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Witness Testimony of The Honorable Steve Gunderson, President and CEO Association of Private Sector Colleges and Universities (APSCU)

Mr. Chairman, Ranking Member Braley: 

Thank you very much for this invitation to testify before you today.  It is great to be back again before this distinguished Subcommittee.  APSCU shares your commitment to ensuring that every postsecondary institution provides the highest level of service to each and every veteran.  We take great pride that our schools – with the support services, flexible schedules, and focused delivery of academics – are designing and delivering education in ways that meet the needs of today’s veteran-students.  As one representative of our Nation’s postsecondary education system, I believe it is our moral imperative to ensure that our servicemembers and veterans receive the education they deserve with the benefits they earned at every institution of higher education. 

As a sector, we have been engaged in working with the Subcommittee, and others, to identify and develop protocols that best meet the academic needs of our veterans.  On January 31st,  APSCU made what some might call a surprising step by joining some our harshest critics on letters to the House and Senate Veterans Affairs Committees, and the President supporting two very basic, but critical, ideas for veterans:  increased educational counseling and a way to have their complaints heard and resolved fairly.  It was in the spirit of these tenets that Rep. Bilirakis (R-FL) first introduced legislation, H.R. 4057, directing the Secretary of the Department of Veterans Affairs (VA) to develop a comprehensive policy to improve outreach and transparency to veterans and members of the Armed Forces through the provision of information on institutions of higher learning.  I was honored to represent private sector colleges and universities at a hearing on March 8th in support H.R. 4057.  On the other side of the Capitol, other Members of Congress, also driven by their deep conviction to protect our veteran-students as they enter postsecondary education, introduced legislation modeled very much on the principles included in our letter. APSCU is committed to continuing our good faith discussions to ensure that the bill that best represents the needs expressed by veterans emerges from the House and Senate. 

Mr. Chairman, you can imagine our surprise and disappointment, after sending the letter to the White House and meeting with senior White House officials, that news of an impending Executive Order reached APSCU without any advance notice from the White House, circumventing ongoing, bipartisan, bicameral legislative discussions.  Our Nation’s veterans deserve the best effort put forth by the Administration, Congress, veteran service organizations, and all sectors of higher education to achieve consensus on the best ways to meet the educational needs of our veterans through a constructive, collaborative process.

Quite obviously, Executive Orders have been a widely-used and accepted privilege afforded to our Presidents, starting with George Washington and currently with President Obama.  However, we have some concerns regarding the anticipated implementation and potential negative impact on institutions resulting from Executive Order #13607.  As I earlier stated, APSCU supports the creation of a centralized complaint system.  But, the Executive Order language provides little guidance on the framework of the system, leaving much open to interpretation. Ultimately, we want a system that is fair to both veterans and institutions.  But, most importantly we want a complaint system that leads to a resolution of any problem or misunderstanding.  What we do not want to happen is for the complaint system to become a conduit for politically-motivated attacks, submitted anonymously, by those whom are intent to destroy the reputation of any institution.  In order for the process to operate seamlessly, fairly, and ensuring a resolution, there must be clear accountability and transparency for all parties involved – the veteran submitting the complaint, the VA, and the school.  When the White House briefed the higher education sector on the impending Executive Order the night before it was issued, I requested that all sectors of higher education be at the table to openly participate in the development of a fair, transparent system.  We continue to hope this will occur.  But, we are somewhat concerned by the very short timetable the Administration has established for completing this work, and no such conversation has yet to occur.

You may recall that during my testimony earlier this spring we and others at the table, engaged in an extended dialog about the need to change the way academic progress and/or graduation rates are calculated for those whom comprise the new, “normal” college student – adult-learners, including veterans.  We are encouraged that the Executive Order calls for developing new, appropriate metrics to measure a veteran’s academic progress – individually and collectively – and stand ready to work with the Administration, Congress, and all interested parties to develop a fair, appropriate measurement.  Until that process is completed, no set of data will be relevant for or related to the realities of either a servicemember or veteran’s educational experience.  Therefore, we have concerns with the use of the, “Know Before You Owe” form, as availability of military and veteran population and outcomes from IPEDS is nascent or does not adequately reflect the nontraditional student.  Additionally, the “Know Before You Owe” form is not sufficiently nuanced to reflect the complexity of military and veteran educational assistance, nor does it reflect crucial student demographics, such as Pell-eligibility.  Institutions are also unable to identify on the form if tuition discounts are offered to military or veteran students.  The Consumer Financial Protection Bureau's (CFPB), “Know Before You Owe” financial aid shopping sheet prototype does not reference military or veteran benefits at all, and while the CFPB's college cost comparison tool does include a military aid calculator, it does not appear that this particular tool is what the Executive Order is recommending. These tools, as identified in the Executive Order, cannot adequately, or even accurately, reflect the unique situations and characteristics of the military- and veteran-student population.  Rather than providing the resources and information prospective-students would need to make sound educational decisions, they will instead receive incomplete, misrepresentative data that will likely cause more confusion than assistance.  We extend an invitation to the Administration to work collaboratively to create a form that is representative, accurate, and serves as a true resource for prospective-students.  However, before a form can be created, it is imperative that the current data-collection system is fixed.

Regarding the new enforcement and compliance provision concerning institutional access to military installations, we understand that some institutions with existing Department of Defense (DoD) Memorandums of Understanding (MOUs) have been warned by installations that they will be banned from the base, as a consequence of the Executive Order.  There needs to be additional clarification, as to whether or not the Executive Order has had the effect of invalidating all existing DoD MOUs.  Additionally, as outlined in the Executive Order, the new refund policy will cause an increased cost and administrative burden on institutions, as it is inconsistent with our existing refund procedures.  We would also like to work with the Administration on identifying a suitable refund policy compromise.

Solutions to many of the other areas of concern raised by the President, and even by Capitol Hill, can be addressed through the existing oversight framework already in place.  In fact, private sector colleges and universities are one of the most highly-regulated groups in the country, and the so-called “triad” – a reinforcing network of federal, state and non-governmental accrediting bodies – provides an enhanced level of oversight to ensure minimum levels of program and institutional quality are achieved.  More specifically: the Department of Education (ED); state licensing entities; and national, regional, and programmatic accrediting bodies comprise the “triad” of oversight, which private sector colleges and universities and their programs are subject to for the purposes of eligibility to participate in Title IV federal student aid programs.  Additionally, publicly-traded private sector colleges and universities are also subject to Securities and Exchange Commission (SEC) oversight.  Virtually all institutions are subject to state and federal consumer protection laws, Federal Trade Commission (FTC) rules against unfair and deceptive statements through advertising, promotion, and marketing, and finance disclosure laws if they make loans to students, and state corporation laws. Institutions serving military- or veteran-students are also held accountable through the DoD MOU process, and oversight by the VA and the State Approving Agencies (SAAs).

All institutions of higher education, not just private sector colleges and universities, are required under federal and state law to provide truthful and unambiguous communications with the student consumer about the educational services being offered. However, the recently-implemented changes to the ED’sMisrepresentation Rule provides yet another layer of consumer protections, which private sector colleges and universities must adhere to in order to remain eligible to receive Title IV federal student aid.  If an institution has engaged in “substantial misrepresentation of the nature of its educational program, its financial charges, or the employability of its graduates,” made any false, erroneous, or misleading statement that has the likelihood or tendency to deceive or confuse without regard to materiality or intent, or “substantial misrepresentations” are made by a third-party vendor hired to “provide educational programs, marketing, advertising, recruiting or admissions services,” the repercussions for the institution are severe, including, suspension or termination an institution’s Title IV eligibility.  Consequently, institutions must exercise tremendous caution in how they, and their third-party vendors, state information concerning their educational programs, the employability of their graduates, financial aid availability, costs to students, accreditation, and transfer of credit.  Following the release of the final rule last year, APSCU’s Board of Directors requested that our Student Recruitment Task Force develop guidance for our membership outlining the potential risks posed by the conduct and practices of third-party vendors retained by institutions for student recruitment services.  On October 11, 2011, APSCU released Guidance for APSCU Members – The Misrepresentation Rule and Third-Party Vendors, which additionally urges institutions to conduct a careful review of all of their printed and electronic marketing and advertising materials.  The guidance is included as an attachment to my submitted statement.  Issuing this guidance document, online training seminars identifying best practices on ethical enrollment processes, and hosting multiple webinars addressing marketing, advertising, and recruiting in the new Program Integrity Rules environment are just a handful of concrete examples of how APSCU  has tried to provide our members with the resources and tools to ensure they are complaint with the law.  APSCU also continues to work with our members and other stakeholders on initiatives designed to promote clear and unambiguous communications with students and prospective students.  For example, industry stakeholders are engaging in preliminary negotiations towards the creation of a credible, self-regulatory mechanism to monitor the marketplace and distinguish the good actions from the bad. While only in its infancy stage, it is an opportunity for APSCU, our member institutions, and representatives from the lead-generation industry to engage in critical conversations about the best practices for the sector in approaching marketing, recruiting, and advertising, today and tomorrow.

There are many other existing avenues to enforce misconduct by an individual school.  One such example is our accrediting agencies. Founded in 1912, the Accrediting Council for Independent Colleges and Schools (ACICS) is the largest national accrediting organization of degree-granting institutions, including professional, technical, and occupational programs.  The organization is recognized by both ED and the Council for Higher Education Accreditation (CHEA).  Institutions accredited by ACICS, admissions and recruitment standards are clearly outlined in the document, Accreditation Criteria Policies, Procedures, and Standards.”  The policy places the ultimate burden on the institution to oversee the activities of an institution’s employees and non-employees (third-party vendors or contractors) with respect to admissions and recruiting referral, recruiting, evaluation, and admissions and ensure that any information used as part of recruiting and enrollment activities are clear and accurate.  Institutions are also provided strict guidance concerning employment on third-party vendors or contractors.  Recruiting requirements demand ethical conduct that is compatible with the educational objectives of the institution, and that the financial resources expended to engage in recruiting activities is consistent with the stated mission of the institution.  Also outlined are a list of the minimum standards accredited institutions are expected to follow concerning recruitment and enrollment, with a notable inclusion of language directing institutions participating in Title IV programs to understand regulations imposed by the ED as they apply to recruiting practices.

The Accrediting Commission of Career Schools and Colleges (ACCSC), founded in 1967, isa private, non-profit, independent accrediting agency also recognized by ED.  Institutions accredited by ACCSC include private, postsecondary, non-degree-granting institutions and degree-granting institutions in the United States, as well as those granting associate, baccalaureate and master’s degrees, which are predominantly organized to educate students for occupational, trade and technical careers, and institutions that offer programs online.  Similar to ACICS, ACCSC also requires accredited institutions to exercise ethical conduct and procedures in the recruitment of students and also sets minimum standards for their institutions to follow.  Included in ACCSC’s, Standards of Accreditation”, the section devoted toStudent Recruitment, Advertising, and Disclosures“ sets clear parameters for recruitment, enrollment, advertising, and misrepresentation,  and also outlines that a school will be held accountable for the actions and representations of its recruiters and representatives. For example, the Standards clearly state that ACCSC-accredited institutions must prohibit school personnel from recruiting prospective students in settings where they cannot reasonably be expected to make sound, informed choices about enrollment.  ACCSC-accredited institutions are required to maintain and enforce a code of conduct for all personnel primarily responsible for recruiting and admissions activities, which must also meet a minimum set of criteria.  The “Standards of Accreditation” also require institutions to comply with all applicable federal and state laws and regulations pertaining to student recruitment.

It might come a surprise to some, but the VA currently has the authority to prohibit the enrollment of an eligible veteran or eligible person using any VA educational benefits in any course offered by any institution of higher education, which utilizes advertising, sales, or enrollment practices considered to be erroneous, deceptive, or misleading either by actual statement, omission, or intimation.  In addition, institutions which offer courses approved for the enrollment of eligible individuals or veterans are required to maintain a complete record of all advertising, sales, or enrollment materials used by, or on behalf of, the institution during the preceding 12-month period.  The institutional record, as well as any materials, including direct mail pieces, brochures, printed literature used by sales persons, media, and any sales or recruitment manuals, are subject to review and inspection by the SAA or the Secretary of the VA.  The Secretary of the VA is also authorized to enter into an agreement with the Federal Trade Commission (FTC), where appropriate, to assist in carrying out investigations and reviews.

“Private vocational or distance education schools,” or private sector colleges and universities,  are specifically subject to the FTCs longstanding rules against unfair and deceptive statements through advertising, promotion, and marketing, as well as state laws prohibiting unfair or deceptive trade practices.  The FTC is empowered to take corrective action if, after the conclusion of an investigation, the Commission has reason to believe that the practices fall within the scope of conduct declared unlawful by the statute.  For example, it is deceptive for an institution to misrepresent, directly or indirectly, in advertising, promotional materials, or in any other manner, the size, location, services, facilities, or equipment of its school or the number or educational qualifications of its faculty and other personnel.

The Servicemembers Opportunity Colleges (SOC) has established “Standards and Guidelines” for all SOC Consortium members about recruiting, marketing, and program information.  For an institution to be eligible to receive DoD Tuition Assistance (TA) benefits, the institution must first enter into a MOU with the DoD.  A requirement of the MOU is for all institutions to adhere the SOC Principles and Criteria, which outlines specific parameters for SOC Consortium members in their advertising, recruiting, and admissions practices for servicemembers.  The Principles and Criteria each include information requiring that institutions adequately and accurately represents their education programs, requirements, and services available, communicate with servicemembers in a clear, comprehensive, and completely truthful manner; take responsibility for admissions and recruitment policies, including being accountable for all recruitment and enrollment actions whether conducted by staff, faculty, partners, or other third party agents acting on the institution’s behalf; are transparent and truthful about the cost of attendance or any other costs associated with attendance. 

This extensive list outlining, which authorities currently exist to address misconduct by any institutions of higher education emphasizes two key points: first, misconduct by any institution should not be tolerated by the authorities empowered to enforce their rules and procedures.  The current rules and regulations exist to provide the appropriate authorities with the power to take the steps and actions necessary to ensure that any school engaging in illegal or improper practices is held responsible; and second, we need to stop indicting an entire sector of higher education for political reasons using anecdote and rhetoric instead of facts.  It would seem to me that if problems or concerns had been addressed through the existing processes, and engaging institutions to be a part of the solution, our conversation today could have focused on how all sectors of higher education can enhance the academic experience for our veterans rather than implicating an entire sector that greatly values its service to veterans.

The Post-9/11 GI Bill was a “game-changer” on postsecondary marketing and recruiting across all sectors of higher education.  According to a 2009 Lumina Foundation/ACE report examining the state of programs and services for veterans on campuses across all sectors of higher education – From Soldier to Student: Easing the Transition of Service Members on Campus” – more than half of the participating institutions reported engaging in recruiting efforts specifically designed to attract military and veterans.  In fact, since September 11, 2001, 65 percent of colleges and universities that offer services to veterans and servicemembers enhanced their services and programs geared towards military and veteran students with the establishment of marketing and outreach strategies to attract veterans and military as one of the top areas of emphasis, regardless of sector.  For example, 58 percent of four-year, public and private non-profit and two-year, public institutions reported an increase in their marketing and recruitment efforts, with 69 percent of private, four-year,  non-profit institutions reported increases in this area.  The principle of Occam’s razor states that “the simplest explanation is most likely the correct one.”  The Post-9/11 GI Bill has changed the entire postsecondary landscape regarding the education and recruitment of veterans.  However, since the benefits began in 2009, time-and-time again veteran students have cited the reason for their decision to attend public two-year institutions and private sector colleges and universities is the simple fact that these schools have the greatest capacity to meet their educational needs -- not because of widespread, “predatory” practices.I could even use this opportunity to thank those here today for spearheading, “The Military Coalition” efforts to first get the Post-9/11 GI Bill enacted, but then pressuring Congress to subsequently include non-degree granting institutions as eligible institutions under the law.  The Coalition recognized that veterans, as non-traditional students, value the qualities inherently ingrained into the framework of these institutions, such as geographic proximity to home or work, institutional emphasis on the adult-learner, flexible class schedules, and campuses in other states. 

These qualities were also highlighted in a follow-up to the 2009 report entitled, “Service Members in School: Military Veterans’ Experiences Using the Post-9/11 GI Bill and Pursuing Postsecondary Education,” and report author, Jennifer L. Steele’s, subsequent Commentary in the Army Times entitled, “Colleges Can Learn from For-Profits Emphasis on the Consumer.“ The Report indicates that many veteran-students attend private sector colleges and universities, including availability of evening and weekend classes, matching skill-training with marketplace need, and hybrid classroom- and online-based academic delivery, and generous awarding of military experience or training as academic credit.  Access was cited as the most important quality to the veterans surveyed, and private sector colleges and universities often provided the only access to the required courses leading to a degree.  Veterans valued the high institutional participation in the Yellow Ribbon Program; one-third, or thirty-percent, of private sector colleges and universities participate in the Yellow Ribbon program, and proudly, of the participating schools, forty-five percent place no restrictions on the number of veterans served or offer the maximum benefit contribution.  Private sector colleges and universities were also given higher-than-average rates by veterans with respect to their academic advising experiences. 

Since the enactment of the Post-9/11 GI Bill, 152,000 veterans, spouses, and dependents have chosen to attend private sector colleges and universities using the Post-9/11 GI Bill.  Since the benefits began in 2009, time-and-time again veteran-students have cited the reason for their decision to attend public two-year institutions and private sector colleges and universities is the simple fact that our schools have the greatest capacity to meet their educational needs.  As non-traditional students, veterans in particular value many of the institutional qualities, which are inherently ingrained into the framework of private sector colleges and universities, such as geographic proximity to home or work, institutional emphasis on the adult-learner, flexible class schedules, and campuses in other states.  Qualities Sergeant Michael Kidd (USMC) considered when he chose ECPI University because the school gave him the flexibility to continue his military service and offered the retraining necessary to pursue a career using computers after suffering debilitating injuries during his deployment in Iraq.  Sergeant Kidd has gone from fighting combat threats to learning to fight cyber threats, as part of a DoD initiative aimed at getting injured service members back into the military or the civilian workforce.  Cyber-warfare is an increasingly concerning threat, according to a 2011 DoD report, identifying the vulnerability of more than 15,000 defense computer networks and seven million computing devices across hundreds of installations across the world and civilian targets, such as power grids and financial systems.  Job prospects for wounded warriors in cyber-security fields are favorable, especially for those who hold security clearances.  Sergeant Kidd is one example of our Nation’s wounded warriors who are making the transition from the battlefield into a non-traditional combat field thanks to the support of a private sector university.  [SP1]  

Corporal Chad Pfeifer (USA) ret. also represents the face of military and veteran education today.  In the immortal words of Robert Frost, “the best way out is always through,” and Chad’s story of recovery and discovery following an IED detonation which took his left leg while serving in Operation Iraqi Freedom in 2007, is nothing short of inspirational.  Rather than succumbing to depression or the limitations of his disability, Chad taught himself to play golf, as a way of staying sane during the grueling seven months of physical therapy.  It is estimated that one that one in five returning combat veterans reports coping with at least one disability, and Chad returned home needing time to heal from his debilitating, physical loss while also readjusting to civilian life.  The Army veteran and Purple Heart recipient, picked up a golf club for the first time during his rehabilitation and never looked back.  Hitting balls became a form of therapy as he adjusted to life with his new, prosthetic leg, and Chad was a natural.   It was soon clear that golf had a transformative impact on him and when his therapy was complete, Chad returned to his hometown to pursue his interest in the golf industry professionally.  With the support of his family and new colleagues, he entered the National Amputee Championship – a tournament that would come to define his future education and career path. Chad had tried the “traditional” higher education route, but it was his chance encounter at the tournament with another competitor who was a student at The Golf Academy of America that sent him down the path of achieving his dream of a professional golf career.  In 2011, Chad received an associate degree in Golf Complex Operations and Management and the scratch golfer is now working his way through the PGA Apprentice Program in Scottsdale, AZ as an assistant golf professional.  What started out as a form of therapy, ultimately became Chad’s personal and professional salvation, and with great humility, credits The Golf Academy of America for his tremendous accomplishments and for making his dreams of hitting a little, white ball into the hole a reality.   The veteran-centric support Chad received at the Golf Academy is evidenced in both the way he ended up enrolling there and the way he describes his experience as a veteran-student there.  Serving military and veteran students is a top priority for The Golf Academy of America, as part of the Education Corporation of America family, and benefits from the Military Student Center (MSC), which was launched in 2009 and is available to all students, faculty, and family members.  Modeled from the best practices of both private and public institutions serving military- and veteran-students, the MSC is a clearinghouse of resources for military and veteran students, and currently serves more than 2,900 enrolled military and veteran students.  Military veterans and spouses, who have been given specialized training in both DoD TA and VA benefits, assist prospective and current students in understanding the complexities of the various benefits for which they may be eligible.  In the last year, the MSC has responded to almost 29,000 phone calls from students in need of assistance.   Since its formation, the MSC has also awarded more than $7.7 million dollars in scholarships to servicemembers, veterans, and their families.  In addition, Education Corporation of America is a member of the SOC and follows guidelines established by the ACE for evaluation of both military and college transcripts.  But, ECPI and The Golf Academy of America are just two examples of how our schools are truly serving the needs and addressing the concerns of veterans.   

Unfortunately these stories, and countless others, are not often told in the media or on Capitol Hill.  The bad actions of some schools have set the stage for those with the bully-pulpit to launch an attack on the hundreds of thousands of veterans, spouses, and dependents who attend private sector colleges and universities.  If there is one thing we can all agree on today, Sergeant Kidd and Corporal Pfeiffer, along with their  brothers and sisters in uniform who have fought, died, and continue to proudly serve our Nation, are heroes; not pawns in Washington’s latest political game.  To that end, APSCU remains committed to working with every stakeholder to identify and resolve any problems that might exist.  I would like to address these remarks specifically to the Members of the Subcommittee, full Committee, representatives from the VA and veteran service organizations, and even the Administration, when I say for the record that even one bad action by any institution of higher education that violates the educational principals we have been entrusted with by our military and veteran students is one too many.  Further, I cannot and will not defend the indefensible.  The recruitment of any prospective student, veteran or civilian, who cannot reasonably be expected to make informed and thoughtful enrollment decisions, is unconscionable.  Recruitment documents that require staff to use psychologically cruel methods and strategies to pressure prospective students to enroll are absolutely unacceptable[JS2] [SP3] .  The majority of private sector colleges and universities hold the integrity bar very high for their recruiting personnel, and expect recruiting activities to follow legal, regulatory, and moral standards when interacting with any prospective student, however.  A veteran who is here in this room today experienced the frustration felt by many other veterans who visit a very official-sounding website in search of information about their education benefits, but are instead bombarded by unwanted phone calls and/or emails.  This is not ok.  But, the solution to ensuring that our veterans enroll at the institution that best meets their needs, receive the support they need to complete with a degree or diploma, and the skills and resources to find a job will be found here, in this Subcommittee and in the Senate Veterans Affairs Committee, not through a Presidential Executive Order.  And APSCU appreciates the opportunity to further assist the Subcommittee in identifying and facilitating the right solution to the challenges facing our Nation’s veteran-students. 

Ultimately the success or failure of the Executive Order is in the hands of the Administration.  A promise was made to me that the White House would work directly with APSCU and others in the higher education sector to address concerns about the complaint process.  I will hold them to that and I hope you will also.  We must address the structure and scope of the complaint process to ensure that both the rights of the student and the rights of the institution are protected.  There are also significant deficiencies with the “Know Before You Owe” form and the use of insufficient, inadequate data.  As I said in my opening paragraph, if our collective goal is to ensure that our servicemembers and veterans receive the education they deserve with the benefits they earned at every institution of higher education, then we must put politics aside and get to work on a real solution.

Mr. Chairman and Members of the Subcommittee, I want to express my deep appreciation for both your continued commitment to insuring our veterans are provided with both the access and the quality they deserve using their earned, education benefits; and for your continued oversight efforts of this process.  It is imperative that we seize this opportunity to work together to achieve the outcome we all seek.  But for that to happen, we must summon a greater spirit of positive collaboration among all stakeholders.  APSCU is prepared to do the hard work that lies ahead and welcomes anyone, at anytime, to join us in continuing the evolution of this conversation out of the realm of political rhetoric and into thoughtful policy discussions with the end goal of arming our veterans with the resources they need to make the best academic decisions!

Thank you.  I stand ready to answer any questions you might have.


 [SP1]ECPI student

 [JS2]We need to make clear that if this happens, first it is the rare exception NOT the norm.  And second there already exist remedies for improper representation of a school’s education outcomes.

 [SP3]Unfortunately, this comment was not regarding any misrepresentation – it was regarding multiple schools’ inclusion of very objectionable language (ie “Pain Funnel; Push the Pain Points)