VA EDUCATION 

BENEFITS

Student 

Characteristics and 

Outcomes Vary across 

Schools

Report to Congressional Requesters

July 2013

GAO-13-567

United States Government Accountability Office
United States Government Accountability Office

Highlights of GAO-13-567, a report to 

congressional requesters

July 2013

VA EDUCATION BENEFITS

Student Characteristics and Outcomes Vary across 

Schools

Why GAO Did This Study

In fiscal year 2012, various VA 

education programs provided nearly

$11 billion in education payments to 

almost 1 million veterans. The 2008 

Post-9/11 GI Bill significantly increased 

education benefits for veterans and 

provided for separate payments for 

tuition and fees, for housing expenses,

and for books. In fiscal year 2012, VA 

made about $8.5 billion in tuition, 

housing, and other payments under the 

Post-9/11 GI Bill. GAO was asked to 

review data on VA’s education 

programs. Specifically, GAO 

examined: (1) the distribution of VA 

education payments among schools; 

(2) how student characteristics and 

outcomes at highly VA-funded schools 

compare to those of other VA-funded 

schools; and (3) how student 

characteristics and outcomes compare 

at highly VA-funded public, nonprofit, 

and for-profit schools. 

To address these topics, GAO 

collected fiscal year 2010 and 2011

data from VA (the most recent data 

available at the time of our study) and 

school year 2010-2011 and 2011-2012 

data from the Department of 

Education. GAO used these data to 

compare VA payment amounts, as well 

as student characteristics and 

outcomes, at highly VA-funded schools 

and other schools. Veterans typically 

comprise a small proportion of a 

school’s total enrollment. GAO also 

conducted regression analysis to 

compare student outcomes at public, 

nonprofit and for-profit schools after 

controlling for other factors, such as 

school enrollment and tuition.

What GAO Recommends

GAO makes no recommendations in 

this report.

What GAO Found

The majority of the Department of Veterans Affairs (VA) education payments

were made to a small percentage of schools receiving VA funding in fiscal year

2011, primarily through the Post-9/11 GI Bill. About 5 percent of schools (654 

schools) received more than $3.8 billion in aggregate VA education payments

used for tuition and fees in fiscal year 2011, over 60 percent of such funding. 

These 654 “highly VA-funded schools” each received at least $2 million (and as 

much as $113 million) in Post-9/11 GI Bill tuition and fee payments from fiscal 

year 2010 through fiscal year 2011 and enrolled more total students on average 

than other schools. Almost half of tuition and fee payments for all VA education 

programs were used at public schools. However, the breakdown of Post-9/11 GI 

Bill payments differed somewhat, with for-profit and public schools receiving

about the same proportion of Post-9/11 GI Bill tuition and fee payments.

Fiscal Year 2011 Tuition and Fee Payments by Sector for All VA Education Programs and for 

the Post-9/11 GI Bill

Note: For VA education programs that pay veterans a fixed monthly amount, payments include the 

total payments made to veterans because it was not possible to determine what portion was used for 

tuition payments to schools. 

Highly VA-funded schools generally had more positive outcomes than other VAfunded schools. Compared to other schools, highly VA-funded schools generally 

had higher retention rates (percentage of students returning to the same school 

from 1 year to the next) and graduation rates. Because data on student veterans 

are limited, the student characteristics and outcomes in GAO’s analyses are for 

school populations as a whole. Student outcomes were generally similar when 

GAO tested more narrow definitions of highly VA-funded schools (at least $5 

million and $10 million in Post-9/11 GI Bill funding). 

Among highly VA-funded schools, student characteristics and outcomes differed 

at public, nonprofit, and for-profit schools. For instance, highly VA-funded forprofit schools enrolled a higher percentage of low-income and minority students 

than public or nonprofit schools. After controlling for differences in school and 

student characteristics, for-profit schools had lower retention rates compared to 

public and nonprofit schools. However, for-profit schools had graduation rates 

that were higher than public schools and similar to nonprofit schools. 

View GAO-13-567. For more information, 

contact Melissa Emrey-Arras at (617) 788-

0534 or EmreyArrasM@gao.gov.
Page i GAO-13-567 VA Education Benefits

Letter 1

Background 3

A Small Percentage of Schools Received a Majority of VA 

Payments, Primarily through the Post-9/11 GI Bill 8

Highly VA-Funded Schools Enrolled a Lower Percentage of LowIncome Students and Had More Positive Outcomes than Other 

Schools 12

Among Highly VA-Funded Schools, Student Characteristics and 

Outcomes Varied at Public, Nonprofit, and For-Profit Schools 16

Agency Comments and Our Evaluation 19

Appendix I Scope and Methodology 20

Appendix II For-Profit Schools and the 90/10 Requirement 31

Appendix III School Characteristics at Highly VA-Funded Schools 

Compared to Other VA-Funded Schools 33

Appendix IV Comparisons of School Characteristics across Public, 

Nonprofit, and For-Profit Schools 37

Appendix V Comments from the Department of Veterans Affairs 41

Appendix VI GAO Contact and Staff Acknowledgments 42

Contents
Page ii GAO-13-567 VA Education Benefits

Tables

Table 1: VA Education Programs Available to Eligible Veterans 4

Table 2: Highly VA-Funded Schools at Different Post-9/11 Payment 

Levels 23

Table 3: Fiscal Year 2011 Post-9/11 GI Bill Funding, Numbers of 

Veterans, and Funding per Veteran 34

Figures

Figure 1: Beneficiaries of Selected VA Education Benefit Programs, 

Fiscal Years 2007-2013 5

Figure 2: Fiscal Year 2011 VA Education Payments by Program 9

Figure 3: Fiscal Year 2011 Tuition and Fee Payments by Sector for 

All VA Education Programs and for the Post-9/11 GI Bill 10

Figure 4: Fiscal Year 2011 Post-9/11 GI Bill Payments, Numbers of 

Veterans, Payments per Veteran, and School Year 2011-12 

Average Tuition, at Highly VA-Funded Schools, by Sector 11

Figure 5: Percentage of Low-Income, Minority, Part-Time, and 

Older Students at Highly VA-Funded and Other Schools, 

School Year 2011-12 13

Figure 6: School Year 2011-12 Retention, Overall Graduation, 4- and 

2-Year Graduation, and 3-Year Student Loan Default Rates 

for Highly VA-Funded Schools and Other Schools 14

Figure 7: Comparisons of Selected Student Characteristics and 

Outcomes for Different Definitions of Highly VA-Funded 

Schools 15

Figure 8: Percentage of Different Student Populations at Highly VAFunded Public, Nonprofit, and For-Profit Schools, School 

Year 2011-12 17

Figure 9: 90/10 Rates of Highly VA-Funded and Other VA-Funded 

Schools, School Year 2011-12 32

Figure 10: Number of Students at Highly VA-Funded and Other VAFunded Schools, School Year 2010-11 33

Figure 11: Comparison of Yellow Ribbon Program Participation 

and Distance Education at Highly VA-Funded and Other 

VA-Funded Schools, School Year 2011-12 35

Figure 12: School Year 2011-12 Highest Degree Offering at Highly 

VA-Funded and Other VA-Funded Schools 36

Figure 13: Retention, Overall Graduation, 4- and 2-Year Graduation, 

and 3-Year Student Loan Default Rates across Highly VAFunded Schools, by Sector, School Year 2011-12, before 
Page iii GAO-13-567 VA Education Benefits

Controlling for Differences in Student and School 

Characteristics 37

Figure 14: School Year 2010-11 Enrollment Levels at Highly VAFunded Schools, by Sector 38

Figure 15: School Year 2011-12 Comparison of Yellow Ribbon 

Program Participation and Distance Education at Highly 

VA-Funded Schools, by Sector 39

Figure 16: School Year 2011-12 Highest Degree Offering at Highly 

VA-Funded Schools, by Sector 40

Abbreviations 

Education U.S. Department of Education 

IPEDS Integrated Postsecondary Education Data System 

NSLDS National Student Loan Data System

OPEID-6 Office of Postsecondary Education Identification

Post-9/11 GI Bill Post-9/11 Veterans Educational Assistance 

Act of 2008 

VA U.S. Department of Veterans Affairs 

VR&E Vocational Rehabilitation and Employment 

Yellow Ribbon Yellow Ribbon GI Education 

Enhancement Program

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Page 1 GAO-13-567 VA Education Benefits

441 G St. N.W.

Washington, DC 20548

July 25, 2013

The Honorable Patty Murray

Chairman

Committee on the Budget

United States Senate

The Honorable Bernie Sanders

Chairman

Committee on Veterans’ Affairs

United States Senate

The Honorable Jay Rockefeller 

United States Senate

The Department of Veterans Affairs (VA) provided nearly $11 billion in 

postsecondary education benefits through multiple programs to almost 1 

million veterans and their beneficiaries in fiscal year 2012, up from about 

$3 billion in 2008. Education benefits for veterans significantly increased 

with the passage of the Post-9/11 Veterans Educational Assistance Act of 

2008 (Post-9/11 GI Bill).1 Other veterans are still receiving benefits for 

prior service through older programs like the Montgomery GI Bill.2

Participation in the Post-9/11 GI Bill program is expected to increase by 

over 10 percent from 2011 to 2013 in part due to veterans returning from 

service in Iraq and Afghanistan. Given the growth of the Post-9/11 GI Bill 

program, VA education programs and schools that receive significant VA 

payments have been subject to increased scrutiny. At the same time, little 

systemic information is available on veterans’ education outcomes.3

 1 Pub. L. No. 110-252, tit. V, 122 Stat. 2323, 2357-86.

In 

light of these trends, you asked us to review data on VA’s education 

programs. For this report, we examined:

2 38 U.S.C. §§ 3001-3036.

3 VA has initiated several recent efforts to collect new outcome information on student 

veterans, which should eventually shed light on the extent to which veterans are achieving 

successful postsecondary outcomes. See GAO, VA Education Benefits: Efforts Needed to 

Improve Program Management and Provide More Information to Student Veterans, 

GAO-13-338 (Washington, D.C.; May 22, 2013).
Page 2 GAO-13-567 VA Education Benefits

1. What is the distribution of VA education payments among schools?

2. How do student characteristics and outcomes at highly VA-funded 

schools compare to those of other VA-funded schools?

3. How do student characteristics and outcomes compare at public, 

nonprofit, and for-profit schools that are highly VA-funded?

To address these questions, we reviewed relevant federal laws and 

regulations and interviewed VA and Department of Education (Education) 

officials. For question one, we analyzed the most recent data available 

from VA at the time of our study—fiscal years 2010 and 2011 data on 

enrollment and payment amounts by school for all students receiving VA 

education benefits. Specifically, we compared payment amounts across 

all VA education programs and types of schools. We also identified 

“highly VA-funded schools,” specifically, those schools that received at 

least $2 million in payments from the Post-9/11 GI Bill program from fiscal 

year 2010 through fiscal year 2011.4

To compare student characteristics and outcomes for questions two and 

three, we conducted descriptive statistical analyses using Post-9/11 GI 

Bill payment data and school years 2010-2011 and 2011-2012 data on 

school characteristics reported by schools through Education’s Integrated 

Postsecondary Education Data System (IPEDS). Because data on 

student veterans are limited, the student characteristics and outcomes in 

our analyses are for school populations as a whole.

5

 4 We used the Post-9/11 GI Bill program for the designation of “highly VA-funded school” 

because it provides for tuition and fee payments to be made directly to schools, whereas 

most other VA education programs do not make tuition and fee payments separately. The 

Post-9/11 GI Bill program is also the largest and fastest-growing VA education program.

We compared highly 

VA-funded schools with other VA-funded schools and, within the group of 

highly VA-funded schools, we compared schools across the public, 

nonprofit, and for-profit sectors. We also conducted sensitivity analyses to 

test differences in student characteristics and outcomes using narrower 

definitions of highly VA-funded schools ($5 million, $10 million, and $15 

million in total Post-9/11 GI Bill payments from fiscal years 2010 through 

2011). In addition, for question three, we conducted multivariate 

5 Veterans typically comprise a small proportion of a school’s total enrollment, so veterans 

would generally have little impact on those characteristics and outcomes for the school 

population as a whole. 
Page 3 GAO-13-567 VA Education Benefits

regression analysis at the $2 million level to compare student outcomes in 

different sectors while statistically controlling for differences in student 

characteristics that could affect those outcomes.6

The student outcome measures we used have certain limitations. For 

instance, the IPEDS graduation rates include only full-time, first-time 

students and exclude students who attend part-time or transfer to another 

school. For schools with a bachelor’s degree as the highest 

undergraduate degree offered, the IPEDS retention rates—the 

percentage of students returning to the same school from one fall to the 

next—include only first-time, full-time students seeking a bachelor’s 

degree. See appendix I for a more detailed discussion of our scope and 

methodologies.

With this analysis, for 

example, we could determine whether schools in one sector were 

significantly more likely to have higher graduation rates than schools in 

another sector, after controlling for other factors. We assessed the 

reliability of the VA and Education data by interviewing relevant officials 

about how these data were compiled and reviewing documentation about 

the specific data systems. As a result of this assessment, we concluded 

that the VA and Education data were sufficiently reliable for our reporting 

purposes.

We conducted this performance audit from February 2012 through July 

2013 in accordance with generally accepted government auditing 

standards. Those standards require that we plan and perform the audit to 

obtain sufficient, appropriate evidence to provide a reasonable basis for 

our findings and conclusions based on our audit objectives. We believe 

that the evidence obtained provides a reasonable basis for our findings 

and conclusions based on our audit objectives.

VA has been providing veterans educational assistance benefits since 

1944.7

 6 We could not conduct regression analyses for question two to compare highly VAfunded schools and other VA-funded schools because some other VA-funded schools 

were not included in Education’s IPEDS data and therefore data on their characteristics 

were not available. For question three, we also conducted regression analyses at the $5 

million level to identify any significant differences compared to the $2 million regression 

results. Regression analyses were not possible at the $10 million or $15 million level 

because of the limited number of schools in some sectors.

These benefits have been put in place over time in order to 

7 Servicemen’s Readjustment Act of 1944, Pub. L. No. 78-346, 58 Stat. 284. 

Background
Page 4 GAO-13-567 VA Education Benefits

compensate for compulsory service, encourage voluntary service, avoid 

unemployment, provide equitable benefits to all who served, or promote 

military retention. Table 1 lists the current major benefit programs 

available to eligible individuals who pursue education or training. Eligibility 

requirements vary among programs and are based on several factors, 

including when and for how long a veteran served in the military. In some 

cases, a veteran can be eligible for multiple education programs and may 

have to choose which program to use.

Table 1: VA Education Programs Available to Eligible Veterans 

Program Description 

Participants

(FY 2012) 

Payments

(FY 2012) 

Post-9/11 Veterans Educational 

Assistance Program (Post-9/11 

GI Bill) 

38 U.S.C. §§ 3301-3334.

Provides benefits to veterans who served on active duty for at 

least 90 days after September 10, 2001. The program provides 

individuals who served on active duty for 36 months with the 

full cost of attendance at a public school and up to a maximum 

amount at nonprofit and for-profit schools ($18,077 in 

academic year 2012-13). Some veterans may also receive 

additional payments for housing expenses and books. Under 

certain circumstances, veterans can transfer their Post-9/11 GI 

Bill benefits to spouses and children. 

646,302 $8,453 million 

(includes both 

tuition and housing) 

Montgomery GI Bill-Active Duty

38 U.S.C. §§ 3001-3036.

Provides a fixed monthly allowance primarily to veterans who 

enter active duty after June 30, 1985. In fiscal year 2013, the 

benefit is $1,564 per month for full-time study.

118,549 $932 million

Montgomery GI Bill-Selected 

Reserve

10 U.S.C. §§ 16131-16137.

Provides a monthly benefit payment for reservists, including 

the National Guard, who agree to serve for 6 years. In fiscal 

year 2013, the benefit is $356 per month for full-time study.

60,393 $157 million

Survivors’ and Dependents’ 

Educational Assistance Program

38 U.S.C. §§ 3500-3566.

Provides education and training opportunities to eligible 

dependents of certain veterans who were disabled or died 

during active duty service. In fiscal year 2013, beneficiaries 

could receive up to $987 per month based on their enrollment 

status.

87,707 $455 million

Reserve Educational Assistance 

Program

10 U.S.C. §§ 16131-16166.

Provides benefits to reservists with at least 90 days 

consecutive active-duty service after September 10, 2001. In 

fiscal 2013, the benefit is $1,251 per month for full-time study, 

with at least 2 years of consecutive active-duty service. 

19,774 $77 million

Vocational Rehabilitation and 

Employment Program (VR&E)

38 U.S.C. §§ 3100-3121.

Provides services to veterans with service-connected 

disabilities. These services help servicemembers and veterans 

achieve their employment goals and can include education 

benefits and counseling. 

61,755 $791 million 

(including 

subsistence 

payments)

Total 994,480a $10.9 billion

Source: GAO analysis of interim data provided by VA for publication in an updated version of its FY 2012 Annual Benefits Report, which 

was not available when GAO issued its report, and other data provided by VA.

Notes: Data for the VR&E program are for those veterans who received retraining as part of their 

rehabilitation services. VR&E provides for veterans’ tuition, fees, books, and supplies. Veterans 

enrolled in training services are eligible to receive a subsistence allowance to assist them with living 

expenses.
Page 5 GAO-13-567 VA Education Benefits

The Veterans Retraining Assistance Program is a new VA education program that began providing 

benefits in July 2012. This program offers 12 months of training assistance to veterans age 35 to 60

who are not eligible for any other VA education benefit program. From July 1, 2012 through 

September 30, 2012, 12,251 beneficiaries received about $6 million in payments through the 

program. The Veterans Retraining Assistance Program was authorized by the Vow to Hire Heroes 

Act of 2011, Pub. L. No. 112-56, tit. II, § 211, 125 Stat. 712, 713. 

a

Participants would be counted twice in this total if they received benefits under more than one 

program.

FY = fiscal year.

The education benefits available to veterans and their dependents were 

significantly expanded with the enactment of the Post-9/11 GI Bill. Since 

the Post-9/11 GI Bill became effective August 1, 2009, the number of 

veterans and other beneficiaries receiving VA education benefits has 

increased by almost two-thirds (see fig. 1). Participation in VA education 

benefit programs is expected to increase as the number of post-9/11 

veterans grows to over 5 million by 2020.

Figure 1: Beneficiaries of Selected VA Education Benefit Programs, Fiscal Years 

2007-2013

Note: Other VA education programs include the Montgomery GI Bill-Active Duty, the Montgomery GI 

Bill-Selected Reserve, Survivors’ and Dependents’ Educational Assistance Program, and the Reserve 

Educational Assistance Program, but not the VR&E program.
Page 6 GAO-13-567 VA Education Benefits

The Post-9/11 GI Bill provides a new way to deliver VA education 

benefits. VA education programs established prior to the Post-9/11 GI Bill 

typically provided a fixed monthly payment to a veteran or other eligible 

beneficiary to be used for tuition, books, or living expenses while in 

school. The Post-9/11 GI Bill, however, provides for tuition and fee 

payments to be made directly to the school and authorizes a separate 

monthly housing allowance to the student, as well as a book allowance.8

To help cover the costs of their postsecondary education, veterans may 

also be eligible for grants and loans available from federal student aid 

programs administered by Education, such as Pell Grants and William D. 

Ford Federal Direct Loans.9 Veterans may use student loans to pay for 

living expenses not covered by VA education payments. VA education 

payments are not considered when calculating eligibility for federal 

student aid and do not affect the amount of aid a veteran can receive 

from Education.10

To maintain their eligibility for federal student aid programs administered 

by Education, for-profit schools must obtain at least 10 percent of their 

total revenues from sources other than federal student aid programs 

(those authorized by Title IV of the Higher Education Act of 1965)—this is 

known as the 90/10 rule.

Student veterans may also be eligible for state and 

institutional aid (scholarships from state governments or schools, for 

example).

11

 8 VA’s Vocational Rehabilitation and Employment program also makes tuition and fee 

payments directly to a school and pays a separate monthly housing allowance to students. 

This program offers a variety of services, including educational benefits, to help veterans 

with service-connected disabilities and employment barriers obtain stable and suitable 

employment. 

Because VA education payments are not 

authorized by this law, they are counted as nonfederal student aid for this 

purpose and thus toward the 10 percent requirement; as a result, 

9 For the purposes of this report, we define federal student aid programs as financial aid 

programs authorized under Title IV of the Higher Education Act, 20 U.S.C. §§ 1070-1099d 

and 42 U.S.C. §§ 2751-2756b.

10 20 U.S.C. § 1087vv(j). See also GAO, Higher Education: Veteran Students Received 

Similar Amounts of Title IV Aid As Nonveterans but More Total Aid with GI Benefits, 

GAO-08-741, (Washington, D.C.: June 20, 2008). 

11 20 U.S.C. § 1094(a)(24).

Administration of the Post9/11 GI Bill

Other Sources of Student 

Aid
Page 7 GAO-13-567 VA Education Benefits

enrolling veterans helps for-profit schools meet the 90/10 rule. See 

appendix II for more information on the 90/10 rule.

A wide variety of schools offer different types of postsecondary education 

programs. Schools also have different campus structures, including a 

single campus, multiple campuses, or no physical campus if a school

offers only online programs. Correspondingly, veterans may use VA 

education benefits at different types of schools to pursue a variety of 

programs:

• 4-year and above schools: Colleges and universities that typically 

offer bachelor’s and higher level degrees in programs that cover 4 or 

more years. These schools may also offer associate’s degree 

programs.

• 2-year schools: Community colleges and other schools that typically 

offer associate’s degrees, but can also offer certificate programs.

• Less than 2-year schools: Vocational and technical schools that offer 

certificate programs, but typically not degrees, in programs lasting 

less than 2 years.

The following types of schools may offer programs of any length noted 

above:

• Public schools: operated and funded by state or local governments,

• Nonprofit schools: owned and operated by nonprofit organizations 

whose net earnings do not benefit any shareholder or individual, and

• For-profit schools: privately owned and net earnings can benefit a 

shareholder or individual.

While many colleges and universities are eligible to receive payments 

from both VA and Education, other types of entities, while not eligible for 

federal student aid, are eligible for VA education funding. For example, 

veterans may use VA education benefits for apprenticeship opportunities, 

on-the-job training programs, and entrepreneurship courses, which are 

not typically eligible for federal student aid administered by Education. 

However, there is significant overlap among the schools receiving funding 

from VA or Education.

Types of Schools Offering 

Postsecondary Education
Page 8 GAO-13-567 VA Education Benefits

In fiscal year 2011, about 5 percent of VA-funded schools received over 

60 percent of VA education payments devoted to tuition and fees.12 That 

year, 654 “highly VA-funded schools” received more than $3.8 billion in 

total VA education payments.13 The highly VA-funded schools—which 

each received at least $2 million (and as much as $113 million) in total 

payments from the Post-9/11 GI Bill from fiscal years 2010 through 

2011—consisted of 293 public, 147 nonprofit, and 214 for-profit schools. 

Other VA-funded schools received about $2.4 billion in total VA education 

payments in fiscal year 2011.14

The majority of VA’s education payments were distributed through the 

Post-9/11 GI Bill program, while the Montgomery GI Bill-Active Duty 

program provided the second highest amount of payments (see fig. 2). 

Use of the Post-9/11 GI Bill program increased more than any other VA 

education program from fiscal years 2010 through 2011. In fiscal year 

2011, Post-9/11 GI Bill payments and number of student veterans served 

increased by over 50 percent. In contrast, enrollments and total payments 

for the Montgomery GI Bill-Active Duty program decreased by 25 percent 

from fiscal years 2010 through 2011. VA officials said that veterans with a 

choice between the Post-9/11 GI Bill and other programs may be more 

apt to choose the Post-9/11 GI Bill because of its more generous benefits.

Highly VA-funded schools enrolled a 

greater number of students on average compared to other schools. In 

school year 2010-11, for example, 34 percent of highly VA-funded 

schools had more than 20,000 students, while only 2 percent of other VAfunded schools did.

 12 For this analysis, we used tuition and fee payments made directly to schools for the 

Post-9/11 GI Bill and the Vocational Rehabilitation and Employment program, but 

excluded payments made to student veterans for books and housing expenses, unless 

otherwise stated. For other VA education programs that pay a fixed monthly amount to 

veterans, we attributed to the school the total VA payments made to veterans, which may 

overestimate VA payments received by schools with tuition rates that are less than total 

VA payments.

13 The schools in this highly VA-funded group each received at least $2 million in total 

funding from fiscal years 2010 through 2011 from the Post-9/11 GI Bill. 

14 The Vocational Rehabilitation and Employment program includes a variety of 

postsecondary education providers, including computer training companies and law 

enforcement academies, which are included in total schools.

A Small Percentage of 

Schools Received a 

Majority of VA 

Payments, Primarily 

through the Post-9/11 

GI Bill
Page 9 GAO-13-567 VA Education Benefits

Figure 2: Fiscal Year 2011 VA Education Payments by Program

Note: The Post-9/11 GI Bill and Vocational Rehabilitation and Employment payment amounts listed 

here include tuition and fee payments made to the school, but not additional housing allowance 

payments.

When we looked at all VA programs, we found that veterans used almost 

half of total nationwide VA education payments devoted to tuition and 

fees at public schools, about one-fifth at nonprofit schools, and about a 

third at for-profit schools in fiscal year 2011 (see fig. 3). However, the 

breakdown of Post-9/11 GI Bill funding was a little different—for-profit 

schools collectively received about the same percentage of tuition and fee 

payments from the Post-9/11 GI Bill program as public schools.
Page 10 GAO-13-567 VA Education Benefits

Figure 3: Fiscal Year 2011 Tuition and Fee Payments by Sector for All VA Education 

Programs and for the Post-9/11 GI Bill

Note: Payment amounts for the Post-9/11 GI Bill and the Vocational Rehabilitation and Employment 

programs include only tuition payments made directly to schools, but not additional housing 

allowance or other payments. For all other VA education programs, because it is not possible to 

determine what portion of payments was used for tuition payments to schools, payments include the 

total payments made to veterans, which may exceed actual tuition costs in some cases.

When looking specifically at highly VA-funded schools (those receiving $2 

million or more in Post-9/11 GI Bill funds from fiscal years 2010 through 

2011), we found that for-profit schools received the most total Post-9/11 

GI Bill payments for tuition and fees. Highly VA-funded for-profit schools 

also had the highest Post-9/11 GI Bill payments per veteran, while public 

schools enrolled the most veterans and had the lowest Post-9/11 GI Bill 

payments per veteran (see fig. 4).15

 15 The average VA payment amount per veteran is influenced by several factors, including 

tuition rates, program offerings, and use of the Yellow Ribbon GI Education Enhancement 

(Yellow Ribbon) Program. Under this program, participating private schools or public 

schools charging out-of-state tuition enter into a voluntary agreement with VA to pay a 

portion of the tuition and fees that exceed an individual’s Post-9/11 GI Bill benefit and VA 

matches the school’s contribution. 38 U.S.C. § 3317.
Page 11 GAO-13-567 VA Education Benefits

Figure 4: Fiscal Year 2011 Post-9/11 GI Bill Payments, Numbers of Veterans, Payments per Veteran, and School Year 2011-12 

Average Tuition, at Highly VA-Funded Schools, by Sector

Notes: Highly VA-funded schools are those that received at least $2 million in total Post-9/11 GI Bill 

payments from FY 2010 through FY 2011.

When we tested narrower definitions of highly VA-funded schools, we saw similar results in the 

percentage of veterans at schools receiving at least $5 million in Post-9/11 payments from FY 2010 

through FY 2011. However, at the $10 million payment level, for-profit schools did not enroll the 

highest proportion of student veterans, in contrast to the $2 million level. Rather, nonprofit schools 

had the highest proportion of student veterans at the $10 million level, while public schools had the 

lowest proportion. The number of schools in the $15 million group was too small to conduct a reliable 

sector analysis.

FY = fiscal year.
Page 12 GAO-13-567 VA Education Benefits

Our analysis showed that the overall student population at highly VAfunded schools had some different characteristics and generally had 

higher retention and graduation rates compared to students enrolled at 

other VA-funded schools.16

 16 Our analyses of student and school characteristics are based on data for all students at 

a school and are not specific to student veterans. Our analyses are also limited to schools 

that reported data to the IPEDS system; some VA-funded schools are not required to 

report data to IPEDS. However, all highly VA-funded schools reported data to IPEDS and 

therefore were included in our analyses. Furthermore, the other VA-funded schools that 

did not report information to IPEDS represented a small percentage of the total cases—

less than 1 percent of the total Post-9/11 GI Bill enrollees and tuition and fee payments. 

Retention rate is a measure of the rate at which students persist in their educational 

Highly VA-funded schools—those that 

received at least $2 million in Post-9/11 GI Bill payments from fiscal years 

2010 through 2011—generally enrolled a lower percentage of low-income 

students in school year 2011-2012 than other VA-funded schools (see fig. 

5). They also enrolled proportionately fewer part-time students, a slightly 

lower percentage of minority students, and a higher proportion of 

veterans than other schools.

program at an institution, expressed as a percentage.

Highly VA-Funded 

Schools Enrolled a 

Lower Percentage of 

Low-Income Students 

and Had More 

Positive Outcomes 

than Other Schools
Page 13 GAO-13-567 VA Education Benefits

Figure 5: Percentage of Low-Income, Minority, Part-Time, and Older Students at 

Highly VA-Funded and Other Schools, School Year 2011-12

Notes: We use the term “low-income” to describe students receiving federal Pell grants, a needbased federal student aid program for low-income students.

The information on veterans as a percentage of student enrollment is from school year 2010-2011.

Highly VA-funded schools are those that received at least $2 million in total Post-9/11 GI Bill 

payments from fiscal year 2010 through fiscal year 2011.

Highly VA-funded schools generally had better retention and overall 

graduation rates, with similar student loan default rates as other VAfunded schools in school year 2011-2012 (see fig. 6). When we looked 

specifically at the graduation rates of 4-year schools, highly VA-funded 

schools generally had higher graduation rates. However, at 2-year 
Page 14 GAO-13-567 VA Education Benefits

schools, highly VA-funded schools had slightly lower graduation rates 

than other schools.17

Figure 6: School Year 2011-12 Retention, Overall Graduation, 4- and 2-Year 

Graduation, and 3-Year Student Loan Default Rates for Highly VA-Funded Schools 

and Other Schools

Notes: Highly VA-funded schools are those that received at least $2 million in total Post-9/11 GI Bill 

payments from fiscal year 2010 through fiscal year 2011.

Overall graduation rates include rates for both 2-year and 4-year schools.

Education calculates student loan default rates to include defaults that occur within 3 years after a 

student borrower was required to begin repaying loans. In some cases, a school with several related 

campuses may report a single default rate for all of the campuses together. In these cases, we 

assigned that single rate to each campus.

IPEDS outcome data have certain limitations. For example, the graduation rate includes only firsttime, full-time students, while part-time and transfer students are excluded from the calculation.

 17 See appendixes II and III for additional analyses of highly VA-funded and other VAfunded schools.
Page 15 GAO-13-567 VA Education Benefits

Our results were generally similar when we tested narrower definitions of 

highly VA-funded schools. Specifically, when we looked at schools 

receiving at least $5 million and $10 million (rather than $2 million) in 

combined fiscal year 2010 and 2011 Post-9/11 GI Bill payments, student 

characteristics and outcomes were generally similar to the results at the 

$2 million level (see fig. 7).18

Figure 7: Comparisons of Selected Student Characteristics and Outcomes for 

Different Definitions of Highly VA-Funded Schools

Student characteristics and outcomes 

differed somewhat for a small group of schools receiving at least $15 

million in Post-9/11 GI Bill payments. These 38 schools had a higher 

percentage of low-income students and lower overall graduation rates 

than other schools, in contrast to the results at the $2 million level. 

However, the results for these 38 schools are sensitive to the inclusion or 

exclusion of specific schools. For example, the overall graduation rate is 

similar to the other levels when the largest school is excluded.

Notes: The 2-year graduation rate differed at the $15 million level as well. In contrast to the results at 

the $2 million level, highly VA-funded schools at the $15 million level had a higher 2-year graduation 

rate than other VA-funded schools. Likewise, the 4-year graduation rate differed at the $15 million 

 18 The $5 million level created a highly VA-funded group of 239 schools and the $10 

million level created a group of 75 schools.
Page 16 GAO-13-567 VA Education Benefits

level. In contrast to the results at the $2 million level, highly VA-funded schools at the $15 million level 

had a lower 4-year graduation rate than other VA-funded schools.

We use the term “low-income” to describe students who received federal Pell grants, a need-based 

federal student aid program for low-income students.

FY = fiscal year.

Within the highly VA-funded group of schools, for-profit schools had 

higher proportions of low-income and minority students, along with mixed 

outcomes in retention, graduation, and default rates, compared to public 

and nonprofit schools.19 Nonprofit schools, meanwhile, had the lowest 

percentage of low-income students and public schools had the lowest 

percentage of minority students (see fig. 8).20

 19 See appendix IV for additional analyses of highly VA-funded public, nonprofit, and forprofit schools. 

20 Previous GAO analysis found similar differences in student characteristics among 

public, nonprofit, and for-profit schools that participate in federal student aid programs. 

See GAO, Postsecondary Education: Student Outcomes Vary at For-Profit, Nonprofit, and 

Public Schools, GAO-12-143 (Washington, D.C.: Dec. 7, 2011).

Among Highly VAFunded Schools, 

Student 

Characteristics and 

Outcomes Varied at 

Public, Nonprofit, and 

For-Profit Schools
Page 17 GAO-13-567 VA Education Benefits

Figure 8: Percentage of Different Student Populations at Highly VA-Funded Public, 

Nonprofit, and For-Profit Schools, School Year 2011-12

Notes: Highly VA-funded schools are those that received at least $2 million in total Post-9/11 GI Bill 

payments from fiscal year 2010 through fiscal year 2011.

The information on veterans as a percentage of student enrollment is from school year 2010-2011.

We use the term “low-income” to describe students who received federal Pell grants, a need-based 

federal student aid program for low-income students.

After controlling for differences in school and student characteristics using 

multiple regression analysis, we found that student outcomes varied 

across schools in different sectors.21

 21 We controlled for a number of school and student characteristics, such as the size of 

the school, the proportion of low-income and minority students, and whether a school 

offered bachelor’s or graduate degrees. We conducted the multiple regression analysis 

using the $2 million definition of highly VA-funded schools.
Page 18 GAO-13-567 VA Education Benefits

• Retention Rates: Highly VA-funded for-profit schools had lower 

retention rates than public and nonprofit schools. The average forprofit school had retention rates about 6 points lower than similar 

public schools. Public and nonprofit schools had similar retention 

rates.22

• Graduation Rates: Highly VA-funded for-profit and nonprofit schools 

had similar graduation rates, which were higher, on average, than 

graduation rates at public schools.23 Graduation rates at for-profit 

schools were about 6 percentage points higher than those of public 

schools.24

• Default Rates: Highly VA-funded for-profit schools had higher student 

loan default rates than public and nonprofit schools.25

 22 IPEDS retention and graduation rates are not directly related as they are calculated for 

different groups of students. IPEDS retention rates are calculated for first-time 

For-profit 

schools had default rates that were, on average, about 6.5 percentage 

degree or 

certificate-seeking students from the previous fall who either re-enrolled or successfully 

completed their program by the current fall, except for 4-year schools, where they are 

calculated for first-time bachelor’s degree-seeking undergraduates from the previous fall 

who are again enrolled in the current fall. By contrast, IPEDS graduation rates are 

calculated for students entering a school as full-time, first-time, degree/certificate-seeking 

undergraduate students in a particular year.

23 In a previous report, we reviewed existing studies on students’ outcomes that controlled 

for differences in student characteristics at public, nonprofit, and for-profit schools 

participating in federal student aid programs. We found that two studies showed that 

students at for-profit schools had higher graduation rates for certificate programs, similar 

graduation rates for associate’s degree programs, and lower graduation rates for 

bachelor’s degree programs than students at public and nonprofit schools. The studies we 

reviewed generally used a different data source for graduation rates than this report; they 

focused on individual student graduation rates, rather than aggregate school-level 

graduation rates reported in IPEDS. See GAO-12-143. Our regression analysis of highly 

VA-funded schools controlled for schools offering programs of different lengths; however, 

methodological challenges with IPEDS graduation rates limited our ability to separately 

analyze graduation rates for different types of programs. 

24 Across sectors, schools with higher tuition tended to have higher retention and 

graduation rates than their lower-priced counterparts. Our model also showed that, as 

tuition increased, the percentage of the student body who were veterans decreased at 

highly VA-funded public and nonprofit schools. However, at highly VA-funded for-profit 

schools, higher tuition rates were not associated with significant declines in the proportion 

of veterans attending a school, after controlling for differences in school and student 

characteristics.

25 In some cases, the student loan default rate is reported at a central campus level, 

rather than individual campuses. Accordingly, we used a collapsed dataset to assess 

differences in default rates at the central campus level.
Page 19 GAO-13-567 VA Education Benefits

points higher than public schools’ default rates. Public schools’ default 

rates were, on average, slightly higher than nonprofit schools’ rates.26

We provided a draft copy of this report to VA and Education for review 

and comment. VA generally agreed with GAO’s findings and provided 

some technical comments, which we incorporated as appropriate (see

app. V for VA’s comments). Education did not provide formal comments 

on this report, but did provide some technical comments that we 

incorporated as appropriate. 

We are sending copies of this report to relevant congressional 

committees, the Secretaries of VA and Education, and other interested 

parties. In addition, this report will be available at no charge on GAO’s 

Web site at http://www.gao.gov.

If you or your staff have any questions about this report, please contact 

me at (617) 788-0534 or EmreyArrasM@gao.gov. Contact points for our 

Offices of Congressional Relations and Public Affairs may be found on 

the last page of this report. GAO staff who made key contributions to this 

report are listed in appendix VI.

Melissa Emrey-Arras

Director, Education, Workforce, and

 Income Security Issues

 26 In a previous report, we reviewed existing studies on students’ outcomes that controlled 

for differences in student characteristics at public, nonprofit, and for-profit schools 

participating in federal student aid programs. In that report, we reviewed the results from 

two studies that showed students at for-profit schools had higher default rates than those 

at 4-year public schools, but had mixed results compared to students at other schools—

specifically, one study showed that students at for-profit schools had higher default rates 

than those at 4-year nonprofit schools and 2-year nonprofit and public schools, while the 

other study did not show any statistically significant differences. See GAO-12-143.

Agency Comments 

and Our Evaluation
Appendix I: Scope and Methodology

Page 20 GAO-13-567 VA Education Benefits

To address our objectives, we reviewed relevant federal laws and 

regulations, interviewed VA and Education officials, and analyzed fiscal 

years 2010 and 2011 data from VA on enrollment and payment amounts 

by school for all students receiving benefits from one of VA’s education 

programs. Specifically, we compared payment levels across VA 

education programs and types of schools and identified schools with high 

payment levels. We then conducted descriptive statistical analyses using 

VA payment data and school characteristics data reported by schools 

through Education’s Integrated Postsecondary Education Data System

(IPEDS) to compare the student outcomes and other characteristics of 

highly VA-funded schools with other schools receiving VA funding. In 

addition, we conducted multivariate statistical analysis to examine sector 

level differences in student outcomes at highly VA-funded schools.

We conducted our review between February 2012 and July 2013 in 

accordance with generally accepted government auditing standards. 

Those standards require that we plan and perform the audit to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our 

findings and conclusions based on our audit objectives. We believe that 

the evidence obtained provides a reasonable basis for our findings based 

on our audit objectives.

We used the following data sources for our analyses.

We obtained data from VA on enrollment and payment amounts by 

school for students receiving benefits from the following VA education 

programs in fiscal years 2010 or 2011:

• Post-9/11 Veterans Educational Assistance Program

• Montgomery GI Bill—Active Duty

• Montgomery GI Bill—Selected Reserve

• Survivors’ and Dependents’ Educational Assistance Program

• Reserve Educational Assistance Program

• Vocational Rehabilitation and Employment Program

We assessed the reliability of the VA payment and enrollment data by 

interviewing VA officials about how these data were compiled and 

reviewing documentation about VA’s data systems. As a result of this 

assessment, we concluded that VA data were sufficiently reliable for our 

reporting purposes.

Appendix I: Scope and Methodology

Data Sources

VA Data
Appendix I: Scope and Methodology

Page 21 GAO-13-567 VA Education Benefits

IPEDS is a system of interrelated surveys conducted annually to gather 

information from every college, university, and technical and vocational 

institution that participates in federal student financial aid programs. The 

Higher Education Act of 19651 requires institutions that participate in 

federal student aid programs to complete surveys conducted as part of 

IPEDS, which requires schools to report data on enrollments, program 

completions, graduation rates, finances, institutional prices, and student

financial aid.2 We used IPEDS data for the 2010-2011 and 2011-2012 

school years to identify the characteristics of schools that received VA 

education payments, such as sector, enrollment, highest degree offering, 

student characteristics, graduation rate, and retention rate. We assessed 

the reliability of IPEDS data by discussing variables with IPEDS officials 

and reviewing past GAO uses of IPEDS data. As a result of this 

assessment, we concluded that IPEDS data were sufficiently reliable for 

our reporting purposes.

We obtained data on student loan default rates from the National Student 

Loan Data System (NSLDS), which is Education’s central database for 

federal student aid grants and loans. We used the official fiscal year 2009 

3-year cohort default rate. This is calculated for all borrowers of federal 

student loans who were required to begin repaying these loans in fiscal 

year 2009 and is calculated by determining how many of these borrowers 

defaulted on their loans in fiscal years 2009, 2010, or 2011. We assessed 

the reliability of the default rate data by interviewing Education officials 

about how the NSLDS data are compiled and used. As a result of this 

assessment, we concluded that default rate data were sufficiently reliable

for our reporting purposes.

To maintain their eligibility for federal student aid programs (those 

authorized by Title IV of the Higher Education Act of 19653

), for-profit 

schools must obtain at least 10 percent of their total revenues from 

sources other than federal student aid programs—this is known as the 

90/10 rule.4

 1 20 U.S.C. §§ 1070-1099d and 42 U.S.C. §§ 2751-2756b.

The percentage of a for-profit school’s total revenues 

2 20 U.S.C. § 1094(a)(17). 

3 20 U.S.C. §§ 1070-1099d and 42 U.S.C. §§ 2751-2756b.

4

20 U.S.C. § 1094(a)(24). 

IPEDS

Student Loan Default 

Rates

90/10 Rates at For-Profit 

Schools
Appendix I: Scope and Methodology

Page 22 GAO-13-567 VA Education Benefits

obtained from federal student aid programs is known as the “90/10 rate.” 

Our analysis of 90/10 rates is presented in appendix II.

We obtained data on 90/10 rates at for-profit schools from Education’s 

eZ-Audit data system, which collects information from the annual audited 

financial statements of all schools receiving federal student aid funds. We 

used 90/10 rates that were reported on schools’ audited financial 

statements for school fiscal years that ended between July 1, 2010 and 

June 30, 2011. We assessed the reliability of the 90/10 rates by reviewing 

past GAO uses of 90/10 data and discussing the current data system with 

Education officials. As a result of this assessment, we concluded that the 

eZ-Audit data were sufficiently reliable for our reporting purposes.

Objective 1: We analyzed VA’s data to compare payment and enrollment 

levels across VA’s different education programs. Comparing payments 

received by schools across VA education programs is complicated by the 

different payment mechanisms used by VA education programs. Most VA 

education programs provide a fixed monthly payment to the student 

veteran who can use it to pay for tuition and other education expenses. 

For the analyses in this objective, we attributed total payments made to a 

veteran or other beneficiary under these programs to the school; 

however, to the extent that the total payments exceed a school’s tuition, 

this analysis may overestimate VA payment amounts received by schools 

with lower tuition. The Post-9/11 GI Bill and the Vocational Rehabilitation 

and Employment (VR&E) programs are different in that they make tuition 

and fee payments directly to the school a veteran or other beneficiary is 

attending. Our calculations for those programs include tuition and fee 

payments made to the school, but not additional housing allowance or 

other payments, unless otherwise stated. The total number of schools in 

our analysis was increased by including payments for education

programs funded by the VR&E program. The VR&E program includes a 

variety of education providers, such as computer training companies, law 

enforcement academies, and private tutoring services. We also analyzed 

VA’s data to compare payment and enrollment levels at different types of 

schools (e.g., associate’s, bachelor’s, and non-college degree programs 

and public, nonprofit, and for-profit schools).

Defining Highly VA-Funded Schools: We also used the VA payment 

data to define highly VA-funded schools. We defined highly VA-funded 

schools using Post-9/11 GI Bill payments because it is the largest VA 

education program in terms of total student enrollment and tuition and fee 

payments and because tuition and fee payments made to the school can 

Data Analysis
Appendix I: Scope and Methodology

Page 23 GAO-13-567 VA Education Benefits

be identified. Specifically, we defined highly VA-funded schools as those 

that received at least $2 million in total tuition and fee payments from the 

Post-9/11 GI Bill for fiscal years 2010 through 2011. We used this cut-off 

because this group of schools represented the majority of Post-9/11 GI 

Bill funding (60 percent) and included sufficient numbers of schools in 

different sectors to allow us to compare sector results using a multiple 

regression analysis.

We conducted extensive sensitivity analyses to assess the consistency of 

our results for more narrow definitions of highly VA-funded schools. 

Specifically, we repeated our analyses using a cut-off of $5 million, $10 

million, and $15 million for highly VA-funded schools. Table 2 provides 

information on the number of schools included at each funding level, by 

sector.

Table 2: Highly VA-Funded Schools at Different Post-9/11 Payment Levels

$2 Million $5 Million $10 Million $15 Million

Number of 

schools Percentage

Number of

schools Percentage

Number of 

schools Percentage

Number of 

schools Percentage

Public 

Schools

293 45% 101 42% 20 27% 8 21%

Nonprofit 

Schools

147 22% 57 24% 22 29% 8 21%

For-Profit 

Schools

214 33% 81 34% 33 44% 22 58%

Total 654 100% 239 100% 75 100% 38 100%

Source: GAO analysis of VA data.

Our findings at the $5 million and $10 million levels were generally 

consistent with our findings at the $2 million level, although some 

differences were not statistically different. This may be due to the fact that 

analyses at the higher dollar thresholds were based on fewer 

observations. Some results differed at the $15 million dollar level; 

however, this group consisted of a very small number of schools and 

statistical testing on such a small subset of schools may be less reliable 

and more subject to the influence of large outliers than at the $2 million, 

$5 million, or $10 million levels. The results for these 38 schools are 

sensitive to the inclusion or exclusion of specific schools. For example, 

the overall graduation rate is similar to the other levels when the largest 

school is excluded. Therefore, the conclusions that can be drawn from 

statistical analyses at the $15 million level are more limited than at the $2 

million level. Further, because of the limited number of schools at the $10 
Appendix I: Scope and Methodology

Page 24 GAO-13-567 VA Education Benefits

million and $15 million levels, we could not confirm whether sector 

differences we observe at these payment levels would persist after 

controlling for other factors with regression modeling.

Objectives 2 and 3: For these objectives, we first had to merge the VA 

payment and enrollment data with IPEDS data on student and school 

characteristics. We matched all of the highly VA-funded schools with the 

appropriate school in the IPEDS database. However, we could not match 

all of the other VA-funded schools for a variety of reasons. For example, 

some VA-funded schools do not participate in federal student aid 

programs and are therefore not included in IPEDS. In addition, the data 

for VA’s Vocational Rehabilitation and Employment program included 

payments for tutoring and employment services provided by entities other 

than schools (and that were not relevant to our analyses). It is also 

possible that we were unable to match some schools because the school 

name in the VA data did not match closely enough to the school name 

listed in IPEDS. However, these non-matched schools represented a 

small percentage of the total cases—less than 1 percent of the total Post9/11 enrollees and tuition payments.

We then calculated a variety of student and school characteristics, such 

as the percentage of students who are low-income,5 minority, or over the 

age of 25; and graduation and retention rates.6

 5 We use the term “low-income” to describe students who received federal Pell grants, a 

need-based federal student aid program for low-income students.

Education’s data do not 

identify student veterans, so these characteristics are for a school’s total 

student population and are not veteran specific. We compared student 

and school characteristics at (1) highly VA-funded schools with other 

schools receiving VA education payments and (2) public, nonprofit, and 

for-profit schools in the highly VA-funded group. For our descriptive 

analysis of student-level characteristics (such as the percentage of lowincome or minority students or graduation rates), we calculated 

percentages using the student population (rather than the number of 

schools) as the denominator.

6 Retention rate is a measure of the rate at which students persist in their education 

program at an institution, expressed as a percentage. For 4-year institutions, this is the 

percentage of first-time bachelor’s (or equivalent) degree-seeking undergraduates from 

the previous fall who are again enrolled in the current fall. For all other institutions this is 

the percentage of first-time degree/certificate-seeking students from the previous fall who 

either re-enrolled or successfully completed their program by the current fall.
Appendix I: Scope and Methodology

Page 25 GAO-13-567 VA Education Benefits

Descriptive Statistics: We conducted various descriptive statistical 

analyses to determine whether highly VA-funded schools had different 

school and student characteristics and outcomes than other schools that 

received payments from VA education benefits. We conducted similar 

analyses to determine whether specific kinds of highly VA-funded schools 

had different school and student characteristics and outcomes than 

others. We examined t-tests of means and proportions for continuous and 

categorical variables, comparing both highly VA-funded schools to all 

other schools, and, among highly VA-funded schools, comparing schools 

in different sectors. We aggregated across schools within each sector to 

develop implicitly weighted means and proportions for these 

comparisons; accordingly, large outliers may have an influence on the 

results, particularly when looking at smaller subsets of schools. 

Additionally, these kinds of t-tests assume that there are a sufficient 

number of schools in each sector to reliably calculate a distribution 

around the statistic of interest. We did not conduct statistical testing 

across sectors among schools receiving $15 million or more in VA 

payments—when there are as few as 8 schools per sector—because this 

assumption does not apply. All differences reported are significant at the 

95 percent level unless otherwise noted. This indicates that there is less 

than a 5 percent probability that we would have gotten such a result by 

chance if there were really no difference in the mean or proportion 

between variables. These analyses examine differences prior to 

controlling for the effects of other variables.

Multiple Regression Analysis: To develop meaningful comparisons 

when comparing different types of schools, it is important to account for 

differences in student and institutional characteristics as much as 

possible. We used a school-level analysis for the regression analysis. We 

conducted additional analyses of our comparison of highly VA-funded 

schools in different sectors to control for differences in student and 

institutional characteristics. We were not able to conduct a similar 

analysis for our comparison of highly VA-funded schools with other VAfunded schools because some of the other VA-funded schools did not 

report IPEDS information; however, these schools represent a small 

percentage of total Post-9/11 GI Bill payments and enrollment.7

 7 All of the highly VA-funded schools reported information to IPEDS.

Multiple 

regression analysis is a method for exploring how a dependent variable is 

related to a number of independent variables, while controlling for other 
Appendix I: Scope and Methodology

Page 26 GAO-13-567 VA Education Benefits

factors that could have an impact on the value of the dependent variable. 

We used ordinary least squares regression modeling to assess whether 

observed differences in student outcomes at highly VA-funded schools in 

different sectors remained after controlling for differences in student 

characteristics.

We tested multiple model specifications to ensure that our estimates were 

stable across different models, as well as different functional forms for the 

dependent variables to ensure consistency of interpretation. While we 

report the results from our analysis of all highly VA-funded schools, we 

also estimated the models using the subset of schools that received $5 

million or more in VA payments. Except where noted below with respect 

to the retention rate analysis, the results were consistent across 

specifications and populations, in terms of the direction, relative 

magnitude, and significance of the coefficients. Results reported are 

significant at the 95 percent level.

For our regression analysis of the proportion of veterans for highly VAfunded schools, we used the log of the veteran-student ratio (veterans as 

a percent of all students) to mitigate high skew, the impact of outliers, and 

to ensure that the data better conformed with the statistical assumptions 

that underlie linear regression modeling. We controlled for a variety of 

characteristics in addition to sector, including school enrollment in five 

categories, whether a school offered bachelor’s or graduate degrees, 

whether a school offered distance education, the school’s specialty 

(information technology, health care, or business compared to other 

schools), tuition, and student characteristics.8

 8 Enrollment was broken into five categories, based roughly on the 10th percentile, the 25th

percentile, the 75th percentile and the 90th percentile. Depending on the model, tuition was 

broken into five categories based roughly on the 10th, 25th, 75th and 90th percentiles, or 

into three categories as part of an interaction term with sector based loosely on the 10th

and 90th percentile cutoffs. 

Student characteristics 

included the percent of students on Pell Grants (as a proxy for the 

percent of low-income students), the percent of part-time students, and 

the percentages of students who were minority, female, or over the age of 

25. Our model showed that after controlling for other factors there was no 

significant difference in the log of the veteran-student ratios across 

sectors. As tuition increased, the percentage of the student body who 

were veterans generally decreased. When we examined an interaction 

term for sector and tuition, we found that the veteran-student ratios 
Appendix I: Scope and Methodology

Page 27 GAO-13-567 VA Education Benefits

decreased significantly as tuition increased for public and nonprofit 

schools, but that the veteran-student ratio at for-profit schools did not 

appear to fall as tuition increased. That is, as tuition increased, the 

percentage of the student body who were veterans at highly VA-funded 

public and nonprofit schools decreased after controlling for school and 

student characteristics, whereas at highly VA-funded for-profit schools, 

higher tuition rates were not associated with significant declines in the 

proportion of veterans attending a school. Our final model with separate 

terms for sector and tuition included 646 schools with complete data on 

veteran-student ratio and all independent variables, and had an R2 of .66, 

meaning that variation in the independent variables predicted 

approximately two-thirds of the variation in the log of the veteran-student 

ratio.

When analyzing graduation and retention rates, we adapted our set of 

independent variables to accommodate potential confounds resulting 

from the fact that schools serve students who are pursuing different levels 

of degrees.9 Instead of controlling for the highest degree offered, our 

regression models control for the primary focus of the school by including 

intercepts for schools that primarily serve students seeking associate’s 

degrees, schools that do not primarily serve students seeking bachelor’s 

degrees, and for schools that offered greater than a bachelors’ degree. 

We also included a control for the proportion of veterans in the school 

population, as well as the balance of the student and school controls used 

in our model of the proportion of veterans at a school. We excluded from 

the regression analyses of graduation and retention rates those few 

highly VA-funded schools that reported serving only graduate students or 

not offering degrees, and schools that had graduation rates more than 10 

percentage points higher than their retention rates.10

 9 Schools that have a 4-year component but that serve primarily associate’s degree or 

other students may report only the 4-year graduation rate, even if 4-year students are a 

relatively small portion of the school’s student body.

After excluding 

these records, records with missing or problematic graduation or retention 

rate data, and other records with missing data on independent variables, 

our regression analyses included 608 and 582 schools respectively for 

the analyses of graduation and retention rates.

10 Although in theory a school cannot graduate a larger proportion of students than it 

retains, in practice the use of different student cohorts in the denominator of graduation 

and retention rate calculations can result in minor misalignments across years. 
Appendix I: Scope and Methodology

Page 28 GAO-13-567 VA Education Benefits

We found that, on average, highly VA-funded nonprofit and for-profit 

schools had significantly higher graduation rates than public schools, after 

adjusting for other factors. Nonprofit schools’ graduation rates were, on 

average, about 6.5 percentage points higher than those of public schools, 

and the graduation rate of for-profit schools was on average about 6.0 

percentage points higher than those of public schools; the difference 

between nonprofit schools’ rates and those of for-profit schools was not 

statistically significant. Across sectors, schools with higher tuition tended 

to have significantly higher graduation rates than their lower-priced 

counterparts, controlling for school and student characteristics. Our final 

model with separate terms for sector and tuition had an R2 of .74, which 

suggests that the variation in the independent variables predicted 

approximately three-quarters of the variation in the graduation rate. Our 

regression analysis of retention rates showed that controlling for other 

factors, public and nonprofit schools had similar retention rates, while on 

average, for-profit schools had significantly lower retention rates than 

public and nonprofit schools. After controlling for school and student 

characteristics, for-profit schools had retention rates that were on average 

approximately 6 points lower than that of public schools with similar 

characteristics. Additionally, although schools with higher tuitions tended 

to have higher retention rates than their lower-priced counterparts, an 

interaction term to explore this relationship showed that it did not hold for 

for-profit schools. In other words, although higher-priced public and 

nonprofit schools had higher retention rates than low-priced public 

schools, there was no statistically significant difference between lowpriced public school’s retention rates and those of higher-priced for-profit 

schools. Our final model with separate terms for sector and tuition had an 

R2 of .60, meaning that the variation in our independent variables 

predicted approximately 60 percent of the variation in the retention rate.

The student loan default rate is reported at the Office of Postsecondary 

Education Identification (OPEID-6) level that may link to a central campus 

or school, rather than individual campuses; consequently we used a 

collapsed dataset to assess differences in default rate at the central 

campus or school level.11

 11 The OPEID-6 is the identification number used by Education’s Office of Postsecondary 

Education to identify schools that have program participation agreements so that its 

students are eligible to participate in federal student financial assistance programs under 

Title IV regulations. 

The dataset collapsed together highly VAfunded schools based on the OPEID-6 identifier, which left approximately 
Appendix I: Scope and Methodology

Page 29 GAO-13-567 VA Education Benefits

560 schools and chains for analysis; due to missing data on independent 

variables, our models of default rate include 546 cases. Although the 

majority of our control variables overlap with those used in other models, 

we did not include in our default rate analysis variables that were unique 

to a site or campus, such as whether a school offered distance education. 

For student characteristic variables, each individual variable reflects the 

number of students in the category across all sites or campuses over the 

total number of students across sites or campuses. Our tuition measure is 

a weighted average across campuses, weighted by total enrollment. The 

size variable is based on the total enrollment at all campuses. Our 

regression analysis shows that among schools and chains, highly VAfunded for-profit schools and chains had significantly higher student loan 

default rates than nonprofit and public schools. The default rate of 

nonprofit schools was slightly but significantly below that of public 

schools, controlling for other factors. Overall, highly VA-funded for-profit 

schools and chains had default rates that were, on average, about 6.5 

percentage points higher than their public counterparts, whereas the 

default rate at nonprofit schools was approximately 1 percentage point 

lower than that for public schools, after adjusting for tuition, size, and 

student characteristics. When we limited our analysis to schools receiving 

$5 million or more in VA payments, we found that while for-profit schools 

and chains still appeared to have higher default rates than public schools, 

the default rate of nonprofit schools was not significantly different from 

that of public schools. Our final model of the default rate at all highly VAfunded central campuses and institutions had an R2 of about .70, which 

suggests that variation in the independent variables in the model 

predicted approximately 70 percent of the variation in the default rate.

The student characteristics and outcomes included in our analyses are for 

all students enrolled at a school and are not specific to student veterans. 

While veterans typically represent a small percentage of a school’s 

overall student population, we analyzed the characteristics and outcomes 

of the overall student populations because veteran-specific data do not 

exist.

The student outcomes measures used in our analyses have certain 

limitations. For example, the IPEDS graduation rates include only fulltime, first-time students and thus exclude a significant number of other 

students (e.g., those who attend part-time or transfer to another school). 

For schools with a bachelor’s degree as the highest degree offered, the 

IPEDS retention rates include only students seeking a bachelor’s degree, 

even if most students at the school receive associate’s degrees. Finally, 

Limitations of the 

Analysis
Appendix I: Scope and Methodology

Page 30 GAO-13-567 VA Education Benefits

Education tracks only student loan default rates for a 3-year period after a 

borrower is scheduled to begin repaying the student loan. Defaults that 

occur after this 3-year period are not counted in a school’s default rate.

Lastly, schools do not always report their IPEDS graduation and retention 

rate data using the same unit of analysis as their default and 90/10 rates. 

Education allows a school to report data on related campuses in several 

ways. For example, a school with five related campuses may report a 

separate graduation rate for each campus, but a single 90/10 rate or a 

single default rate for the five campuses together. In these cases, we 

assigned the single 90/10 rate or default rate to each related campus for 

our descriptive analysis. For our regression modeling of default rates, we 

collapsed data to the central campus or institution level.
Appendix II: For-Profit Schools and the 90/10 

Requirement

Page 31 GAO-13-567 VA Education Benefits

To maintain their eligibility for federal student aid programs (those 

authorized by Title IV of the Higher Education Act of 1965, as amended, 

such as Pell Grants and William D. Ford Federal Direct Loans), for-profit 

schools must obtain at least 10 percent of their total revenues from 

sources other than federal student aid programs—this is known as the 

90/10 rule.1 Because VA education payments are not authorized by this 

legislation, it is counted as non-federal student aid for this purpose and 

thus toward the 10 percent requirement; as a result, enrolling veterans 

helps for-profit schools meet the 90/10 rule. The percentage of a for-profit 

school’s total revenues obtained from federal student aid programs is 

known as the “90/10 rate.” If a for-profit school does not comply with the 

90/10 rule for 1 fiscal year, the school’s eligibility to participate in the 

federal student aid program becomes provisional for the next 2 years.2

Schools with high levels of revenue from sources other than federal 

student aid (such as Post-9/11 GI Bill payments) could be expected to 

have a lower proportion of overall revenue from federal student aid 

programs and therefore lower 90/10 rates. This is what we found when 

we compared 90/10 rates at highly VA-funded and other VA-funded forprofit schools. Specifically, a somewhat higher percentage of highly VAfunded schools had 90/10 rates at 85 percent or below, compared to 

other for-profit schools (see fig. 9). In other words, highly VA-funded forprofit schools had lower 90/10 rates in the aggregate than other for-profit 

schools, meaning that they received proportionally less federal student 

aid than other for-profit schools.

If 

noncompliance occurs for 2 consecutive fiscal years, the school becomes 

ineligible to participate in the federal student aid program for at least 2 

fiscal years.

3

 1 20 U.S.C. § 1094(a)(24). 

2 20 U.S.C. § 1094(d)(2).

3 For more information on 90/10 rates, see GAO, For-Profit Schools: Large Schools and 

Schools that Specialize in Healthcare Are More Likely to Rely Heavily on Federal Student 

Aid, GAO-11-4 (Washington, D.C.: Oct. 4, 2010).

Appendix II: For-Profit Schools and the 90/10 

Requirement
Appendix II: For-Profit Schools and the 90/10 

Requirement

Page 32 GAO-13-567 VA Education Benefits

Figure 9: 90/10 Rates of Highly VA-Funded and Other VA-Funded Schools, School 

Year 2011-12

Note: Highly VA-funded schools are those that received at least $2 million in total Post-9/11 GI Bill 

payments from fiscal year 2010 through fiscal year 2011.
Appendix III: School Characteristics at Highly 

VA-Funded Schools Compared to Other VAFunded Schools

Page 33 GAO-13-567 VA Education Benefits

This appendix presents additional data comparing school characteristics 

at highly VA-funded schools and other VA-funded schools.

Figure 10: Number of Students at Highly VA-Funded and Other VA-Funded Schools, 

School Year 2010-11

Note: Highly VA-funded schools are those that received at least $2 million in total Post-9/11 GI Bill 

payments from fiscal year 2010 through fiscal year 2011.

Appendix III: School Characteristics at 

Highly VA-Funded Schools Compared to 

Other VA-Funded Schools
Appendix III: School Characteristics at Highly 

VA-Funded Schools Compared to Other VAFunded Schools

Page 34 GAO-13-567 VA Education Benefits

Table 3: Fiscal Year 2011 Post-9/11 GI Bill Funding, Numbers of Veterans, and 

Funding per Veteran 

FY 2011 Post9/11 GI Bill 

Funding 

FY 2011 Post9/11 GI Bill 

Student 

Veterans 

FY 2011 

Funding Per 

Veteran 

School Year 

2011-2012 

Average 

Tuition 

Highly VAFunded 

Schools 

$2,436,469,986 333,739 $7,300.53 $18,829 

Other VAFunded 

Schools

$1,139,785,636 222,549 $5,121.50 $16,689

Source: GAO analysis of VA and IPEDS data.

Notes: Highly VA-funded schools are those that received at least $2 million in total Post-9/11 GI Bill 

payments from FY 2010 through FY 2011.

Post-9/11 GI Bill funding per veteran is influenced by several factors, including tuition rates, program 

offerings, and use of the Yellow Ribbon program.

Tuition may be higher at the highly VA-funded schools because they all offer at least an associate’s 

degree, while some other VA-funded schools offer only non-degree programs; tuition tends to 

increase for more advanced degrees.

FY = fiscal year.
Appendix III: School Characteristics at Highly 

VA-Funded Schools Compared to Other VAFunded Schools

Page 35 GAO-13-567 VA Education Benefits

Figure 11: Comparison of Yellow Ribbon Program Participation and Distance 

Education at Highly VA-Funded and Other VA-Funded Schools, School Year 2011-

12

Notes: Highly VA-funded schools are those that received at least $2 million in total Post-9/11 GI Bill 

payments from fiscal year 2010 through fiscal year 2011.

Veterans attending nonprofit or for-profit schools (or public schools as out-of-state students) may 

receive additional benefits to cover tuition costs that exceed their Post-9/11 GI Bill benefit through 

VA’s Yellow Ribbon Program. Under this program, participating schools enter into a voluntary 

agreement with VA to pay a portion of the tuition and fees that exceed an individual’s Post-9/11 GI Bill 

benefit and VA matches the school’s contribution.

Distance education refers to schools that offer any courses via the internet, video, or other forms 

outside the classroom.
Appendix III: School Characteristics at Highly 

VA-Funded Schools Compared to Other VAFunded Schools

Page 36 GAO-13-567 VA Education Benefits

Figure 12: School Year 2011-12 Highest Degree Offering at Highly VA-Funded and 

Other VA-Funded Schools

Note: Highly VA-funded schools are those that received at least $2 million in total Post-9/11 GI Bill 

payments from fiscal year 2010 through fiscal year 2011.
Appendix IV: Comparisons of School 

Characteristics across Public, Nonprofit, and 

For-Profit Schools

Page 37 GAO-13-567 VA Education Benefits

This appendix presents additional data comparing student outcomes and 

school characteristics at highly VA-funded public, nonprofit, and for-profit

schools.

Figure 13: Retention, Overall Graduation, 4- and 2-Year Graduation, and 3-Year 

Student Loan Default Rates across Highly VA-Funded Schools, by Sector, School 

Year 2011-12, before Controlling for Differences in Student and School 

Characteristics

Note: Highly VA-funded schools are those that received at least $2 million in total Post-9/11 GI Bill 

payments from fiscal year 2010 through fiscal year 2011.

Appendix IV: Comparisons of School 

Characteristics across Public, Nonprofit, and 

For-Profit Schools
Appendix IV: Comparisons of School 

Characteristics across Public, Nonprofit, and 

For-Profit Schools

Page 38 GAO-13-567 VA Education Benefits

Figure 14: School Year 2010-11 Enrollment Levels at Highly VA-Funded Schools, by 

Sector

Note: Highly VA-funded schools are those that received at least $2 million in total Post-9/11 GI Bill 

payments from fiscal year 2010 through fiscal year 2011.
Appendix IV: Comparisons of School 

Characteristics across Public, Nonprofit, and 

For-Profit Schools

Page 39 GAO-13-567 VA Education Benefits

Figure 15: School Year 2011-12 Comparison of Yellow Ribbon Program 

Participation and Distance Education at Highly VA-Funded Schools, by Sector

Notes: Highly VA-funded schools are those that received at least $2 million in total Post-9/11 GI Bill 

payments from fiscal year 2010 through fiscal year 2011.

Veterans attending nonprofit or for-profit schools (or public schools as out-of-state students) may 

receive additional benefits to cover tuition costs that exceed their Post-9/11 GI Bill benefit through 

VA’s Yellow Ribbon Program. Under this program, participating schools enter into a voluntary 

agreement with VA to pay a portion of the tuition and fees that exceed an individual’s Post-9/11 GI Bill 

benefit and VA matches the school’s contribution.

Distance education refers to schools that offer any courses via the internet, video, or other forms 

outside the classroom.
Appendix IV: Comparisons of School 

Characteristics across Public, Nonprofit, and 

For-Profit Schools

Page 40 GAO-13-567 VA Education Benefits

Figure 16: School Year 2011-12 Highest Degree Offering at Highly VA-Funded 

Schools, by Sector

Note: Highly VA-funded schools are those that received at least $2 million in total Post-9/11 GI Bill 

payments from fiscal year 2010 through fiscal year 2011.
Appendix V: Comments from the Department 

of Veterans Affairs

Page 41 GAO-13-567 VA Education Benefits

Appendix V: Comments from the Department 

of Veterans Affairs
Appendix VI: GAO Contact and Staff 

Acknowledgments

Page 42 GAO-13-567 VA Education Benefits

Melissa Emrey-Arras, (617) 788-0534 or emreyarrasm@gao.gov

In addition to the contact named above, individuals making key 

contributions to this report were Michelle St. Pierre, Assistant Director; 

Mariana Calderon, Nathan Gottfried, Jennifer Gregory, Andrew Nelson, 

and Tranchau Nguyen. In addition, key support was provided by Deborah 

Bland, Will Colvin, Kirsten Lauber, Theresa Lo, John Mingus, Mimi 

Nguyen, Anna Maria Ortiz, Michelle A. Sager, George Scott, Kate van 

Gelder, Mark Ward, and Craig Winslow.

Appendix VI: GAO Contact and Staff 

Acknowledgments

GAO Contact

Staff 

Acknowledgments

(131151)
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