Good afternoon Madam Chairwoman, Ranking Member Boozman, and other Members of the Subcommittee.  I am pleased to be here today to provide the Department of Veterans Affairs’ (VA) views on pending legislation affecting our education and housing programs.  Three of the bills on today’s agenda affect programs or laws administered by the Departments of Labor or Defense.  Accordingly, we respectfully defer to the Department of Labor regarding H.R. 3257, the “Military Family Leave Act of 2009,” and to the Department of Defense regarding H.R. 3976, the “Helping Heroes Keep Their Homes Act of 2009,” and H.R. 4469, a bill “to amend the Servicemembers Civil Relief Act to provide for protection of child custody arrangements for parents who are members of the Armed Forces deployed in support of a contingency operation.”

EDUCATION PROPOSALS

H.R. 3484

Madam Chairwoman, your bill, H.R. 3484, would amend section 3485(a)(4) of title 38, United States Code, to extend until June 30, 2014, VA’s authority regarding certain work-study activities under the educational assistance programs we administer.

Public Law 107-103, the “Veterans Education and Benefits Expansion Act of 2001,” established a 5-year pilot program under section 3485(a)(4) of title 38 that expanded work-study activities by increasing the number of places where a student could work and receive VA work-study benefits.  Subsequent public laws extended the period of the pilot program, and the provisions are currently scheduled to terminate on June 10, 2010.

VA does not oppose legislation that would extend the current expiration date of the work-study provisions, subject to Congress identifying offsets for the additional benefits costs.  However, we would prefer that the legislation provide a permanent authorization of the work-study activities rather than extending repeatedly for short time periods.

We estimate that the enactment of H.R. 3484 would result in benefits costs of $331,000 in fiscal year 2010, and $6.7 million over 5 years.  If made permanent, the authorization would result in benefits costs of $16.6 million over 10 years.

H.R. 3813

H.R. 3813, the “Veterans Training Act,” would amend section 3313(b) of title 38, United States Code, to expand the universe of approved programs of education under the Post-9/11 GI Bill to include programs approved for purposes of chapter 30 of title 38 (Montgomery GI Bill (MGIB)).  Thus, in addition to programs of education leading to undergraduate or post-graduate degrees offered at institutions of higher learning (colleges and universities, or similar institutions, including a technical or business school, offering postsecondary level academic instruction that leads to an associate or higher degree if the school is empowered by the appropriate State education authority under State law to grant an associate or higher degree), eligible individuals would be able to pursue non-college degree programs at other institutions.  Qualifying programs would include those pursued at an educational institution as defined under section 3452(c) of title 38.  This measure does not include payment provisions for the newly-covered programs of education.

While VA supports the intent to expand the programs of education for which an eligible individual may use Post-9/11 GI Bill benefits, VA does not support H.R. 3813.  Without specific payment rules, the expansion proposed in this legislation adds significant payment complexity to the program.  For example, the statute limits the amount payable under the Post-9/11 GI Bill to an amount equal to the maximum in-state charges for an undergraduate program of education charged by a public institution.  To accommodate all the various fee charges for undergraduate programs and the differences state-by-state, VA established a maximum credit-hour charge for tuition and maximum fee charges per term.  This ensured that VA made payments in accordance with the intent of the initial legislation (that an individual eligible for the maximum benefit would not have to pay tuition and fees in an undergraduate program at a public institution).

Most non-degree programs are offered on a clock-hour measurement basis and students are generally charged tuition for the entire program versus term-by-term.  A Veteran enrolled in a specialized computer training program lasting 6 months could be charged $10,000 for the program.  It is unclear how VA should determine the maximum amount payable for such a program compared to an undergraduate program offered by an institution of higher learning (IHL).  If VA were to limit payment to an amount equivalent to full-time attendance for a 6-month enrollment in an undergraduate program at a public institution with the highest charges in the state in which the Veteran is enrolled, the Veteran could be responsible for a significant portion of his or her charges as compared to a Veteran enrolled in an IHL.  Most IHLs charge tuition based on enrollment for the term, quarter, or semester versus the entire undergraduate program.

In addition, under existing statute, VA must pay the tuition and fee charge for the entire program for a program offered by an institution that offers programs of education on other than a term, quarter, or semester basis.  Thus, VA could pay significant tuition and fees up front for an 18-month specialized computer-programming course.  If the student dropped out after completing only 3 months of the program, VA would then be responsible for collecting a large overpayment, as the statute provides the Secretary cannot provide benefits for a course from which an individual withdraws unless there are mitigating circumstances.  Even with acceptance of mitigating circumstances, VA would be responsible for recovering an amount equal to the prorated tuition for the 15 months the individual was not pursuing his or her program.  If the school had a policy that limited refunds to 60 percent of the tuition charges if the individual withdraws after 30 days from the start of the course, the Veteran would be responsible for repayment of the overpayment with some of his or her own funds.  Depending on the tuition charges and the institution’s refund policy, this could be a significant burden for the Veteran who does not complete a program.

VA is working aggressively on a new payment system to support the existing Post-9/11 GI Bill provisions.  Adding new payment provisions before full deployment of the payment system would severely hamper deployment efforts.  In addition, it would impact service delivery by adding additional rules while VA is manually processing claims augmented by limited automated tools.  VA recommends postponing significant changes to the Post-9/11 GI Bill until after successful deployment of the payment system in December 2010 so that enhancements to the program do not have a negative impact on service delivery to those clients utilizing benefits this summer and fall.

Unfortunately, we are not able to estimate of the cost of enactment of this proposal at this time, but we will provide such an estimate for the record.

H.R. 3948

H.R. 3948, the “Test Prep for Heroes Act,” would amend section 3315 of title 38, United States Code, to authorize payments to students under the Post-9/11 GI Bill for test preparatory courses–defined to mean a “preparatory course for a test that is required or used for admission to institution of higher education,” or a “preparatory course for a test that is required or used for admission to a graduate school.”  If enacted, this measure would allow an individual eligible for Post-9/11 GI Bill educational assistance to receive payment for one licensing and certification test and one test preparatory course.  The total amount payable could not exceed the lesser of $2,000, or the cost of the licensing and certification test and test preparatory course combined.

Currently, under 38 U.S.C. § 3315, individuals eligible for education benefits under the Post-9/11 GI Bill only can receive payment for one licensing or certification test as described in section 3452(b).  The licensing and certification test may not exceed the lesser of $2,000 or the fee charged for the test.

VA does not oppose legislation that would provide for payment of test preparatory courses under the Post-9/11 GI Bill.  We note, however, that H.R.3948 does not specify an effective date, and, therefore, VA suggests the addition of an effective date provision make the amendments applicable to tests taken on or after January 1, 2011 (which would be after deployment of the Post-9/11 GI Bill payment system).

VA estimates the costs associated with H.R 3948 would be insignificant.

H.R. 4079

H.R. 4079 would temporarily suspend, during the period beginning on October 1, 2010, and ending on September 30, 2015, a requirement in 38 U.S.C. § 3677(b)(1)(A)(ii) that potential employers of Veterans participating in programs of on-the-job training (OJT) demonstrate a wage progression for such Veteran employees when applying for approval by State approving agencies (SAAs).

Currently, 38 U.S.C. § 3677(b)(1)(A)(ii) requires that, as part of the application for SAA approval, an employer seeking to hire a Veteran as part of an OJT program must provide a certification that the Veteran’s wages will be increased in regular periodic increments until, no later than the last full month of the training period, such wages will be at least 85 percent of the wages paid for the job for which the individual is being trained.  Some SAAs have indicated they are unable to approve some training programs because employers cannot commit to offering periodic wage increases due to current economic conditions.

VA does not support enactment of this bill.  Although the requirement in current law that the wages must reach a level of 85 percent of the wages for the job a Veteran is being trained for may be too restrictive under current economic conditions, we suggest that Congress instead consider reducing the relevant percentage requirement rather than completely removing it.  Modifying the requirement in this manner could allow SAAs to approve more employers to participate in OJT programs and increase valuable employment opportunities for Veterans.  We believe it is worthwhile to keep in place a mechanism for an incremental wage increase, or “glidepath,” so Veterans will see the commitment to progress, promise, and opportunity.

In addition, H.R. 4079 would require VA to report to the House and Senate Committees on Veterans’ Affairs on the effects of the temporary suspension of the wage-increase requirement.  This report would be due no later than June 1, 2015.  VA does not currently have the reporting capability to track such data.  As such, VA would have to develop reporting mechanisms with SAAs before implementing this legislation.

Unfortunately, we are not able to estimate of the cost of enactment of this proposal at this time, but we will provide such an estimate for the record.

H.R. 4203

H.R. 4203 would amend section 3313 of title 38, United States Code, to direct the Secretary to ensure that payments of educational assistance to a Veteran/student under the Post-9/11 GI Bill may be made directly to the Veteran’s bank account.  Currently, under 38 U.S.C. § 3323 there are no provisions that establish the requirements or the methods of payment to individuals who are eligible for the Post-9/11 GI Bill.

VA does not support this measure because we believe it is unnecessary.  Currently, individuals receiving education benefits under the Post-9/11 GI Bill can request that VA make these payments directly to their bank account.  VA has provided this payment option since the new program began in August 2009.  Therefore, if this measure were enacted, there would be no impact on VA business processes and procedures.

There is no cost to VA associated with H.R. 4203.

HOUSING PROPOSAL

H.R. 4359

H.R. 4359, the “Warriors Adapting Residences with Mortgages for Energy Renovations Act” (or "WARMER Act”), would expand the Secretary’s authority to guarantee housing loans for energy-efficient dwellings and increase the maximum amount certain Veterans may borrow toward making energy-efficient improvements.  It also would require the Secretary, within 90 days of enactment of the bill, to prescribe interim policy guidance on energy-efficiency audits and the conditions under which such audits may be performed.  VA supports the goal of encouraging energy efficiency and is still assessing the impacts of the bill on borrowers and program costs.  We will provide the Department’s views on this bill for the record.

Madam Chairwoman, this concludes my statement.  I would be happy to respond to questions you or the other Members of the Subcommittee may have regarding our views as presented.