to discuss improving educational outcomes for our military and veteran populations. --------------------------------------------------------------------------- \1\ The prepared statement of Dr. Von Lehmen appears in the appendix on page 83. --------------------------------------------------------------------------- The University of Maryland University College was established in 1947 to meet the unique academic needs of working adults. As you have noted, it is one of 11 public degree-granting institutions that form the University System of Maryland. And today, UMUC serves 94,000 students in 28 countries, all 50 States, about 40,000 of whom are active-duty members, veterans, or family members. In fact, it is accurate to say that UMUC's focus on adult students started with its service to active-duty members which began largely with face-to-face programs on military installations in Europe in 1949 and Asia in 1956, and continues to this day at 130 locations around the world. These locations include sites in Iraq, Afghanistan, Africa, elsewhere in the Middle East where the University has had faculty and staff in harm's way to offer face to face educational opportunities for servicemembers in those countries. My submitted testimony points to a few of UMUC's processes that were instituted to increase positive educational outcomes for all of our students, but especially for our military and veteran students. These included measures of accountability that have been instituted, long-standing measures that have been instituted within our Office of Enrollment Management (OEM), the academic support service that we provide by our Effective Writing Center, our 24/7 library support that is available to our students, among others. I will not duplicate those details here, but wish to use the remainder of my time to directly discuss the areas in which UMUC believes the Federal Government can support improved educational outcomes for military and veterans student populations. First, while mindful of the fiscal exigency which you have underscored several times, Mr. Chairman, we believe that military tuition assistance is essential to the success of our military students. Veterans are coming home to a highly competitive job market and as the unemployment numbers indicate, far too many are unemployed and countless others are underemployed. When competing against non-veterans, the key differentiator is often a college degree. The military services have made significant investments in narrowing this gap by funding the cost of college through the Tuition Assistance Program. This program has catapulted a significant number of active-duty members toward educational goals that they once had thought were impossible. The impact of increased investments in tuition assistance is substantial. In fiscal year 2002, the first year of 100 percent tuition assistance, there was an increase of 32 percent in individual enrollments DOD-wide, and this increase has been sustained in subsequent years. We ask this Subcommittee to continue its leadership in this area and to closely examine the impact of proposed changes to the Tuition Assistance Program. Second, we believe that there should be continued support for the American Council on Education (ACE) and Service Members Opportunity College's (SOC) programs. These programs can jumpstart the veterans' academic progress toward degree completion by evaluating and certifying military training for academic credit, ensuring reciprocal acceptance of credit across participating institutions, and accelerating the entry of military members and veterans into the workforce by shortening their time to degree completion. Third, we recommend that the Federal Government create and implement a regime that would produce real consequences for institutions that are significantly out of compliance with the Military Voluntary Education Review Program (MIVER). DOD Directive 1322.25 requires that all institutions participating in the military Tuition Assistance Program sign a memorandum of understanding with DOD committing these institutions to participate in the review of all their programs according to the MIVER best practices. In the past, this program has resulted in team visits to installations, review of academic programs, team recommendations about issues or problems to be addressed. But historically, there's been little real consequence for institutions that did not observe these principles or address the recommendations. So consequences for noncompliance could include suspension of eligibility to participate in the DOD Tuition Assistance Program for institutions that are seriously out of compliance. Fourth, we have seen that the funding shortfalls have resulted over the years in a drastic reduction in providing servicemembers and veterans with easy and convenient access to highly qualified education counselors. Despite the very best efforts of the military service, this latest generation of largely first-time college students are often left to their own devices to make a decision that should be preceded by unbiased and highly qualified advising. We ask that the Subcommittee look at the importance of education counselors as it considers how best to assure sound Federal investments in educational programs that serve our military and veteran populations. So in conclusion, the University of Maryland University College strongly supports the work of this Subcommittee in exploring proven practices and improving education outcomes for those who have honorably volunteered to support and defend this country. They deserve nothing less than the best. This concludes my remarks, Mr. Chairman. I am happy to answer any questions that you may have. Senator Carper. Great, thanks very much for that testimony. Really, uniformly excellent testimony from this panel. Thank you. Thank you all. I want to come back to the 90/10 rule in just a moment. Before I do that, I just want to draw the attention of our Subcommittee to a number of letters that many of our top veterans groups have sent us calling on Congress to fix the 90/ 10 rule so that GI Bill benefits are counted toward the 90 percent limit on Federal funding. We realize there are other alternatives to that. But we received letters\1\ from, among others, American Veterans, Student Veterans of America, Veterans of Foreign Wars (VFW), the Vietnam Veterans of America (VVA), Military Officers Association, Blue Star Families, Paralyzed Veterans of America, VetsFirst, and I would, without objection, want to submit those letters for the record. --------------------------------------------------------------------------- \1\ The letters referenced by Senator Carper appears in the appendix on page 115. --------------------------------------------------------------------------- I want to come back to solutions, if we could for a couple of different ideas here for how to address the 90/10 rule, keep it as it is, change it so that the monies that are government funds meant to help veterans, or active duty personnel, actually become a part of the 90 percent. There is a variety of things that could be done. We have heard from some. I think we heard from Dr. Kitchner here that suggest that maybe simply fixing the 90/10 rule is not quite so easily as just making sure that we count all the veterans assistance and all the active duty military assistance in the 90 percent. Maybe that is something, another way to deal with this. I just want each of you to take a minute or so and just talk about, if you were in our shoes and you are looking at this problem with the perverse incentives that we are getting from the 90/10 rule, among the perverse incentives is that there is no skin in the game. There is no skin in the game for the colleges and universities, whether they are proprietary, private, public, no skin in the game. And I am reminded a little bit here of the subprime lending episode that we went through this last decade where you had, in some cases, mortgage brokers are getting people who were really not in any position to become homeowners, did not have the wherewithal to become homeowners, folks buying homes on which the appraisals were not worth the paper they were written on, and the mortgage folks did not have any skin in the game because they handed off the application to a mortgage bank and the mortgage bank ultimately hands it off maybe to Fannie Mae or Freddie Mac to get securitized. These mortgages were bundled together and you have a whole string of players there who had no skin in the game. And when you have no skin in the game, market forces do not work very well. I am reminded a little bit of that situation here. Let me just start with Mr. Daywalt. Let us say you are on this side of the dais and you have to figure out what to do in this instance with the 90/10 rule. What would you do? Why would you do it? Mr. Daywalt. Do you want us to only address the 90/10 or-- -- Senator Carper. Start just with 90/10, but then we will go beyond that. Mr. Daywalt. As I put in my written statement, sir I think all of the Federal funds should be put on the 90 percent side, because I think you will find that the way some of these predatory for-profits are operating, there is no skin in the game from non-Federal funds. It is all Federal funds. I know everybody talks 90/10. I would not have a problem going to 80/ 20 and push it back some more. That may put some of them out of business, but if they cannot act as a normal university, then maybe they should not be in business. Senator Carper. All right, thank you. Mr. Gallucci. Mr. Gallucci. As the VFW mentioned in our written statement, we would also support bringing all Federal funds on the 90 side, and as I stated, this was the intention of the law. If you look at the legislative history of 85/15, where it came from, why it was started, it was designed to make sure that school solvency was not strictly reliant on Federal funds. What we have now with the two stovepiped regulations is a situation where a school can manipulate one population simply to fall into compliance with the other rule. 85/15 is still on the books in Title 38, part of Chapter 36 in how the GI Bill is administered, but it is relatively irrelevant just because of the number of veterans who are eligible for benefits and how robust higher education benefits are these days. So to fall in line with the original intention of the law, we feel it is perfectly appropriate to bring that money on the 90 side. Senator Carper. All right. Thank you. Dr. Kitchner. Dr. Kitchner. Thank you, Mr. Chairman. I prefer to point to the fact that it is our position--I believe that we should first differentiate between Federal student aid and VA or DOD funds. The GI Bill is what we consider to be an earned benefit. It is not financial aid. It is not something that someone qualifies for because of financial status or any other determination. It is an earned benefit that I think most of our military people were very well aware of when they enlisted. This was a part of the inducement to enlist, would be to take advantage of the Post-9/11 GI Bill or the Montgomery Bill before it. I think that is an important distinction that we should maintain and keep that in front of our mind because that is part of the reason why I think the original higher education authorization wrote the law the way it did. I also would not want to encourage any kind of a policy change that ended up with unintended consequences such as reducing the amount of opportunities and access to higher education that our veterans enjoy and deserve. I think it is very important that we not let a policy decision that could affect the number of students that an institution could enroll or would involve having an institution have to go out and find more cash paying students in order to avoid a 90/10 trigger when, in fact, those cash-paying students are neither part of their fundamental mission, historical mission, nor for that matter would they necessarily be available unless we went to an international market which does nothing, quite frankly, to help support the President's objective to further educate America's civilian and military population. So I think we want to make sure that as we struggle through this challenge of identifying bad actors and promoting good practices, that we focus on the academic dimension of this question and not simply the economic one. Thank you. Senator Carper. Good, thank you. Doctor Von Lehmen. Dr. Von Lehmen. Thank you, Mr. Chairman. As an institution, we would support including all Federal funds on the 90 percent side of the formula. We do not think it is unreasonable that institutions receiving Federal funds should be able to demonstrate, by some consequential measure, that other stakeholders have confidence in them. So we have reservation about including veterans benefits and military tuition assistance on the 90 percent side with Title IV. Senator Carper. All right. Thank you. That question that I just gave you is pretty narrow, how would you fix the perverse incentives provided by the current 90/10 rule. Mr. Daywalt, I think you were prepared to go just a little bit beyond that specific question. Do you want to go back and pick that up? If not, I have another more specific question. Mr. Daywalt. Sure. I have some other recommendations that you can consider. I look at it from a business perspective and from having sat on the boards of different schools. These schools are using Federal funds--I'm talking about the predatory for-profits. They are using Federal funds to fund their marketing and sales and commission campaigns. Some of them as much as 50 percent of the revenues coming in are being used to advertise, which I see them all over the place. If they are going to use Federal monies--our taxpayer dollars--I do not think they should be allowed to use any more then 10 percent of their total revenue for marketing and sales campaigns. I was on one school's board when the new dean of the business school asked to raise the marketing funds for the business school from 5.5 to 7 percent. You would have thought that he had raped the Queen and killed the President. I mean, the board members were going nuts. What do you mean, 7 percent? But he wound up getting 8, by the way. But limiting it to 10 percent, I think, would be very important. I think the agencies should make better use of their mechanisms that they have. There was a school that was suspended earlier this year, but it was reinstated, and it goes back to the things with the GAO. If they take people that are blatantly violating the law, why are we still giving them money? Something tells me that there is something wrong. And the issue that has been brought up several times about having better information available for the veterans through the command curriculum counselors through the TAP and ACAP centers is very important because a lot of these people came into the military when they were 18 and they have no idea what higher education is all about. They did not stick around to talk to the kids who went to college. They came straight into the military. So they are flying blind and they do need some help and assistance. Senator Carper. Is it fair to say that some of their parents never went to college either? Mr. Daywalt. I think that is very fair to say. I came from a family where I was the first one that went to college and then my mom and dad got their degrees after my dad retired after 30 years of working. Senator Carper. My parents had an expectation for their son and daughter, my sister and me, to go to college, but also we had to figure out how to pay for it. Mr. Daywalt. Yes, we did. Senator Carper. All right. Did you want to continue? Mr. Daywalt. No. I think the other suggestions I have in here stand--there is one and that is the accreditation issue. I know it is not popular to say that some of these for-profits put together what is called, on the Internet, fake accrediting agencies, but we need to look at that issue very hard. If they are running a business school program and they cannot get accepted by the American Association of the Collegiate Schools of Business, why are we putting Federal dollars into it? Senator Carper. OK. Good point, sir. Mr. Gallucci, do you want to speak more about it? I want to give Mr. Daywalt a chance to do that. Do you want to speak more broadly on how to proceed on a strictly 90/10 rule fix? Mr. Gallucci. Absolutely. So you are talking about some other ways that the VFW believes we could solve this problem? Senator Carper. Yes, sir. Mr. Gallucci. Basically, it is improving oversight mechanisms. 90/10 is really just one facet of this. We also spoke about memorandums of understanding with colleges. That is one avenue that you could go down. VA eligibility, also, State Approving Agency resources, and this is really one of the largest ones that I wanted to touch on, because as I mentioned in my testimony and as we heard from the previous panel, that they are the boots on the ground for enforcement. And what we found is basically they have been broken, they have been broken for a long time. They do a great job with the resources they have, but they haven't had enough since 2006. They have not had a funding increase since 2006. The new GI Bill came in place in 2009 and dictated that State Approving Agencies were going to have to take on even more work as a result. This benefit is too robust and their responsibilities are too great that at 2006 funding levels, there is no possible way that they can accomplish their mission successfully. The VFW testified on this back in 2009 before the House. Our concerns were reiterated last year before the Senate VA Committee by the National Association of State Approving Agencies. So this is not a new problem. We know that our front line troops, the State approving agents, do not have the resources they need and predatory schools are obviously slipping through the cracks. Senator Carper. All right. Dr. Kitchner, I am going to ask if we could just hold it right there and I will come back and ask you and Dr. Von Lehmen to just sort of pick up where we are leaving off. Senator Brown, would you like to proceed with your questions? Thanks. Senator Brown. Sorry. I am bouncing back and forth. I am working on a couple of things back home that are very serious. So, Mr. Gallucci, first of all, thanks for your testimony and your service. I do not believe you answered this question, but you described today's 90/10 and 85/15 rules ineffective, stovepiped regulations. And I can kind of understand that being here in Washington, now how we have a regulatory process that is broken and needs to be done better. It seems to be a point of agreement amongst most stakeholders. I do not think there is much argument. How do we stop viewing each program and its own independent like entity and start realizing that all these programs are just a means to educate our military and veterans? No. 1. And do you think this weakens oversight of these programs and where do you think we can make improvements? Mr. Gallucci. With respect to 90/10 and 85/15, we feel that going back to the original intent of the rules is what we really want to do. 85/15 was really one of the original rules to rein in fly by-night schools, and as it has been eroded over the decades as we have heard, higher education developed a very similar rule, 90/10, which covers higher education funds, work- study programs, but there is no interplay. What we have heard is that 85/15 is effectively irrelevant. It is still in Title 38, but it does not really apply these days because there are enough veterans going to school and higher education dollars are a much more lucrative source of revenue. We do not feel that bringing the VA and military dollars onto the 90 side would have an adverse effect on oversight. VA is still authorized to--the State Approving Agencies are still authorized to do their jobs. The military is still authorized to monitor its education programs and how its dollars are spent. This is simply making sure that schools cannot solely rely on taxpayer dollars for solvency. Senator Brown. And Dr. Kitchner. Dr. Kitchner. Yes, sir. Senator Brown. Considering the challenges that have been described, what are the challenges in administering these financial aid programs from an institutional perspective? And then Dr. Von Lehmen, if I could have you answer that question as well. Dr. Kitchner. Thank you, Senator. One of the jobs that my wife said she would never touch is being a financial aid director, and I feel exactly the same way. Financial aid administration is a complex business and it is not actually one of those areas that I have a great deal of expertise in. I think the issue that we have been trying to address, both in the context of this hearing and, I think, in some broader context with the Department of Education program integrity rules, is that we ultimately want to see whatever form of policy and rules are established, that they end up accomplishing the objectives for which they are being proposed, and that is, program integrity and quality of the instruction. It is our sense that 90/10 does not deal with that at all. Senator Brown. Let us take it a step further then as a followup. What is the suggested streamlined process that we can use from an administrative perspective while ensuring also that Federal oversight is maintained? Dr. Kitchner. Well, one option I think would be to establish academic metrics, meaningful academic metrics that would reflect institutional performance, publish those metrics so that we have an opportunity to compare institutions to institutions, providing prospective students and other members of the public with useful and relevant information to make decisions about colleges and programs that they may be interested in. I think another opportunity that we have is to identify what Chairman Carper referred to as skin in the game. There needs to be an opportunity for institutions to show that they are going to be accountable for what they do not do well, and I think some of us have reasonably good opportunities to make changes or to modify practices so that we do not have to bump up against accountability issues that will end up costing institutions money. Senator Brown. Thank you. Doctor Von Lehmen. Dr. Von Lehmen. Like my colleague, Dr. Kitchner, I am not one who is well-schooled in all the details of financial aid advisement, but I do know from where I sit that it is extremely complicated to administer, very complicated for the student, and I think that recent regulations that have been implemented by the Department of Education make it even more complicated still and more difficult to administer. From the standpoint of our institution, I think the fundamental issue is that these regulations are designed for more traditional colleges and universities that do not have, as their principal mission, serving adult students. They are designed for the kind of traditional enrollment patterns that you find on traditional colleges and universities where you have three opportunities to enroll, fall, spring, and summer. What the changes might be I could not say in detail, but I think if you ask any college administrator or any student, they would say the same thing about the complexity and difficulty of administration. I would like to reinforce some comments that Dr. Kitchner made. I think that as a Nation, we need to take stronger steps toward accountability in higher education, and I think that the first step is agreeing on what the metrics are. And that is a complicated question because depending on what the differences among institutions are, the metrics might be the same, but now they are applied might be different. I will say from my institution, our student population is very different from the population that is captured by the IPEDS data which looks at traditional college cohorts and how many of them graduated in a 6-year period. Our experience is it takes students on average maybe 10 years to graduate. We have people who walk across our platform, including active duty members who may have been at it for 12, 13 or 14 years before they graduate. So I think this area of metrics is very important. In fact, there are efforts underway to achieve some clarity about what these metrics should be, especially as they are applied in the context that we are talking about, active duty members and veterans. The servicemembers' opportunities consortium has formed a group representing colleges and universities, including American Military University, to discuss this very issue and to produce some recommendations about what these metrics should be. Senator Brown. Thank you for those thorough answers. I must say I will come back if it is appropriate. Senator Carper. Well, it will be. Dr. Kitchner, Dr. Von Lehmen, I am going to go back. Mr. Daywalt and Mr. Gallucci had a chance to respond more fully. And if you would like to as well, to my earlier question. If not, I will just come up with a somewhat different question for Mr. Daywalt. Dr. Kitchner. Dr. Kitchner. Chairman Carper, would you mind repeating the question? Senator Carper. I am not sure that I can. I said, beyond a 90/10 fix, what are some other things we ought to be doing? You have already cited this to some extent, beyond a 90/10 fix. What are some other things that we ought to be doing, we being the Legislative Branch? Dr. Kitchner. OK. Mr. Chairman, I think that one of the things that I think you are already doing, and I commend you for that, is monitoring carefully what the Department of Education has attempted to do with its program integrity rules. I think many of us in this room, if perhaps not everyone in the room, would recognize that those rules are subject to refinement and perhaps reconsideration in some cases. But nevertheless, they have the potential of getting at the core issues here, which is program integrity, which is, in fact, institutional performance. And I believe, for example, while gainful employment is a very controversial issue and perhaps one of those that does need some thoughtful tweaking, if not more, the fact is, gainful employment has the effect or the potential effect of driving down the cost of higher education; that it will force institutions to manage very carefully their finances in order to not have an issue with the formula between the cost of instruction and the employment opportunities of their graduates. Ironically, at the same time that we look at gainful employment as maybe having that potential, it then bumps right up against 90/10, which as I have tried to demonstrate in that brief poster next to me, has precisely the opposite effect of driving up the costs. So we have two initiatives, both appropriate in many respects, but they are working at cross purposes. And so I would suggest that working closely with the Department of Education, working closely with the higher education community. There is much that we can do, and to Dr. Von Lehmen's point, I think we need to look thoughtfully at whether or not rules that were in place 20 years ago, for that matter 10 years ago, if they still have relevancy, given the fact that we have an entirely different population that is looking at higher education as an opportunity that they can take advantage of because the methodologies and the technology are out there to do so. Thank you, sir. Senator Carper. Good, thank you, sir. Dr. Von Lehmen. Dr. Von Lehmen. I have no further comments. Senator Carper. OK, good. We are back to Mr. Daywalt, if I could. I just want to give you an opportunity to respond to what our friends from the Department of Veterans Affairs said earlier about barring only one school out of, I think, 6,000 from receiving GI Bill benefits or funds. Do you think the VA is doing a good enough job at policing schools? Mr. Daywalt. Well, that kind of puts me on the spot, but my personal feeling says no, they have not, and I speak as a person who--I mean, I am responsible for bottom line where I work at. If we cheat, I am going to wind up in front of the SEC. If you have 15 colleges that are cheating and basically lying, committing fraud, why were they not suspended? Why are they even allowed on the military bases? They should have been thrown off. That seems to be common sense, but common sense does not seem to be ruling things right now. And as a businessman, I have to ask, if these 15 were really doing all this to whose benefit is it to have them still there? Does not someone who commits fraud supposed to not be able to get access to Federal funds? Senator Carper. I think the answer is self-evident. Thank you. All right. In my old job as Governor of Delaware, one of the things we used to do, when we had a problem--I will give you a couple of examples. We had a problem in Delaware where we raise a lot of chickens in our State. There are 300 chickens for every person who lives in Delaware. And on the Delmarva Peninsula which includes the Eastern shore of Maryland and the Eastern shore of Virginia, poultry is a huge industry. Eighty percent of our ag industry in Delaware is poultry. And we have a lot of chickens living in chicken houses and every so often the chicken houses are cleaned out and the nutrients that are high in phosphorus, high in nitrogen and we have to do something with it. For years the farmers just spread the nutrients very thickly across farm fields across Delmarva. When it rains or when this stuff is stacked up in the middle of a field and it rains and washes off into our rivers, lakes, streams, eventually finds its way over to the Chesapeake Bay. There is a large expense of the Chesapeake Bay where there is nothing living. It is just dead, in part because of the high nutrient loads. About 10 or 12 years ago, we pulled all the farmers together in our State and said, ``Look, we have a big problem here.'' It is a problem. Now, you guys and gals and environment stewards, help us figure this out, and they did. They took off, if you will, maybe the darker hat and they put on a white hat and said, ``We ought to have rules on how much of these nutrients can be spread for every farm.'' We are going to have a nutrient application program designed for that farm, given what the soils are like. We are going to make sure that everybody is trained who are going to be spreading these nutrients, and we are going to come up with ways to take nutrients and treat them under high temperatures in a special manufacturing situation. We take about 15 percent of the chicken waste now to a facility run by Perdue, Perdue Poultry, where they actually transform them into an organic fertilizer which is pelletized, sold all over the country by Scott and just get it off the Peninsula. But that was a problem where the folks who were helping to create the problem--it was not just the farmers. It is golf courses, it is other people who put fertilizer on their lawns. The farmers helped us come up with a solution. We have a problem in Delaware with welfare, in fact, in the country. I spent a lot of time on this as Governor with the National Governors Association (NGA). When we incentivize people not to go to work, people on welfare not to go to work, just to have more kids, because when they went to work, they lost their health care benefits, they didn't have anybody to help look after their kids. All the incentives were just misaligned. So we asked to help solve the problem? We asked people on welfare. Welfare moms and dads it is not a good situation. Help us solve this. We did the same thing with teen pregnancy. We got a lot of kids, a lot of high school students to help us solve that problem. Part of the problem here is proprietary schools and, frankly, the private and the public schools who are not doing the kind of job they need to with respect to delivering the results, that is, people who get an education and are unable to go out and make a living, be productive citizens. They are not doing their share. I hope that some of them feel ashamed. I hope some feel very proud, some of the folks. The representatives in your State would be very proud of the job that you do, but some of the other folks that are out there offering these so-called services ought to feel ashamed. But they can be part of the solution and we need for them to be part of the solution. My hope is that going forward, that they more and more will feel like, I am part of the problem here, everything I do, everything I know I do I can do better, the same is true of them. And we need for them to be part of that solution. Let me stop there and go back to Senator Brown. Senator Brown. I just have a few questions. I am just going to read something. I think it was either yesterday's or today's New York Times, Holly Petraeus notes that there are some of for-profit colleges with a long record of serving the military, solid academic credentials, and a history of success for their graduates. But compared with other schools, for-profit colleges generally have low graduation rates and a poor record of gainful employment for their alumni. So Mr. Gallucci, with those results, it does not really seem like a sustainable business model. And if so, why have some of these bad actors in the for-profit industry persisted? Mr. Gallucci. Well, thanks for the question, Senator Brown. We would have to believe that some of these institutions have persisted because of poor oversight and poor regulations. Senator Brown. And the thing that Mr. Daywalt just said about not kicking them out and actually following through with the threats, I think, is critical. Mr. Gallucci. Exactly, and that comes back to who is actually vetting the processes and what I had said about the State Approving Agencies. This is one of the reasons that we had suggested that VA possibly adopt something similar to the memorandums of understanding that the Department of Defense uses. There are positive actors who are out there, who are doing this right. We had the opportunity to sit down with some folks from the University of Phoenix who had launched a 2-year pilot on an orientation program. They saw that in the 2-years that they implemented this pilot program, 20 percent of students just walk away right then. It is free of charge. They realize they cannot handle it and they walk away. They decided to institute that nationwide. This is a step that they have taken to say that, We are focused on the outcomes that our students receive. Another step that they have taken was an online questionnaire to determine whether or not you are ready for it. With some healthy skepticism, I went online and took it myself and discovered that given my time requirements, I am not ready to attend one of their programs. Your time available for your studies is of serious concern. Your reasons for going to school are a reasonable concern. Your support and resources are a reasonable concern. I thought that was incredibly transparent. Some of these memoranda, if they are comprehensive enough, if you are transparent about graduation rates, job placement rates, accreditation, and also your student services to veterans, can improve these outcomes. Senator Brown. So Dr. Kitchner, how is AMU doing it differently, other than other for-profits that have been criticized for putting profits over students' success. Dr. Kitchner. Senator Brown, I am not able to speak to a lot of our colleagues, but I will say that I think one of the strategies that we have in place and we have had it in place historically is very similar to what Mr. Gallucci referred to in terms of making sure that, No. 1, that the students that enroll are prepared to succeed. I think anything short of some kind of a process, a vetting process, an introductory course, which is what we have--which, by the way, if a student is not passing it, they are refunded the cost of it. The department is not on the hook for it, the student is not on the hook for it. Senator Brown. That is not the case in all programs? Dr. Kitchner. Again, I would not presume to know, but I suspect it is probably not. I do not think there are probably very many public universities that offer that option, to be honest with you, and I am not suggesting everyone should. I think it depends on the population you are trying to serve and it is one of the variables that often gets lost here, is that the for-profit sector, for all of its imagined and real faults, is reaching out to an under-served population, an historically under-served group of people who probably were not particularly academically inclined in high school and perhaps not as successful in high school as they ultimately can be and will be. But they reach out to that population and try to help them succeed. I think as we look at metrics, as we look at thresholds of performance, we really need to look at an institution by institution process, to some extent, to determine what kind of students they are working with, what the challenges of those students are, and how effective the institutions are with those populations. So it needs to be sort of population specific, if you will. Senator Brown. Thank you. And Dr. Von Lehmen, in your opinion, what quality controls and best practices in the public education sector can be applied to address some of the concerns regarding the for-profit industry, if you can comment? Dr. Von Lehmen. Well, let us see. I think that is a big question. It involves a number of things which I know some of the for-profits do in fact do. Learning outcomes assessment is extremely important. This is assessing your programs at an institutional level to see whether or not the institution is actually engendering the qualities that it promises them that they will achieve at institutions. I am talking about things like critical thinking, ability to write and speak well, quantitative literacy, information literacy, so on and so forth, as well as competency in their chosen field of study. So I think learning outcomes assessment is extremely important to the quality and the effectiveness of academic programs. I think it is extremely important, especially for the student population that we serve, to try to understand what makes successful students successful. The term of art that is used these days is data mining. The idea is to use the data that you have on your successful students, including their behaviors, to the extent those behaviors, and to try to come up with actionable conclusions that you can institutionalize in some way that will help other students be successful. So those are two, I think, key academically centered quality control measures, but I think the quality control measures extend to student services and other parts of the university. Services have a big impact on students and their success. A very good example is degree audit. It is not uncommon for active duty members to have attended a number of different colleges and universities. And so, when they come to us and talk to us about our degree programs, certainly one question that has to be answered is, not only what are the requirements of that program, but where would they stand in that program with us in terms of the previous college work that they have completed; how much of that would transfer into their degree program. So it is very important that their previous college work be evaluated in a timely manner. We are dependent on them to provide us with the information that we can evaluate, but once provided, should be evaluated quickly, within a day, or 2, or 3 days, so that the active duty member or veteran, will know, in that 120 semester hour-undergraduate program or that graduate program, how much of their prior college work and indeed, military training through ACE evaluation, will transfer into their degree program. So there should be metrics on services like degree audit so that once a student's file is complete, there is no excuse for that information to sit there for a month, 2 months, 3 months or a year. They should be receiving an evaluation within days, if that long, so that they know where they stand. The same thing is true for processing their applications for veterans assistance or financial aid. There should be metrics around how quickly those services are provided. So metrics are key and I think those metrics need to apply not just to academic programs, but across the spectrum including student services. Senator Brown. Thank you and thank you, Mr. Chairman. Senator Carper. Sure. Thank you very much for being part of this hearing. Senator Brown and I are supposed to be in another meeting in the Capitol in about 15 minutes, so we are going to wrap up here in about 10 or 12 minutes. The last question I will probably ask of you is just if you have a closing thought and it is an opportunity. We already asked you to do opening statements and we do not ask you to do closing statements, but I will give you that opportunity for maybe a minute. So just be thinking about what you might want to say. I think this will be for Dr. Kitchner and Dr. Von Lehmen. There is a recent study, I believe, out of Columbia University that showed that students enrolled in online courses control for a number of factors, but were more likely to fail or drop out of courses than were those who took the same courses in person. I am not surprised at that, but it was interesting to hear what they reported. Some have suggested we address this by requiring students to take a readiness assessment for online instruction providing training for faculty members in online pedagogy and improving student support services such as round- the-clock tutoring and academic services, not just technical support. How do your schools address these areas and what do you think about the need for such reforms in order to increase online retention and completion? Dr. Kitchner. Dr. Kitchner. Thank you, Mr. Chairman. As an online university that responds to students and interacts with students literally 24/7 from around the world, No. 1, we have to staff for that and we have to have an information technology backbone that will support that. That is absolutely critical. That is where we have a tremendous investment of resources and we continue to support that. We have a large cohort of individuals who work in student support services. I think the number is approaching 50 in student support services alone. We have admissions counselors who basically handle in-bound calls, not outbound. In other words, they are responding to individuals who have an inquiry about the institution, whether or not it is going to fit their needs, whether or not the program is available and it is going to fit their career aspirations. We have an online, a very robust online color-coded degree audit that an individual who enrolls in a program can literally go online and determine whether a course that they might be interested in taking will fit into that degree program, so that they know that they are not looking at a degree option that will not actually meet their long-term expectations. These are just examples of what we feel is essential to an online environment, that you really have to take advantage of the technology, while at the same time, making sure that there is this interactivity. And our students and faculty both have to go through a very rigorous, what you referred to, I think, sort of introductory vetting of whether or not they are capable of succeeding. We do not want faculty that do not like the mode and they are not going to be successful adapting to that mode. And obviously students have to be comfortable with it. So we focus very intently on making sure that we have a right match there. Thank you, sir. Senator Carper. All right, thank you. Dr. Von Lehmen. Dr. Von Lehmen. Thank you, Mr. Chairman. Well, just to respond to the point you made in reference to the Columbia University study, let me start by saying UMUC does offer quite a few face-to-face classes, especially overseas, under our large military contracts. But certainly the majority of our enrollments stateside are online. I guess the first thing I would say is, the Columbia University is right. Online education is not for everyone. And so, I do think it is a responsibility of institutions to give students an opportunity, before they commit anything, to determine whether or not this is a mode in which they can be successful. At UMUC, we have what we call UMUC 411. We have several versions of this. We have a military and veterans UMUC 411, but at its core it is the same as what we would offer any other student, which is a week-long opportunity at no charge to enroll in kind of an online orientation. This is an active class. The purpose is really twofold. One is to give students an opportunity to experience the platform itself and how it works and how an online class would work. Through that week, they also have an opportunity to interact asynchronously with financial aid advisors, with academic advisors, with faculty members so they get some understanding of the institution and the people who staff it. I mentioned data mining before. What we have found is that the retention rate of students who go through the UMUC 411 is far higher than students who do not. And so, I think it just underscores the point that online education is not for everyone. Faculty training is key. Online teaching--and I say this as someone who taught face to face for many years. I was a tenured associate professor at another university some time ago before joining UMUC, so I taught face to face for many years, and, in fact, was skeptical as a face-to-face instructor. And so, I went through the online training myself with UMUC, which at that time was a 5-week online training course. There was a class, it had an instructor, and we as faculty novices, had assignments to complete and readings to do, and I found at that time it took me about 15 hours a week, apart from my day job, to complete that training from week to week. I have since taught online. But the point is that even today, we require all of our faculty, whether they are full-time or adjunct, to go through this training program. And it is not just pedagogy. I like to view it as kind of a seminary. The purpose of seminaries is not just education, it is formation. And what we try to do is imbue our faculty with our values and the value is students first, respect for students, excellence, and those are values to which we subsequently hold them to. We likewise give them some practical pointers. We found-- and this is really maybe a commonplace thing to say, but we have actually found through analysis that one of the biggest things that correlates with student success and student persistence is the engagement of the faculty member in the online classroom, being there for the student, providing them with very quick feedback on work, being mindful when they are not there and going after them, Why were you not in class last week, we really missed you. This is critical. Good academic advisement, that again is empirically informed. Academic advisement does not just mean being fluent about what the admission requirements and the degree requirements of a given program are. It is being mindful of those things that I mentioned before. What does actionable research tell us is more likely to make students successful? And some of these things should be embedded, and in our institution are embedded, in the academic advisement. Here is one concrete example, we have found that students who have completed their college writing before they come to UMUC are far more likely to succeed in an online environment than students who have not completed their college writing before they come to UMUC. And if you think about that, that intuitively makes perfect sense because writing is how much of the interaction occurs in the online asynchronous classroom. And so, if we have students that come to us or want to begin who have not had their college writing course, we advise them that this is one of the first courses they should take with us in their first semester because we know that it will make them more successful in the long run. Support is very important. I recently returned from a trip to Russia. We have had 20 year agreements with Russian universities, one Irkutsk State University in Siberia, another in Vladivostok, and they are very interested now in moving their programs into the online mode. One of the things my President emphasized to them is that it is not just about the classroom. If you are going to successfully offer online programs at a distance, it is different from serving a traditional campus residential community with some occasional online courses where if they need library support they can walk over to the library, or if they need advising, they can just walk over to the advising center. You have to put your whole campus online so that students can access not simply library resources, but have 24/7 librarian assistance as well; that they can get academic advisement when they need it, and help with their writing if that is a difficulty for them and so on, as well 24/7 technical support. And certainly our university does all of those things. Senator Carper. Good. Well, I had said the last thing I wanted to ask for you all each to take a short period of time and give a benediction. We do not have time. I need to be in the Capitol in about 3 minutes, so we are going to have to forego that. I just want to say, this has been an illuminating hearing, troubling to some extent, but also very encouraging. For the schools out there, proprietary schools or those that are not proprietary schools that are not giving taxpayers what we deserve and their students, especially military and veterans what they deserve and have earned, You need to start. You need to look very carefully at some of the very smart things that you are doing at your two institutions and get with it. We are just one Subcommittee. We are part of the Committee on Homeland Security and Governmental Affairs (HSGAC), but this is a Subcommittee that is very tenacious. And in the words of Winston Churchill, we do not give up. I mean, when we get our teeth into something, we just do not give up. We are not going to let up on this one either. There is too much money involved, taxpayer money that we do not have, and there are too many veterans involved that need a better break than they are getting and need a bigger helping hand than they are getting. We are there to help our brothers and sisters. I just want to thank you for being here. Mr. Gallucci, special thanks to you and all veterans groups that have helped us prepare for this day, and also to say there are a number of other committees, certainly the Education Committee led by their Chairman, Tom Harkin, other Members of the Senate and House, I am sure, who have an interest in these issues and have are anxious to help address the concerns that have been raised and solve this problem. Part of the solution is going to be, I think, is available in the Department of Defense, in the Department of Veterans Affairs, Department of Education, the veterans organizations, but also in the institutions that are providing these educational services, in some cases very well, in some cases not well at all. I will close with this. In a hearing we had here a month or so ago, we had friends from the Department of Defense including Marines who were trying to lead the way to be the first on the beach and the first of the services to have auditable finances, financial statements. We need to look for those good examples. We need to look for those best practices and find ways to incentivize and do more of that. What we cannot measure, we cannot manage. And we talked a lot here today about metrics and how do we figure--like I always say, how do you measure success? For me, this is kind of simple, but it is to make sure that people who use taxpayer dollars to get a better education, at the end of the day, that education is worth something to them and to our country. Sometimes when George Voinovich was here, and he and I served together first as Governors and as Senators for many years, we would, from time to time, hold round tables. When we were trying to get the, interested parties in a room, rather than a hearing. That was the kind of structure we were interested in really developing a consensus. It can be pretty helpful. And I think we might want to try to do one here. Lamar Alexander, the Senator from Tennessee, another former Governor, he likes to say that hearings are where the Senators just talk and they do not listen. We do not listen very well. He said, we should really call them ``talkings.'' But round tables actually give a chance for all the interested parties, the stakeholders, including the white hats from the industry and those that do not have white hats. And I think it would be a good idea to get folks in a room and talk about what we are doing well and what we need to do better. So with that having been said, my colleagues who were not here will have the opportunity for 2 weeks to submit written questions. If they do, I would just ask that you respond to those promptly. This is not an issue that is going to go away. Deficits are not going to go away. Veterans who need a real good education, it is not going to go away. Our Nation, which needs a good workforce, that need is not going to go away. There is a lot here at stake and we are going to get it done. Thank you, very, very much. With that, this hearing is concluded. Thank you. [Whereupon, at 4 p.m., the Subcommittee was adjourned.] A P P E N D I X ----------
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