United States General Accounting Office

GAO Report to the Committee on Veterans’

Affairs, U.S. Senate

October 1995 VA STUDENT

FINANCIAL AID

Opportunity to Reduce

Overlap in Approving

Education and Training

Programs

GAO/HEHS-96-22

GAO United States

General Accounting Office

Washington, D.C. 20548

Health, Education, and

Human Services Division

B-259871 

October 30, 1995

The Honorable Alan K. Simpson

Chairman

The Honorable John D. Rockefeller IV

Ranking Minority Member

Committee on Veterans’ Affairs

United States Senate

Since the 1940s, the Department of Veterans Affairs (VA) and its

predecessor agencies have contracted with state approving agencies (SAA)

to assess whether schools and training programs offer education of

sufficient quality for veterans to receive VA education assistance benefits

when attending them.1 SAAs perform this “gatekeeping” or approval

function through such activities as evaluating course quality, school

financial stability, and student progress. In fiscal year 1994, VA paid more

than $1 billion in education assistance benefits to more than 450,000

beneficiaries and spent about $12 million for SAA gatekeeping services.

Other federal agencies—particularly the Department of Education and the

Department of Labor—also assess schools and programs for various

purposes, such as student loans, apprenticeship assistance, and other

forms of federal support. Concerned about potential duplication of effort,

you asked us to determine the extent to which SAA assessment activities

overlap the efforts of other agencies.

We focused our analysis on SAA activities during fiscal year 1994. We

specifically looked at the degree to which schools or programs with

SAA-approved courses of study were also reviewed as a part of Education’s

or Labor’s gatekeeping systems. We analyzed and compared the

gatekeeping activities of the three agencies, especially the standards used

in evaluating the schools and programs. Much of our information on SAA

activities was supplied by VA regional offices through the VA central office.

Appendix I contains a more complete discussion of our scope and

methodology. We conducted our review from October 1994 through

August 1995 in accordance with generally accepted government auditing

standards.

1

The pertinent federal law—title 38—authorized state governments to create or designate SAAs (38

U.S.C. 3671(a)). Although funded by federal money and responsible for enforcing federal law, SAAs are

usually part of a state’s department of education. In some states, SAAs are organizationally located in

other departments, such as labor or veterans’ services.

Page 1 GAO/HEHS-96-22 VA’s Approval of Schools
B-259871 

Results in Brief We estimate that $10.5 million of the $12 million paid to SAAs in 1994 was

spent to conduct assessments that overlapped those of the Department of

Education. These assessments involved reviews of academic and

vocational schools that were already accredited by Education-approved

agencies.2 SAA efforts costing another $400,000 in 1994 may have

overlapped assessments of apprenticeship programs done by Labor,

though the data were not available to determine if overlap was indeed

occurring. The remaining SAA assessment activity—costing about

$1.1 million—did not overlap activities of other agencies because it

involved on-the-job training (OJT) programs and unaccredited schools,

neither of which Education or Labor assessed.

The continued use of SAAs to conduct assessments that overlap other

assessments does not appear to be a useful investment of scarce federal

dollars. The overlap may not amount to out-and-out duplication, because

SAAs use standards and methods that may differ somewhat from those of

other reviewing bodies. However, a comparison of VA’s key standards with

those used by Education’s gatekeepers shows that the standards are

similar. Given this similarity, and the significant amount of SAA work

(about 87 percent) that overlapped Education assessments, reducing SAA

activity to apply only to those schools and programs not subject to

Education gatekeeping appears advisable.

How Do VA,

Education, and Labor

Perform Gatekeeping?

In general, the term “gatekeeping” refers to the responsibilities and

activities that entities—VA, Education, and Labor—undertake to determine

whether postsecondary educational and training programs and institutions

meet federal requirements. Although the standards, procedures, and

methods used by the entities may differ, the overriding purpose of

gatekeeping remains the same regardless of the programs or agencies

involved. To assess the overlap that occurs, it is important to first

understand each of the three agencies’ particular gatekeeping approaches.

VA’s Gatekeeping VA administers a number of programs designed to assist individuals in

gaining access to postsecondary education or training for a specific

occupation. VA generally provides its assistance in the form of payments to

veterans, service persons, reservists, and certain spouses and dependents.

Before an individual entitled to VA education assistance can obtain money

for an education or training program, the program must be approved by an

2

Accreditation is the process by which an accrediting agency, approved by Education, recognizes that

an educational institution or program meets the agency’s established standards and requirements.

Page 2 GAO/HEHS-96-22 VA’s Approval of Schools
B-259871 

SAA, or by VA in those cases in which an SAA has not been contracted to

perform the gatekeeping work. In all, 61 SAAs existed in the 50 states, the

District of Columbia, and Puerto Rico during 1994.3

SAAs are responsible both for determining which courses should be

approved and for ensuring that schools are complying with the schools’

established standards relating to the course or courses that have been

approved. According to a VA official, SAAs are generally expected to make

an annual supervisory visit to each school with enrolled education

beneficiaries. In fiscal year 1994, about 95 percent of SAA staff performed

these primary functions for academic and vocational schools, with the

remaining 5 percent covering apprenticeship and other OJT training

programs.4

Contract costs paid to each SAA by VA primarily represent reimbursements

to the state for salaries and travel and an allowance for administrative

expenses. For budgetary purposes, costs are allocated using

formula-driven guidelines and are largely dependent on such factors as

projected school or training program work loads, state employee salary

schedules, and the distances SAA officials must travel to inspect or

supervise schools or training programs.

SAA contracts have been the focus of cost-cutting activity in recent years.

VA officials said that before fiscal year 1988, VA was spending about $17 to

$18 million annually for SAA contracts. Starting in fiscal year 1988, the

Congress set an annual funding cap of $12 million. For fiscal year 1994, the

61 SAAs requested VA funding totaling $14.4 million but received

$12 million. These requests were to support a total of 164 professional

staff in SAAs whose staffing ranged from 12.3 positions to less than 0.5

position. For fiscal year 1995, the Congress increased the cap to

$13 million.

Education’s Gatekeeping Most of the aid associated with Education’s programs is provided in the

form of grants and guaranteed student loans under title IV of the Higher

3

Nine states—California, Hawaii, Indiana, Minnesota, New Jersey, North Carolina, Oregon,

Washington, and Wisconsin—had two SAAs.

4

The four principal types of training—academic, vocational, apprenticeship, and other on-the-job

training—allowed under VA educational programs are defined in appendix II. Appendix II also

contains additional information on VA’s educational assistance programs.

Page 3 GAO/HEHS-96-22 VA’s Approval of Schools
B-259871 

Education Act of 1965, as amended.5 In fiscal year 1994, postsecondary

student aid administered by Education totaled more than $32 billion, with

more than 6.6 million students receiving some form of assistance.

Education’s approach involves activities conducted by a gatekeeping

“triad” composed of accrediting agencies, state licensing agencies, and

Education itself. In order for students attending a school to receive title IV

financial aid, the school must be (1) accredited by an entity recognized for

that purpose by the Secretary of Education, (2) licensed or otherwise

legally authorized to provide postsecondary education in the state in

which it is located, and (3) certified to participate in federal student aid

programs by Education.

Each part of the gatekeeping triad has its own responsibilities. Although

specific responsibilities differ, parts of the triad may be evaluating similar

areas, such as aspects of a school’s curriculum, students’ progress, or the

school’s financial capability to participate in title IV programs.6

• Accreditation is an essential step in Education’s gatekeeping process, in

that unaccredited schools or programs are ineligible to participate in title

IV programs. The process of accreditation is a nongovernmental peer

evaluation that is performed by more than 90 accrediting associations of

regional or national scope. Each accrediting body applies a relevant set of

standards to the institution, department, or program under review. Those

that meet the standards become accredited.

• To participate in title IV programs, each educational institution must also

have legal authority to operate in the state in which it is located. At the

state level, licensing or other approval is conducted by a state agency.

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

its own set of standards.

• Education’s own responsibilities include determining the administrative

and financial capacity of schools to participate in title IV programs and

monitoring the performance of accrediting and licensing bodies. In all,

more than 7,500 postsecondary institutions were certified to participate in

title IV student aid programs by Education in 1994.

5

Title IV programs include Federal Family Education Loans, Federal Perkins Loans, Federal Direct

Student Loans, Pell Grants, Supplemental Educational Opportunity Grants, College Work-Study, and

State Student Incentive Grants.

6

See appendix III for additional information on each part of the triad.

Page 4 GAO/HEHS-96-22 VA’s Approval of Schools
B-259871 

Labor’s Gatekeeping Apprenticeship programs are a focus of Labor’s gatekeeping activities.

Under the National Apprenticeship Act of 1937, Labor establishes and

promotes labor standards to safeguard the welfare of apprentices.

Eligibility for various federal programs, including VA education assistance

to veterans attending apprenticeship programs, is conditioned upon

conformance to these standards. The standards require, for example, that

an apprenticeship program (1) provide for periodic review and evaluation

of the apprentice’s progress in job performance and related instruction

and (2) prepare appropriate progress records documenting such reviews.

Labor’s Bureau of Apprenticeship and Training determines whether a

program conforms to Labor’s standards. If the program is found to be in

conformance, it can be “registered,” either by Labor or by a state

apprenticeship agency or council that Labor has recognized.

To What Extent Did

SAA Gatekeeping

Overlap Other

Efforts?

After examining gatekeepers’ activities, comparing their assessment

standards, and conducting other analyses, we determined that most SAA

activity overlapped work done by others. More specifically, an estimated

87 percent of SAA staff time, costing about $10.5 million of the $12 million

spent by VA in fiscal year 1994, was spent reviewing and approving courses

at academic and vocational schools that were also accredited by

Education-approved agencies (see fig. 1). An estimated 3 percent of SAA

staff time, costing about $400,000, was spent assessing apprenticeships,

but we could not readily determine whether this activity overlapped

Labor’s efforts. The remaining portion of SAA staff time, costing about

$1.1 million, was spent on gatekeeping functions that did not overlap the

efforts of other entities.

Page 5 GAO/HEHS-96-22 VA’s Approval of Schools
B-259871 

Figure 1: Estimated Overlap of SAA

Efforts With Other Gatekeepers’ Work,

Fiscal Year 1994

87.3% • Overlapped Education-Approved

Accreditors’ Work

•

3.4%

Unable to Determine Whether

Overlapped Labor’s Work

•

9.3%

Did Not Overlap Either Labor’s or

Education’s Work

Most SAA Activity

Overlapped Education’s

Gatekeeping

Most SAA activity occurred at academic and vocational schools that had

been accredited by nationally recognized accrediting agencies—part of the

activity of Education’s gatekeeping triad. In fiscal year 1994, SAAs reviewed

and approved 6,294 academic and vocational schools that had been

accredited by accrediting agencies.

These schools were also potentially subject to the two other parts of

Education’s gatekeeping triad. We examined how likely it was that these

schools had also been certified by Education itself.7

 We selected a

judgmental sample of five states (Mississippi, Vermont, Washington, West

Virginia, and Wyoming) and the District of Columbia. For these six

jurisdictions, we obtained (1) a list from VA of 273 SAA-approved vocational

and academic schools that had also been accredited and (2) a list from

Education of all schools that were Education-certified. In all, 255

(93 percent) of the schools on the VA list were also Education-certified.

7

Each of the 50 states has its own agency structures and standards, and we did not attempt to test the

degree to which schools had been reviewed by them (see app. III).

Page 6 GAO/HEHS-96-22 VA’s Approval of Schools
B-259871 

While SAA reviews may differ somewhat from those conducted by

Education gatekeepers, SAAs and Education use similar standards for

approving education and training programs. Both VA and Education base

their standards for approving or certifying schools and courses on federal

laws and regulations. We identified 15 key standards in the law and

regulations that academic and vocational schools must meet to be

approved by SAAs (see app. IV). We compared these key standards with

those used by accrediting bodies, states, and Education and found them to

be similar (see app. V). Examples follow.

• A school seeking SAA approval must have a policy that gives veterans

appropriate credit for previous education and training. Of the seven

accrediting agencies whose standards we reviewed, five required schools

to have such a policy, and the policies were similar.

• Schools seeking SAA approval must also demonstrate that they have

sufficient financial resources to ensure their proper operation and to fulfill

their commitment to provide quality education for their students. Both

Education and accreditation agencies had similar requirements concerning

financial resources.

SAA Overlap of Labor’s

Gatekeeping Efforts Is

Unknown

The possibility exists that SAA reviews of apprenticeship programs also

overlap Labor’s gatekeeping efforts. The law requires SAA approval of an

apprenticeship if a student in the program is to receive VA educational

assistance. Before approving such a program, an SAA must determine that

the training establishment and its apprentice courses are in conformance

with Labor’s standards of apprenticeship. However, VA regulations do not

require that an SAA-approved apprenticeship program be registered by

Labor.

While the potential for overlap exists, we were unable to determine if it

actually occurred because data were not available to determine whether

SAA-approved programs were also registered by Labor.

Some SAA Gatekeeping

Efforts Did Not Overlap

About 9 percent of SAAs’ staff effort did not overlap other gatekeeping

efforts. This portion of SAA activity fell into two categories: approval of

unaccredited schools and programs, and approval of OJT programs other

than apprenticeships.

Unaccredited institutions. Under the law, SAAs may approve courses of

study at unaccredited institutions, thereby making veterans eligible to

Page 7 GAO/HEHS-96-22 VA’s Approval of Schools
B-259871 

receive assistance for attending. By contrast, Education’s regulations

generally require schools to be accredited before they are certified,

thereby making students eligible for title IV programs. As of September 30,

1994, SAAs had approved courses of study for veterans at 534 unaccredited

academic and vocational schools. The SAA staff that reviewed and

approved these schools—about 7 percent of SAA staff—did not duplicate

Education’s efforts.

Other OJT programs. SAAs also review and approve other OJT programs that

do not qualify as apprenticeship programs and that are not subject to

review and registration by Labor. SAAs’ efforts to assess other OJT programs

thus did not overlap Labor’s gatekeeping efforts. We estimate that for

fiscal year 1994, these approvals took about 2 percent of SAA staff time.

Conclusions The substantial amount of overlap that occurred between SAA and other

gatekeepers’ efforts raises questions about whether SAA efforts should

continue at their current level. We estimated that 87 percent of the

approval effort expended by SAAs related to schools and programs also

subject to accreditation by Education-approved entities. Also, in our

review of six jurisdictions, 93 percent of the accredited schools were also

certified by Education to participate in title IV student aid programs.

School certification involves applying standards that are similar to those

used by SAAs. On its face, an SAA review of courses of study at an

Education-certified school would appear to add only marginal value. The

same may be true for SAA reviews of apprenticeship programs, though the

lack of information precludes us from determining if overlap exists with

Labor’s oversight.

We believe an opportunity exists for reducing federal expenditures by over

$10 million annually through the elimination of overlapping SAA

gatekeeping efforts. VA and SAA efforts would be better focused on such

activities as reviewing courses offered by unaccredited schools, for which

no other form of federal oversight currently exists.

Matters for

Congressional

Consideration

The Congress may wish to consider whether it is necessary for VA to

continue contracting with SAAs to review and approve educational

programs at schools that have already been reviewed and certified by

Education.

Page 8 GAO/HEHS-96-22 VA’s Approval of Schools
B-259871 

Agency Comments

and Our Evaluation

We requested comments on a draft of this report from the Secretaries of

Education and Veterans Affairs. Education provided several clarifying and

technical suggestions, which we incorporated where appropriate.

In general, VA said that it has reservations about relying upon Education’s

gatekeeping system to ensure the integrity and quality of education and

training programs made available to VA education program beneficiaries.

VA’s two principal comments were that

• the draft report did not elaborate on the specific mechanisms or

organizational elements within Education that are in place to ensure that

the requirements of title 38 of the U.S. Code are met and

• it is questionable whether accreditation, in the absence of funding for the

state postsecondary review entities (SPRE)8

 program, will accomplish the

approval, monitoring, and supervisory requirements of the laws governing

VA education programs.

In the report, we do discuss Education’s gatekeeping triad composed of

accrediting agencies, state licensing agencies, and Education itself, which

performs the same basic function as SAAs for many of the same schools.

Under title 38, the essential responsibility of SAAs is to determine which

courses should be approved and to ensure that schools are complying with

their established standards relating to the courses that have been

approved before an individual entitled to VA education assistance can

obtain money for an education or training program. Education’s

gatekeeping triad does similar work: assessing whether schools and

training programs offer education of sufficient quality for students to

receive federal financial assistance under title IV of the Higher Education

Act, as amended.

In fiscal year 1994, the Department of Education provided more than $32

billion in financial aid to 6.6 million students. The SPRE program has never

been fully operational, and only nine states’ SPREs had been approved by

Education as of September 30, 1995. Thus, the elimination of SPRE funding

should have little impact on the operation of the gatekeeping triad. In

addition, before the SPRE program was initiated, the majority of education

and training programs approved by SAAs were offered by schools that were

also accredited and certified by Education’s gatekeeping system. And, as

8

State-created SPREs were authorized by the Higher Education Amendments of 1992 to help ensure

the quality of education, financial responsibility, and administrative capability of postsecondary

institutions participating in title IV programs. SPREs support the state’s review of problem schools that

are referred to the state by Education. However, federal funding for SPREs was rescinded by P.L.

104-19.

Page 9 GAO/HEHS-96-22 VA’s Approval of Schools
B-259871 

illustrated in this report, we found that both VA and Education gatekeepers

apply similar standards in determining educational program acceptability

at the same schools.

VA also said that the role states and SAAs perform in approving education

and training programs should continue and that it believes that such a

function should not be centralized at the federal level. However, as noted

in our report, just as the SAA functions are not totally centralized at the

federal level, neither are the gatekeeping efforts of Education’s triad,

which relies on the nonfederal work of accrediting entities and state

licensing bodies to perform an important portion of the school approval

work.

The full text of VA’s comments appears in appendix VI of this report.

Copies of this report are being sent to the Chairman and Ranking Minority

Member, House Committee on Veterans’ Affairs; the Secretaries of

Veterans Affairs, Education, and Labor; appropriate congressional

committees; and other interested parties.

Please call me at (202) 512-7014 if you or your staff have any questions

regarding this report. Major contributors include Joseph J. Eglin, Jr.,

Assistant Director; Charles M. Novak; Daniel C. Jacobsen; and Robert B.

Miller.

Cornelia M. Blanchette

Associate Director, Education

 and Employment Issues

Page 10 GAO/HEHS-96-22 VA’s Approval of Schools
Page 11 GAO/HEHS-96-22 VA’s Approval of Schools
Contents

Letter 1

Appendix I 

Scope and

Methodology

14

Appendix II 

VA Postsecondary

Educational

Assistance Programs

15

Appendix III 

Education’s

Gatekeeping Triad

17

Accrediting Entities 17

States 17

Department of Education 18

Appendix IV 

Key VA Standards

Used by SAAs for

Approving Courses at

Postsecondary

Academic and

Vocational Schools

19

Appendix V 

Standards of

Education’s

Gatekeeping Triad

Used for Comparison

With VA Standards

21

Accrediting Entities 21

States 22

Department of Education 22

Page 12 GAO/HEHS-96-22 VA’s Approval of Schools
Contents

Appendix VI 

Comments From the

Department of

Veterans Affairs

23

Table Table II.1: Trainees Participating in, and Funds Expended for,

VA’s Three Primary Educational Assistance Programs, Fiscal

Year 1994

15

Figures Figure 1: Estimated Overlap of SAA Efforts With Other

Gatekeepers’ Work, Fiscal Year 1994

6

Figure II.1: Percent of VA Education Beneficiaries by Type of

Training, Fiscal Year 1994

16

Abbreviations

OJT on-the-job training

SAA state approving agency

SPRE state postsecondary review entity

VA Department of Veterans Affairs

Page 13 GAO/HEHS-96-22 VA’s Approval of Schools
Appendix I 

Scope and Methodology

To determine the functions of SAAs, we reviewed various VA and SAA

documents, including regulations, policies, procedures, contracts, budget

submissions, training manuals, and congressional testimony. We also held

discussions with VA, SAA, and National Association of State Approving

Agencies officials. On the basis of these efforts and additional discussions

with officials from Education and Labor, we confirmed that the work of

Education and Labor gatekeepers would be most appropriate to compare

with SAA gatekeeping work.

As an indicator of overlapping or duplicative functions, we analyzed SAAs’

gatekeeping activities for fiscal year 1994 to determine the extent that

schools with SAA-approved courses of study were also reviewed as part of

Education’s gatekeeping system. Since much of the SAA data we needed for

analysis were not centrally available from VA, the VA central office gathered

the information we requested from its regional offices and provided it to

us. We did not verify the accuracy of this information.

VA was unable to readily provide a listing of SAA-approved apprenticeship

programs or to determine whether such approved programs were also

registered by Labor. Therefore, we had no basis on which to determine the

existence or the extent of overlapping functions between SAAs and Labor

for apprenticeship programs.

As an indicator of the similarities between Education and VA gatekeeping

work, we identified, from the law and VA regulations, key standards used

by SAAs in reviewing schools and educational courses and compared them

with standards used by Education in evaluating schools for participation

in title IV programs.9

 The focus of our review was overlapping and

duplicative functions between SAAs and other entities; we were not asked

to analyze the effectiveness of these functions.

9

See appendix IV for a listing of key VA standards. See appendix V for standards used by the Education

gatekeeping triad.

Page 14 GAO/HEHS-96-22 VA’s Approval of Schools
Appendix II 

VA Postsecondary Educational Assistance

Programs

SAAs administer VA’s largest education benefits programs: the Montgomery

G.I. Bill, the Post-Vietnam Era Veterans’ Educational Assistance, and the

Survivors’ and Dependents’ Educational Assistance programs. In fiscal

year 1994, these programs served 453,973 trainees at an estimated cost of

about $1 billion (see table II.1), an average of $2,223 per trainee. The

Montgomery G.I. Bill, which covers veterans, military personnel, and

selected reservists, is the largest program and accounts for over 85 percent

of the total funds expended.

Table II.1: Trainees Participating in,

and Funds Expended for, VA’s Three

Primary Educational Assistance

Programs, Fiscal Year 1994

Program

Number of

trainees

Funds expended

(in thousands)

Percent of total

funds

Montgomery G.I. Bill 387,907 $ 858,908 85.1

Post-Vietnam Era

Veterans’ Educational

Assistance 25,806 48,114 4.8

Survivors’ and

Dependents’ Educational

Assistance 40,260 102,384 10.1

Total 453,973 $1,009,406 100.0

VA categorizes the types of training allowed under its educational

programs as

• academic—degree and certain professional programs at institutions of

higher learning;

• vocational—noncollege degree, vocational, or technical diploma or

certificate programs;

• apprenticeship—OJT typically requiring a minimum of 2,000 hours’ work

experience supplemented by related classroom instruction, leading to

journeyman status in a skilled trade; and

• other OJT—typically requiring supervised job instruction for a period of not

less than 6 months and not more than 2 years, leading to a particular

occupation.

During fiscal year 1994, over 91 percent of VA education beneficiaries

received academic training at institutions of higher learning (see fig. II.1).

Page 15 GAO/HEHS-96-22 VA’s Approval of Schools
Appendix II 

VA Postsecondary Educational Assistance

Programs

Figure II.1: Percent of VA Education

Beneficiaries by Type of Training,

Fiscal Year 1994

91.6% • Academic

•

6.1%

Vocational

•

2.3%

Apprenticeship/Other OJT

Page 16 GAO/HEHS-96-22 VA’s Approval of Schools
Appendix III 

Education’s Gatekeeping Triad

Accrediting Entities The focus of accrediting bodies is to determine the quality of education or

training provided by the institutions or programs they accredit. In general,

institutions of higher education are permitted to operate with considerable

independence and autonomy. As a consequence, American educational

institutions can vary widely in the character and quality of their programs.

To ensure a basic level of quality, the practice of accreditation arose in the

United States as a means of conducting nongovernmental peer evaluation

of educational institutions and programs. Private educational associations

of regional or national scope have adopted standards reflecting the

qualities of a sound educational program and have developed procedures

for evaluating institutions or programs to determine whether they are

operating at basic levels of quality.

Educational accreditation can be institutional or specialized. Institutional

accreditation involves assessing the educational quality of an entire

institution; this type of accreditation is used when each of an institution’s

parts is seen as contributing to the achievement of the institution’s

objectives. At the end of fiscal year 1994, the Secretary of Education

recognized nine institutional accrediting commissions or agencies,

covering six geographical regions of the country, as qualified to perform

accreditation. In addition, eight national institutional accrediting

commissions or agencies were recognized by the Secretary. Specialized, or

programmatic, accreditation usually applies to particular programs,

departments, or schools. Most of the specialized accrediting agencies

review units within higher education institutions that have been

institutionally accredited. At the end of fiscal year 1994, 74 specialized

accrediting agencies were also recognized by the Secretary as qualified to

perform accreditation throughout the nation.

States State licensing agencies authorize educational institutions to operate

within their borders.10 Schools must be licensed by each state in order to

participate in the title IV program. In addition to licensing agencies,

several states have created SPREs under the Higher Education

Amendments of 1992, in part, to reduce program fraud and abuse. Under

the 1992 amendments, the federal government provided funding for states

that choose to create SPREs to produce a more active and consistent state

role in the gatekeeping structure. SPREs are charged with developing

10In addition to having basic licensing requirements, some agencies in the various states have more

rigorous gatekeeping standards for licensing postsecondary schools. Although these agencies are an

important part of the overall Education gatekeeping structure, we excluded them from the scope of

our review because each of the 50 states has its own agency structures and standards, making the job

of identifying and analyzing them beyond the capacity of our limited review resources.

Page 17 GAO/HEHS-96-22 VA’s Approval of Schools
Appendix III 

Education’s Gatekeeping Triad

review standards, in consultation with institutions in the state, for

approval by the Secretary of Education. SPREs then use these standards as

criteria for reviewing educational institutions referred to them by the

Secretary. Those institutions that do not satisfy SPRE review standards may

be required to comply or cease participating in title IV programs.

The future of SPREs is in doubt because their funding was rescinded by the

104th Congress (P.L. 104-19).

Department of

Education

As the federal representative in the gatekeeping triad, the role of

Education is varied. First, Education is responsible for determining the

administrative and financial capacity of institutions to participate in title

IV programs. It also determines whether each applicant school has met all

eligibility requirements (including accreditation and state licensing) before

it certifies the school for participation in title IV programs. Finally,

Education monitors and oversees the responsibilities of the other two

triad members by

• recognizing and publishing a list of those accrediting agencies the

Secretary believes are reliable authorities as to the quality of education or

training offered by institutions of higher education and ensuring that these

agencies have appropriate standards for conducting their accreditation

work and

• evaluating and approving (or disapproving) each SPRE’s review standards

and referring specific educational institutions to a SPRE for review.

Page 18 GAO/HEHS-96-22 VA’s Approval of Schools
Appendix IV 

Key VA Standards Used by SAAs for

Approving Courses at Postsecondary

Academic and Vocational Schools

We identified from the law and regulations11 the following key standards

that VA and SAAs used in reviewing education and training programs at

participating schools.

1. Information in school catalogs is to cover such things as enrollment

requirements; student progress (that is, grading and absences) and

conduct; refunds; schedule of charges; course outlines; faculty; and school

calendar.

2. Schools are to maintain adequate records of and enforce policies on

student progress and conduct, including attendance records for nondegree

programs.

3. Schools are to maintain records of and proper credit for students’

previous education.

4. Schools or courses are to be accredited by a nationally recognized

agency. Alternatively, course quality, content, and length are to be

consistent with similar courses of other schools, with recognized accepted

standards.

5. Course credit is to be awarded in standard semester or quarter hours or

by college degree, or courses are to lead to a vocational objective and

certificate of completion.

6. Space, equipment, facilities, and instructional material should be

adequate.

7. Schools should have a sufficient number of adequately educated and

experienced personnel.

8. Schools’ personnel are to be of good reputation and character.

9. Schools are to be financially sound.

10. Schools should maintain a pro rata refund policy for student tuition

and charges.

11. Schools’ advertising, sales, and enrollment practices should not be

erroneous, deceptive, or misleading.

1138 C.F.R., part 21, subpart D, “Administration of Educational Benefits.”

Page 19 GAO/HEHS-96-22 VA’s Approval of Schools
Appendix IV 

Key VA Standards Used by SAAs for

Approving Courses at Postsecondary

Academic and Vocational Schools

12. Schools must comply with various government safety codes and

regulations.

13. Schools’ courses of study must have had a 2-year period of operation

prior to enrollment of students receiving VA program benefits (except

training establishment courses).

14. A school is precluded from approval when more than 85 percent of its

enrolled students are having their costs paid in part by the school or VA.

15. Under certain conditions, courses offered at a school branch or

extension may be approved in combination with courses offered at the

parent facility.

Page 20 GAO/HEHS-96-22 VA’s Approval of Schools
Appendix V 

Standards of Education’s Gatekeeping Triad

Used for Comparison With VA Standards

Accrediting Entities We reviewed the standards of seven accrediting bodies as representative

of the 91 accreditors that were recognized nationally by the Secretary of

Education at the end of fiscal year 1994. Four accrediting bodies were

specialized program accreditors covering the entire nation, and three were

institutional accreditors covering various regions of the country. The

seven accrediting bodies’ standards we reviewed follow.

National in Scope • The Accrediting Bureau of Health Education Schools’ Manual for Allied

Health Education Schools, 5th edition, 1989. The Bureau accredits private

and proprietary postsecondary health education institutions and

specialized programs (primarily certificate or associate degree) for

medical assistant and medical laboratory technician.

• The American Assembly of Collegiate Schools of Business’ Achieving

Quality and Continuous Improvement Through Self-Evaluation and Peer

Review: Standards for Accreditation in Business Administration and

Accounting, April 1994. The Assembly accredits any institutionally

accredited collegiate institution offering degrees in business

administration and accounting.

• The American Culinary Federation Educational Institute Accrediting

Commission’s Policies, Procedures, and Standards, April 1994. The

Commission accredits programs that award postsecondary certificates or

associate degrees in the culinary arts or food service management areas at

accredited institutions or to nationally registered apprenticeship

programs.

• The Computer Science Accreditation Commission of the Computing

Sciences Accreditation Board’s Criteria for Accrediting Programs in

Computer Science in the United States, June 1992. The Board accredits

4-year baccalaureate programs in computer science.

Regional in Scope • The Middle States Association of Colleges and Schools Commission on

Higher Education’s Characteristics of Excellence in Higher Education:

Standards for Accreditation, February 1994 (five states and the District of

Columbia, Puerto Rico, and the Virgin Islands). The Commission accredits

degree-granting institutions of higher education.

• The North Central Association of Colleges and Schools Commission on

Institutions of Higher Education’s Handbook of Accreditation,

September 1994 (19 states). The Commission accredits degree-granting

institutions of higher education.

• The Northwest Association of Schools and Colleges Commission on

Colleges’ Accreditation Handbook, 1994 edition (seven states). The

Page 21 GAO/HEHS-96-22 VA’s Approval of Schools
Appendix V 

Standards of Education’s Gatekeeping Triad

Used for Comparison With VA Standards

Commission accredits institutions, rather than specific programs, whose

principal programs lead to formal degrees, associate and higher.

States We reviewed the state review standards for SPREs that are provided in

federal regulation 34 C.F.R., part 667, subpart C.

Department of

Education

The standards we reviewed included the following rules and procedures

that Education uses.

• To determine whether an educational institution qualifies in whole or in

part as an eligible higher education institution under the Higher Education

Act: 34 C.F.R., part 600.

• To determine a higher education institution’s financial responsibility: 34

C.F.R. 668.15, and to determine its administrative capability: 34 C.F.R.

668.16.

• To ensure that accrediting agencies are, for the Higher Education Act and

other federal purposes, reliable authorities as to the quality of education

or training offered by the higher education institutions or programs they

accredit: 34 C.F.R., part 602.

Page 22 GAO/HEHS-96-22 VA’s Approval of Schools
Appendix VI 

Comments From the Department of

Veterans Affairs

Page 23 GAO/HEHS-96-22 VA’s Approval of Schools
Appendix VI 

Comments From the Department of

Veterans Affairs

(104802) Page 24 GAO/HEHS-96-22 VA’s Approval of Schools
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