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IMPROVING EDUCATIONAL OUTCOMES FOR OUR 

MILITARY AND VETERANS 

HEARING 

BEFORE THE

FEDERAL FINANCIAL MANAGEMENT, GOVERNMENT 

INFORMATION, FEDERAL SERVICES, AND 

INTERNATIONAL SECURITY SUBCOMMITTEE 

OF THE

COMMITTEE ON 

HOMELAND SECURITY AND 

GOVERNMENTAL AFFAIRS 

UNITED STATES SENATE 

ONE HUNDRED TWELFTH CONGRESS 

FIRST SESSION 

SEPTEMBER 22, 2011 

Available via the World Wide Web: http://www.fdsys.gov 

Printed for the use of the 

Committee on Homeland Security and Governmental Affairs 

( 

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(II) 

COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS 

JOSEPH I. LIEBERMAN, Connecticut, Chairman 

CARL LEVIN, Michigan 

DANIEL K. AKAKA, Hawaii 

THOMAS R. CARPER, Delaware 

MARK L. PRYOR, Arkansas 

MARY L. LANDRIEU, Louisiana 

CLAIRE MCCASKILL, Missouri 

JON TESTER, Montana 

MARK BEGICH, Alaska 

SUSAN M. COLLINS, Maine 

TOM COBURN, Oklahoma 

SCOTT P. BROWN, Massachusetts 

JOHN MCCAIN, Arizona 

RON JOHNSON, Wisconsin 

ROB PORTMAN, Ohio 

RAND PAUL, Kentucky 

JERRY MORAN, Kansas 

MICHAEL L. ALEXANDER, Staff Director 

NICHOLAS A. ROSSI, Minority Staff Director 

TRINA DRIESSNACK TYRER, Chief Clerk 

JOYCE WARD, Publications Clerk and GPO Detailee 

SUBCOMMITTEE ON FEDERAL FINANCIAL MANAGEMENT, GOVERNMENT 

INFORMATION, FEDERAL SERVICES, AND INTERNATIONAL SECURITY 

THOMAS R. CARPER, Delaware, Chairman 

CARL LEVIN, Michigan 

DANIEL K. AKAKA, Hawaii 

MARK L. PRYOR, Arkansas 

CLAIRE MCCASKILL, Missouri 

MARK BEGICH, Alaska 

SCOTT P. BROWN, Massachusetts 

TOM COBURN, Oklahoma 

JOHN MCCAIN, Arizona 

RON JOHNSON, Wisconsin 

ROB PORTMAN, Ohio 

JOHN KILVINGTON, Staff Director 

WILLIAM WRIGHT, Minority Staff Director 

DEIRDRE G. ARMSTRONG, Chief Clerk 

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(III) 

C O N T E N T S 

Opening statements: Page 

Senator Carper ................................................................................................. 3 

Senator Brown .................................................................................................. 6 

Prepared statements: 

Senator Carper ................................................................................................. 47 

Senator Brown .................................................................................................. 49 

WITNESSES 

THURSDAY, SEPTEMBER 22, 2011 

Hon. Jim Webb, A U.S. Senator from the State of Virginia ................................ 1 

Curtis L. Coy, Deputy Under Secretary for Economic Opportunity, Veterans 

Benefits Administration, U.S. Department of Veterans Affairs; accompanied 

by Keith Wilson, Director of the Education Service, Veterans Benefits Administration, U.S. Department of Veterans Affairs .......................................... 6 

Theodore L. Daywalt, President, VetJobs .............................................................. 23 

Ryan M. Gallucci, Deputy Director, National Legislative Service, Veterans 

of Foreign Wars of the United States ................................................................. 25 

Russell S. Kitchner, Vice President for Regulatory and Governmental Relations, American Public University System ........................................................ 27 

Greg Von Lehmen, Provost and Chief Academic Officer, University of Maryland University College ....................................................................................... 29 

ALPHABETICAL LIST OF WITNESSES

Coy, Curtis L.: 

Testimony .......................................................................................................... 6 

Prepared statement .......................................................................................... 51 

Daywalt, Theodore L.: 

Testimony .......................................................................................................... 23 

Prepared statement .......................................................................................... 56 

Gallucci, Ryan M.: 

Testimony .......................................................................................................... 25 

Prepared statement .......................................................................................... 67 

Kitchner, Russell S.: 

Testimony .......................................................................................................... 27 

Prepared statement .......................................................................................... 72 

Von Lehmen, Greg: 

Testimony .......................................................................................................... 29 

Prepared statement .......................................................................................... 83 

Webb, Hon. Jim: 

Testimony .......................................................................................................... 1 

APPENDIX 

Questions and responses for the Record from: 

Mr. Coy .............................................................................................................. 89 

Mr. Daywalt ...................................................................................................... 95 

Mr. Gallucci ....................................................................................................... 97 

Mr. Kitchner ..................................................................................................... 100 

Mr. Lehmen ....................................................................................................... 106 

Statement of Hollister K. Petraeus, Assistant Director, Office of 

Servicemember Affairs, Consumer Financial Protection Board ....................... 110 

Letters referenced by Senator Carper .................................................................... 115 

Chart referenced by Mr. Kitchner .......................................................................... 129 

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(1) 

IMPROVING EDUCATIONAL OUTCOMES FOR 

OUR MILITARY AND VETERANS 

THURSDAY, SEPTEMBER 22, 2011 

U.S. SENATE, SUBCOMMITTEE ON FEDERAL FINANCIAL MANAGEMENT, GOVERNMENT INFORMATION, FEDERAL SERVICES, AND INTERNATIONAL SECURITY, OF THE COMMITTEE ON HOMELAND SECURITY

AND GOVERNMENTAL AFFAIRS, Washington, DC. 

The Subcommittee met, pursuant to notice, at 1:34 p.m., in Room 

SD–342, Dirksen Senate Office Building, Hon. Thomas R. Carper, 

Chairman of the Subcommittee, presiding. 

Present: Senators Carper and Brown. 

Senator CARPER. I was going to say this hearing should come to 

order, but this is about the quietest crowd I have seen, Senator 

Webb, in quite a while. I think we are just going to lead off here 

and we will forego our opening statements and just come right to 

you. 

Thank you so much for being here with us today. Thanks a lot 

for your service to our country all those years, and for your service 

today. It is just an honor to be your colleague. Thank you for coming today. 

TESTIMONY OF HON. JIM WEBB, A UNITED STATES SENATOR 

FROM THE STATE OF VIRGINIA 

Senator WEBB. Thank you very much, Mr. Chairman, and I want 

to say I appreciate your taking the time to hold this hearing. I 

think you and I both, as military veterans, got a good bit of our 

own education taken care of by Uncle Sam and we know how valuable that can be in terms of building the rest of somebody’s professional life. 

We are here today to try to make sure that the GI Bill that we 

passed can continue in the form that we passed it and still address 

some of these issues that are now challenging the program. 

I understand one of the primary purposes of this hearing is to 

examine the 90/10 rule in place for for-profit schools and how it 

would be modified or could be modified to better serve veterans and 

active duty military students. I would like to commend you and 

Senator Harkin for your focus on that issue and look forward to the 

outcome of this hearing. 

This year marked the second anniversary of the implementation 

of the Post-9/11 GI Bill. I introduced this legislation on my first 

day in office, starting with a simple concept, having spent 4 years 

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2 

of my earlier life as committee counsel in the House Veterans Committee, and that was that we owe those people who have served 

since September 11, 2001 the same type of quality educational benefits that those who served in World War II received, which was 

to have their tuition paid for, their books bought, and to receive a 

monthly stipend which is a much more generous benefit than those 

who served in Vietnam had received. 

I am very proud to say that we were able to do that and it continues to be a great investment in the future of our country 

through the people who have served, and as of August the 1, our 

GI Bill had helped to educate 587,000 beneficiaries. I am very 

proud of that statistic. 

And as the Chairman will remember, the passage of this legislation was not a simple process, but I think it has turned out to be 

a very, very good thing for the country and for our veterans. When 

we look at World War II, for every dollar that was spent on the 

World War II GI Bill, $7 were generated for our economy because 

of the successful careers that people were able to have after they 

had gone through more schooling. 

I am here today to ensure that we continue that concept. Forprofit schools, by statistics that have been given to me by my staff, 

have collected more than one-third of all of these Post-9/11 GI Bill 

benefits over the 2009 to 2010 school year. But they train one-quarter of our veterans. 

We have all received letters from Veterans of Foreign Wars 

(VFW), Amvets, Paralyzed Veterans, Student Veterans of America, 

Blue Star Families, VetFirst, Military Association of America, all 

stating their concern about this trend line, and if they have not 

been entered in the record, I would ask that they be entered into 

the record during this hearing. 

Senator CARPER. They will be. 

Senator WEBB. The World War II GI Bill, history shows, had a 

similar problem. In 1951, a Government Accountability Office 

(GAO) report found that a 1,700,000 veterans had enrolled in 

courses offered by for-profit schools, 5,000 of which sprang up after 

the creation of the GI Bill, and about 20 percent of the people who 

had gone to those schools had completed their course. There was, 

to quote from that report, no information available as to the number of graduates who actually were able to be placed in jobs for 

which they had been trained. 

Congress, at that time, responded to concerns of waste, fraud, 

and abuse by establishing specific standards for on-the-job training 

programs and made them subject to State education approving 

agencies. 

But the abuses of the World War II program, especially among 

for-profit vocational schools, led to follow-on restrictions of that program and to even stricter restrictions under the program established after the Korean Conflict, and then eventually to the somewhat parsimonious GI Bill given to those who served during the 

Vietnam War, which began with a $50 a month straight stipend, 

at its height reached $340 a month just straight stipend, no tuition 

paid for, no books, none of the things that the people who came 

back from World War II had and none of the things that people in 

our Post-9/11 GI Bill now have. 

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3 

Data we have been given shows that eight out of the top 10 recipients of Post-9/11 GI Bill benefits in 2010–2011 were for-profit 

education companies. These eight for-profit education companies, 

out of a larger pool of for-profits, collected a billion dollars, 24 percent of all the benefits. 

For-profits at large collected 37 percent of GI Bill funds, according to the data given to my office, and they trained only 19 percent 

of the veterans. 

I would like to point out that this problem is not necessarily the 

growth of the for-profit sector. There are for-profit institutions that 

are providing our non-traditional population a great service, but 

with this amount of Federal dollars being spent in this sector, we 

owe it to the taxpayers and to our veterans to carefully monitor 

and provide adequate oversight. 

Money that goes to a for-profit for tuition does not really go to 

the veteran. It enables the veteran to get an education. So fixing 

this problem is not taking anything away from the veteran. In fact, 

it is ensuring the continuation of the program. 

My goals are first to ensure that we are providing a high quality 

education to our veterans, and giving them access to critical information that will help them make their own informed decisions. 

Total cost of program, transferability of credits, default rates, graduation rates, job placement rates upon graduation are a few ways 

to ensure transparency. 

Second and most important, I hope we can look more closely at 

the role that our State Approving Agencies (SAA) play in approving 

educational programs in order to ensure that the Department of 

Veterans Affairs (VA) is being aggressive in their own executive capacity to further strengthen these requirements. 

I believe this is, at bottom, a leadership issue that can be best 

addressed through the structure of the Department of Veterans Affairs and I hope you will encourage that process during your hearing. 

I know you will be receiving testimony today from many who are 

knowledgeable about the 90/10 rule and these other issues, and I 

again thank you for holding this hearing and for allowing me to 

testify. Thank you, Mr. Chairman. 

Senator CARPER. Not at all. Thank you for being the author of 

the Post-9/11 GI Bill and for working with us and providing really 

great leadership to try to make sure that the promise, the potential 

of that GI Bill and preparing folks when they come back from Iraq 

and Afghanistan or some other place—— 

Senator WEBB. Thank you very much. 

Senator CARPER [continuing]. Have the opportunity to actually 

complete their education, get a job, become productive members of 

our society. So thank you so much. 

With that, I am going to invite the next panel to come forward, 

and as you come forward, I am going to go ahead and begin an 

opening statement. 

OPENING STATEMENT OF SENATOR CARPER 

Senator CARPER. As we hold this hearing, our Nation’s debt 

stands at over $14.6 trillion. Ten years ago, it stood at less than 

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half that amount, around $5.7 trillion. If we remain on our current 

course, our debt may double again by the end of this decade. 

Currently, the Joint Select Committee on Deficit Reduction is 

working to provide us with a roadmap to reduce our cumulative 

Federal deficits over the next decade by more than $1.2 trillion. I 

believe that it’s imperative that we do better than that, and we 

have had, as recently as last year, a couple of different deficit commissions, including one led by Erskine Bowles and Alan Simpson 

who provided what I thought was a pretty good roadmap to get us 

on the right path out of this fiscal morass. In the end, I hope that 

it is the roadmap that we will still end up using. 

With that goal in mind, the Subcommittee repeatedly has asked 

the question. Is it possible to get a better result for less money in 

almost every Federal program, or at least a better result for the 

same amount of money. 

Oftentimes I have said in this hearing room that Americans believe that we operate under a culture of spendthrift here in Washington, and those people are not entirely wrong. We need to establish a different kind of culture—a culture of thrift. We need to look 

in every nook and cranny of Federal spending: defense program, 

domestic spending, tax expenditures, and find places where we can 

do more with less or more with the same amount of money. This 

Subcommittee has spent the last 6 years under Democrat and 

under Republican leadership, to explain this mission. 

Most of us in this room today, however, understand that we simply cannot cut our way out of debt, tax our way out of debt, or save 

our way out of debt. We must also grow our way out of debt, and 

we can do so, in part, by making investments, smart investments 

in research and development, in infrastructure, and also in education, investments in education that will enable Americans to become more productive workers so we can compete with the rest of 

the world. 

For years, the GI Bill helped us to achieve this goal by raising 

the skill levels of hundreds of thousands of Americans who have 

served in our military and were returning to civilian life. Senator 

Webb alluded to the fact that he has received help from taxpayers 

to get an education. 

I went to Ohio State University as a Navy ROTC Midshipman 

to get my undergraduate education after the Vietnam War. Came 

back to the United States and moved from California to Delaware, 

got an M.B.A. at the University of Delaware on the GI Bill, and 

as he suggested, it was not a lot of money. I was happy to have 

every dime of it. But I think we received about 200 bucks a month 

at that point in time. 

And when you compare that with the GI Bill benefits that are 

enured to those coming home from Iraq or Afghanistan today, it is 

a whole lot different, and I think it is a change for the better. 

But for years, the GI Bill helped us to achieve this goal by raising the skill levels of hundreds of thousands of Americans who are 

coming home from serving abroad and returning to civilian life. 

However, in 2008, it became clear to Congress that after years of 

multiple tours of duty in Iraq and Afghanistan, the modern day 

military needed a modern day GI Bill to ease our troops’ transition 

into civilian life. 

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5 

That is where Jim Webb, newly elected Senator, came in and 

that is why we passed the Post-9/11 GI Bill that he authored, 

which pays for the tuition and housing costs of any member of the 

military who served more than 90 continuous days on active duty 

since September 10, 2001, and who has accrued some 36 total 

months of active duty service. 

Since passing this bill, $11.5 billion have been spent to send veterans back to school under this program. However, recent reports 

show that too many veterans have been subjected to highly questionable recruiting practices by some schools, subjected to deceptive 

marketing and substandard education instruction. Not in all, but 

in some of the schools that they attend, including some for-profit 

schools. And, I might add, some public schools and some private 

schools. 

These problems highlight a key flaw in our higher education system. Currently, the incentives that some schools, for-profits, nonprofits, privates, but especially the for-profits, I think are just misaligned. 

These institutions are rewarded for enrolling more students—especially veterans with a fully paid for education—but these schools 

have too little incentive to make sure that their graduates are prepared to join the workforce and begin productive careers and productive lives. 

Having said that, let me say as clearly as I can, that this is not 

an issue solely at for-profit schools. There are many public schools 

and some private colleges and universities that experience similar 

issues with extremely low degree completion rates, high default 

rates, and a poor record of serving our veterans. And to be fair, 

there are also a number of for-profit institutions that offer a quality education and schools that have a history of success with placing students in well-paying jobs. 

We are here today because I believe that we have a moral imperative to ensure that these abusive practices, where they do occur, 

wherever they occur, are stopped so that those who have sacrificed 

for our country can obtain an education that will equip them with 

the skills that will enable them to find a good job, repay any college 

loans that they have incurred, and go on to live productive lives as 

productive citizens, both in the workforce and in their communities. 

Today’s hearing will focus on how we can fix this problem by better incentivizing schools to deliver a high quality education to our 

military and to our veteran population. We will examine what efforts have improved educational outcomes and enhanced the ability 

of veterans and our military to receive good-paying jobs upon the 

completion of their education. We will also examine what has not 

worked and why flawed Federal policies might encourage schools to 

continue with practices that do not serve students well. We have, 

I think, a terrific line-up of witnesses here today who I will introduce shortly. We look forward to a productive hearing, to a hearing 

more about this issue, and to learning more about this issue. 

First I want to turn to a fellow who has just joined us at my 

right and that is Senator Scott Brown for any comments that he 

would like to add. Thank you. 

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6 

1The prepared statement of Mr. Coy appears in the appendix on page 51. 

OPENING STATEMENT OF SENATOR BROWN 

Senator BROWN. Thank you, Mr. Chairman. I apologize for being 

late. We have been running around dealing with some issues back 

in the home district. I do have a statement. I will just offer it for 

the record due to my being tardy. I want to hear what the witnesses have to say. So I would submit my opening statement for 

the record. 

Senator CARPER. OK, thanks so much. 

Our first witness is Curtis Coy and he is the Deputy Under Secretary for Economic Opportunity in the Department of Veterans Affairs. In this role, Mr. Coy oversees all education benefits, loan 

guarantee services, and vocational rehabilitation and employment 

services for America’s veterans. 

Prior to his current position, Mr. Coy served, I believe, as Acting 

Deputy Commissioner, Chief Financial Officer (CFO) of the Food 

and Drug Administration (FDA). Another great job. 

Additionally, from 2002 to 2009, Mr. Coy held the position of 

Deputy Assistant Secretary for Administration at the Department 

of Health and Human Services (HHS). Mr. Coy also served as an 

officer in the United States Navy, and before that, I believe he was 

an enlisted member of the U.S. Air Force. 

He retired from the Navy in 1994 with the rank of Commander, 

and as a retired Navy Captain, my favorite rank in the Navy was 

Commander, Commander Coy, Commander Carper. Those were 

good days. 

We have asked Mr. Coy to discuss how the Department of Veterans Affairs prevents against abuse of the Post-9/11 GI Bill and 

how we can better incentivize the provision of high quality education to our Nation’s students. 

Mr. Coy, we thank you for being here. And I believe accompanying you today is Keith Wilson. Mr. Wilson, are you also going 

to testify? 

Mr. WILSON: I will. 

Senator CARPER. Oh, good. Well, then once Mr. Coy has completed his comments, I will come to you and I will give an introduction for you as well. But, Mr. Coy, please proceed. Your entire testimony will be made part of the record and you are welcome to summarize if you wish. 

TESIMONY OF CURTIS L. COY,1 DEPUTY UNDER SECRETARY 

FOR ECONOMIC OPPORTUNITY, VETERANS BENEFITS ADMINISTRATION, U.S. DEPARTMENT OF VETERANS AFFAIRS 

ACCOMPANIED BY KEITH WILSON, DIRECTOR OF THE EDUCATION SERVICE, VETERANS BENEFITS ADMINISTRATION, 

U.S. DEPARTMENT OF VETERANS AFFAIRS 

Mr. COY. Yes, sir, thank you. Good afternoon, Chairman Carper, 

Ranking Member Brown. I appreciate the opportunity to appear before you today to discuss the Post-9/11 GI Bill and educational outcomes for Veterans and military students. I am accompanied today 

by Mr. Keith Wilson, as you indicated, who is the Director of the 

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7 

Department of Veterans Affairs Education Service. My full written 

statement has been submitted for the record. 

From August 1, 2009 to June 15, 2011, the VA paid approxi- mately $4.4 billion in tuition and fees and Yellow Ribbon program 

payments under the Post-9/11 GI Bill to institutions of higher 

learning. This amount does not include the monthly housing allowances and the books and supplies stipends paid directly to Post-9/ 

11 GI Bill beneficiaries.During this period, approximately $1.6 billion was paid to private, for-profit schools on behalf of more than 

145,000 students. Students attending private, for-profit schools 

made up approximately 23.8 percent of the beneficiaries, while 36.4 

percent of the tuition and fee dollars are paid on their behalf. 

Under the 90/10 rule, proprietary institutions may not receive 

more than 90 percent of their revenue from funds under Title IV 

of the Higher Education Act (HEA) of 1965. While VA defers to the 

Department of Education (ED) on the 90/10 calculation, there is an 

argument for including the Post-9/11 GI Bill in the 90 percent limit 

on Federal funding or related proposals. Under the present structure, some institutions may be targeting Veterans because of the 

Federal education benefits they received and are treated the same 

way as private funds in the 90/10 calculation. VA believes Veterans 

should not be aggressively recruited by institutions, principally because of financial motives, and that Federal and State statutes and 

VA’s oversight activities provide a strong monitoring in this area. 

Modifications to the 90/10 rule could, however, provide additional 

tools to assist in this area. However, such a change could cause 

some schools to exceed the 90 percent threshold and be at risk of 

losing eligibility to receive Federal student aid. To ensure that Veterans are not adversely affected, the manner in which such a 

change would be implemented is important. VA would welcome the 

opportunity to work collaboratively with the Department of Education and the Subcommittee as it consider changes in this area. 

VA is aware of concerns raised regarding for-profit institutions and 

fraudulent activities. 

Under existing VA statutes, for-profit institutions are held to the 

same standards and criteria as non-profit institutions for the purpose of approval for use of VA education benefits. VA believes veterans and their eligible dependents should be able to use and 

choose to use their education benefits at the academic institution— 

public, private, non-profit, or private for-profit—that best meets 

their specific needs and is approved by the State Approving Agency 

of jurisdiction. 

As of August 1, 2011, standard degree programs offered at accredited public and private not-for-profit schools are deemed approved for VA educational benefits without separate SAA approval 

per Public Law (PL) 111–377. In other cases, SAAs evaluate programs offered by each academic institution to determine whether 

their quality and offerings are similar to other programs offered in 

the State. If they are not, the SAA will not approve the program. 

This takes into account compliance with State and VA statutes, including those pertaining to misrepresentation or deceptive marketing. 

Additionally, Public Law 111–377 expanded VA’s authority to 

utilize SAAs for oversight of programs and institutions. VA will 

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8 

begin to use the SAAs for compliance reviews for this authority in 

fiscal year 2012. A primary focus of these SAA reviews will be to 

conduct compliance reviews and increased oversight for for-profit 

schools. It is important for vets and their eligible dependents to 

make informed decisions concerning their VA benefits. VA provides 

free consulting services and assists veterans in determining their 

aptitudes, interests, and abilities in locating an appropriate educational program. 

Mr. Chairman, this concludes my statement. We look forward to 

working with the Subcommittee to provide the very best support 

possible to our veterans and beneficiaries as they pursue their educational goals. I would be pleased to answer any questions you or 

Senator Brown may have. Thank you, sir. 

Senator CARPER. Not at all. Thank you very much for that testimony. Mr. Wilson, I understand that you are not here to testify, 

but you are here to respond to any questions? 

Mr. WILSON. That is correct and I apologize for any confusion. I 

will not be providing testimony. 

Senator CARPER. That is OK. We are glad that you are here. Mr. 

Wilson, just a real quick, little bio on you. I understand you are 

the Director of Education Service at the Department of Veterans 

Affairs. Is that correct? 

Mr. WILSON. That is correct, Mr. Chairman. 

Senator CARPER. And as Director there, I understand that you 

provide executive level oversight in development of policy, of planning, and integration of educational programs that are administered by the Veterans Benefit Administration. 

And there are approximately half a million veterans, 

servicemembers, and other dependents pursue educational opportunities annually under the programs that Mr. Wilson administers. 

And I think you have been at the VA for about, what, 20 years and 

worked all over, actually, in a number of places around the country. 

And also a Navy veteran and served 8 years, I am told, as an 

operational specialist. We thank you for that service and for being 

here today and your willingness to answer questions for us. 

Since Senator Brown was good enough to not give a statement 

and to go right to the witnesses, I am going to give him the opportunity, if he would like to, to just lead off with the questions. Senator Brown. 

Senator BROWN. Thank you, Mr. Chairman. So probably for both 

of you, I would think, as the lead agency on the GI Bill, it is the 

VA’s special responsibility to ensure that post-service military benefits are used effectively. Obviously we would not be here today if 

these programs were serving all of our servicemembers and veterans effectively as they should be. 

In previous hearings, and obviously today, we have had veterans 

groups, and we have some in our next panel, and they will highlight some of the concerns regarding the poor oversight and lack of 

counseling services, et cetera. 

In your opinion—I will start with you, Mr. Coy—what do think 

the VA could do better, No. 1? And how long would it take to implement the changes you would suggest? And then, what type of 

support do you need from us? 

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9 

Mr. COY. Thank you, Senator Brown. We take any of these allegations that our student vets are somehow being misrepresented or 

being charged inappropriately or any abuse that is there. I think 

one of the things that we are most proud of is, we have revamped 

our compliance and survey program for our State Approving Agencies. 

Keith has some very specific details on the length and breadth 

and scope of that program, but we look—you had asked what we 

can do and how long it would take. We would very much look forward to working with the Subcommittee, the Department of Education, Department of Defense (DOD) for their tuition assistance 

program to implement any of these changes that the Committee 

may deem appropriate. 

Senator BROWN. Mr. Wilson, do you have anything to add? 

Mr. WILSON. A few comments, yes. Thank you. We have had a 

long-standing relationship with our State Approving Agencies since 

1948, actually. It has been a very effective relationship. The State 

Approving Agencies, on many fronts, are essentially the boots on 

the ground when it comes to the GI Bill at the State level. 

As occurs over time, we would like more. We would like more 

flexibility, additional resources, et cetera. And we were able to 

achieve additional efficiencies and more flexibility in terms of how 

we can use those State Approving Agencies under Public Law 111– 

377. 

We are now able to use those State Approving Agencies for fullblown compliance surveys, much as we currently have been doing 

with our VA employees. And what that does is give us more resources to actually go into areas that we have concerns or want to 

provide additional oversight and take some good deep dives into 

these areas. 

Our goal, beginning fiscal year 2012, is to provide a compliance 

survey at every for-profit institution every year. We have completed 

a large part of the training with the State Approving Agencies to 

do that, and come October 1, they will begin doing those compliance surveys in conjunction with our own staff, and then begin 

doing their work on their own. 

Senator BROWN. According to some, and in Mr. Ryan Gallucci’s 

testimony, the VFW has found that many of the SAAs are undermanned and under-trained. In one State, there is only one employee to carry out this function. They do it as collateral duty, not 

as a primary mission. And other States only have a handful of 

staff. 

What I have heard from veteran students is that there seems to 

be a disconnect from the time that they actually apply and then get 

the funding, making sure the funding is properly credited, and they 

get the other benefits they are entitled to. 

Why does there seem to be kind of a disproportionate amount of 

oversight from one State to another and one system to another? 

How do you resolve that? How do you do it better? 

Mr. COY. I will let Keith elaborate, but our budget for the SAA 

contracts that we do every year is about $19 million and that is in 

statute. There is a formula that is used to allocate those funds 

across the States and territories. Keith is more than willing to talk 

H605-41331-79W7 with DISTILLER

10 

about how we go about doing that allocation. He is certainly the 

expert there. 

Mr. WILSON. The funding amount available for the SAAs is set 

by statute. Over the last several years, it has gone up from about 

$12 million to the current level of about $19 million. We have 

about 62 State Approving Agencies we contract with. Some States 

organizationally are split up separate so we will have more than 

one contract in some of the States. 

The allocation of that money is divided up by active institutions 

essentially within the State. So basically, the number of schools 

that have active GI Bill participants will govern the amount of 

funding that they receive under those benefits. 

If I could loop back and just touch on your comment about delays 

and benefits, et cetera, we are very proud of what we have been 

able to accomplish over the last couple of years in terms of standing up the Post-9/11 GI Bill. We are very current right now on 

processing claims. Largely processing of claims is unrelated to work 

in the SAA area. 

We are processing enrollments in about 10 days right now for the 

fall enrollment. We have received about 350,000 enrollments for 

students, about 320,000 of those are already paid. So, but of course, 

that is one step. In order to make sure that our veterans are succeeding, the first thing we focused on is the necessity to make sure 

they are in school, they are being paid dependably, accurately, 

timely. 

We believe they are there. We want to continue to increase our 

work on making sure that the outcomes, as a result of those enrollments, do occur. 

Senator BROWN. So if somebody actually has problems that 

maybe you are not aware of, what is the best way for the individual student, veteran, to deal with it? 

Mr. COY. Problems academically or problems from—— 

Senator BROWN. No, just the things we were talking about, the 

flow of the registration, the pay, the benefits, just implementation 

thereof. 

Mr. COY. There is a variety of different areas. We have an 800 

number that students can call. 

Senator BROWN. Do you have it handy? Maybe at some point you 

can get it and we can just announce it because some people watch 

this, do they not? 

Mr. WILSON. I would be happy to announce it. 

Senator BROWN. OK. 

Mr. WILSON. 1–888–GIBILL1. 

Senator BROWN. OK, good. 

Mr. WILSON. And individuals can also e-mail us directly from our 

Web site which is gibill.va.gov. 

Senator BROWN. Great. Well, I have another round, but I will 

just defer to you, Mr. Chairman. 

Senator CARPER. Before I ask my question, I am just going to try 

to make real clear what I am trying to do here, what I think we 

are trying to do here. We have a huge budget deficit, as we know, 

$1.3 trillion this year, huge increase—a decade ago we had a balanced budget and a surplus. And here we are with these huge deficits and deficits as far as the eye can see. 

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11 

And we know if want to be competitive with the rest of the 

world, which is getting tougher, they are different competitors 

these days. And it sort of like at the end of World War II or the 

end of the Vietnam War. But if we want to be competitive, we have 

to specialize, that is to say we have to out-educate, out-innovate, 

out-compete everybody else. 

And part of doing that is making sure we do a better job in research and development that can be commercialized and turned 

into products we can sell around the world. Part of that is making 

sure we have an infrastructure, not just roads, highways and 

bridges, but rails, port, water, sewer, all kinds of infrastructure including broadband. 

And the third is to make sure we have a workforce. Students 

coming out of our schools not just colleges and universities, but out 

of our high schools who can read, write, think, do math, familiar 

with technology. We have to do all those things. And we don’t have 

a lot of money to spare given the size of our budget deficit, so we 

want to get a better result, a better result for the same amount of 

money, and hopefully maybe a better result for less money in terms 

of our workforce preparedness. 

I think one of our next witnesses for our next panel, Ted 

Daywalt, who is the President of VetJobs, a fellow you know, stated in his testimony that veterans need to have better information 

available to them in order to make more informed decisions about 

which schools to attend. 

I think you may have mentioned in your testimony, Mr. Coy, 

that the Department of Veterans Affairs offers counseling and 

guidance on your Web site about the options available to veterans. 

Let me just ask you, any idea, is this somehow required reading 

for all veterans seeking to use their GI Bill benefits? And to your 

knowledge you have exit counseling that the Department of Defense requires military personnel to participate in while 

transitioning to veteran status. 

I remember when my squadron came home at the end of the 

Vietnam War to come back to California, and then when I separated in the middle part of 1973, as I am sure somebody, somebody 

said something to me about veterans benefits because I knew I was 

eligible for some financial aid through the GI Bill and I knew that 

we were eligible for like dental benefits of some kind for the first 

year or two. 

But I do not recall really a kind of structured debriefing or a 

structured briefing with materials that we should take with us and 

commit to memory. I do not know. Maybe it is different today. Give 

us some idea of how does it work today and the stuff that is on 

your Web site on counseling and guidance, obviously it is available 

to veterans. Do we have any idea if they actually look at it and understand it? 

Mr. COY. Yes, sir. We are very concerned about making sure that 

our veterans choose the right school. Keith and his organization 

send out letters at least twice a year, I believe, to veterans and 

they reference choosing the right school. In fact, Mr. Wilson here 

is the author of Choosing the Right School that is on the Web site 

and has received quite a bit of acclaim for doing just that. 

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With respect to sort of monitoring and watching students as they 

progress through, we do that through a number of different ways. 

Most certainly the schools’ certifying officers and officials have a 

feel for that. This past June we started having schools report to us 

graduations and success rates and students that are on academic 

probation. We have a program that we can get counseling as soon 

as we know a student is having any difficulties or problems, whether it be in payments, whether it be in academics, and we can offer 

them that counseling through some of our Chapter 36 counseling. 

In addition to that, we have started a pilot program at eight 

schools. We plan on expanding to another nine this coming year. 

That is called VetSuccess on Campus. In the program, we have put 

a full-time counselor on campus to provide any sort of counseling 

or help with respect to those vets that are on there. It is been very 

successful and very, very well-received at the schools and by our 

veteran students. 

Senator CARPER. So those are schools like brick-and-mortar 

schools as opposed to those that are available maybe over the 

Internet? 

Mr. COY. Yes, sir. There are eight pilot schools right now. 

Senator CARPER. How many schools in the whole universe of 

schools where GI’s can go? 

Mr. COY. For Post-9/11 Bill, the latest numbers I have seen is 

about 6,000 schools. Is that correct, Keith? 

Mr. WILSON. Yes. 

Senator CARPER. So in terms of the meaningfulness of 8 or 17, 

that is just a drop in the bucket, isn’t it? 

Mr. WILSON. Absolutely, yes, sir. And it is a pilot program and 

we are putting it out there and we are looking at ways to, in fact, 

expand that program across-the-board. 

Mr. COY. I guess finally to answer your other question directly, 

as you probably know, the President has called for a joint DOD and 

VA task force to take a look at the entire transition process and 

employment issues across the board. Both Keith and I have been 

asked to serve on that and, in fact, we left the task force meeting 

at an offsite to come here to testify. So there are a number of different things that are being worked right now. We are looking at 

a number of things in the future with respect to providing that sort 

of support to our vets on campus. 

Senator CARPER. Good. Mr. Wilson, do you want to add anything? 

Mr. WILSON. Just a couple points. We could not agree with you 

more concerning the veterans, servicemembers also, needing the 

right information to make decisions on schools. Our approach is 

early intervention and redundancy. We do direct mailings to individuals beginning one year into active service. 

We direct mail to every individual once they have been on active 

duty. We do that again at 2 years, we do that at the 6-month mark 

prior to graduation, and then we do that again at separation, in addition to providing them the specifics on how to choose schools, 

questions that they should ask during the transition assistance 

briefing. 

So we want to reach the individuals while they are still 

servicemembers because a lot of times, that is really when they are 

making the decisions on where they could potentially go to school. 

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13 

Just from a personal level, I have an interest in that. My son, 

Noah, is with the 82d Airborne. 

Senator CARPER. What is his name? 

Mr. WILSON. Noah Wilson. 

Senator CARPER. Noah? 

Mr. WILSON. Yes, sir. 

Senator CARPER. Like, Noah, I think it is starting to rain? 

Mr. WILSON. Absolutely, yes. He has heard that once or twice. 

The important thing, though, is reaching those individuals while 

they are on active duty because that is where they are forming 

their opinions on where they want to go to school. So we want to 

get that information to them early and often. 

Senator CARPER. Good, all right. Senator Brown. 

Senator BROWN. Thank you, Mr. Chairman. So I want to turn for 

a minute to the consumer education piece of what we are doing to 

ensure that veterans and servicemembers are, in fact, informed 

consumers. In your statement, you state that the VA is significantly expanding their engagement with students throughout their 

educational experiences, but I did not here any specific examples. 

What are you doing in terms of expanding the services and how 

you are doing it and what has the response from the students 

been? If you could just walk us through that, I will start with you, 

Mr. Coy. 

Mr. COY. Absolutely. We are very concerned about—— 

Senator BROWN. If somebody walks in, Hi, I just completed a 

tour of duty, I am eligible for benefits, what do you tell them on 

the way in? 

Mr. COY. In the transition phase or on campus? 

Senator BROWN. Transition and on campus. 

Mr. COY. In the transition phase, as I indicated earlier, Senator, 

we are in the process of editing the entire transition process. 

Senator BROWN. What happens now, though? Because during the 

during the transition you are doing something. 

Mr. COY. Right now during the transition, we do a 4-hour presentation for departing servicemembers with respect to all of their 

benefits that they are eligible for within the VA. And so, that is 

a 4-hour presentation. We have another 2 hours of what we call 

DTAP, or transition assistance, for our disabled veterans so that 

adds on another 2 hours. And it lays out all of their educational 

benefits for each of the departing servicemembers. 

Senator BROWN. Do they get a handout? Do they get a breakdown, a physical breakdown or is this just an in-class presentation, 

they have to take notes? 

Mr. COY. Well, they get a copy of the presentation. There are a 

number of brochures that are given. Keith, can you be specific 

about the exact brochures? 

Senator BROWN. Well, let me just kind of tell you what I am getting at. So I am in the Guard, and we have a pretty good educational program in Massachusetts for State schools and the like. 

And when our soldiers come home from doing their duty, they actually go through an out-processing or a demobilization where it is 

A to Z, mental health, physical, financial, et cetera, educational 

benefits and the like. 

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14 

We not only give them that type of presentation, but we give 

them a packet with the actual hardcore numbers and a breakdown, 

because with all due respect, when the soldier has done his duty, 

his or her duty, they just want to get home. They want to take off 

the uniform, they want to have some relaxation time, however they 

do that, and they are not focused. 

Then all of a sudden it is coming August and they say, Oh, my 

gosh, honey, you have to go to school, you have these great opportunities. And like, Oh, I got a nice briefing, but I do not remember 

a thing. So is there a packet, a presentation that is professionally 

done and easy to understand that they get? 

Mr. COY. I would suggest that we are very much interested in 

making sure that our vets that are coming back have that information. With respect to the specific packet of information, there is a 

number of different brochures, as well as on the Web site. But in 

terms of a specific package that we hand out, I am not so sure that 

we provide that. 

Senator BROWN. Yes, I would be curious to see whether, in fact, 

a handout—because I think it is important to know. I mean, the 

Web site is great, certainly, but how do they even ultimately know 

to go to the Web site to get that information? So I have noticed 

that there seems to be a little bit of a disconnect. So once they get 

on campus, then what? 

Mr. COY. Once they get on campus, it depends on which campus 

they are at, certainly. 

Senator BROWN. Well, the average campus. 

Mr. COY. The average campus does not have a VetSuccess oncampus counselor. They have the school certifying official and we 

have—and the school certifying official is required to sort of keep 

track of those students. There is also counseling benefits that students are eligible for and we get them in touch with counselors in 

one of the 57 regional offices the VA has, as well as other counselors that are out-stationed across the board. 

Keith, do you want to elaborate a little bit more? 

Mr. WILSON. Just to amplify on a couple points. We mentioned 

earlier the redundancy in the information we provide veterans. We 

agree, when they are ready to separate, they want to go home. 

That is why we try to reach out earlier during the lifetime of their 

career to provide them GI Bill information earlier. 

Just to touch on a couple of the things that Mr. Coy mentioned 

earlier in his testimony, what we have done with the schools is create more of a proactive relationship by having them provide us information that we previously did not have. For instance, we provide 

information on how to apply for benefits, et cetera, to veterans. 

What we began requiring schools to report to us this fall are situations where the veteran may be under some type of challenge. 

Academically, they do not seem to be succeeding. Schools are required now to report to us when a student is placed on academic 

probation or when they are terminated for academic reasons. 

What we do with that information is circle back to them once 

again and make them aware of the Chapter 36 counseling that Mr. 

Coy talked about earlier. We have the resources to sit down with 

these veterans, if they choose, and help them determine aptitudes, 

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15 

interests, and abilities, and perhaps recommendations on some 

type of programs that fit. 

So if a person chooses a school or a program, they are struggling, 

we want to try to redirect them into a program that may be a better fit so they can succeed. 

Senator BROWN. And in extension of what the Chairman said 

about trying to get the best value for our dollar and find out how 

we can do it better, some of the figures about college loan debt and 

default rates are pretty alarming. What kind of counseling is the 

VA doing with veterans about the financial implications of their 

educational choices, specifically about the amount of in-kind debt 

that they are taking on? Either one of you. 

Mr. WILSON. For debt, I am not aware of anything we specifically 

refer to concerning debt. 

Senator BROWN. The educational choices you just noted, do you 

have the post—when they are at a point where they are—do you 

have a pre-enrollment that you, say, sit down with that soldier and 

say—that veteran, and say, Hey, you really cannot be a cook, but 

boy, you would be a great engineer? I mean, do you have that? 

Mr. WILSON. It is not a requirement when one goes through the 

process. It is a mechanism that is made available to the individuals. Last year we had about 12,000 individuals that we provided 

this type of what we refer to as Chapter 36 counseling. 

Senator BROWN. I am all set, Mr. Chairman. Thanks. 

Senator CARPER. If I could, I want to go back to one of my earlier 

questions where we were talking about the guidance or support 

that is offered to GIs, particularly those that are coming home to 

return to civilian life. Has any of this guidance or support, is it required for all vets using the GI Bill? Do they have to participate? 

Do they have to attend? Do they have to acknowledge that they 

have gone through certain transitioning before they are allowed to 

participate in the program? 

Mr. COY. I will answer that, I guess, a couple different ways. The 

information that Mr. Wilson talked about in terms of sending the 

information to those servicemembers while they are still on active 

duty, so all of them get that information. 

With respect to the Transition Assistance Program, which is the 

counseling session that is sponsored by the Department of Labor 

(DOL), it is a 21⁄2 to 3-day session with respect to the entire gamut 

of servicemembers getting out. That is currently not really a mandatory attendance required. The Marines make it mandatory, but 

the rest of the services do not make it mandatory. 

Senator CARPER. Well, why do you suppose the Marines do and 

the others do not? 

Mr. COY. That would be a subjective judgment, but I think that 

is how Marines are structured. They want all their troops to go to 

the Transition Assistance Program and they make it so. 

Senator CARPER. And another part of what we are doing here in 

this Subcommittee is trying to make sure the Department of Defense actually is able to produce auditable and audited financials, 

and they do not and they do not even expect to be auditable until 

like maybe 2017. 

We always like to say, what you cannot measure, you cannot 

manage. So we are working on it real hard. Secretary Panetta is 

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providing great leadership there to put a fire under their people. 

The Marines are actually trying to be first on the beach in that regard as well, and they are trying to lead the way and show the 

other services how it is done. I hope they are going to be successful 

because we need that. 

I am very much encouraged to hear what you say they are doing, 

and maybe we can look to them to provide a model to the Army, 

the Air Force, and the rest of their Navy brothers and sisters. A 

question for Mr. Coy. Maybe for Mr. Wilson. I am going to come 

back to the issue of the State Approving Agencies. 

As I understand it, these agencies for each State are the only entity that make firm decisions about whether a veteran can use GI 

Bill benefits to pay for their tuition for specific school programs, 

and as I understand, the State Approving Agencies are formed and 

staffed by State governments, not by the Federal Government, by 

State governments. 

Any idea how many programs currently are approved by a State 

Approving Agency, but are not part of an accredited institution? 

Any idea there? 

Mr. COY. I do not have that information in front of me. Senator 

Carper. I am going to just ask you to answer that for the record, 

if you will. How many programs currently are approved by State 

Approving Agencies, but are not part of accredited institutions, if 

you would. You may not be able to answer this one either, but I 

will ask it again. How do State Approving Agencies’ certification requirements change from State to State? Can you just help me with 

that? 

Mr. COY. We have recently put out a guide for State approving 

officials. We also have a VA State Approving Agencies joint peer 

review process that we meet with them once a year to provide that 

consistency. Keith, do you want to give a little bit more meat on 

that? 

Mr. WILSON. The compliance surveys and the approval criteria 

that State Approving Agencies apply are actually codified in Federal statute. So in terms of the things that they are looking at from 

a Federal perspective, it is exactly the same in every State. Now, 

that would be supplemented by anything the States individually 

would have codified within State statutes, which the State Approving Agencies, of course, also could enforce. 

Senator CARPER. And do you have a situation where some of 

these State Approving Agencies are probably doing a pretty good 

job, well-staffed, people who know what they are doing that are religiously executing their responsibilities and some of them are not? 

Do we have any idea if that is case? 

Mr. WILSON. We do. I would say the vast majority of State Approving Agencies are very well-trained, highly motivated individuals that do a superb job. As with any group of individuals, we 

have those that we really consider our go-to people and people we 

work with to improve their performance. 

We conduct an annual performance review on every one of them. 

Senator CARPER. This is a question for both of you, if I could. If 

I am a veteran coming home using the Post-9/11 GI Bill and I have 

a complaint about the school, with whom do I address this concern? 

Is it my regional VA office? Is it the State Approving Agency? How 

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17 

does the VA track these complaints and how do you share them 

with the Department of Defense and the Department of Education? 

Any idea of how many complaints you have shared with the DOD 

and the Department of Ed since the creation of the Post-9/11 Bill? 

Can you just help me with that outline of questioning, please? 

Mr. WILSON. Sure. If students have concerns about their school, 

there are several ways they can reach us. No. 1, they can call us 

on our 888–GIBILL1 number. No. 2, they can e-mail us. No. 3, 

when we go out and do compliance surveys at these schools, the 

schools are required to tell the students, The VA is going to be 

there, and they can meet face to face with our compliance survey 

people that go out to the schools. 

Additionally, beginning in fiscal year 12 our customer satisfaction survey that goes out to every one of our 800,000 students has 

had additional information in it where they report to us specific responses concerning their experience with their school. 

Previously, that survey was more on how well we were meeting 

their needs in terms of timely payment. We have expanded that to 

begin diving down into their experiences with their school. 

Senator CARPER. Thank you for that. Senator Harkin and I were 

joined at a press conference earlier this morning on the subject 

that relates very much to what we are looking at today. A fellow 

named John Elliott, an Army veteran, an Iraq veteran, he told us 

about applying for benefits, in this case, at a proprietary school. 

It ended up the school claimed that they were signed up with the 

VA and that he could get his education through the school using 

the GI Bill. It turned out to be not true. And then they ultimately 

sent him a bill for $9,600 for tuition to pay back for the benefits. 

But yet, the school said clearly that, ‘‘We work in conjunction with 

the GI Bill, we work with VA.’’ However it was not true, and they 

ended up dunning him $9,600. The night before this morning’s 

press conference, he got word from the school, proprietary school, 

that his $9,600 in debt was forgiven. 

Well, let me just ask you and sort of following onto that, are 

these State Approving Agencies that we are talking about in charge 

of cracking down on schools that incorrectly claim, like the one I 

just described, that incorrectly claim that they are eligible to accept 

veterans assistance benefits? Whose job is to crack down on an institution like that, whether they are proprietary, public, or private? 

Mr. WILSON. Yes, Mr. Chairman. Ultimately, it is the VA’s responsibility. The State Approving Agencies act as our agents in this 

area. They do have the enforcement authority by law in this area, 

but they are acting as our agent, so it is a cooperative relationship. 

Specifically on the individual you are referring to, I do know about 

the specifics of that case. I am a little bit reluctant to talk about 

it obviously publicly, but I would be happy to talk a little bit oneon-one. There are a little bit more issues involved. 

Senator CARPER. Good. 

Mr. WILSON. But I would be happy to talk to you about that. 

Senator CARPER. All right, appreciate that. 

Mr. WILSON. But ultimately, it is the State Approving Agency’s 

authority to pull approval when those situations do occur. They do 

exercise that authority. We have had specifically one situation reH605-41331-79W7 with DISTILLER

18 

cently where we have pulled approval. That approval is still under 

suspense, so we do exercise that authority. 

Senator CARPER. All right. Any idea—and you may have to answer this for the record since the implementation of the Post-9/11 

GI Bill, how many schools have been barred from receiving GI Bill 

payments? And what was the nature, just in general, what was the 

nature of these violations that may have led to these actions? 

Mr. COY. We were just talking. I think this fiscal year we have 

one school that we barred from getting GI Bill payments. 

Senator CARPER. And tell me again how many schools are there 

that are eligible for GI Bill reimbursement, how many? 

Mr. COY. I think we mentioned about 6,000. 

Senator CARPER. So out of 6,000, one has been barred? 

Mr. WILSON. If I could amplify a little bit? 

Senator CARPER. Please. 

Mr. WILSON. We are aware of specifically one case this fiscal 

year. One of the things that we have recognized is that nationally 

we didn’t do a good job of collecting information. 

Senator CARPER. So you did do a good job or did not? 

Mr. WILSON. What we did—— 

Senator CARPER. No, no, I just misunderstood what you said. 

Mr. WILSON. I’m sorry. 

Senator CARPER. I could not tell if you said we did a good job or 

we did not do a good job nationally. 

Mr. WILSON. One thing that we did not do a good job nationally 

on is collecting information at the national level specifically on the 

compliance, et cetera. Up until this fiscal year, that information 

was stored, collected independently within each of the States on 

however they did it within their State. So it made it difficult for 

us to respond to those type of questions from a national perspective, from a programmatic perspective. 

We do, beginning this fiscal year 2011, we started collecting that 

information nationally and the one school that we mentioned is the 

one that we are specifically aware of in fiscal year 2011. 

Senator CARPER. Well, I would just urge you to look harder. Let 

us talk for a little bit before we wrap up and move to our second 

panel about the incentives for veteran recruitment. And as I mentioned earlier, I believe our higher education incentives are misaligned. Too often we incentivize schools to recruit high quantities 

of students without necessarily incentivizing those same schools to 

provide a high quality of education. 

I think that is especially true with our veterans, and I would like 

to refer to something that Holly Petraeus said in her statement 

that you also discussed, I think, when you were talking about the 

90/10 rule. There is an op-ed that she wrote in today’s New York 

Times. And she is the wife of a veteran, David Petraeus, and the 

mother of a veteran, Stephen. But Ms. Petraeus stated that, under 

the 90/10 rule, a for-profit school has to make sure that it obtains 

at least 10 percent of its overall revenue from a source other than 

the Department of Education funds. And therefore, no more than 

90 percent of a school’s revenues contracting can come from Federal student aid, in this case through the Department of Education. 

However, because revenues from the Post-9/11 GI Bill or the 

DOD Tuition Assistance Program (TAP), which is assistance that 

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19 

accrues to active duty personnel, military personnel, those are not 

counted as Federal student aid. And they are treated as other revenues, really equivalent to private dollars. 

I am going to paraphrase what Ms. Petraeus stated, but something to this effect. For every servicemember that a for-profit college recruits who will be using DOD Tuition Assistance or GI Bill 

funds, the for-profit college can then go out and enroll nine other 

students who are using Federal student aid from the Department 

of Education. This has given some for-profit colleges an incentive 

to see servicemembers as nothing more than dollar signs in uniform, and they use some very unscrupulous marketing techniques 

to draw them in. 

My next question would be, do you agree with this statement by 

Mrs. Petraeus about the negative incentives that we have created 

under the current 90/10 rule? 

Mr. COY. Thank you. We certainly recognize that an argument 

could be made to include the GI Bill and Tuition Assistance Programs under the 90 percent rule, and we would be happy to work 

most certainly with the Subcommittee. I think our most significant 

concern would be if there was a policy change, a change of this nature, how it would be implemented and what effects it may or may 

not have on our veterans. 

Short of that, we would be absolutely delighted to work with the 

Subcommittee, Department of Education, and Department of Defense to implement such a policy if that is what was decided upon. 

Senator CARPER. Mr. Wilson, do you want to add anything to 

that? 

Mr. WILSON. I think that is a very good summary. We are actively engaged with DOD and Department of Education talking 

specifically about this. 

Senator CARPER. What incentives does the Department, your Department, the Department of Veterans Affairs, have in place to motivate schools not just to recruit veterans, but to provide them with 

a quality education that leads to good-paying jobs? 

Mr. WILSON. I am having a little bit of a difficult time getting 

my head around that because there are so many things at work 

here. Ultimately, we consider that a school should be honored to be 

able to train these individuals. These are our best and brightest in 

the country. I think everybody recognizes that. They deserve the 

best education this country has to offer. 

Our experience has been that most institutions have the same 

philosophy on that. We do have statutes in place that hold all 

schools to the same level of accountability statutorily. 

One of the things that we are looking at, as Mr. Coy talked about 

in the task force, is going beyond. One of the things that we are 

specifically looking at is how do we identify best practices, where 

are the schools, what are they doing to maximize the veterans’ experience on campus and doing a good job of handing them off to 

become employable individuals who do become employed. That is 

core to what we are talking about in this task force. 

Senator CARPER. I think it is important for us to identify best 

practices. One of the things we try to do on this Subcommittee, as 

Senator Brown knows, we try to identify best practices. We try to 

put a spotlight on best practices in the Federal Government from 

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A to Z. And we also try to put a spotlight on worst practices, and 

in part to use positive reinforcement to encourage worst practice to 

become better practices and maybe ultimately best practices. 

In closing my questioning here, I would just say it again. Our 

country faces huge budget deficits. We are not sure how we are 

going to get out of it. I think at the end of the day, it has to be 

a combination of cutting spending, a combination of raising some 

revenues, a combination of growing the heck out of the economy, 

in combination of getting better results for less money in every 

nook and cranny in this government, and that includes in these 

programs. 

It includes to make sure that we are getting our money’s worth 

out of Pell grants and out of student loans, out of GI Bill, out of 

Tuition Assistance. We are spending money here and not getting 

a very good result, in too many cases where we do not have the 

money to spend in the first place. We simply borrow it from other 

countries, borrow it overseas in too many cases. We are wasting it. 

We are going to hear from some schools here in a few minutes 

in this second panel where they are, in one case, a for-profit, but 

they both work all over the country, in fact, around the world providing educational opportunities who actually get a pretty good result. And what we want to do is incentivize a lot more of that. 

This needs to be, as we used to say in the Navy, all hands on 

deck. I know I can do a better job here, so can Senator Brown, so 

can the Members of our Subcommittee making sure that the behavior that is untoward, unethical, that kind of behavior stops. And 

that we need everybody in the VA, particularly for those that are 

working with you that are doing the Lord’s work on this front in 

trying to make sure that we get on the right track. I thank you for 

that. 

But we need the folks that are on active duty, the people that 

are doing the transitioning, making sure that the people, when 

they are leaving the Guard or coming home, the Army, Navy, Air 

Force, Marines, that they are getting the kind of transitioning and 

turn over that they needed to make wise decisions. 

And at the end of the day, there is a moral imperative here. It 

is not just an economic imperative, like we do not have the money 

to pay for this and the taxpayers are getting screwed. There is a 

moral imperative here because we have been saying to people who 

have been willing to lay down their lives, if they have to, and if 

they are asked to, that when you come home, you are going to get 

a GI Bill that Jim Webb and others worked really hard to create 

that is not worth the paper that it is written on, and that is just 

morally wrong and we are going to change that. Senator Brown. 

Senator BROWN. Mr. Chairman, one of the reasons I have enjoyed being on this Subcommittee is to try to identify a lot of the 

things that are actually now being worked on by the Administration and by both parties to try to get more value out of our dollars. 

So I appreciate you bringing this forward and I look forward to the 

next hearing as well. 

Senator CARPER. Gentlemen, give us a closing statement, please, 

just a closing comment, both of you. 

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21 

Mr. COY. My only closing comment, Mr. Chairman, is aye, aye, 

we hear you. It is an honor to testify and it has been an honor to 

work at the VA for those wonderful vets that you just described. 

Senator CARPER. A closing thought, Mr. Wilson. 

Mr. WILSON. I think it is clear we have the same desire. We want 

the veterans to get the best education they can and we look forward to working with the Subcommittee to achieve those goals. 

Senator CARPER. Good, thank you both. And we welcome our 

next panel of witnesses and would ask, as Mr. Coy and Mr. Wilson 

weight anchor, that our third panel actually come to the table, 

please. I am going to begin giving a brief introduction of them. 

Ted Daywalt, the first witness, President and CEO of VetJobs. 

VetJobs is the leading military jobs board on the Internet. It connects veterans transitioning from the military or completing their 

post-military education with employers across the country. Mr. 

Daywalt has worked with veterans of all backgrounds and has 

helped them to find good paying jobs in successful careers. 

In addition to his work with VetJobs, Mr. Daywalt served on active duty in the U.S. Navy. There seems to be a recurring theme 

here, Senator Brown. We have to get some Army guys in here. 

Mr. WILSON. I object. We need to have more Army guys, Mr. 

Chairman. 

Senator CARPER. I promise. 

Mr. WILSON. Pulling rank on me here. 

Senator CARPER. Mr. Daywalt served on active duty in the Navy 

for 7 years before transitioning to the Naval Reserve Intelligence 

Program in 1978, and he retired from the U.S. Navy with 28 years 

of service at the rank of captain. Mr. Daywalt also sits on the 

board of the College Educators for Veterans in Higher Education, 

has previously sat on the board of Emory University and the International Association of Employment Web sites (IAEWS) and testified before the President’s Commission on the National Guard and 

Reserves. Thank you for your service as a member of the Navy and 

for the work that you are doing as a citizen. 

Ryan Gallucci is the Deputy Director of the National Legislative 

Service for the Veterans of Foreign Wars. With 2.1 million members nationwide, the VFW is the largest veterans service organization for combat veterans in our country. I am honored to be a life 

member, and I suspect others on our Subcommittee are as well. 

Mr. Gallucci served as the education expert for the Veterans of 

Foreign Wars and is responsible for carrying out the organization’s 

efforts to help transitioning servicemembers and veterans pursue 

higher education and viable career paths following their military 

service. Here we go. In addition, Mr. Gallucci served 8 years in the 

U.S. Army Reserve leaving the military in 2007 as a Civil Affairs 

sergeant. 

He was awarded the Meritorious Bronze Star, the Army Commendation Medal, and Combat Action Badge for his actions while 

deployed to Iraq in 2003 and 2004. We thank you especially for 

that service. 

Upon returning statewide, Mr. Gallucci earned a bachelor’s degree in journalism and political science from the University of 

Rhode Island using his GI Bill benefits. Mr. Gallucci, again, we 

thank you for being here today and for your service. 

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Next is Dr. Russell Kitchner and our third witness, the Vice 

President for Government Affairs, Regulatory Affairs for the American Public University System (APUS). The American Public University System is the parent organization of two for-profit colleges, 

the American Public University (APU) and the American Military 

University (AMU). 

The American Public University System serves more than 83,000 

students with 64 percent of its student population currently serving in the military. Dr. Kitchner is joining us today because by all 

accounts, American Military University is a for-profit school that 

does a good job of serving the active duty military personnel of our 

country. Dr. Kitchner is here today to discuss some of the keys we 

discussed, describe that his school has adopted on educating our 

military. 

Dr. Kitchner, we have talked a little bit about the bad actors in 

the for-profit education industry, and frankly, in the non-profit and 

private non-profits, too. But I want to thank you for agreeing to 

come today and share with us a different perspective, from a 

school’s perspective, a school that appears to be doing it right. 

And finally Dr. Greg Von Lehmen. Our last witness, but certainly not our least. Greg Von Lehmen, Provost, Chief Academic 

Officer of the University of Maryland University College (UMUC). 

The University of Maryland University College is a non-profit public college and one of 11 accredited degree-granting institutions in 

the University of Maryland system offering courses on 130 military 

installations across the globe and serving over 90,000 students. 

The University of Maryland University College is one of the largest distance learning institutions in the world. Prior to becoming 

Provost, Dr. Von Lehmen worked for the University of Maryland 

University College’s Asia office serving as the Area Development 

for Japan, I believe, for about 4 years and also spent time in a 

classroom teaching constitutional administrative law, political philosophy, political administration at Georgia, Southwestern State 

University and Troy University. 

Dr. Von Lehmen is here today to talk about the University of 

Maryland University College service and how the college serves its 

military and veterans population and the initiatives they have undertaken to improve the education provided to these students. Doctor Von Lehmen, great to see you and thank you for coming before 

us and for your testimony. 

Let me just say before we all start, when you think about it, Senator Brown and I have spent a fair amount of our lives and years 

in uniform. I remember in my 5 years of active duty, 13, I think 

permanent duty station changes and just a whole lot more of temporary active duty, we will go here or there, all over Southeast Asia 

and other parts of the world. And it is really hard to get an education when you are doing that. 

And the idea of being able to do distance learning, it is a great 

idea, particularly for folks in the military, if it is done right. And 

at the end of the day, we want to make sure it is done right, not 

just in a couple States in this country. We want to make sure it 

is done right all over the world for economic reasons and for moral 

reasons. Thank you. 

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1The prepared statement of Mr. Daywalt appears in the appendix on page 56. 

Mr. Daywalt, your whole testimony will be made part of the 

record. Please summarize and proceed as you wish. Thank you. 

TESTIMONY OF TED DAYWALT,1 PRESIDENT, VETJOBS 

Mr. DAYWALT. Thank you, sir. Good afternoon, Chairman, Ranking Member Brown, staff of the Subcommittee. Let me first thank 

you for the opportunity to come before the Subcommittee today to 

share with you information that is relevant to the Subcommittee’s 

discussions on improving veterans education outcomes. It is an 

honor to be here. 

VetJobs has a unique vantage point on these discussions just by 

the nature of our business. VetJobs deals with veterans and their 

family members on a daily basis who are pursuing employment, 

but also the education necessary to obtain meaningful employment. 

As I mentioned in my written testimony, veteran education prospects have improved greatly with the new Post-9/11 GI Bill, but 

when one looks at the evidence, the current Post-9/11 GI Bill has 

truly been usurped by predatory for-profit schools. Note I use the 

term predatory for-profit schools as not all for-profit schools have 

engaged in less than ethical behavior. 

I would not put schools like the University of Phoenix and American Military University in the same category as Kaplan and Education Management Corporation. You may seen the New York 

Times story that Education Management is being sued by the Department of Justice (DOJ) in four States for $11 billion of fraud. 

The actions and behaviors of these predatory for-profit schools 

like Kaplan and Education Management need to be stopped. I first 

became aware of the issue while working with the veterans who 

thought they had earned the credible associate or bachelor degree 

only to learn that their degree was worthless and they had no 

chance to recover their now lost GI Bill. 

For example, Stephen Kimball of McComb, Illinois had obtained 

a bachelor’s in business administration from the University Management in Technology while he was on active duty. When he left 

service, he applied to many graduate schools but was rejected because his degree was not recognized as a legitimate degree. As Stephen told me, in order to go to graduate school, he needs another 

bachelor’s degree, which could take years since he no longer has his 

GI Bill. Kimball’s experience is unfortunately typical of many veterans who have been deceived by the predatory for-profit schools. 

Besides the deceptive practices used by the predatory for-profit 

schools, I learned that the fees charge by the predatory for-profit 

schools are outrageous. A bachelor’s degree from the University of 

Florida costs $24,458, but a bachelor’s degree from the predatory 

for-profit school Everest College in Florida costs $81,680. And the 

predatory for-profit schools degree are not recognized by the traditional brick and mortar schools. 

The students who attend these schools—— 

Senator CARPER. I am sorry. Would you just say that again? 

Mr. DAYWALT. You can get a bachelor’s degree from the University of Florida as an in-state student for $25,000. It is actually 

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$24,458. The Everest College which is based down in Florida, your 

bachelor’s degree would be $81,680. 

Senator CARPER. OK, thank you. 

Mr. DAYWALT. I could have put both my kids through Emory for 

that. 

The students who attend these schools are wasting their GI Bill 

benefits due to not understanding the system and not receiving 

guidance from their command educational counselors. And many of 

the veterans who are snarled in this quagmire are aggressively encouraged to take on more debt by the predatory for-profit schools. 

This ultimately leads to many veterans and their spouses defaulting on their college notes. 

Since over 60 percent of companies now run credit checks on prospective employees, it becomes very hard for any of these veterans 

and their spouses to be able to obtain employment. And that is why 

VetJobs involves itself in this issue. The predatory for-profit 

schools are hindering our veterans and their spouses from being 

able to obtain gainful employment. I have also learned of predatory 

for-profit schools that target military spouses on bases, setting up 

a recruiting table at the post exchanges and commissioners. I have 

been told they have admitted spouses who did not have a high 

school diploma or an acceptable SAT. 

But what really bothers me, Chairman, is that after last year’s 

GAO undercover investigation that found 15 predatory for-profit 

schools had made deceptive or otherwise questionable statements 

to GAO’s undercover applicants, and four schools actually encouraged personnel to falsify their financial aid forms to qualify for 

Federal aid, the VA and DOD did nothing to decertify the schools 

or ban them from receiving GI Bill or Tuition Assistance monies. 

VA continues to allow these predatory for-profit schools to enroll 

active duty, veterans, and spouses. These predatory for-profit 

schools continue today to target veterans and their spouses. There 

obviously is no effective oversight of the educational programs at 

DOD and VA! 

As a businessman and a retired senior officer and a taxpayer, I 

have to ask, how does this situation be allowed to persist, and more 

importantly, why? To be fair, yesterday there was a report in the 

Chronicle of Higher Education that DOD is stepping up its oversight of online learning amid growing congressional scrutiny of its 

tuition benefit program. But I think it is a shame that it took congressional and press pressure to get DOD to do its job. 

It is obvious to me that many predatory for-profit schools see 

military students as dollar signs in uniforms. The actions of the 

predatory for-profit schools need to be stopped. Veterans, the very 

people who have defended our country and protected our Constitutional Republic and given us the free market society that we in 

business so dearly enjoy, deserve better treatment. 

In conclusion, I now want to point out that had DOD and VA 

provided the proper oversight, we would not be here today, and veterans and their family members would not have been encountering 

they myriad of problems discussed above. Any solution considered 

by this Subcommittee and Congress to the above problems must include a way to ensure DOD and VA are held accountable. Thank 

you for your time, sir. 

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1The prepared statement of Mr. Gallucci appears in the appendix on page 67. 

Senator CARPER. You bet. And before you start, Mr. Gallucci, 

thanks for that testimony, very much. Some of you are familiar 

with the Gainful Employment Rule that the Department of Education has worked on, tried to update and to put in place, and I 

know we tend to blame in some cases the VA, DOD or whatever. 

They have been—their efforts to make the meaningful—Gainful 

Employment Rule meaningful and more rigorous have been, as you 

may know, not supported, not endorsed, not welcomed here in our 

Legislative Branch. There have been too many instances, especially 

I think in the House, strongly opposed. 

So there is plenty of blame to go around, that none of us is without blame. All of us have to be part of the solution, and my hope 

is that following today’s hearing, we will be more inspired to do 

that. 

Mr. Gallucci, thank you. 

TESTIMONY OF RYAN GALLUCCI,1 DEPUTY DIRECTOR, NATIONAL LEGISLATIVE SERVICE, VETERANS OF FOREIGN 

WARS OF THE UNITED STATES 

Mr. GALLUCCI. Thank you. Chairman Carper, Ranking Member 

Brown, and Members of the Subcommittee staff. On behalf of more 

than 2 million members of the Veterans of Foreign Wars and our 

auxiliaries, the VFW would like to thank this Committee for our 

opportunity to present our views on this critical issue. 

During tough economic times, military and veterans’ education 

benefits provide a critical tool in ensuring that our Nation’s heroes 

can compete in a cut-throat job market. Unfortunately, certain 

schools, particularly predatory for-profit, have chosen to prey on 

those eligible for military and veterans education benefits, failing 

to deliver a quality education. 

When schools prey on veterans, they quite literally steal their 

benefits. For example, a veteran may enroll in a predatory school 

using up to 2 years of their GI Bill. At this point, the veteran realizes that the program is worthless, withdraws, and seeks education 

elsewhere. Unfortunately, credits from the predatory school do not 

count. The veteran must start over. With 4 years of school ahead, 

but only 2 years of benefits to pay for it, the veteran must now pay 

out-of-pocket, wasting time and taxpayer dollars, while the predatory school walks away with cash to find their next victim. 

We are only 2 years into the new GI Bill, so the VFW believes 

that we have not yet seen the worst of this phenomenon. Some say 

that this is just the free market at work and that the government 

should stay out of this fight since only quality for-profits will survive. The VFW disagrees since both quality and the predatory 

schools have been shown to profit off government benefits regardless of the outcomes for student vets. 

The VFW equates GI Bill funds to Federal contracts since both 

are paid for by the taxpayer which is why outcomes are paramount. 

As an example, when the military contracted to build a new hospital at Fort Belvoir, a for-profit company earned a healthy payday 

from the taxpayers as a result of the project. However, at Fort 

Belvoir a new fully functional hospital is serving soldiers. 

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Similarly, when students use the GI Bill, the VFW expects 

schools to be able to deliver degrees or certificates with which veterans can find jobs. If the school’s business model ensures that veterans cannot receive such credentials, the school should not receive 

further Federal funding. Two rules that attempt to address the free 

market issue are VA’s 85/15 rule and is companion 90/10 rule in 

the Higher Education Act, which my written remarks explain in 

detail. 

These rules set government funding caps for schools at 90 and 

85 percent respectively, but operate independently of each other. 

90/10 includes only higher education funds, while 85/15 only includes VA and military funds. To the VFW, this creates a perfect 

storm through which predatory schools can master a complex cycle 

of compliance. 

Should they approach the 90 threshold, aggressively targeting 

military students will ensure compliance, yet revenue still comes 

entirely from Federal sources. The VFW believes that predatory 

schools recognize that consumers will not invest in their product so 

they look for government funds to insure solvency. 

To protect military and veterans education benefits, the VFW 

would recommend changing these rules to ensure that all taxpayerfunded programs fall under a single umbrella, as they were intended to do, creating an incentive for schools to deliver a product 

that can survive at least some free-market scrutiny. 

As I mentioned before, VFW’s primary concern is student outcomes. To some, this means graduation rates. The VFW would not 

recommend legislating graduation or default rate thresholds to improve outcomes. Rather, the VFW believes that the Department of 

Education and VA must insist on transparency for institutions to 

receive taxpayer dollars, providing incentives for schools to do better. 

The VFW makes several recommendations on how to improve 

transparency in our written remarks with the help of some for-profits who have chosen to do business the right way. Most notably, we 

recommend that VA implement specific Memorandums of Understanding (MOU) for schools to be eligible for funding, building on 

the Department of Defense’s model, and ensuring that student veterans have all the information up front to make an informed decision. 

Unfortunately, the approval process for veterans and academic 

programs create two more hurdles for those seeking to use GI Bill. 

First, VA solely verifies eligibility for veterans based on military 

service. Today veterans are allowed to enroll in programs for which 

they never satisfied prerequisites, only to rack up bills that VA 

cannot pay. Given the new pay models for the Post-9/11 GI Bill, the 

VFW believes that VA could also play a role in verifying a veteran’s 

eligibility to enroll in a program. 

Second, many State Approving Agencies tasked with ensuring 

education program compliance are understaffed or inadequately 

trained. For example, the agent in Rhode Island took on her role 

as a collateral duty. This is not an isolated incident, with more 

than 16 States facing similar circumstances and agencies literally 

screaming for more resources. Approving agencies are the first line 

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1The prepared statement of Dr. Kitchner appears in the appendix on page 72. 

of defense against predatory schools and need the right tools to do 

their jobs. 

In recent months, discussions over fiscal responsibility have us 

concerned about the continued viability of the new GI Bill should 

veterans not receive the educational opportunities they were promised. Our veterans have earned these benefits and it is our duty to 

ensure that predatory companies cannot exploit them. 

The VFW looks forward to working with this Subcommittee and 

the education community on developing solutions to better serve 

our veterans. Mr. Chairman, this concludes my remarks and I 

would be happy to answer any questions you may have. 

Senator CARPER. Very good testimony, thank you, Mr. Gallucci. 

Thanks a lot. Dr. Kitchner, please proceed. 

TESTIMONY OF RUSSELL S. KITCHNER,1 PH.D, VICE PRESIDENT FOR REGULATORY AND GOVERNMENTAL RELATIONS, 

AMERICAN PUBLIC UNIVERSITY SYSTEM 

Dr. KITCHNER. Mr. Chairman, Senator Brown, please accept my 

sincere thanks for the privilege of sharing with you and the other 

members of this Committee our perspectives on the important subject of how institutions of higher education can better serve our Nation’s military personnel and their families. 

If I may, before beginning my formal comments this afternoon, 

I would like to acknowledge the presence behind me and to over 

my left shoulder, two members of our APUS Board of Trustees, 

General Julius Becton and Dr. Kate Zatz. 

Senator CARPER. Would you all raise your hand, please? Good, 

nice to see you both. Thank you for joining us. 

Dr. KITCHNER. And also our APUS Vice President for Strategic 

Initiatives, Colonel Phil McNair. 

Senator CARPER. Who is that? OK, thanks. Thanks so much. 

Dr. KITCHNER. I also sit here as a representative of more than 

60,000 members of our armed forces and veterans whom we support as students. They have entrusted their educational futures to 

us as we, in this room, entrust our safety and security to them. Retired Marine Corps Major James P. Etter founded American Military University in 1991 as a graduate school to provide military officers with the opportunity to earn an advanced degree in a discipline associated with their military professions. 

The American Public University System was chartered in 2002 

in response to the educational needs of the public service community, particularly in such fields as criminal justice, public safety, 

and national security. AMU and APU share a common curriculum, 

facilities, faculty, and staff, and a common mission which is to provide access to an affordable, high-quality post-secondary education 

with an emphasis on educating the Nation’s military and public 

service communities. 

The university is both regionally and nationally accredited. It offers more than 80 associate’s, bachelor’s, and master’s degree programs including many specifically established to respond to the career interests and objectives of military personnel and their families. All of its courses are offered exclusively online in a format that 

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1The chart referenced by Mr. Kitchner appears in the appendix on page 129. 

enables students and faculties to interact asynchronously regardless of location or time zone. 

Today APUS serves more than 90,000 military and public service 

professionals and other civilians studying from all 50 States and 

130 foreign countries. APUS has maintained its historical commitment to monitoring and assessing its performance. Our efforts in 

this regard have not gone unnoticed and our written testimony 

points to some noteworthy examples. 

However, whatever success we have enjoyed in terms of program 

assessment and evaluation would be of little consequence unless 

the resulting data were applied to institutional performance as 

measured by student success. It is due to this dedication and commitment that we are pleased and honored to be present at this 

hearing and to share this table with representatives of our Nation’s 

servicemembers and the University of Maryland which, as many of 

us know, is a pioneer in extending educational opportunities to 

America’s military personnel. 

I would like to offer five straightforward strategies that we have 

found to be helpful in serving military students and veterans. No. 

1, maintain affordable prices and reduce the time to completion by 

not placing unwarranted limits on a certified or other forms of 

transfer credit. 

No. 2, encourage a one-course-at-a-time approach to enrollment, 

particularly among students studying online for the first time. No. 

3, recognize that active duty military are working adults, as are 

most veterans, and as such, they deserve an appropriate institutional investment in academic counseling and other support services. 

No. 4, design, develop, and implement courses, curricula, and 

programs that align with military-related careers and professional 

vocations outside the military that are relevant to this special population of students. And finally, participate in nationally 

benchmarked surveys and studies and openly publish institutional 

metrics that effectively inform prospective students, as well as education service officers and commanding officers. 

I have been asked to address the relative merits of two proposals 

relating to the so-called 90/10 rule. One proposal would shift DOD 

and VA funds to the 90 side of the formula and the other would 

eliminate it from the formula altogether. The only fundamental difference between these two suggestions is that the impact of the 

first would be felt sooner. In the end, the effect of 90/10 is that it 

likely will unnecessarily increase the cost of and access to education options available to our servicemembers. 

Academic quality and institutional performance are issues that 

warrant at least as much attention, but at this time I would ask 

that we consider the chart1 that is before you. Note that given 

equal amounts of Federal financial aid for which a student qualifies, Institution A whose tuition is 50 percent less than Institution 

B would be out of compliance with 90/10 unless it increases its tuition by slightly over 11 percent. 

A thoughtful analysis of the actual impact of 90/10 reveals that 

it does nothing to enhance the prospects for student success, it is 

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1The prepared statement of Dr. Von Lehmen appears in the appendix on page 83. 

not reward operational efficiency, it does not extend access to traditionally under-served populations, and it does not reduce educational costs to students or taxpayers. If anything, it inhibits initiatives that support or have the potential to support those objectives. 

In a generous spirit expressed by this Subcommittee in calling 

for this hearing, we would like to work toward meaningful alternatives to 90/10, alternatives that place greater emphasis on institutional performance regardless of funding models. To that end, we 

would welcome the opportunity to work with the Department of 

Defense and the Veterans Administration to ensure that America’s 

military personnel have access to high-quality educational programs. 

And I would emphasize the importance of the concept of cooperative efforts in this regard. Clearly our interests are not mutually 

exclusive. And we have a duty to do a better job for those whose 

duty continues to be to serve us and protect us. Thank you, Mr. 

Chairman, and I do welcome your questions. 

Senator CARPER. Great testimony and thank you for those great 

and very thoughtful suggestions. 

Dr. KITCHNER. Thank you. 

Senator CARPER. Dr. Von Lehmen, please proceed. 

TESTIMONY OF GREG VON LEHMEN,1 PH.D., PROVOST AND 

CHIEF ACADEMIC OFFICER, UNIVERSITY OF MARYLAND 

UNIVERSITY COLLEGE 

Dr. VON LEHMEN. Good afternoon, Chairman Carper. On behalf 

of our President, Dr. Susan Aldridge, I thank you for the opportunity to appear today to discuss improving educational outcomes 

for our military and veteran populations. 

The University of Maryland University College was established 

in 1947 to meet the unique academic needs of working adults. As 

you have noted, it is one of 11 public degree-granting institutions 

that form the University System of Maryland. And today, UMUC 

serves 94,000 students in 28 countries, all 50 States, about 40,000 

of whom are active-duty members, veterans, or family members. 

In fact, it is accurate to say that UMUC’s focus on adult students 

started with its service to active-duty members which began largely 

with face-to-face programs on military installations in Europe in 

1949 and Asia in 1956, and continues to this day at 130 locations 

around the world. These locations include sites in Iraq, Afghanistan, Africa, elsewhere in the Middle East where the University 

has had faculty and staff in harm’s way to offer face to face educational opportunities for servicemembers in those countries. 

My submitted testimony points to a few of UMUC’s processes 

that were instituted to increase positive educational outcomes for 

all of our students, but especially for our military and veteran students. These included measures of accountability that have been 

instituted, long-standing measures that have been instituted within our Office of Enrollment Management (OEM), the academic support service that we provide by our Effective Writing Center, our 

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24/7 library support that is available to our students, among others. 

I will not duplicate those details here, but wish to use the remainder of my time to directly discuss the areas in which UMUC 

believes the Federal Government can support improved educational 

outcomes for military and veterans student populations. 

First, while mindful of the fiscal exigency which you have underscored several times, Mr. Chairman, we believe that military tuition assistance is essential to the success of our military students. 

Veterans are coming home to a highly competitive job market and 

as the unemployment numbers indicate, far too many are unemployed and countless others are underemployed. When competing 

against non-veterans, the key differentiator is often a college degree. 

The military services have made significant investments in narrowing this gap by funding the cost of college through the Tuition 

Assistance Program. This program has catapulted a significant 

number of active-duty members toward educational goals that they 

once had thought were impossible. 

The impact of increased investments in tuition assistance is substantial. In fiscal year 2002, the first year of 100 percent tuition 

assistance, there was an increase of 32 percent in individual enrollments DOD-wide, and this increase has been sustained in subsequent years. We ask this Subcommittee to continue its leadership 

in this area and to closely examine the impact of proposed changes 

to the Tuition Assistance Program. 

Second, we believe that there should be continued support for the 

American Council on Education (ACE) and Service Members Opportunity College’s (SOC) programs. These programs can jumpstart 

the veterans’ academic progress toward degree completion by evaluating and certifying military training for academic credit, ensuring reciprocal acceptance of credit across participating institutions, 

and accelerating the entry of military members and veterans into 

the workforce by shortening their time to degree completion. 

Third, we recommend that the Federal Government create and 

implement a regime that would produce real consequences for institutions that are significantly out of compliance with the Military 

Voluntary Education Review Program (MIVER). DOD Directive 

1322.25 requires that all institutions participating in the military 

Tuition Assistance Program sign a memorandum of understanding 

with DOD committing these institutions to participate in the review of all their programs according to the MIVER best practices. 

In the past, this program has resulted in team visits to installations, review of academic programs, team recommendations about 

issues or problems to be addressed. But historically, there’s been 

little real consequence for institutions that did not observe these 

principles or address the recommendations. So consequences for 

noncompliance could include suspension of eligibility to participate 

in the DOD Tuition Assistance Program for institutions that are 

seriously out of compliance. 

Fourth, we have seen that the funding shortfalls have resulted 

over the years in a drastic reduction in providing servicemembers 

and veterans with easy and convenient access to highly qualified 

education counselors. Despite the very best efforts of the military 

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1The letters referenced by Senator Carper appears in the appendix on page 115. 

service, this latest generation of largely first-time college students 

are often left to their own devices to make a decision that should 

be preceded by unbiased and highly qualified advising. 

We ask that the Subcommittee look at the importance of education counselors as it considers how best to assure sound Federal 

investments in educational programs that serve our military and 

veteran populations. 

So in conclusion, the University of Maryland University College 

strongly supports the work of this Subcommittee in exploring proven practices and improving education outcomes for those who have 

honorably volunteered to support and defend this country. They deserve nothing less than the best. This concludes my remarks, Mr. 

Chairman. I am happy to answer any questions that you may have. 

Senator CARPER. Great, thanks very much for that testimony. 

Really, uniformly excellent testimony from this panel. Thank you. 

Thank you all. 

I want to come back to the 90/10 rule in just a moment. Before 

I do that, I just want to draw the attention of our Subcommittee 

to a number of letters that many of our top veterans groups have 

sent us calling on Congress to fix the 90/10 rule so that GI Bill benefits are counted toward the 90 percent limit on Federal funding. 

We realize there are other alternatives to that. 

But we received letters1 from, among others, American Veterans, 

Student Veterans of America, Veterans of Foreign Wars (VFW), the 

Vietnam Veterans of America (VVA), Military Officers Association, 

Blue Star Families, Paralyzed Veterans of America, VetsFirst, and 

I would, without objection, want to submit those letters for the 

record. 

I want to come back to solutions, if we could for a couple of different ideas here for how to address the 90/10 rule, keep it as it 

is, change it so that the monies that are government funds meant 

to help veterans, or active duty personnel, actually become a part 

of the 90 percent. There is a variety of things that could be done. 

We have heard from some. I think we heard from Dr. Kitchner 

here that suggest that maybe simply fixing the 90/10 rule is not 

quite so easily as just making sure that we count all the veterans 

assistance and all the active duty military assistance in the 90 percent. Maybe that is something, another way to deal with this. 

I just want each of you to take a minute or so and just talk 

about, if you were in our shoes and you are looking at this problem 

with the perverse incentives that we are getting from the 90/10 

rule, among the perverse incentives is that there is no skin in the 

game. There is no skin in the game for the colleges and universities, whether they are proprietary, private, public, no skin in the 

game. 

And I am reminded a little bit here of the subprime lending episode that we went through this last decade where you had, in some 

cases, mortgage brokers are getting people who were really not in 

any position to become homeowners, did not have the wherewithal 

to become homeowners, folks buying homes on which the appraisals were not worth the paper they were written on, and the mortgage folks did not have any skin in the game because they handed 

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off the application to a mortgage bank and the mortgage bank ultimately hands it off maybe to Fannie Mae or Freddie Mac to get 

securitized. 

These mortgages were bundled together and you have a whole 

string of players there who had no skin in the game. And when you 

have no skin in the game, market forces do not work very well. I 

am reminded a little bit of that situation here. 

Let me just start with Mr. Daywalt. Let us say you are on this 

side of the dais and you have to figure out what to do in this instance with the 90/10 rule. What would you do? Why would you do 

it? 

Mr. DAYWALT. Do you want us to only address the 90/10 or—— 

Senator CARPER. Start just with 90/10, but then we will go beyond that. 

Mr. DAYWALT. As I put in my written statement, sir I think all 

of the Federal funds should be put on the 90 percent side, because 

I think you will find that the way some of these predatory for-profits are operating, there is no skin in the game from non-Federal 

funds. It is all Federal funds. I know everybody talks 90/10. I 

would not have a problem going to 80/20 and push it back some 

more. That may put some of them out of business, but if they cannot act as a normal university, then maybe they should not be in 

business. 

Senator CARPER. All right, thank you. Mr. Gallucci. 

Mr. GALLUCCI. As the VFW mentioned in our written statement, 

we would also support bringing all Federal funds on the 90 side, 

and as I stated, this was the intention of the law. If you look at 

the legislative history of 85/15, where it came from, why it was 

started, it was designed to make sure that school solvency was not 

strictly reliant on Federal funds. What we have now with the two 

stovepiped regulations is a situation where a school can manipulate 

one population simply to fall into compliance with the other rule. 

85/15 is still on the books in Title 38, part of Chapter 36 in how 

the GI Bill is administered, but it is relatively irrelevant just because of the number of veterans who are eligible for benefits and 

how robust higher education benefits are these days. So to fall in 

line with the original intention of the law, we feel it is perfectly appropriate to bring that money on the 90 side. 

Senator CARPER. All right. Thank you. Dr. Kitchner. 

Dr. KITCHNER. Thank you, Mr. Chairman. I prefer to point to the 

fact that it is our position—I believe that we should first differentiate between Federal student aid and VA or DOD funds. The GI 

Bill is what we consider to be an earned benefit. It is not financial 

aid. It is not something that someone qualifies for because of financial status or any other determination. It is an earned benefit that 

I think most of our military people were very well aware of when 

they enlisted. 

This was a part of the inducement to enlist, would be to take advantage of the Post-9/11 GI Bill or the Montgomery Bill before it. 

I think that is an important distinction that we should maintain 

and keep that in front of our mind because that is part of the reason why I think the original higher education authorization wrote 

the law the way it did. 

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33 

I also would not want to encourage any kind of a policy change 

that ended up with unintended consequences such as reducing the 

amount of opportunities and access to higher education that our 

veterans enjoy and deserve. 

I think it is very important that we not let a policy decision that 

could affect the number of students that an institution could enroll 

or would involve having an institution have to go out and find more 

cash paying students in order to avoid a 90/10 trigger when, in 

fact, those cash-paying students are neither part of their fundamental mission, historical mission, nor for that matter would they 

necessarily be available unless we went to an international market 

which does nothing, quite frankly, to help support the President’s 

objective to further educate America’s civilian and military population. 

So I think we want to make sure that as we struggle through 

this challenge of identifying bad actors and promoting good practices, that we focus on the academic dimension of this question and 

not simply the economic one. Thank you. 

Senator CARPER. Good, thank you. Doctor Von Lehmen. 

Dr. VON LEHMEN. Thank you, Mr. Chairman. As an institution, 

we would support including all Federal funds on the 90 percent 

side of the formula. We do not think it is unreasonable that institutions receiving Federal funds should be able to demonstrate, by 

some consequential measure, that other stakeholders have confidence in them. So we have reservation about including veterans 

benefits and military tuition assistance on the 90 percent side with 

Title IV. 

Senator CARPER. All right. Thank you. That question that I just 

gave you is pretty narrow, how would you fix the perverse incentives provided by the current 90/10 rule. Mr. Daywalt, I think you 

were prepared to go just a little bit beyond that specific question. 

Do you want to go back and pick that up? If not, I have another 

more specific question. 

Mr. DAYWALT. Sure. I have some other recommendations that 

you can consider. I look at it from a business perspective and from 

having sat on the boards of different schools. These schools are 

using Federal funds—I’m talking about the predatory for-profits. 

They are using Federal funds to fund their marketing and sales 

and commission campaigns. Some of them as much as 50 percent 

of the revenues coming in are being used to advertise, which I see 

them all over the place. 

If they are going to use Federal monies—our taxpayer dollars— 

I do not think they should be allowed to use any more then 10 percent of their total revenue for marketing and sales campaigns. I 

was on one school’s board when the new dean of the business 

school asked to raise the marketing funds for the business school 

from 5.5 to 7 percent. You would have thought that he had raped 

the Queen and killed the President. I mean, the board members 

were going nuts. What do you mean, 7 percent? But he wound up 

getting 8, by the way. 

But limiting it to 10 percent, I think, would be very important. 

I think the agencies should make better use of their mechanisms 

that they have. There was a school that was suspended earlier this 

year, but it was reinstated, and it goes back to the things with the 

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GAO. If they take people that are blatantly violating the law, why 

are we still giving them money? Something tells me that there is 

something wrong. 

And the issue that has been brought up several times about having better information available for the veterans through the command curriculum counselors through the TAP and ACAP centers is 

very important because a lot of these people came into the military 

when they were 18 and they have no idea what higher education 

is all about. They did not stick around to talk to the kids who went 

to college. They came straight into the military. So they are flying 

blind and they do need some help and assistance. 

Senator CARPER. Is it fair to say that some of their parents never 

went to college either? 

Mr. DAYWALT. I think that is very fair to say. I came from a family where I was the first one that went to college and then my mom 

and dad got their degrees after my dad retired after 30 years of 

working. 

Senator CARPER. My parents had an expectation for their son 

and daughter, my sister and me, to go to college, but also we had 

to figure out how to pay for it. 

Mr. DAYWALT. Yes, we did. 

Senator CARPER. All right. Did you want to continue? 

Mr. DAYWALT. No. I think the other suggestions I have in here 

stand—there is one and that is the accreditation issue. I know it 

is not popular to say that some of these for-profits put together 

what is called, on the Internet, fake accrediting agencies, but we 

need to look at that issue very hard. If they are running a business 

school program and they cannot get accepted by the American Association of the Collegiate Schools of Business, why are we putting 

Federal dollars into it? 

Senator CARPER. OK. Good point, sir. Mr. Gallucci, do you want 

to speak more about it? I want to give Mr. Daywalt a chance to do 

that. Do you want to speak more broadly on how to proceed on a 

strictly 90/10 rule fix? 

Mr. GALLUCCI. Absolutely. So you are talking about some other 

ways that the VFW believes we could solve this problem? 

Senator CARPER. Yes, sir. 

Mr. GALLUCCI. Basically, it is improving oversight mechanisms. 

90/10 is really just one facet of this. We also spoke about memorandums of understanding with colleges. That is one avenue that you 

could go down. VA eligibility, also, State Approving Agency resources, and this is really one of the largest ones that I wanted to 

touch on, because as I mentioned in my testimony and as we heard 

from the previous panel, that they are the boots on the ground for 

enforcement. 

And what we found is basically they have been broken, they have 

been broken for a long time. They do a great job with the resources 

they have, but they haven’t had enough since 2006. They have not 

had a funding increase since 2006. The new GI Bill came in place 

in 2009 and dictated that State Approving Agencies were going to 

have to take on even more work as a result. 

This benefit is too robust and their responsibilities are too great 

that at 2006 funding levels, there is no possible way that they can 

accomplish their mission successfully. The VFW testified on this 

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back in 2009 before the House. Our concerns were reiterated last 

year before the Senate VA Committee by the National Association 

of State Approving Agencies. So this is not a new problem. We 

know that our front line troops, the State approving agents, do not 

have the resources they need and predatory schools are obviously 

slipping through the cracks. 

Senator CARPER. All right. Dr. Kitchner, I am going to ask if we 

could just hold it right there and I will come back and ask you and 

Dr. Von Lehmen to just sort of pick up where we are leaving off. 

Senator Brown, would you like to proceed with your questions? 

Thanks. 

Senator BROWN. Sorry. I am bouncing back and forth. I am working on a couple of things back home that are very serious. 

So, Mr. Gallucci, first of all, thanks for your testimony and your 

service. I do not believe you answered this question, but you described today’s 90/10 and 85/15 rules ineffective, stovepiped regulations. And I can kind of understand that being here in Washington, 

now how we have a regulatory process that is broken and needs to 

be done better. 

It seems to be a point of agreement amongst most stakeholders. 

I do not think there is much argument. How do we stop viewing 

each program and its own independent like entity and start realizing that all these programs are just a means to educate our military and veterans? No. 1. And do you think this weakens oversight 

of these programs and where do you think we can make improvements? 

Mr. GALLUCCI. With respect to 90/10 and 85/15, we feel that 

going back to the original intent of the rules is what we really want 

to do. 85/15 was really one of the original rules to rein in fly bynight schools, and as it has been eroded over the decades as we 

have heard, higher education developed a very similar rule, 90/10, 

which covers higher education funds, work-study programs, but 

there is no interplay. 

What we have heard is that 85/15 is effectively irrelevant. It is 

still in Title 38, but it does not really apply these days because 

there are enough veterans going to school and higher education 

dollars are a much more lucrative source of revenue. We do not feel 

that bringing the VA and military dollars onto the 90 side would 

have an adverse effect on oversight. 

VA is still authorized to—the State Approving Agencies are still 

authorized to do their jobs. The military is still authorized to monitor its education programs and how its dollars are spent. This is 

simply making sure that schools cannot solely rely on taxpayer dollars for solvency. 

Senator BROWN. And Dr. Kitchner. 

Dr. KITCHNER. Yes, sir. 

Senator BROWN. Considering the challenges that have been described, what are the challenges in administering these financial 

aid programs from an institutional perspective? And then Dr. Von 

Lehmen, if I could have you answer that question as well. 

Dr. KITCHNER. Thank you, Senator. One of the jobs that my wife 

said she would never touch is being a financial aid director, and 

I feel exactly the same way. Financial aid administration is a complex business and it is not actually one of those areas that I have 

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a great deal of expertise in. I think the issue that we have been 

trying to address, both in the context of this hearing and, I think, 

in some broader context with the Department of Education program integrity rules, is that we ultimately want to see whatever 

form of policy and rules are established, that they end up accomplishing the objectives for which they are being proposed, and that 

is, program integrity and quality of the instruction. It is our sense 

that 90/10 does not deal with that at all. 

Senator BROWN. Let us take it a step further then as a followup. 

What is the suggested streamlined process that we can use from 

an administrative perspective while ensuring also that Federal 

oversight is maintained? 

Dr. KITCHNER. Well, one option I think would be to establish academic metrics, meaningful academic metrics that would reflect institutional performance, publish those metrics so that we have an 

opportunity to compare institutions to institutions, providing prospective students and other members of the public with useful and 

relevant information to make decisions about colleges and programs that they may be interested in. 

I think another opportunity that we have is to identify what 

Chairman Carper referred to as skin in the game. There needs to 

be an opportunity for institutions to show that they are going to 

be accountable for what they do not do well, and I think some of 

us have reasonably good opportunities to make changes or to modify practices so that we do not have to bump up against accountability issues that will end up costing institutions money. 

Senator BROWN. Thank you. Doctor Von Lehmen. 

Dr. VON LEHMEN. Like my colleague, Dr. Kitchner, I am not one 

who is well-schooled in all the details of financial aid advisement, 

but I do know from where I sit that it is extremely complicated to 

administer, very complicated for the student, and I think that recent regulations that have been implemented by the Department of 

Education make it even more complicated still and more difficult 

to administer. 

From the standpoint of our institution, I think the fundamental 

issue is that these regulations are designed for more traditional 

colleges and universities that do not have, as their principal mission, serving adult students. They are designed for the kind of traditional enrollment patterns that you find on traditional colleges 

and universities where you have three opportunities to enroll, fall, 

spring, and summer. 

What the changes might be I could not say in detail, but I think 

if you ask any college administrator or any student, they would say 

the same thing about the complexity and difficulty of administration. 

I would like to reinforce some comments that Dr. Kitchner made. 

I think that as a Nation, we need to take stronger steps toward accountability in higher education, and I think that the first step is 

agreeing on what the metrics are. And that is a complicated question because depending on what the differences among institutions 

are, the metrics might be the same, but now they are applied might 

be different. 

I will say from my institution, our student population is very different from the population that is captured by the IPEDS data 

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which looks at traditional college cohorts and how many of them 

graduated in a 6-year period. Our experience is it takes students 

on average maybe 10 years to graduate. We have people who walk 

across our platform, including active duty members who may have 

been at it for 12, 13 or 14 years before they graduate. 

So I think this area of metrics is very important. In fact, there 

are efforts underway to achieve some clarity about what these 

metrics should be, especially as they are applied in the context that 

we are talking about, active duty members and veterans. The 

servicemembers’ opportunities consortium has formed a group representing colleges and universities, including American Military 

University, to discuss this very issue and to produce some recommendations about what these metrics should be. 

Senator BROWN. Thank you for those thorough answers. I must 

say I will come back if it is appropriate. 

Senator CARPER. Well, it will be. Dr. Kitchner, Dr. Von Lehmen, 

I am going to go back. Mr. Daywalt and Mr. Gallucci had a chance 

to respond more fully. And if you would like to as well, to my earlier question. If not, I will just come up with a somewhat different 

question for Mr. Daywalt. Dr. Kitchner. 

Dr. KITCHNER. Chairman Carper, would you mind repeating the 

question? 

Senator CARPER. I am not sure that I can. I said, beyond a 90/ 

10 fix, what are some other things we ought to be doing? You have 

already cited this to some extent, beyond a 90/10 fix. What are 

some other things that we ought to be doing, we being the Legislative Branch? 

Dr. KITCHNER. OK. Mr. Chairman, I think that one of the things 

that I think you are already doing, and I commend you for that, 

is monitoring carefully what the Department of Education has attempted to do with its program integrity rules. I think many of us 

in this room, if perhaps not everyone in the room, would recognize 

that those rules are subject to refinement and perhaps reconsideration in some cases. 

But nevertheless, they have the potential of getting at the core 

issues here, which is program integrity, which is, in fact, institutional performance. And I believe, for example, while gainful employment is a very controversial issue and perhaps one of those 

that does need some thoughtful tweaking, if not more, the fact is, 

gainful employment has the effect or the potential effect of driving 

down the cost of higher education; that it will force institutions to 

manage very carefully their finances in order to not have an issue 

with the formula between the cost of instruction and the employment opportunities of their graduates. 

Ironically, at the same time that we look at gainful employment 

as maybe having that potential, it then bumps right up against 90/ 

10, which as I have tried to demonstrate in that brief poster next 

to me, has precisely the opposite effect of driving up the costs. 

So we have two initiatives, both appropriate in many respects, 

but they are working at cross purposes. And so I would suggest 

that working closely with the Department of Education, working 

closely with the higher education community. There is much that 

we can do, and to Dr. Von Lehmen’s point, I think we need to look 

thoughtfully at whether or not rules that were in place 20 years 

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ago, for that matter 10 years ago, if they still have relevancy, given 

the fact that we have an entirely different population that is looking at higher education as an opportunity that they can take advantage of because the methodologies and the technology are out 

there to do so. Thank you, sir. 

Senator CARPER. Good, thank you, sir. Dr. Von Lehmen. 

Dr. VON LEHMEN. I have no further comments. 

Senator CARPER. OK, good. We are back to Mr. Daywalt, if I 

could. I just want to give you an opportunity to respond to what 

our friends from the Department of Veterans Affairs said earlier 

about barring only one school out of, I think, 6,000 from receiving 

GI Bill benefits or funds. Do you think the VA is doing a good 

enough job at policing schools? 

Mr. DAYWALT. Well, that kind of puts me on the spot, but my 

personal feeling says no, they have not, and I speak as a person 

who—I mean, I am responsible for bottom line where I work at. If 

we cheat, I am going to wind up in front of the SEC. If you have 

15 colleges that are cheating and basically lying, committing fraud, 

why were they not suspended? Why are they even allowed on the 

military bases? They should have been thrown off. 

That seems to be common sense, but common sense does not 

seem to be ruling things right now. And as a businessman, I have 

to ask, if these 15 were really doing all this to whose benefit is it 

to have them still there? Does not someone who commits fraud supposed to not be able to get access to Federal funds? 

Senator CARPER. I think the answer is self-evident. Thank you. 

All right. 

In my old job as Governor of Delaware, one of the things we used 

to do, when we had a problem—I will give you a couple of examples. We had a problem in Delaware where we raise a lot of chickens in our State. There are 300 chickens for every person who lives 

in Delaware. And on the Delmarva Peninsula which includes the 

Eastern shore of Maryland and the Eastern shore of Virginia, poultry is a huge industry. Eighty percent of our ag industry in Delaware is poultry. 

And we have a lot of chickens living in chicken houses and every 

so often the chicken houses are cleaned out and the nutrients that 

are high in phosphorus, high in nitrogen and we have to do something with it. For years the farmers just spread the nutrients very 

thickly across farm fields across Delmarva. 

When it rains or when this stuff is stacked up in the middle of 

a field and it rains and washes off into our rivers, lakes, streams, 

eventually finds its way over to the Chesapeake Bay. There is a 

large expense of the Chesapeake Bay where there is nothing living. 

It is just dead, in part because of the high nutrient loads. 

About 10 or 12 years ago, we pulled all the farmers together in 

our State and said, ‘‘Look, we have a big problem here.’’ It is a 

problem. Now, you guys and gals and environment stewards, help 

us figure this out, and they did. They took off, if you will, maybe 

the darker hat and they put on a white hat and said, ‘‘We ought 

to have rules on how much of these nutrients can be spread for 

every farm.’’ 

We are going to have a nutrient application program designed for 

that farm, given what the soils are like. We are going to make sure 

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that everybody is trained who are going to be spreading these nutrients, and we are going to come up with ways to take nutrients 

and treat them under high temperatures in a special manufacturing situation. We take about 15 percent of the chicken waste 

now to a facility run by Perdue, Perdue Poultry, where they actually transform them into an organic fertilizer which is pelletized, 

sold all over the country by Scott and just get it off the Peninsula. 

But that was a problem where the folks who were helping to create the problem—it was not just the farmers. It is golf courses, it 

is other people who put fertilizer on their lawns. The farmers 

helped us come up with a solution. 

We have a problem in Delaware with welfare, in fact, in the 

country. I spent a lot of time on this as Governor with the National 

Governors Association (NGA). When we incentivize people not to go 

to work, people on welfare not to go to work, just to have more 

kids, because when they went to work, they lost their health care 

benefits, they didn’t have anybody to help look after their kids. All 

the incentives were just misaligned. So we asked to help solve the 

problem? We asked people on welfare. 

Welfare moms and dads it is not a good situation. Help us solve 

this. We did the same thing with teen pregnancy. We got a lot of 

kids, a lot of high school students to help us solve that problem. 

Part of the problem here is proprietary schools and, frankly, the 

private and the public schools who are not doing the kind of job 

they need to with respect to delivering the results, that is, people 

who get an education and are unable to go out and make a living, 

be productive citizens. They are not doing their share. 

I hope that some of them feel ashamed. I hope some feel very 

proud, some of the folks. The representatives in your State would 

be very proud of the job that you do, but some of the other folks 

that are out there offering these so-called services ought to feel 

ashamed. 

But they can be part of the solution and we need for them to be 

part of the solution. My hope is that going forward, that they more 

and more will feel like, I am part of the problem here, everything 

I do, everything I know I do I can do better, the same is true of 

them. And we need for them to be part of that solution. 

Let me stop there and go back to Senator Brown. 

Senator BROWN. I just have a few questions. I am just going to 

read something. I think it was either yesterday’s or today’s New 

York Times, Holly Petraeus notes that there are some of for-profit 

colleges with a long record of serving the military, solid academic 

credentials, and a history of success for their graduates. But compared with other schools, for-profit colleges generally have low 

graduation rates and a poor record of gainful employment for their 

alumni. 

So Mr. Gallucci, with those results, it does not really seem like 

a sustainable business model. And if so, why have some of these 

bad actors in the for-profit industry persisted? 

Mr. GALLUCCI. Well, thanks for the question, Senator Brown. We 

would have to believe that some of these institutions have persisted 

because of poor oversight and poor regulations. 

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Senator BROWN. And the thing that Mr. Daywalt just said about 

not kicking them out and actually following through with the 

threats, I think, is critical. 

Mr. GALLUCCI. Exactly, and that comes back to who is actually 

vetting the processes and what I had said about the State Approving Agencies. This is one of the reasons that we had suggested that 

VA possibly adopt something similar to the memorandums of understanding that the Department of Defense uses. There are positive actors who are out there, who are doing this right. 

We had the opportunity to sit down with some folks from the 

University of Phoenix who had launched a 2-year pilot on an orientation program. They saw that in the 2-years that they implemented this pilot program, 20 percent of students just walk away 

right then. It is free of charge. They realize they cannot handle it 

and they walk away. They decided to institute that nationwide. 

This is a step that they have taken to say that, We are focused on 

the outcomes that our students receive. 

Another step that they have taken was an online questionnaire 

to determine whether or not you are ready for it. With some 

healthy skepticism, I went online and took it myself and discovered 

that given my time requirements, I am not ready to attend one of 

their programs. Your time available for your studies is of serious 

concern. Your reasons for going to school are a reasonable concern. 

Your support and resources are a reasonable concern. I thought 

that was incredibly transparent. Some of these memoranda, if they 

are comprehensive enough, if you are transparent about graduation 

rates, job placement rates, accreditation, and also your student 

services to veterans, can improve these outcomes. 

Senator BROWN. So Dr. Kitchner, how is AMU doing it differently, other than other for-profits that have been criticized for 

putting profits over students’ success. 

Dr. KITCHNER. Senator Brown, I am not able to speak to a lot 

of our colleagues, but I will say that I think one of the strategies 

that we have in place and we have had it in place historically is 

very similar to what Mr. Gallucci referred to in terms of making 

sure that, No. 1, that the students that enroll are prepared to succeed. 

I think anything short of some kind of a process, a vetting process, an introductory course, which is what we have—which, by the 

way, if a student is not passing it, they are refunded the cost of 

it. The department is not on the hook for it, the student is not on 

the hook for it. 

Senator BROWN. That is not the case in all programs? 

Dr. KITCHNER. Again, I would not presume to know, but I suspect it is probably not. I do not think there are probably very many 

public universities that offer that option, to be honest with you, 

and I am not suggesting everyone should. 

I think it depends on the population you are trying to serve and 

it is one of the variables that often gets lost here, is that the forprofit sector, for all of its imagined and real faults, is reaching out 

to an under-served population, an historically under-served group 

of people who probably were not particularly academically inclined 

in high school and perhaps not as successful in high school as they 

ultimately can be and will be. 

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But they reach out to that population and try to help them succeed. I think as we look at metrics, as we look at thresholds of performance, we really need to look at an institution by institution 

process, to some extent, to determine what kind of students they 

are working with, what the challenges of those students are, and 

how effective the institutions are with those populations. So it 

needs to be sort of population specific, if you will. 

Senator BROWN. Thank you. And Dr. Von Lehmen, in your opinion, what quality controls and best practices in the public education 

sector can be applied to address some of the concerns regarding the 

for-profit industry, if you can comment? 

Dr. VON LEHMEN. Well, let us see. I think that is a big question. 

It involves a number of things which I know some of the for-profits 

do in fact do. Learning outcomes assessment is extremely important. This is assessing your programs at an institutional level to 

see whether or not the institution is actually engendering the 

qualities that it promises them that they will achieve at institutions. I am talking about things like critical thinking, ability to 

write and speak well, quantitative literacy, information literacy, so 

on and so forth, as well as competency in their chosen field of 

study. 

So I think learning outcomes assessment is extremely important 

to the quality and the effectiveness of academic programs. I think 

it is extremely important, especially for the student population that 

we serve, to try to understand what makes successful students successful. The term of art that is used these days is data mining. The 

idea is to use the data that you have on your successful students, 

including their behaviors, to the extent those behaviors, and to try 

to come up with actionable conclusions that you can institutionalize 

in some way that will help other students be successful. 

So those are two, I think, key academically centered quality control measures, but I think the quality control measures extend to 

student services and other parts of the university. Services have a 

big impact on students and their success. A very good example is 

degree audit. 

It is not uncommon for active duty members to have attended a 

number of different colleges and universities. And so, when they 

come to us and talk to us about our degree programs, certainly one 

question that has to be answered is, not only what are the requirements of that program, but where would they stand in that program with us in terms of the previous college work that they have 

completed; how much of that would transfer into their degree program. 

So it is very important that their previous college work be evaluated in a timely manner. We are dependent on them to provide us 

with the information that we can evaluate, but once provided, 

should be evaluated quickly, within a day, or 2, or 3 days, so that 

the active duty member or veteran, will know, in that 120 semester 

hour-undergraduate program or that graduate program, how much 

of their prior college work and indeed, military training through 

ACE evaluation, will transfer into their degree program. 

So there should be metrics on services like degree audit so that 

once a student’s file is complete, there is no excuse for that information to sit there for a month, 2 months, 3 months or a year. 

H605-41331-79W7 with DISTILLER

42 

They should be receiving an evaluation within days, if that long, 

so that they know where they stand. The same thing is true for 

processing their applications for veterans assistance or financial 

aid. There should be metrics around how quickly those services are 

provided. 

So metrics are key and I think those metrics need to apply not 

just to academic programs, but across the spectrum including student services. 

Senator BROWN. Thank you and thank you, Mr. Chairman. 

Senator CARPER. Sure. Thank you very much for being part of 

this hearing. Senator Brown and I are supposed to be in another 

meeting in the Capitol in about 15 minutes, so we are going to 

wrap up here in about 10 or 12 minutes. 

The last question I will probably ask of you is just if you have 

a closing thought and it is an opportunity. We already asked you 

to do opening statements and we do not ask you to do closing statements, but I will give you that opportunity for maybe a minute. So 

just be thinking about what you might want to say. 

I think this will be for Dr. Kitchner and Dr. Von Lehmen. There 

is a recent study, I believe, out of Columbia University that showed 

that students enrolled in online courses control for a number of factors, but were more likely to fail or drop out of courses than were 

those who took the same courses in person. I am not surprised at 

that, but it was interesting to hear what they reported. Some have 

suggested we address this by requiring students to take a readiness assessment for online instruction providing training for faculty members in online pedagogy and improving student support 

services such as round-the-clock tutoring and academic services, 

not just technical support. 

How do your schools address these areas and what do you think 

about the need for such reforms in order to increase online retention and completion? Dr. Kitchner. 

Dr. KITCHNER. Thank you, Mr. Chairman. As an online university that responds to students and interacts with students literally 

24/7 from around the world, No. 1, we have to staff for that and 

we have to have an information technology backbone that will support that. That is absolutely critical. That is where we have a tremendous investment of resources and we continue to support that. 

We have a large cohort of individuals who work in student support services. I think the number is approaching 50 in student support services alone. We have admissions counselors who basically 

handle in-bound calls, not outbound. In other words, they are responding to individuals who have an inquiry about the institution, 

whether or not it is going to fit their needs, whether or not the program is available and it is going to fit their career aspirations. 

We have an online, a very robust online color-coded degree audit 

that an individual who enrolls in a program can literally go online 

and determine whether a course that they might be interested in 

taking will fit into that degree program, so that they know that 

they are not looking at a degree option that will not actually meet 

their long-term expectations. These are just examples of what we 

feel is essential to an online environment, that you really have to 

take advantage of the technology, while at the same time, making 

sure that there is this interactivity. 

H605-41331-79W7 with DISTILLER

43 

And our students and faculty both have to go through a very rigorous, what you referred to, I think, sort of introductory vetting of 

whether or not they are capable of succeeding. We do not want faculty that do not like the mode and they are not going to be successful adapting to that mode. And obviously students have to be comfortable with it. So we focus very intently on making sure that we 

have a right match there. Thank you, sir. 

Senator CARPER. All right, thank you. Dr. Von Lehmen. 

Dr. VON LEHMEN. Thank you, Mr. Chairman. Well, just to respond to the point you made in reference to the Columbia University study, let me start by saying UMUC does offer quite a few 

face-to-face classes, especially overseas, under our large military 

contracts. But certainly the majority of our enrollments stateside 

are online. 

I guess the first thing I would say is, the Columbia University 

is right. Online education is not for everyone. And so, I do think 

it is a responsibility of institutions to give students an opportunity, 

before they commit anything, to determine whether or not this is 

a mode in which they can be successful. 

At UMUC, we have what we call UMUC 411. We have several 

versions of this. We have a military and veterans UMUC 411, but 

at its core it is the same as what we would offer any other student, 

which is a week-long opportunity at no charge to enroll in kind of 

an online orientation. 

This is an active class. The purpose is really twofold. One is to 

give students an opportunity to experience the platform itself and 

how it works and how an online class would work. Through that 

week, they also have an opportunity to interact asynchronously 

with financial aid advisors, with academic advisors, with faculty 

members so they get some understanding of the institution and the 

people who staff it. 

I mentioned data mining before. What we have found is that the 

retention rate of students who go through the UMUC 411 is far 

higher than students who do not. And so, I think it just underscores the point that online education is not for everyone. 

Faculty training is key. Online teaching—and I say this as someone who taught face to face for many years. I was a tenured associate professor at another university some time ago before joining 

UMUC, so I taught face to face for many years, and, in fact, was 

skeptical as a face-to-face instructor. And so, I went through the 

online training myself with UMUC, which at that time was a 5- 

week online training course. There was a class, it had an instructor, and we as faculty novices, had assignments to complete and 

readings to do, and I found at that time it took me about 15 hours 

a week, apart from my day job, to complete that training from 

week to week. I have since taught online. 

But the point is that even today, we require all of our faculty, 

whether they are full-time or adjunct, to go through this training 

program. And it is not just pedagogy. I like to view it as kind of 

a seminary. The purpose of seminaries is not just education, it is 

formation. And what we try to do is imbue our faculty with our values and the value is students first, respect for students, excellence, 

and those are values to which we subsequently hold them to. 

H605-41331-79W7 with DISTILLER

44 

We likewise give them some practical pointers. We found—and 

this is really maybe a commonplace thing to say, but we have actually found through analysis that one of the biggest things that correlates with student success and student persistence is the engagement of the faculty member in the online classroom, being there for 

the student, providing them with very quick feedback on work, 

being mindful when they are not there and going after them, Why 

were you not in class last week, we really missed you. This is critical. 

Good academic advisement, that again is empirically informed. 

Academic advisement does not just mean being fluent about what 

the admission requirements and the degree requirements of a given 

program are. It is being mindful of those things that I mentioned 

before. What does actionable research tell us is more likely to make 

students successful? And some of these things should be embedded, 

and in our institution are embedded, in the academic advisement. 

Here is one concrete example, we have found that students who 

have completed their college writing before they come to UMUC 

are far more likely to succeed in an online environment than students who have not completed their college writing before they 

come to UMUC. And if you think about that, that intuitively makes 

perfect sense because writing is how much of the interaction occurs 

in the online asynchronous classroom. 

And so, if we have students that come to us or want to begin who 

have not had their college writing course, we advise them that this 

is one of the first courses they should take with us in their first 

semester because we know that it will make them more successful 

in the long run. 

Support is very important. I recently returned from a trip to Russia. We have had 20 year agreements with Russian universities, 

one Irkutsk State University in Siberia, another in Vladivostok, 

and they are very interested now in moving their programs into the 

online mode. One of the things my President emphasized to them 

is that it is not just about the classroom. 

If you are going to successfully offer online programs at a distance, it is different from serving a traditional campus residential 

community with some occasional online courses where if they need 

library support they can walk over to the library, or if they need 

advising, they can just walk over to the advising center. 

You have to put your whole campus online so that students can 

access not simply library resources, but have 24/7 librarian assistance as well; that they can get academic advisement when they 

need it, and help with their writing if that is a difficulty for them 

and so on, as well 24/7 technical support. And certainly our university does all of those things. 

Senator CARPER. Good. Well, I had said the last thing I wanted 

to ask for you all each to take a short period of time and give a 

benediction. We do not have time. I need to be in the Capitol in 

about 3 minutes, so we are going to have to forego that. 

I just want to say, this has been an illuminating hearing, troubling to some extent, but also very encouraging. For the schools out 

there, proprietary schools or those that are not proprietary schools 

that are not giving taxpayers what we deserve and their students, 

especially military and veterans what they deserve and have 

H605-41331-79W7 with DISTILLER

45 

earned, You need to start. You need to look very carefully at some 

of the very smart things that you are doing at your two institutions 

and get with it. 

We are just one Subcommittee. We are part of the Committee on 

Homeland Security and Governmental Affairs (HSGAC), but this is 

a Subcommittee that is very tenacious. And in the words of Winston Churchill, we do not give up. I mean, when we get our teeth 

into something, we just do not give up. We are not going to let up 

on this one either. There is too much money involved, taxpayer 

money that we do not have, and there are too many veterans involved that need a better break than they are getting and need a 

bigger helping hand than they are getting. We are there to help our 

brothers and sisters. 

I just want to thank you for being here. Mr. Gallucci, special 

thanks to you and all veterans groups that have helped us prepare 

for this day, and also to say there are a number of other committees, certainly the Education Committee led by their Chairman, 

Tom Harkin, other Members of the Senate and House, I am sure, 

who have an interest in these issues and have are anxious to help 

address the concerns that have been raised and solve this problem. 

Part of the solution is going to be, I think, is available in the Department of Defense, in the Department of Veterans Affairs, Department of Education, the veterans organizations, but also in the 

institutions that are providing these educational services, in some 

cases very well, in some cases not well at all. 

I will close with this. In a hearing we had here a month or so 

ago, we had friends from the Department of Defense including Marines who were trying to lead the way to be the first on the beach 

and the first of the services to have auditable finances, financial 

statements. We need to look for those good examples. We need to 

look for those best practices and find ways to incentivize and do 

more of that. 

What we cannot measure, we cannot manage. And we talked a 

lot here today about metrics and how do we figure—like I always 

say, how do you measure success? For me, this is kind of simple, 

but it is to make sure that people who use taxpayer dollars to get 

a better education, at the end of the day, that education is worth 

something to them and to our country. 

Sometimes when George Voinovich was here, and he and I 

served together first as Governors and as Senators for many years, 

we would, from time to time, hold round tables. When we were trying to get the, interested parties in a room, rather than a hearing. 

That was the kind of structure we were interested in really developing a consensus. It can be pretty helpful. 

And I think we might want to try to do one here. Lamar Alexander, the Senator from Tennessee, another former Governor, he 

likes to say that hearings are where the Senators just talk and 

they do not listen. We do not listen very well. He said, we should 

really call them ‘‘talkings.’’ But round tables actually give a chance 

for all the interested parties, the stakeholders, including the white 

hats from the industry and those that do not have white hats. And 

I think it would be a good idea to get folks in a room and talk 

about what we are doing well and what we need to do better. 

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46 

So with that having been said, my colleagues who were not here 

will have the opportunity for 2 weeks to submit written questions. 

If they do, I would just ask that you respond to those promptly. 

This is not an issue that is going to go away. Deficits are not going 

to go away. Veterans who need a real good education, it is not 

going to go away. Our Nation, which needs a good workforce, that 

need is not going to go away. There is a lot here at stake and we 

are going to get it done. Thank you, very, very much. With that, 

this hearing is concluded. Thank you. 

[Whereupon, at 4 p.m., the Subcommittee was adjourned.] 

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