United States Government Accountability Office

GAO Testimony before the Subcommittee on 

Economic Opportunity, Committee on 

Veterans’ Affairs, House of 

Representatives

VA STUDENT FINANCIAL 

AID 

Actions Needed to Reduce 

Overlap in Approval 

Activities 

Statement of George A. Scott, Director 

Education, Workforce and Income Security Issues 

For Release on Delivery

Expected at 2:00 p.m. EDT

Thursday, April 19, 2007

 

GAO-07-775T 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

April 19, 2007

VA STUDENT FINANCIAL AID 

Actions Needed to Reduce Overlap in 

Highlights of GAO-07-775T, a testimony Approval Activities 

before the Subcommittee on Economic 

Opportunity, Committee on Veterans’ 

Affairs, House of Representatives 

In fiscal year 2006, the Department

of Veterans Affairs (VA) paid 

$19 million to state approving

agencies (SAA) to assess whether 

schools and training programs are 

of sufficient quality for veterans to 

receive VA education assistance

benefits when attending them. The

Departments of Education and

Labor also assess education and 

training programs for various 

purposes. This testimony describes 

(1) changes that have occurred in 

state approving agencies’ duties

and functions since 1995, (2) the 

extent to which the SAA approval 

process overlaps with efforts by

the Departments of Education and

Labor, and (3) the additional value 

that SAA approval activities bring 

to VA education benefit programs.

This testimony is based on a March 

2007 report (GAO-07-384).

What GAO Recommends

We recommended that VA take 

steps to monitor SAA spending and 

duplication of efforts with other 

agencies and that VA establish 

outcome-oriented performance 

measures to assess the 

effectiveness of SAA efforts. VA 

agreed with our recommendations 

and stated that it will take actions 

to address them. 

Since 1995, legislative changes effective in 2001 created additional 

responsibilities for SAAs, including promoting the development of 

apprenticeship and on-the-job training programs, providing outreach 

services, and approving tests for occupational licensing. From fiscal 

years 2003 to 2006, SAA funding increased from $13 million to $19 million 

to expand services and support the additional responsibilities. However, 

funding is scheduled to decrease beginning in fiscal year 2008. 

Many education and training programs approved by SAAs have also been

approved by Education or Labor, and VA has taken few steps to 

coordinate approval activities with these agencies. More than two-thirds 

of all programs approved by SAAs are offered by institutions that have 

been certified by Education. Many apprenticeship programs approved by 

SAAs have also been approved by Labor, although apprenticeship 

programs make up less than 2 percent of all programs approved by SAAs. 

Similar categories of approval standards, such as student achievement, 

exist across agencies, but the specific standards within each category

vary and the full extent of the overlap is unknown. For example, VA 

requires schools to give appropriate credit for prior learning while 

Education does not have such a requirement. Despite the overlap in 

approved programs and standards, VA and SAAs have made limited 

efforts to coordinate approval activities with other federal agencies. VA 

does not require SAAs to collect information on the amount of resources 

they spend on specific approval activities; therefore, information is not 

available to determine the amount of resources spent on SAA duties and 

functions, including those that may overlap with those of other agencies.

SAAs reportedly add value to the approval process for education and 

training programs, but the lack of outcome-oriented performance 

measures makes it difficult to assess the significance of their efforts. 

Areas of added value include (1) a focus on student services for veterans 

and on the integrity of VA benefits, (2) more frequent on-site monitoring 

of education and training programs than provided by Education or Labor, 

and (3) assessments and approval of a small number of programs that are 

not reviewed by other agencies. States, schools, and apprenticeship 

officials we spoke with reported that without SAAs, the quality of 

education for veterans would not change. However, veterans’ receipt of 

benefits could be delayed and the time required to complete their 

education and training programs could increase. Despite areas of 

apparent added value, it is difficult to fully assess the significance of SAA 

efforts. VA measures some outputs, such as the number of supervisory 

visits SAAs conduct, but it does not have outcome-oriented performance 

measures, such as the amount of benefit adjustments resulting from 

SAAs’ reviews, to evaluate the overall effectiveness of SAAs. 

www.gao.gov/cgi-bin/getrpt?GAO-07-775T.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact George Scott at 

(202) 512-7215 or scottg@gao.gov. 
Madame Chairwoman and Members of the Subcommittee: 

I am pleased to be here today to present information from our March 2007

report on state approving agencies (SAA).1

 In fiscal year 2006, the 

Department of Veterans Affairs (VA) paid approximately $2.1 billion in 

education assistance benefits to more than 470,000 beneficiaries and about

$19 million to state approving agencies to assess whether schools and 

training programs offer education of sufficient quality for veterans to 

receive VA education assistance benefits when attending them. Qualified 

individuals—veterans, service persons, reservists, and certain spouses and 

dependents—receive benefits through a number of education assistance 

programs for the pursuit of various types of programs, such as a degree

program, vocational program, apprenticeship, or on-the-job training. In 

general, these programs must be approved by an SAA in order for qualified 

individuals to receive VA education assistance benefits. Under contracts 

with VA, SAAs ensure that education and training programs meet VA 

standards through a variety of approval activities, such as evaluating 

course quality, assessing school financial stability, and monitoring student 

progress. 

The Departments of Education (Education) and Labor (Labor) also assess 

education and training programs for various purposes, primarily for 

awarding student aid and providing apprenticeship assistance. These 

assessments are based, in part, on evaluations against standards set by 

laws and regulations, such as those applicable to accrediting agencies. In 

2006, under Title IV of the Higher Education Act, Education provided 

nearly $77 billion in student aid in the form of both grants and loans. 

Education assesses and certifies postsecondary institutions for 

participation in Title IV programs through various oversight functions to 

ensure that these schools meet federal administrative and financial 

requirements and that they are accredited and licensed. Similarly, under 

the National Apprenticeship Act of 1937, Labor is authorized to formulate 

and promote the furtherance of labor standards to safeguard the welfare 

of apprentices. To ensure programs comply with federal standards, Labor 

directly registers and oversees apprenticeship programs in less than half of 

the states and has given state apprenticeship agencies or councils in the 

remaining states such authority over their own programs. 

 1

GAO, VA Student Financial Aid: Management Actions Needed to Reduce Overlap in

Approving Education and Training Programs and to Assess State Approving Agencies, 

GAO-07-384 (Washington, D.C.: Mar. 8, 2007).

Page 1 GAO-07-775T 
Given each agency’s role, the potential of duplicative efforts among federal 

agencies has been a congressional concern. In 1995, GAO reported on this 

matter and concluded that there was a substantial amount of overlap 

between the efforts of SAAs and the other federal agencies.2

 My testimony 

today is based on information from our recent report and will focus on 

(1) changes that have occurred in state approving agencies’ duties and 

functions since 1995, (2) the extent to which the SAA approval process 

overlaps with efforts by the Departments of Education and Labor, and 

(3) the additional value that SAA approval activities bring to VA education 

benefit programs. 

In summary, we found that: 

• Since 1995, legislative changes effective in 2001 created additional 

responsibilities for SAAs, including promoting the development of 

apprenticeship and on-the-job training programs, providing 

outreach services, and approving tests for occupational licensing.3

From fiscal years 2003 to 2006, SAA funding increased from 

$13 million to $19 million to expand services and support the 

additional responsibilities. However, funding is scheduled to 

decrease beginning in fiscal year 2008. 

• Many education and training programs approved by SAAs have also 

been approved by Education or Labor, and VA and SAAs have taken 

few steps to coordinate approval activities with these agencies. In 

addition, information is not available to determine the amount of 

resources spent on SAA duties and functions, including those that 

may overlap with other agencies and programs. 

• SAAs reportedly add value to the approval process for education 

and training programs through (1) a focus on student services for 

veterans and on the integrity of VA benefits, (2) more frequent onsite monitoring of education and training programs than provided 

by Education or Labor, and (3) assessments and approval of a small 

number of programs that are not reviewed by other agencies. 

However, VA’s lack of outcome-oriented performance measures 

 2

GAO, VA Student Financial Aid: Opportunity to Reduce Overlap in Approving 

Education and Training Programs, GAO/HEHS-96-22 (Washington, D.C.: Oct. 30, 1995). 

3

Veterans Benefits and Health Care Improvement Act of 2000, Pub. L. No. 106-419 (2000); 

and Veterans Education and Benefits Expansion Act of 2001, Pub. L. No. 107-103 (2001). 

Page 2 GAO-07-775T 
for evaluating SAAs makes it difficult to assess the significance of 

these efforts. 

To help ensure that federal dollars are spent efficiently and effectively, our 

report recommended that the Secretary of the Department of Veterans 

Affairs take steps to monitor SAA spending and identify whether any 

resources are spent on activities that duplicate the efforts of other 

agencies. We also recommended that the Secretary establish outcomeoriented performance measures to assess the effectiveness of SAA efforts. 

VA agreed with our findings and recommendations and stated that it will 

take a number of steps to address them. 

To conduct our work, we reviewed applicable laws, regulations, and 

program materials; and interviewed officials from each of the entities 

involved in the various approval processes, including federal agencies, 

state approving agencies, schools and training programs. We also 

reviewed and analyzed data on approval decisions from VA, Education, 

and Labor. Our work was performed in accordance with generally 

accepted government auditing standards. 

VA, Education, and Labor assess education and training programs for 

various purposes. VA’s approval process is meant to ensure that education 

and training programs meet VA standards for receipt of veteran education 

assistance benefits, while Education’s and Labor’s processes are primarily 

for awarding student aid and providing apprenticeship assistance. 

Background 

VA administers a number of programs designed to assist individuals in 

gaining access to postsecondary education or training for a specific 

occupation (see table 1). VA generally provides its assistance in the form 

of payments to veterans, service persons, reservists, and certain spouses 

and dependents. 

Page 3 GAO-07-775T 
Table 1: VA Beneficiaries of and Funding for Education and Training Assistance 

Programs in Fiscal Year 2006 

Programs * Beneficiaries Expenditures

Montgomery GI Bill (Chapter 30) 313,766 $1,909,014,605

Reserve Educational Assistance Program 

(Chapter 1607)

23,747 $151,397,610

Educational Assistance for the Selected Reserve 

(Chapter 1606)

65,145 $48,716,031

Dependents and Survivors Educational Assistance 

Program (Chapter 35) 

74,532 $38,787,332

Veterans Educational Assistance Program 

(Chapter 32) 

575 $59,113

Total 477,765 $2,147,974,691

Source: VA. 

*No payments for the National Call to Service program were made in fiscal year 2006. 

Benefits can be used to pursue a degree program, vocational program, 

apprenticeship, and on-the-job training (see fig. 1). Before an individual 

entitled to VA education assistance can obtain money for an education or 

training program, the program must be approved by an SAA, or by VA in 

those cases in which an SAA has not been contracted to perform the work. 

Page 4 GAO-07-775T 
Figure 1: Veteran Enrollment by Program Type in Fiscal Year 2006 

VA’s administrative structure for the education and training assistance 

programs includes its national office, which oversees the four regional 

processing offices (RPO), and the national contract with SAAs. RPOs 

administer the education assistance programs and process benefits for 

veterans. SAAs review education and training programs to determine 

which programs should be approved and ensure schools and training 

providers are complying with VA standards. SAAs have six core duties: 

(1) approval of programs, (2) visits to facilities, (3) technical assistance to 

individuals at facilities, (4) outreach, (5) liaison with other service 

providers, and (6) contract management. Sixty SAAs exist in the 50 states, 

the District of Columbia, and Puerto Rico. Eight states have two SAAs. 

SAAs are usually part of a state’s department of education (31 SAAs). In 

some states, SAAs are organizationally located in other departments such 

as labor (9 SAAs) or veterans’ services (19 SAAs). 

Page 5 GAO-07-775T 
The U.S. Department of Education’s approval process is to ensure that 

schools meet federal Education standards to participate in federal student

financial aid programs. In order for students attending a school to receive

Title IV financial aid, a school must be (1) licensed or otherwise legally 

authorized to provide postsecondary education in the state in which it is 

located, (2) accredited by an entity recognized for that purpose by the 

Secretary of Education, and (3) certified to participate in federal student 

aid programs by Education. As such, the state licensing agencies, 

accrediting agencies, and certain offices within Education are responsible 

for various approval activities. 

• State licensing agencies grant legal authority to postsecondary 

institutions to operate in the state in which they are located. Each 

of the states has its own agency structure, and each state can 

choose its own set of standards. 

• Accrediting agencies develop evaluation criteria and conduct peer 

evaluations to assess whether or not those criteria are met by

postsecondary institutions. Institutions or programs that meet an 

agency’s criteria are then “accredited” by that agency. As of 

November 2005, there were 60 recognized private accrediting 

agencies of regional or national scope. 

• The U.S. Department of Education’s Office of Postsecondary 

Education evaluates and recognizes accrediting agencies based on 

federal requirements to ensure these agencies are reliable 

authorities as to the quality of education or training provided by the 

institutions of higher education and the higher education programs 

they accredit. 

• The U.S. Department of Education’s Office of Federal Student Aid 

determines the administrative and financial capacity of schools to 

participate in student financial aid programs, conducts ongoing 

monitoring of participant schools, and ensures participant schools 

are accredited and licensed by the states. 

The purpose of the Department of Labor’s approval process is to establish 

and promote labor standards to safeguard the welfare of apprentices. 

Labor establishes standards and registers programs that meet the 

standards. Labor directly registers and oversees programs in 23 states but

has granted 27 states, the District of Columbia, and 3 territories authority 

to register and oversee their own programs, conducted by state 

apprenticeship councils (SACs). Labor reviews the activities of the SACs. 

Page 6 GAO-07-775T 
SACs ensure that apprenticeship programs for their respective states 

comply with federal labor standards, equal opportunity protections, and 

any additional state standards. 

Figure 2 shows the agencies responsible for the approval processes for the 

various types of education and training programs. 

Figure 2: Agencies Responsible for the Approval Process for Education and Training Programs 

Source: GAO Analysis. 

Page 7 GAO-07-775T 
In 2001, SAAs received additional responsibilities as a result of legislative 

changes. This included responsibility for actively promoting the 

development of apprenticeship and on-the-job training programs and 

conducting more outreach activities to eligible persons and veterans to 

increase awareness of VA education assistance. SAAs were also charged 

with approving tests used for licensing and certification, such as tests to 

become a licensed electrician. For those tests that have been approved, 

veterans can use VA benefits to pay for testing fees. From fiscal years 2003 

to 2006, SAA funding increased from $13 million to $19 million to expand

services and support the additional responsibilities. Funding is scheduled 

to begin to decrease in fiscal year 2008. 

Many education and training programs approved by SAAs have also been

approved by Education and Labor. Sixty-nine percent of all programs 

approved by SAAs are offered by institutions that have also been certified

by Education. Seventy-eight percent of 

SAA-approved programs in institutions of higher learning (e.g., colleges 

and universities) have been certified by Education. Also, 64 percent of 

SAA-approved non-college degree programs are in institutions that have 

been certified by Education. Although less than 2 percent of all programs 

approved by SAAs are apprenticeship programs, VA and SAA officials 

reported that many of these programs have also been approved by Labor.

Similar categories of approval standards exist across agencies, but the 

specific standards within each category vary and the full extent of overlap 

is unknown. For example, while VA and Education’s approval standards 

both have requirements for student achievement, the New England 

Association of Schools and Colleges, an accrediting agency, requires that 

students demonstrate competence in various areas such as writing and 

logical thinking, while VA does not have this requirement. Also among the

student achievement standards, VA requires schools to give appropriate 

credit for prior learning, while Education does not have such a 

requirement. Table 2 shows the similar categories of standards that exist 

across agencies. 

Legislative Changes 

Effective in 2001 

Created Additional 

Responsibilities for 

SAAs 

Many Education and 

Training Programs 

Approved by SAAs 

Have Also Been 

Approved by 

Education or Labor,

and VA Has Taken 

Few Steps to 

Coordinate Approval 

Activities with These 

Agencies 

Page 8 GAO-07-775T 
Table 2: Approval Standards of Education and Training Programs Used by VA, Education, and Labor

SAA1,2 Education3Labor

Categories of 

approval standards 

IHL/NCD 

accredited

IHL/NCD 

nonaccreditedApprenticeship

On the

job 

training 

Education’s

certification

Federal 

Standards 

for 

accrediting

agencies 

Connecticut 

state 

licensing

agency Apprenticeship

Student achievement x x x x x x x 

Curricula, program 

objectives, and

faculty 

x x x x x x x x

Facilities, equipment, 

and supplies 

x x x x x x x

Institutional 

objectives, capacity, 

and administration 

x x x x x x

Student support 

services 

x x

Recruiting and 

admission practices 

x x x x x x

Record of student 

complaints 

x x

Process related 

requirements (e.g. 

application 

requirements) 

x x x x x x x

Source: GAO analysis of VA, Education, and Labor Standards 

Notes: GAO constructed these categories to encompass the numerous and broad range of standards 

used by agencies. SAAs have different sets of standards for each program type (e.g. IHL and NCD). 

Education’s approval process involves different sets of standards used by different entities, such as

accrediting agencies. Labor has one set of standards that is applicable to apprenticeship programs. 

1

By statute, courses must meet certain criteria. These relate to: (1) record-keeping of student

progress; (2) record-keeping of students’ previous education; (3) quality, content and length of 

courses; (4) qualifications of administrators and instructors; and (5) equipment, space, and 

instructional materials. We categorized the first two criteria as student achievement, criteria (3) and

(4) as Curricula, Program Objectives and Faculty, and criterion (5) as Institutional objectives, 

capacity, and administration. 2

SAA approval requirements for non-accredited courses encompass a 

number of additional criteria, such as having a tuition refund policy and enrollment limitations. 3

Connecticut’s standards may not be representative of standards across the country 

While agencies have the same approval standards in some instances, the 

interpretation and application of these standards may differ. For example, 

VA, accrediting agencies, and Labor each require that facilities have 

adequate space, equipment, and instructor personnel to provide quality 

training, but the definitions of adequacy differ in the level of specificity. 

Similarly, VA and accrediting agencies both require that schools have 

Page 9 GAO-07-775T 
policies related to student achievement, such as minimum satisfactory 

grades, but the requirements differ in level of specificity. 

Despite the overlap in approved programs and standards, VA and SAAs 

have made limited efforts to coordinate approval activities with Education 

and Labor. VA reported that while it has coordinated with Education and 

Labor on issues related to student financial aid and apprentices’ skill 

requirements, it believes increased coordination is needed for approval 

activities in order to determine the extent of duplicative efforts. Most of 

the SAA officials we spoke with reported that they have coordinated with 

SACs to register apprenticeship programs in their states. Labor reported 

that it coordinated with VA’s national office in several instances, including

providing a list of registered apprenticeship programs. Education reported

that it does not have formalized coordination with VA but has had some 

contacts to inform VA of its concerns regarding specific institutions. 

Information is not available to determine the amount of resources spent 

on SAA duties and functions, including those that may overlap with those 

of other agencies. VA does not require SAAs to collect information on the 

amount of resources they spend on specific approval activities. The SAA 

officials we spoke with said that their most time-consuming activity is 

conducting inspection and supervisory visits of schools and training 

facilities. However, the lack of data on resource allocation prevented us 

from determining what portions of funds spent by SAAs were for approval

activities that may overlap with those of other agencies. 

Page 10 GAO-07-775T 
SAAs Reportedly Add 

Value to the Approval 

Process for Education 

and Training 

Programs, but the 

Lack of OutcomeOriented Performance 

Measures Makes It 

Difficult to Assess the 

Significance of Their 

Efforts

SAA and other officials reported that SAA activities add value because 

they provide enhanced services to veterans and ensure program integrity.

According to these officials, SAAs’ added value includes a focus on 

student services for veterans and on VA benefits, more frequent on-site 

monitoring of education and training programs than Education and Labor,

and assessments and approval of a small number of programs that are not 

reviewed by other agencies, such as programs offered by unaccredited 

schools, on-the-job training programs, and apprenticeship programs not 

approved by Labor. 

SAA approval activities reportedly ensure that (1) veterans are taking 

courses consistent with occupational goals and program requirements, 

(2) schools and training programs have evaluated prior learning and work 

experience and grant credit as appropriate, and (3) school or program 

officials know how to complete paperwork and comply with policies 

required by VA educational assistance through technical assistance. 

According to officials we interviewed, SAAs generally conduct more 

frequent on-site monitoring of education and training programs than 

Education or Labor, possibly preventing fraud, waste, and abuse. Some 

officials reported that SAAs’ frequent visits were beneficial because they

ensure that schools properly certify veterans for benefits and that benefits

are distributed accurately and quickly. States, schools, and apprenticeship 

officials we spoke with reported that without SAAs, the quality of 

education for veterans would not change. However, veterans’ receipt of 

benefits could be delayed and the time required to complete their 

education and training programs could increase.

Despite areas of apparent added value, it is difficult to fully assess the 

significance of SAA efforts. VA does measure some outputs, such as the 

number of supervisory visits SAAs conduct, but it does not have outcomeoriented measures, such as the amount of benefit adjustments resulting 

from SAAs’ review of school certification transactions, to evaluate the 

overall effectiveness and progress of SAAs. (See table 3.) 

Page 11 GAO-07-775T 
Table 3: Examples of VA Output Measures and Potential Outcome Measures 

Examples of Existing VA output 

Measures 

Examples of Potential Outcome

Measures 

Percentage of visits to facilities for 

supervisory and inspection purposes 

completed within VA specified timeframes 

Amount of benefit adjustments resulting 

from SAAs’ review of school certification 

transactions 

Number of times technical assistance 

provided to interested parties such as 

individuals and schools 

Error rate of certification transactions 

identified by SAAs 

Number of approved facilities with 

approved programs 

Completion rates of beneficiaries 

Source: GAO analysis.

We made several recommendations to the Department of Veterans Affairs 

to help ensure that federal dollars are spent efficiently and effectively. We

recommended that the Secretary of the Department of Veterans Affairs 

take steps to monitor its spending and identify whether any resources are

spent on activities that duplicate the efforts of other agencies. The extent 

of these actions should be in proportion to the total resources of the 

program. Specifically: 

Prior 

Recommendations 

and Agency Response 

• VA should require SAAs to track and report data on resources spent 

on approval activities such as site visits, catalog review, and 

outreach in a cost-efficient manner, and 

• VA should collaborate with other agencies to identify any 

duplicative efforts and use the agency’s administrative and 

regulatory authority to streamline the approval process. 

In addition, we recommended that the Secretary of the Department of 

Veterans Affairs establish outcome-oriented performance measures to 

assess the effectiveness of SAA efforts. 

VA agreed with the findings and recommendations and stated that it will 

(1) establish a working group with the SAAs to create a reporting system 

to track and report data for approval activities with a goal of 

implementation in fiscal year 2008, (2) initiate contact with appropriate 

officials at the Departments of Education and Labor to identify any 

duplicative efforts, and (3) establish a working group with the SAAs to 

develop outcome-oriented performance measures with a goal of 

implementation in fiscal year 2008. While VA stated that it will initiate 

contact with officials at Education and Labor to identify duplicative 

Page 12 GAO-07-775T 
efforts, it also noted that amending its administrative and regulatory 

authority to streamline the approval process may be difficult due to 

specific approval requirements of the law. We acknowledge these 

challenges and continue to believe that collaboration with other federal 

agencies could help VA reduce duplicative efforts. We also noted that VA

may wish to examine and propose legislative changes needed to further 

streamline its approval process. 

Madame Chairwoman, this completes my prepared statement. I would be 

happy to respond to any questions that you or other members of the 

subcommittee may have. 

For further information regarding this testimony, please contact me at 

(202) 512-7215. Individuals making key contributions to this testimony 

include Heather McCallum Hahn, Andrea Sykes, Kris Nguyen, 

Jacqueline Harpp, Cheri Harrington, Lara Laufer, and Susannah Compton. 

GAO Contacts 

(130665) Page 13 GAO-07-775T 
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