VA Increases Oversight on GI Bill Useage

The Department of Veterans Affairs (VA) has recently increased oversight of how GI bill benefits are being used in higher edcuation, with a focus on institutional compliance with the 85/15 Rule.
 
Under the 85/15 rule, institutions must ensure, for each program of study, that no more than 85% of students enrolled in the progam are receiving GI bill benefits or any form of institutional support, defined as “supported students” by the VA.  Colleges and universities must report this information to theVA for each program by the 30^th day of the term. 
 
According to the VA, the rule is intended “to ensure a minimum number of students, who are not receiving VA benefits, are willing to pay for the full cost of the educational program, and to ensure that the price of the program responds to the general demands of the open market and that a minimum number of non-VA beneficiaries find the program worthwhile and valuable.” (The 85/15 rule is different from, and should not be confused with, the 90/10 rule in the Higher Education Act, which applies to the amount of federal aid a for-profit college can receive.)  
 
Failure to comply with the 85/15 requirement makes a program ineligible to receive GI bill benefits.  The VA has been holding regional webinars for School Certifying Officials to ensure that programs are filled with at least 15% of students who are not using GI bill benefits and who are not otherwise institutionally supported.
 
A “35% waiver” on reporting is available if a school’s total number of supported students enrolled in programs approved to receive VA benefits are less than or equal to 35% of the total student enrollment in all programs approved to receive VA benefits.  If an institution secures a 35% waiver it is excused from reporting the 85/15 quarterly requirement calculations to the VA.  However, the waiver does not mean an institution can avoid compliance with the 85/15 rule, as institutions still must report all instances when a program has a population of supported students in excess of 85%, and must provide 85/15 calculations at the request of a VA official or State Approval Agency.
 
It is our understanding that issues have been flagged recently at flight schools, prompting the VA to increase oversight of all institutional compliance with the rule.
 
To be in compliance with the 85/15 rule, institutions must report properly calculated data to the VA, otherwise institutions will not be able to receive GI bill benefits payments for student veterans.  The VA has provided the following descriptions for Supported and Non-Supported students (these bullets have been copied verbatim from the VA’s slide presentation):  
 
Supported Students

• Any student receiving any amount of VA education benefits
• Any student where the full amount of tuition and fees has not been paid to the educational institution prior to the start of the 15^th day of class
• Any student who received a loan for tuition, fees, or other charges directly from the educational institution if the policy for determining the recipient of such loan is unequal with respect to veterans and nonveterans
• Any student who receives a loan considered to be less than an arm’s length transaction
• Any student where the educational institution accepts less than full tuition, fees or other charges from a loan company (the repayment works to essentially reduce the tuition, fees or other charges accepted by the educational institution from the loan company)
• Any student who is granted any waiver or forgiveness of tuition, fees or other charges
• Any student who receives an institutionally-funded scholarship or grant, if the institutional policy for determining the recipient of such aid is not equal with repect to veterans and nonveterans alike

Note that requiring any student who has not paid in full by the 15^th day of the term to count as a “supported student” appears to be a new requirement.  When asked about this new requirement, VA has indicated that this 15^th day concept is “flexible” and should not be treated as a firm cutoff, but this is not clear from the webinar materials. 
 
Non-Supported Students

• Any student who pays the full amount of tuition, fees, and other mandatory charges to the educational institution prior to the start of the 15^th day of class
• Any student who finances their tuition, fees, and other mandatory charges through an arm’s length transaction (Promissory Note with a neutral 3^rd party lending facility).
• Any student receiving Title IV Department of Education aid
• Any student receiving Tuition Assistance through the Department of Defense
• Any student receiving non-institutional scholarships, grants or other types of aid offered by a third-party entity not affiliated with the school
• Graduate students in receipt of institutional aid
• Any students receiving an institutionally funded loan, scholarship or grant, if the policy for determining the recipients of such aid is equal with respect to veterans and nonveterans alike

Note that if a student is receiving multiple types of aid and any of it is supported, the student must be counted as a supported student.
 
NAICU is working in coalition with the Washington higher education community to bring concerns with the provision itself, as well as its stepped up enforcement, to the VA.
 

For more information, please contact:
Stephanie Giesecke