VA Student Financial Aid: Actions Needed to Reduce Overlap in
Approval Activities (19-APR-07, GAO-07-775T).
In fiscal year 2006, the Department of Veterans Affairs (VA) paid
$19 million to state approving agencies (SAA) to assess whether
schools and training programs are of sufficient quality for
veterans to receive VA education assistance benefits when
attending them. The Departments of Education and Labor also
assess education and training programs for various purposes. This
testimony describes (1) changes that have occurred in state
approving agencies' duties and functions since 1995, (2) the
extent to which the SAA approval process overlaps with efforts by
the Departments of Education and Labor, and (3) the additional
value that SAA approval activities bring to VA education benefit
programs. This testimony is based on a March 2007 report
(GAO-07-384).
-------------------------Indexing Terms-------------------------
REPORTNUM: GAO-07-775T
ACCNO: A68470
TITLE: VA Student Financial Aid: Actions Needed to Reduce
Overlap in Approval Activities
DATE: 04/19/2007
SUBJECT: Aid for education
Education program evaluation
Federal aid programs
Federal/state relations
Financial management
Higher education
Interagency relations
Performance measures
Standards
Student financial aid
Veterans benefits
Veterans education
Vocational education
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GAO-07-775T
* [1]Background
* [2]Legislative Changes Effective in 2001 Created Additional Res
* [3]Many Education and Training Programs Approved by SAAs Have A
* [4]SAAs Reportedly Add Value to the Approval Process for Educat
* [5]Prior Recommendations and Agency Response
* [6]GAO Contacts
* [7]GAO's Mission
* [8]Obtaining Copies of GAO Reports and Testimony
* [9]Order by Mail or Phone
* [10]To Report Fraud, Waste, and Abuse in Federal Programs
* [11]Congressional Relations
* [12]Public Affairs
Testimony before the Subcommittee on Economic Opportunity, Committee on
Veterans' Affairs, House of Representatives
United States Government Accountability Office
GAO
For Release on Delivery
Expected at 2:00 p.m. EDT
Thursday, April 19, 2007
VA STUDENT FINANCIAL AID
Actions Needed to Reduce Overlap in Approval Activities
Statement of George A. Scott, Director
Education, Workforce and Income Security Issues
GAO-07-775T
Madame Chairwoman and Members of the Subcommittee:
I am pleased to be here today to present information from our March 2007
report on state approving agencies (SAA).^1 In fiscal year 2006, the
Department of Veterans Affairs (VA) paid approximately $2.1 billion in
education assistance benefits to more than 470,000 beneficiaries and about
$19 million to state approving agencies to assess whether schools and
training programs offer education of sufficient quality for veterans to
receive VA education assistance benefits when attending them. Qualified
individuals--veterans, service persons, reservists, and certain spouses
and dependents--receive benefits through a number of education assistance
programs for the pursuit of various types of programs, such as a degree
program, vocational program, apprenticeship, or on-the-job training. In
general, these programs must be approved by an SAA in order for qualified
individuals to receive VA education assistance benefits. Under contracts
with VA, SAAs ensure that education and training programs meet VA
standards through a variety of approval activities, such as evaluating
course quality, assessing school financial stability, and monitoring
student progress.
The Departments of Education (Education) and Labor (Labor) also assess
education and training programs for various purposes, primarily for
awarding student aid and providing apprenticeship assistance. These
assessments are based, in part, on evaluations against standards set by
laws and regulations, such as those applicable to accrediting agencies. In
2006, under Title IV of the Higher Education Act, Education provided
nearly $77 billion in student aid in the form of both grants and loans.
Education assesses and certifies postsecondary institutions for
participation in Title IV programs through various oversight functions to
ensure that these schools meet federal administrative and financial
requirements and that they are accredited and licensed. Similarly, under
the National Apprenticeship Act of 1937, Labor is authorized to formulate
and promote the furtherance of labor standards to safeguard the welfare of
apprentices. To ensure programs comply with federal standards, Labor
directly registers and oversees apprenticeship programs in less than half
of the states and has given state apprenticeship agencies or councils in
the remaining states such authority over their own programs.
^1GAO, VA Student Financial Aid: Management Actions Needed to Reduce
Overlap in Approving Education and Training Programs and to Assess State
Approving Agencies, [13]GAO-07-384 (Washington, D.C.: Mar. 8, 2007).
Given each agency's role, the potential of duplicative efforts among
federal agencies has been a congressional concern. In 1995, GAO reported
on this matter and concluded that there was a substantial amount of
overlap between the efforts of SAAs and the other federal agencies.^2 My
testimony today is based on information from our recent report and will
focus on (1) changes that have occurred in state approving agencies'
duties and functions since 1995, (2) the extent to which the SAA approval
process overlaps with efforts by the Departments of Education and Labor,
and (3) the additional value that SAA approval activities bring to VA
education benefit programs.
In summary, we found that:
o Since 1995, legislative changes effective in 2001 created
additional responsibilities for SAAs, including promoting the
development of apprenticeship and on-the-job training programs,
providing outreach services, and approving tests for occupational
licensing.^3 From fiscal years 2003 to 2006, SAA funding increased
from $13 million to $19 million to expand services and support the
additional responsibilities. However, funding is scheduled to
decrease beginning in fiscal year 2008.
o Many education and training programs approved by SAAs have also
been approved by Education or Labor, and VA and SAAs have taken
few steps to coordinate approval activities with these agencies.
In addition, information is not available to determine the amount
of resources spent on SAA duties and functions, including those
that may overlap with other agencies and programs.
o SAAs reportedly add value to the approval process for education
and training programs through (1) a focus on student services for
veterans and on the integrity of VA benefits, (2) more frequent
on-site monitoring of education and training programs than
provided by Education or Labor, and (3) assessments and approval
of a small number of programs that are not reviewed by other
agencies. However, VA's lack of outcome-oriented performance
measures for evaluating SAAs makes it difficult to assess the
significance of these efforts.
^2GAO, VA Student Financial Aid: Opportunity to Reduce Overlap in
Approving Education and Training Programs, [14]GAO/HEHS-96-22 (Washington,
D.C.: Oct. 30, 1995).
^3Veterans Benefits and Health Care Improvement Act of 2000, Pub. L. No.
106-419 (2000); and Veterans Education and Benefits Expansion Act of 2001,
Pub. L. No. 107-103 (2001).
To help ensure that federal dollars are spent efficiently and effectively,
our report recommended that the Secretary of the Department of Veterans
Affairs take steps to monitor SAA spending and identify whether any
resources are spent on activities that duplicate the efforts of other
agencies. We also recommended that the Secretary establish
outcome-oriented performance measures to assess the effectiveness of SAA
efforts. VA agreed with our findings and recommendations and stated that
it will take a number of steps to address them.
To conduct our work, we reviewed applicable laws, regulations, and program
materials; and interviewed officials from each of the entities involved in
the various approval processes, including federal agencies, state
approving agencies, schools and training programs. We also reviewed and
analyzed data on approval decisions from VA, Education, and Labor. Our
work was performed in accordance with generally accepted government
auditing standards.
Background
VA, Education, and Labor assess education and training programs for
various purposes. VA's approval process is meant to ensure that education
and training programs meet VA standards for receipt of veteran education
assistance benefits, while Education's and Labor's processes are primarily
for awarding student aid and providing apprenticeship assistance.
VA administers a number of programs designed to assist individuals in
gaining access to postsecondary education or training for a specific
occupation (see table 1). VA generally provides its assistance in the form
of payments to veterans, service persons, reservists, and certain spouses
and dependents.
Table 1: VA Beneficiaries of and Funding for Education and Training
Assistance Programs in Fiscal Year 2006
Programs * Beneficiaries Expenditures
Montgomery GI Bill (Chapter 30) 313,766 $1,909,014,605
Reserve Educational Assistance Program 23,747 $151,397,610
(Chapter 1607)
Educational Assistance for the Selected 65,145 $48,716,031
Reserve (Chapter 1606)
Dependents and Survivors Educational 74,532 $38,787,332
Assistance Program (Chapter 35)
Veterans Educational Assistance Program 575 $59,113
(Chapter 32)
Total 477,765 $2,147,974,691
Source: VA.
*No payments for the National Call to Service program were made in fiscal
year 2006.
Benefits can be used to pursue a degree program, vocational program,
apprenticeship, and on-the-job training (see fig. 1). Before an individual
entitled to VA education assistance can obtain money for an education or
training program, the program must be approved by an SAA, or by VA in
those cases in which an SAA has not been contracted to perform the work.
Figure 1: Veteran Enrollment by Program Type in Fiscal Year 2006
VA's administrative structure for the education and training assistance
programs includes its national office, which oversees the four regional
processing offices (RPO), and the national contract with SAAs. RPOs
administer the education assistance programs and process benefits for
veterans. SAAs review education and training programs to determine which
programs should be approved and ensure schools and training providers are
complying with VA standards. SAAs have six core duties: (1) approval of
programs, (2) visits to facilities, (3) technical assistance to
individuals at facilities, (4) outreach, (5) liaison with other service
providers, and (6) contract management. Sixty SAAs exist in the 50 states,
the District of Columbia, and Puerto Rico. Eight states have two SAAs.
SAAs are usually part of a state's department of education (31 SAAs). In
some states, SAAs are organizationally located in other departments such
as labor (9 SAAs) or veterans' services (19 SAAs).
The U.S. Department of Education's approval process is to ensure that
schools meet federal Education standards to participate in federal student
financial aid programs. In order for students attending a school to
receive Title IV financial aid, a school must be (1) licensed or otherwise
legally authorized to provide postsecondary education in the state in
which it is located, (2) accredited by an entity recognized for that
purpose by the Secretary of Education, and (3) certified to participate in
federal student aid programs by Education. As such, the state licensing
agencies, accrediting agencies, and certain offices within Education are
responsible for various approval activities.
o State licensing agencies grant legal authority to postsecondary
institutions to operate in the state in which they are located.
Each of the states has its own agency structure, and each state
can choose its own set of standards.
o Accrediting agencies develop evaluation criteria and conduct
peer evaluations to assess whether or not those criteria are met
by postsecondary institutions. Institutions or programs that meet
an agency's criteria are then "accredited" by that agency. As of
November 2005, there were 60 recognized private accrediting
agencies of regional or national scope.
o The U.S. Department of Education's Office of Postsecondary
Education evaluates and recognizes accrediting agencies based on
federal requirements to ensure these agencies are reliable
authorities as to the quality of education or training provided by
the institutions of higher education and the higher education
programs they accredit.
o The U.S. Department of Education's Office of Federal Student Aid
determines the administrative and financial capacity of schools to
participate in student financial aid programs, conducts ongoing
monitoring of participant schools, and ensures participant schools
are accredited and licensed by the states.
The purpose of the Department of Labor's approval process is to establish
and promote labor standards to safeguard the welfare of apprentices. Labor
establishes standards and registers programs that meet the standards.
Labor directly registers and oversees programs in 23 states but has
granted 27 states, the District of Columbia, and 3 territories authority
to register and oversee their own programs, conducted by state
apprenticeship councils (SACs). Labor reviews the activities of the SACs.
SACs ensure that apprenticeship programs for their respective states
comply with federal labor standards, equal opportunity protections, and
any additional state standards.
Figure 2 shows the agencies responsible for the approval processes for the
various types of education and training programs.
Figure 2: Agencies Responsible for the Approval Process for Education and
Training Programs
Source: GAO Analysis.
Legislative Changes Effective in 2001 Created Additional Responsibilities for
SAAs
In 2001, SAAs received additional responsibilities as a result of
legislative changes. This included responsibility for actively promoting
the development of apprenticeship and on-the-job training programs and
conducting more outreach activities to eligible persons and veterans to
increase awareness of VA education assistance. SAAs were also charged with
approving tests used for licensing and certification, such as tests to
become a licensed electrician. For those tests that have been approved,
veterans can use VA benefits to pay for testing fees. From fiscal years
2003 to 2006, SAA funding increased from $13 million to $19 million to
expand services and support the additional responsibilities. Funding is
scheduled to begin to decrease in fiscal year 2008.
Many Education and Training Programs Approved by SAAs Have Also Been Approved by
Education or Labor, and VA Has Taken Few Steps to Coordinate Approval Activities
with These Agencies
Many education and training programs approved by SAAs have also been
approved by Education and Labor. Sixty-nine percent of all programs
approved by SAAs are offered by institutions that have also been certified
by Education. Seventy-eight percent of SAA-approved programs in
institutions of higher learning (e.g., colleges and universities) have
been certified by Education. Also, 64 percent of SAA-approved non-college
degree programs are in institutions that have been certified by Education.
Although less than 2 percent of all programs approved by SAAs are
apprenticeship programs, VA and SAA officials reported that many of these
programs have also been approved by Labor.
Similar categories of approval standards exist across agencies, but the
specific standards within each category vary and the full extent of
overlap is unknown. For example, while VA and Education's approval
standards both have requirements for student achievement, the New England
Association of Schools and Colleges, an accrediting agency, requires that
students demonstrate competence in various areas such as writing and
logical thinking, while VA does not have this requirement. Also among the
student achievement standards, VA requires schools to give appropriate
credit for prior learning, while Education does not have such a
requirement. Table 2 shows the similar categories of standards that exist
across agencies.
Table 2: Approval Standards of Education and Training Programs Used by VA,
Education, and Labor
SAA^1,2 Education^3 Labor
Federal
Standards Connecticut
Categories of On the for state
approval IHL/NCD IHL/NCD job Education's accrediting licensing
standards accredited non-accredited Apprentice-ship training certification agencies agency Apprenticeship
Student x x x x x x x
achievement
Curricula, x x x x x x x x
program
objectives,
and faculty
Facilities, x x x x x x x
equipment, and
supplies
Institutional x x x x x x
objectives,
capacity, and
administration
Student x x
support
services
Recruiting and x x x x x x
admission
practices
Record of x x
student
complaints
Process x x x x x x x
related
requirements
(e.g.
application
requirements)
Source: GAO analysis of VA, Education, and Labor Standards
Notes: GAO constructed these categories to encompass the numerous and
broad range of standards used by agencies. SAAs have different sets of
standards for each program type (e.g. IHL and NCD). Education's approval
process involves different sets of standards used by different entities,
such as accrediting agencies. Labor has one set of standards that is
applicable to apprenticeship programs.
By statute, courses must meet certain criteria. These relate to: (1)
record-keeping of student progress; (2) record-keeping of students'
previous education; (3) quality, content and length of courses; (4)
qualifications of administrators and instructors; and (5) equipment,
space, and instructional materials. We categorized the first two criteria
as student achievement, criteria (3) and (4) as Curricula, Program
Objectives and Faculty, and criterion (5) as Institutional objectives,
capacity, and administration. ^2SAA approval requirements for
non-accredited courses encompass a number of additional criteria, such as
having a tuition refund policy and enrollment limitations. ^3Connecticut's
standards may not be representative of standards across the country
While agencies have the same approval standards in some instances, the
interpretation and application of these standards may differ. For example,
VA, accrediting agencies, and Labor each require that facilities have
adequate space, equipment, and instructor personnel to provide quality
training, but the definitions of adequacy differ in the level of
specificity. Similarly, VA and accrediting agencies both require that
schools have policies related to student achievement, such as minimum
satisfactory grades, but the requirements differ in level of specificity.
Despite the overlap in approved programs and standards, VA and SAAs have
made limited efforts to coordinate approval activities with Education and
Labor. VA reported that while it has coordinated with Education and Labor
on issues related to student financial aid and apprentices' skill
requirements, it believes increased coordination is needed for approval
activities in order to determine the extent of duplicative efforts. Most
of the SAA officials we spoke with reported that they have coordinated
with SACs to register apprenticeship programs in their states. Labor
reported that it coordinated with VA's national office in several
instances, including providing a list of registered apprenticeship
programs. Education reported that it does not have formalized coordination
with VA but has had some contacts to inform VA of its concerns regarding
specific institutions.
Information is not available to determine the amount of resources spent on
SAA duties and functions, including those that may overlap with those of
other agencies. VA does not require SAAs to collect information on the
amount of resources they spend on specific approval activities. The SAA
officials we spoke with said that their most time-consuming activity is
conducting inspection and supervisory visits of schools and training
facilities. However, the lack of data on resource allocation prevented us
from determining what portions of funds spent by SAAs were for approval
activities that may overlap with those of other agencies.
SAAs Reportedly Add Value to the Approval Process for Education and Training
Programs, but the Lack of Outcome-Oriented Performance Measures Makes It
Difficult to Assess the Significance of Their Efforts
SAA and other officials reported that SAA activities add value because
they provide enhanced services to veterans and ensure program integrity.
According to these officials, SAAs' added value includes a focus on
student services for veterans and on VA benefits, more frequent on-site
monitoring of education and training programs than Education and Labor,
and assessments and approval of a small number of programs that are not
reviewed by other agencies, such as programs offered by unaccredited
schools, on-the-job training programs, and apprenticeship programs not
approved by Labor.
SAA approval activities reportedly ensure that (1) veterans are taking
courses consistent with occupational goals and program requirements, (2)
schools and training programs have evaluated prior learning and work
experience and grant credit as appropriate, and (3) school or program
officials know how to complete paperwork and comply with policies required
by VA educational assistance through technical assistance. According to
officials we interviewed, SAAs generally conduct more frequent on-site
monitoring of education and training programs than Education or Labor,
possibly preventing fraud, waste, and abuse. Some officials reported that
SAAs' frequent visits were beneficial because they ensure that schools
properly certify veterans for benefits and that benefits are distributed
accurately and quickly. States, schools, and apprenticeship officials we
spoke with reported that without SAAs, the quality of education for
veterans would not change. However, veterans' receipt of benefits could be
delayed and the time required to complete their education and training
programs could increase.
Despite areas of apparent added value, it is difficult to fully assess the
significance of SAA efforts. VA does measure some outputs, such as the
number of supervisory visits SAAs conduct, but it does not have
outcome-oriented measures, such as the amount of benefit adjustments
resulting from SAAs' review of school certification transactions, to
evaluate the overall effectiveness and progress of SAAs. (See table 3.)
Table 3: Examples of VA Output Measures and Potential Outcome Measures
Examples of Potential Outcome
Examples of Existing VA output Measures Measures
Percentage of visits to facilities for Amount of benefit adjustments
supervisory and inspection purposes resulting from SAAs' review of
completed within VA specified timeframes school certification transactions
Number of times technical assistance Error rate of certification
provided to interested parties such as transactions identified by SAAs
individuals and schools
Number of approved facilities with Completion rates of beneficiaries
approved programs
Source: GAO analysis.
Prior Recommendations and Agency Response
We made several recommendations to the Department of Veterans Affairs to
help ensure that federal dollars are spent efficiently and effectively. We
recommended that the Secretary of the Department of Veterans Affairs take
steps to monitor its spending and identify whether any resources are spent
on activities that duplicate the efforts of other agencies. The extent of
these actions should be in proportion to the total resources of the
program. Specifically:
o VA should require SAAs to track and report data on resources
spent on approval activities such as site visits, catalog review,
and outreach in a cost-efficient manner, and
o VA should collaborate with other agencies to identify any
duplicative efforts and use the agency's administrative and
regulatory authority to streamline the approval process.
In addition, we recommended that the Secretary of the Department of
Veterans Affairs establish outcome-oriented performance measures to assess
the effectiveness of SAA efforts.
VA agreed with the findings and recommendations and stated that it will
(1) establish a working group with the SAAs to create a reporting system
to track and report data for approval activities with a goal of
implementation in fiscal year 2008, (2) initiate contact with appropriate
officials at the Departments of Education and Labor to identify any
duplicative efforts, and (3) establish a working group with the SAAs to
develop outcome-oriented performance measures with a goal of
implementation in fiscal year 2008. While VA stated that it will initiate
contact with officials at Education and Labor to identify duplicative
efforts, it also noted that amending its administrative and regulatory
authority to streamline the approval process may be difficult due to
specific approval requirements of the law. We acknowledge these challenges
and continue to believe that collaboration with other federal agencies
could help VA reduce duplicative efforts. We also noted that VA may wish
to examine and propose legislative changes needed to further streamline
its approval process.
Madame Chairwoman, this completes my prepared statement. I would be happy
to respond to any questions that you or other members of the subcommittee
may have.
GAO Contacts
For further information regarding this testimony, please contact me at
(202) 512-7215. Individuals making key contributions to this testimony
include Heather McCallum Hahn, Andrea Sykes, Kris Nguyen, Jacqueline
Harpp, Cheri Harrington, Lara Laufer, and Susannah Compton.
(130665)
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Highlights of [22]GAO-07-775T , a testimony before the Subcommittee on
Economic Opportunity, Committee on Veterans' Affairs, House of
Representatives
April 19, 2007
VA STUDENT FINANCIAL AID
Actions Needed to Reduce Overlap in Approval Activities
In fiscal year 2006, the Department of Veterans Affairs (VA) paid $19
million to state approving agencies (SAA) to assess whether schools and
training programs are of sufficient quality for veterans to receive VA
education assistance benefits when attending them. The Departments of
Education and Labor also assess education and training programs for
various purposes. This testimony describes (1) changes that have occurred
in state approving agencies' duties and functions since 1995, (2) the
extent to which the SAA approval process overlaps with efforts by the
Departments of Education and Labor, and (3) the additional value that SAA
approval activities bring to VA education benefit programs.
This testimony is based on a March 2007 report (GAO-07-384).
[23]What GAO Recommends
We recommended that VA take steps to monitor SAA spending and duplication
of efforts with other agencies and that VA establish outcome-oriented
performance measures to assess the effectiveness of SAA efforts. VA agreed
with our recommendations and stated that it will take actions to address
them.
Since 1995, legislative changes effective in 2001 created additional
responsibilities for SAAs, including promoting the development of
apprenticeship and on-the-job training programs, providing outreach
services, and approving tests for occupational licensing. From fiscal
years 2003 to 2006, SAA funding increased from $13 million to $19 million
to expand services and support the additional responsibilities. However,
funding is scheduled to decrease beginning in fiscal year 2008.
Many education and training programs approved by SAAs have also been
approved by Education or Labor, and VA has taken few steps to coordinate
approval activities with these agencies. More than two-thirds of all
programs approved by SAAs are offered by institutions that have been
certified by Education. Many apprenticeship programs approved by SAAs have
also been approved by Labor, although apprenticeship programs make up less
than 2 percent of all programs approved by SAAs. Similar categories of
approval standards, such as student achievement, exist across agencies,
but the specific standards within each category vary and the full extent
of the overlap is unknown. For example, VA requires schools to give
appropriate credit for prior learning while Education does not have such a
requirement. Despite the overlap in approved programs and standards, VA
and SAAs have made limited efforts to coordinate approval activities with
other federal agencies. VA does not require SAAs to collect information on
the amount of resources they spend on specific approval activities;
therefore, information is not available to determine the amount of
resources spent on SAA duties and functions, including those that may
overlap with those of other agencies.
SAAs reportedly add value to the approval process for education and
training programs, but the lack of outcome-oriented performance measures
makes it difficult to assess the significance of their efforts. Areas of
added value include (1) a focus on student services for veterans and on
the integrity of VA benefits, (2) more frequent on-site monitoring of
education and training programs than provided by Education or Labor, and
(3) assessments and approval of a small number of programs that are not
reviewed by other agencies. States, schools, and apprenticeship officials
we spoke with reported that without SAAs, the quality of education for
veterans would not change. However, veterans' receipt of benefits could be
delayed and the time required to complete their education and training
programs could increase. Despite areas of apparent added value, it is
difficult to fully assess the significance of SAA efforts. VA measures
some outputs, such as the number of supervisory visits SAAs conduct, but
it does not have outcome-oriented performance measures, such as the amount
of benefit adjustments resulting from SAAs' reviews, to evaluate the
overall effectiveness of SAAs.
References
Visible links
13. fhttp://www.gao.gov/cgi-bin/getrpt?GAO-07-384
14. fhttp://www.gao.gov/cgi-bin/getrpt?GAO/HEHS-96-22
22. fhttp://www.gao.gov/cgi-bin/getrpt?GAO-07-775T
*** End of document. ***