A recent report of the Government Accountability Office (GAO) suggested some interesting findings concerning VA education benefits. About 5 percent of the schools in the report received more than $3.8 billion in VA education payments—over 60 percent of all Post-9/11 GI Bill tuition benefits. This small percentage of schools, which the GAO dubs as “highly VA-funded,” ranged in their receipt of funds from $2 - $113 Million in the 2010 – 2011 fiscal year.
The report found that public and for-profit institutions received roughly the same amount of payments from the VA. However, of the small percentage of highly VA-funded schools, for-profits ate up more than their fair share of the pie. Furthermore, the report shows that these for-profit schools received the highest payments per veteran ($10,000 on average for each of the 99,000 students at for-profits versus $5,000 on average for each of the 174,000 student vets at public schools). Thus the GAO found that for-profits burned up twice as much funding per veteran while educating less than half of the entire population.
This might be surprising if similar findings hadn’t already come out of Senator Harkin’s FY08-09 HELP Committee investigation. This report found that the VA spent comparable amounts ($697 million and $640 million respectively) on tuition for students attending public schools and students attending for-profit schools, but the VA funded 203,790 students at public schools compared to only 76,746 at for-profits. What we needed after the HELP report was an honest look at the performance of veterans at these schools, and the performance of these schools in fostering achievement in their community. Unfortunately, the recent GAO report doesn’t fit the bill.
A closer look reveals that student-veteran data is lacking and statistics are pulled from the entire student body population instead. The GAO even states in fine print that, “Veterans typically comprise a small proportion of a school’s total enrollment, so veterans would generally have little impact on those characteristics and outcomes for the school population as a whole.” This makes for some skewed data if we think we are talking about VA education benefits that are being used by veterans, and we are interested in their performance. If for-profits are using twice the funding to educate half the population of vets, and we are basing the effectiveness of their use of the VA funding by the performance of students who don’t use the benefit, then we are missing the point.
Furthermore, the new report goes on to sound as if it is praising for-profits for having slightly higher rates of retention and graduation rates relative to the public and non-profit sectors. However, with this in mind, the new GAO report fails to recognize that what they consider to be highly VA-funded schools may not represent the real numbers that count—the greater population of veterans using VA education benefits.
Perhaps it’s the most complete look at the new generation of college-bound veterans returning from Iraq and Afghanistan, but unfortunately the report fails to fully capitalize on statistics from the very population it aims to serve. Rather than targeting the cohort of individuals who are utilizing VA education benefits to understand issues like graduation and retention rates, the report focuses more broadly on entire school populations based on relative amounts of Post-9/11 GI Bill funding.
The remaining issues are still unmet. The real issues from the older HELP report have still not been addressed, and we are left with an incomplete and misleading GAO report instead. So what are the issues, you might ask? We know from the prior studies that the outcomes at for-profit schools receiving the most military education benefit revenue were questionable—reporting the lowest loan repayment rates, the highest loan default rates, and high student withdrawal rates, all while pulling in roughly the same amount in benefits to educate far less than half the student-veteran population. Furthermore, while only 13% of students attended for-profit institutions in 2008 – 2009, that 13% accounted for almost half of all student loan defaults. Furthermore, recruitment practices of these for-profits were found to be highly predatory and deceptive—targeting veterans for their use of education benefits. According to an old rule to keep for-profits from being entirely government funded, they must come up with 10% of their funding from private sources before the other 90% can come from federal financial aid. Unfortunately, through a loophole, the GI Bill benefits fall into the 10% category even though they are taxpayer dollars. Therefore, many for-profit institutions target veterans to fill their 10% quota—giving them the ability to bring in 9 other students on full federal funds and continue to line the pockets of their investors.
Why bring up the old statistics and an old report? Because nothing in the new GAO report refutes any of this prior information—it actually ignores the issues altogether—the issues we need addressed now. They do however report that highly VA-funded schools generally had more positive outcomes than other VA- funded schools. Relative to the other schools, these highly VA-funded institutions had higher retention and graduation rates and similar loan default rates. However, this is counter to the 2008 – 2009 HELP Report data by missing its mark in looking at student-veteran performance. By including all populations and diluting the data, it is hard to know what is really being said. One thing is for certain; we need more usable data, focusing on the veterans using benefits and their differing performances at public and for-profit schools before we go jumping to conclusions.