Mr. Joe Wynn
With more and more reports coming out over the past 2 years about how For-Profit Educational Institutions that receive GI Bill funding are doing a disservice to students who are veterans; Executive Order #13607 entitled “Establishing Principles of Excellence for Educational Institutions Serving Service Members, Veterans, Spouses, and other Family Members” is a generous step towards offering an opportunity for these institutions to rectify this situation before pending legislation is passed that will impose more severe regulatory remedies.
According to recent reports by the Government Accountability Office, the National Bureau of Economic Research and Harvard University researchers, students/veterans at For-Profit Colleges have lower success rates than similar students in public and nonprofit colleges. Reports also show lower graduation rates, employment outcomes, with higher debt levels and loan default rates. Ongoing analysis being done by the U.S. Senate Committee on Health, Education, Labor and Pensions (HELP Committee), shows that the For-Profit Colleges receiving the largest sums of money also have a large number of students dropping out.
Enrollment at For-Profit Colleges and trade-schools has tripled in the last decade to about 1.8 million, or nearly 10 percent of the nation’s higher education students. Evidence collected over the past few years shows that For-Profit Colleges are misrepresenting their programs and tuition costs. Rates are far higher than at public and nonprofit institutions. And these schools, partly because they serve poorer students who often need more supportive services, receive almost a quarter of the federal aid.
It appears to be those federal aid dollars that has led many admissions officers to use aggressive recruitment strategies targeted to students who don’t qualify academically for traditional colleges and who have no chance of graduating and veterans, military members and their spouses using the GI Bill, the Tuition Assistance (TA) program, or the Military Spouse Career Advancement Accounts (MyCAA) program for funding.
You see, since GI Bill benefits, TA and MyCAA funds do not technically count as federal education benefits under the U.S. Department of Education’s 90-10 rule. An institution can increase enrollments of veterans, military members and their spouses without violating a rule that is based on a long-standing requirement that no more than 90 percent of a For-Profit College’s revenues can come from federal financial aid. Thus, these institutions are receiving billions of dollars in federal financial aid and still more in GI Bill, TA and MyCAA funding. It’s no wonder why these institutions have been receiving increased profits in recent years.
In light of these findings, it’s troubling to read news that For-Profit Colleges are being allowed to continue these types of practices with little or no accountability. No wonder why the Obama administration wants to impose stricter operating rules for these For-Profit Schools and have them establish Principles of Excellence.
Good Afternoon, Chairman Stutzman, Ranking Member Braley, other members of this Subcommittee, fellow veterans, and guests.
Let me first thank you for the opportunity to come before you on behalf of the veteran’s organizations I represent to share some of my views on the President’s recent Executive Order #13607 entitled “Establishing Principles of Excellence for Educational Institutions Serving Service Members, Veterans, Spouses, and other Family Members” and its impact on schools and veterans.
With more and more reports coming out over the past 2 years about how For-Profit Colleges and Institutions that receive GI Bill funding are providing a disservice to students who are veterans; this Executive Order is a generous step towards offering an opportunity for these institutions to rectify this situation before pending legislation is passed that will impose more severe regulatory remedies.
Though my time of service was many years ago, as a veteran of the US Air Force with the 66th Strategic Missile Squadron, I still have very vivid memories of the military experience. I also remember quite well the tough time I had finding employment after going to a For-Profit Institution that provided no placement assistance and counseling though they advertised that that would. My experience just serves as an example of what many veterans from Iraq and Afghanistan have been going through in the past few years.
According to recent reports by the Government Accountability Office, the National Bureau of Economic Research and Harvard University researchers, students at For-Profit Colleges have lower success rates than similar students in public and nonprofit colleges. Reports also show lower graduation rates, employment outcomes, with higher debt levels and loan default rates. Ongoing analysis being done by the U.S. Senate Committee on Health, Education, Labor and Pensions (HELP Committee) shows that the For-Profit Colleges receiving the largest sums of money also have a large number of students dropping out.
Since our young men and women stepped up to serve this country following the devastating attack on our nation on 9/11; many returning as veterans who served with honor, and many who received distinguished honors for displaying valor and courage during their periods of military service for this country; they don’t deserve to be taken advantage of. Every effort should be made by every institution, government agency, and commercial enterprise to ensure that these veterans receive all of the benefits they are entitled to and deserve.
A new generation of veterans now exists; they are well trained, loyal, battle-tested and under-employed. ‘As a Nation, we have been unsuccessful in providing the originally promised assistance our veterans have earned, deserved, and required so that they would have the opportunity to be as successful in their civilian pursuits as they were in their military assignments.’ (VET-Force Report to the Nation 2012)
CAVEAT EMPTOR for VETERANS
Caveat Emptor is a Latin phrase for “Let the buyer beware.” The term is primarily used in real property transactions meaning that the buyer must perform their due diligence when purchasing an item or service. In other words, consumers need to know their rights and be vigilant in avoiding scams. For example in the private purchase of a used car, the onus is on the buyer to make sure the car is worth the purchase price because once the transaction is complete the buyer will not receive a warranty or return option to the seller.
But when it comes to shopping for an education, a student/veteran should not have to be treated as if they are buying a used car. They need to be given all of the information regarding tuition and fees up front before they enroll in a program of study. They should not be burdened with additional fees after completion of the program that they were not aware of initially or that would not be covered by other funding sources.
Students/Veterans should be made well aware of the quality of the education offered and their potential for employment pending the successful completion of a selected program of study. Counselors should be readily available to provide academic advice.
While For-Profit Colleges play an important role in educating students who may not qualify for traditional schools, over the last decade, far too many institutions have been cited for burdening students with ruinous debt. A report from the Government Accountability Office disclosed that fraudulent or deceptive practices were used at all 15 of the For-Profit Colleges visited by investigators posing as prospective students. Some college officials encouraged applicants to falsify financial aid forms and students were also pressured into signing enrollment contracts before they were allowed to speak to financial aid representatives who would clarify costs.
According to a New York Times Editorial dated 9/11/10, the programs offered at the For-Profit Colleges were substantially more expensive than comparable programs at nearby public colleges. In one example, a student who inquired about the cost of studying for a massage therapy certificate was told that $14,000 was a fair price, even though the local community college offered the same courses for $520.
In addition, too many For-Profit Colleges have been cited for enrolling students who have no chance of graduating and tossing them out once that flow of aid is exhausted. According to a New York Times editorial dated July 28, 2010 the inspector general for the Department of Education told Congress that 70 percent of the department’s higher education fraud investigations were focused on For-Profit Colleges. Schools have been caught falsifying data on student enrollment levels, attendance and eligibility requirements.
And yet another Senate report found that many For-Profit Colleges spent suspiciously little money on teaching, while spending lavishly on recruiting, marketing and administrative costs.
PRINCIPLES OF EXCELLENCE
Executive Order #13607 issued by President Obama attempts to establish a policy that will ensure that our nation’s veterans, service members and their spouses will not be deceived by For Profit Colleges and that specific federal agencies will be directed to provide oversight and management of the benefit programs they use for educational training. For-Profit Colleges will have to establish fair and transparent practices that demonstrate how students/veterans are best served.
For-Profit Colleges and Institutions that receive funding from GI Bill, TA, or MyCAA funding will be expected to adhere to a set of principles that include the following:
(A) Provide information about the total cost of the educational program including amount of debt owed on any student loans after graduation;
(B) Inform veterans about other forms of financial aid before advising them of private student loans;
(C) End fraudulent and unduly aggressive recruiting techniques on and off military installations;
(D) Obtain approval of the state accrediting agency for new courses prior to enrollment;
(E) Allow service members to be readmitted if they had to suspend their attendance temporarily due to military service requirements;
(F) Agree to a refund policy when veterans withdraw prior to course completion;
(G) Provide a plan that details all the requirements needed for program completion and the time it will take to complete them; and
(H) Designate a person(s) to provide counseling with regard to academics, financial aid, disabilities, and job searches.
RESPONSIBILITY for IMPLEMENTATION
The agencies responsible for implementation of the Principles will be the Departments of Defense (DOD), Veterans Affairs (VA), and Education (EDU). Consultation will be provided by the Director of the Consumer Financial Protection Bureau and the Attorney General. These agencies will adhere to the following:
(A) DOD and VA shall reflect these principles in new agreements with educational institutions regarding veterans; and VA shall notify all participating institutions that they are strongly encouraged to comply with the principles and shall post on the VA’s website those that do;
(B) The Secretaries of Defense, VA and EDU in consultation with the Director of the Consumer Financial Protection Bureau (CFPB) and the Attorney General – shall take immediate action to implement this order and within 90 days of the date of this order report to the President on the progress;
(C) The Secretaries of Defense, VA and EDU shall develop a comprehensive strategy for developing student outcome measures and collecting info on the amount of funding received under the Post 9/11 GI Bill and the Tuition Assistance Program and make them publically available; and
(D) The Secretary of VA in consultation with the Secretaries of Defense and EDU shall provide streamlined tools to compare educational institutions using key measures of affordability and value through the VA’s eBenefits portal and include school performance info, consumer protection info, and key federal financial aid documents all which shall be made available to veterans through education counselors.
ENFORCEMENT and COMPLIANCE MECHANISMS
The Executive Order calls for the Secretaries of Defense and VA, in consultation with EDU, CFPB and the Attorney General to submit to the President a plan to strengthen enforcement and compliance mechanisms. The plan shall include proposals to:
(A) Create a centralized complaint system;
(B) Institute uniform procedures for receiving and processing complaints across the State Approving Agencies;
(C) Institute uniform procedures for referring potential matters for civil or criminal enforcement to the Dept. of Justice and/other relevant agencies;
(D) Establish procedures for targeted risk-based program reviews of institutions to ensure compliance with the Principles;
(E) Establish new uniform rules and strengthen existing procedures for access to military installations by educational institutions;
(F) Take all appropriate steps to ensure that websites and programs are not deceptively and fraudulently marketing educational services and benefits to program beneficiaries, including a process to protect the term “GI Bill” and other military or veteran-related terms as trademarks, as appropriate.
IMPACT on SCHOOLS and VETERANS
As referenced herein, this Executive Order offers For-Profit Colleges and institutions an opportunity to improve their performance before stricter legislation is passed. If they desire to achieve the goals proposed in the Executive Order, compliance should not be difficult. Though I suspect that there will be some resistance since doing the right thing will undoubtedly affect their bottom line. But these educational institutions have to be held accountable.
Any laws, policies or regulations that will serve to improve the likelihood of success for our veterans, military members or their families will obviously be well received by them. However, the agencies directed to take actions under the Executive Order have to fully and continually implement the Principles of Excellence dutifully such that all veterans are able to utilize the educational benefits to the maximum extent possible.
NEED for MORE LEGISLATION
The Executive Order does not address the use of federal aid dollars that has led many admissions officers to use aggressive recruitment strategies targeted to veterans, military members and their spouses using the GI Bill, the Tuition Assistance (TA) program, or the Military Spouse Career Advancement Accounts (MyCAA) program for funding. Until the law is changed GI Bill benefits, TA and MyCAA funds still do not technically count as federal education benefits under the U.S. Department of Education’s 90-10 rule.
There are at least 2 bills pending that attempt to address this long-standing requirement that no more than 90 percent of a For-Profit College’s revenues can come from federal financial aid. The rationale is simple, make GI Bill, TA and MyCAA funding less desirable and thereby lessen the predatory tactics used to obtain them.
Other pending legislation by Senators Webb and Murray appear to strengthen the Principles of Excellence referred to in the Executive Order. Both Bills were pending prior to the execution of the Executive Order and include some of the same or similar principles. Under Webb’s Bill additional requirements would include: (1) Expanding the training responsibilities of the State Approving Agencies by requiring them to conduct outreach activities to veterans and members of the Armed Forces, to conduct audits of schools, and to report those findings to the Secretary of Veterans Affairs; (2) Support services; (3) Compliance reviews; (4) Interagency coordination; and (5) Title IV eligibility.
Under Murray’s Bill additional requirements would include: (1) Information availability; (2) Counselors for Education and Veterans Benefits on site; and (3) Curbing misleading marketing and aggressive recruiting.
This Congress cannot continue to allow For-Profit Colleges and institutions in America to be so big that they can be allowed to take advantage of the citizenry of any State, including military veterans, members of the Guard or Reserves, veterans disabled in or after service, women veterans, Black veterans, minority veterans nor veterans homeless or of limited means. Congress needs to provide support to reinforce or expand the Principles of Excellence as put forth in Executive Order #13607 for the benefit of the persons it is designed to serve.
This concludes my statement.
VVA Special Advisor
Nabvets Legislative Liaison
Joe Wynn, Special Advisor
Vietnam Veterans of America
Joe serves as Special Advisor to the Director of Government Relations for the Vietnam Veterans of America (VVA) on projects relating to Veterans Employment, Vocational Rehabilitation, and Small Business. He is a lifetime member and the Legislative Liaison for the National Association for Black Veterans (NABVETS), and Treasurer for the Veterans Entrepreneurship Task Force (VET-Force) which is composed of over 200 organizations and affiliates representing thousands of veterans throughout the U.S.
Joe, a Vietnam-era Veteran, received an Honorable Discharge from the U.S. Air Force and has been an advocate for veterans for more than 20 years. Joe entered the military and completed the Admin Specialist course at Keesler AFB far ahead of schedule. He then served one tour of duty with the 66th Strategic Missile Squadron at Ellsworth AFB, SD.
In 2004, Joe founded the VETS Group, a non-profit organization that provides entrepreneurial education, federal procurement training, employment assistance and other supportive services primarily for veterans, people with disabilities and persons of limited means. Over the past few years, Joe has participated in conferences for federal, state, and local governments in an effort to heighten the level of awareness regarding the needs of veterans.
Through the VETS Group, Joe manages a program to recruit eligible veterans seeking employment and to identify employers who are committed to hiring veterans first. He is also helping to develop an initiative to increase the number of procurement and employment opportunities for veteran owned businesses by identifying procurement opportunities in the private-sector. Partnerships are being formed with large corporate enterprises to offer veterans employment opportunities, business education, mentoring, technical assistance, growth capital, and access to international markets.
In 2005, Joe was appointed by the Honorable Speaker Pelosi to serve as a Commissioner on the Veterans Disability Benefits Commission that completed its work in early 2008. Since 2010, Joe has served as a member of the VA Secretary’s Veterans Advisory Committee for Minority Affairs.
Educational Attainment: Under the G.I. Bill, Joe attended the Universities of DC and Howard. He completed a Bachelor’s degree in Computer Information Systems, a Master’s degree in Business, and two years toward a doctorate in Organizational Communications. He later served as Director of Education at the PTC Career Institute, a business school in Wash., D.C.
Awards: SBA’s Veteran Small Business Champion Award for 2005 of the Washington DC Region. NAACP’s 2006 Julius E. Williams Distinguished Community Service Award for Veteran’s Services. And more recently received recognition awards from Blacks in Government, the Census Bureau, and VET-Force.