VA Student Financial Aid: Actions Needed to Reduce Overlap in Approval Activities
Published: 2007-04-19T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: In fiscal year 2006, the Department of Veterans Affairs (VA) paid $19 million to state approving agencies (SAA) to assess whether schools and training programs are of sufficient quality for veterans to receive VA education assistance benefits when attending them. The Departments of Education and Labor also assess education and training programs for various purposes. This testimony describes (1) changes that have occurred in state approving agencies' duties and functions since 1995, (2) the extent to which the SAA approval process overlaps with efforts by the Departments of Education and Labor, and (3) the additional value that SAA approval activities bring to VA education benefit programs. This testimony is based on a March 2007 report (GAO-07-384).
section_title: What GAO Found
paragraphs: Since 1995, legislative changes effective in 2001 created additional responsibilities for SAAs, including promoting the development of apprenticeship and on-the-job training programs, providing outreach services, and approving tests for occupational licensing. From fiscal years 2003 to 2006, SAA funding increased from $13 million to $19 million to expand services and support the additional responsibilities. However, funding is scheduled to decrease beginning in fiscal year 2008. Many education and training programs approved by SAAs have also been approved by Education or Labor, and VA has taken few steps to coordinate approval activities with these agencies. More than two-thirds of all programs approved by SAAs are offered by institutions that have been certified by Education. Many apprenticeship programs approved by SAAs have also been approved by Labor, although apprenticeship programs make up less than 2 percent of all programs approved by SAAs. Similar categories of approval standards, such as student achievement, exist across agencies, but the specific standards within each category vary and the full extent of the overlap is unknown. For example, VA requires schools to give appropriate credit for prior learning while Education does not have such a requirement. Despite the overlap in approved programs and standards, VA and SAAs have made limited efforts to coordinate approval activities with other federal agencies. VA does not require SAAs to collect information on the amount of resources they spend on specific approval activities; therefore, information is not available to determine the amount of resources spent on SAA duties and functions, including those that may overlap with those of other agencies. SAAs reportedly add value to the approval process for education and training programs, but the lack of outcome-oriented performance measures makes it difficult to assess the significance of their efforts. Areas of added value include (1) a focus on student services for veterans and on the integrity of VA benefits, (2) more frequent on-site monitoring of education and training programs than provided by Education or Labor, and (3) assessments and approval of a small number of programs that are not reviewed by other agencies. States, schools, and apprenticeship officials we spoke with reported that without SAAs, the quality of education for veterans would not change. However, veterans' receipt of benefits could be delayed and the time required to complete their education and training programs could increase. Despite areas of apparent added value, it is difficult to fully assess the significance of SAA efforts. VA measures some outputs, such as the number of supervisory visits SAAs conduct, but it does not have outcome-oriented performance measures, such as the amount of benefit adjustments resulting from SAAs' reviews, to evaluate the overall effectiveness of SAAs.

section_title: Letter
paragraphs: I am pleased to be here today to present information from our March 2007  report on state approving agencies (SAA). In fiscal year 2006, the  Department of Veterans Affairs (VA) paid approximately $2.1 billion in  education assistance benefits to more than 470,000 beneficiaries and about  $19 million to state approving agencies to assess whether schools and  training programs offer education of sufficient quality for veterans to  receive VA education assistance benefits when attending them. Qualified  individuals—veterans, service persons, reservists, and certain spouses and  dependents—receive benefits through a number of education assistance  programs for the pursuit of various types of programs, such as a degree  program, vocational program, apprenticeship, or on-the-job training. In  general, these programs must be approved by an SAA in order for qualified  individuals to receive VA education assistance benefits. Under contracts  with VA, SAAs ensure that education and training programs meet VA  standards through a variety of approval activities, such as evaluating  course quality, assessing school financial stability, and monitoring student  progress.
The Departments of Education (Education) and Labor (Labor) also assess  education and training programs for various purposes, primarily for  awarding student aid and providing apprenticeship assistance. These  assessments are based, in part, on evaluations against standards set by  laws and regulations, such as those applicable to accrediting agencies. In  2006, under Title IV of the Higher Education Act, Education provided  nearly $77 billion in student aid in the form of both grants and loans.  Education assesses and certifies postsecondary institutions for  participation in Title IV programs through various oversight functions to  ensure that these schools meet federal administrative and financial  requirements and that they are accredited and licensed. Similarly, under  the National Apprenticeship Act of 1937, Labor is authorized to formulate  and promote the furtherance of labor standards to safeguard the welfare  of apprentices. To ensure programs comply with federal standards, Labor  directly registers and oversees apprenticeship programs in less than half of  the states and has given state apprenticeship agencies or councils in the  remaining states such authority over their own programs.
Given each agency’s role, the potential of duplicative efforts among federal  agencies has been a congressional concern. In 1995, GAO reported on this  matter and concluded that there was a substantial amount of overlap  between the efforts of SAAs and the other federal agencies. My testimony  today is based on information from our recent report and will focus on   (1) changes that have occurred in state approving agencies’ duties and  functions since 1995, (2) the extent to which the SAA approval process  overlaps with efforts by the Departments of Education and Labor, and   (3) the additional value that SAA approval activities bring to VA education  benefit programs.
In summary, we found that:    Since 1995, legislative changes effective in 2001 created additional  responsibilities for SAAs, including promoting the development of  apprenticeship and on-the-job training programs, providing  outreach services, and approving tests for occupational licensing.  From fiscal years 2003 to 2006, SAA funding increased from   $13 million to $19 million to expand services and support the  additional responsibilities. However, funding is scheduled to  decrease beginning in fiscal year 2008.
Many education and training programs approved by SAAs have also  been approved by Education or Labor, and VA and SAAs have taken  few steps to coordinate approval activities with these agencies. In  addition, information is not available to determine the amount of  resources spent on SAA duties and functions, including those that  may overlap with other agencies and programs.
SAAs reportedly add value to the approval process for education  and training programs through (1) a focus on student services for  veterans and on the integrity of VA benefits, (2) more frequent on- site monitoring of education and training programs than provided  by Education or Labor, and (3) assessments and approval of a small  number of programs that are not reviewed by other agencies.  However, VA’s lack of outcome-oriented performance measures   for evaluating SAAs makes it difficult to assess the significance of  these efforts.
To help ensure that federal dollars are spent efficiently and effectively, our  report recommended that the Secretary of the Department of Veterans  Affairs take steps to monitor SAA spending and identify whether any  resources are spent on activities that duplicate the efforts of other  agencies. We also recommended that the Secretary establish outcome- oriented performance measures to assess the effectiveness of SAA efforts.  VA agreed with our findings and recommendations and stated that it will  take a number of steps to address them.
To conduct our work, we reviewed applicable laws, regulations, and  program materials; and interviewed officials from each of the entities  involved in the various approval processes, including federal agencies,  state approving agencies, schools and training programs.  We also  reviewed and analyzed data on approval decisions from VA, Education,  and Labor.  Our work was performed in accordance with generally  accepted government auditing standards.
subsections: section_title: Background
paragraphs: VA, Education, and Labor assess education and training programs for  various purposes. VA’s approval process is meant to ensure that education  and training programs meet VA standards for receipt of veteran education  assistance benefits, while Education’s and Labor’s processes are primarily  for awarding student aid and providing apprenticeship assistance.
VA administers a number of programs designed to assist individuals in  gaining access to postsecondary education or training for a specific  occupation (see table 1). VA generally provides its assistance in the form  of payments to veterans, service persons, reservists, and certain spouses  and dependents.
Benefits can be used to pursue a degree program, vocational program,  apprenticeship, and on-the-job training (see fig. 1). Before an individual  entitled to VA education assistance can obtain money for an education or  training program, the program must be approved by an SAA, or by VA in  those cases in which an SAA has not been contracted to perform the work.
VA’s administrative structure for the education and training assistance  programs includes its national office, which oversees the four regional  processing offices (RPO), and the national contract with SAAs. RPOs  administer the education assistance programs and process benefits for  veterans. SAAs review education and training programs to determine  which programs should be approved and ensure schools and training  providers are complying with VA standards. SAAs have six core duties:   (1) approval of programs, (2) visits to facilities, (3) technical assistance to  individuals at facilities, (4) outreach, (5) liaison with other service  providers, and (6) contract management. Sixty SAAs exist in the 50 states,  the District of Columbia, and Puerto Rico. Eight states have two SAAs.  SAAs are usually part of a state’s department of education (31 SAAs). In  some states, SAAs are organizationally located in other departments such  as labor (9 SAAs) or veterans’ services (19 SAAs).
The U.S. Department of Education’s approval process is to ensure that  schools meet federal Education standards to participate in federal student  financial aid programs. In order for students attending a school to receive  Title IV financial aid, a school must be (1) licensed or otherwise legally  authorized to provide postsecondary education in the state in which it is  located, (2) accredited by an entity recognized for that purpose by the  Secretary of Education, and (3) certified to participate in federal student  aid programs by Education. As such, the state licensing agencies,  accrediting agencies, and certain offices within Education are responsible  for various approval activities.
State licensing agencies grant legal authority to postsecondary  institutions to operate in the state in which they are located. Each  of the states has its own agency structure, and each state can  choose its own set of standards.
Accrediting agencies develop evaluation criteria and conduct peer  evaluations to assess whether or not those criteria are met by  postsecondary institutions. Institutions or programs that meet an  agency’s criteria are then “accredited” by that agency. As of  November 2005, there were 60 recognized private accrediting  agencies of regional or national scope.
The U.S. Department of Education’s Office of Postsecondary  Education evaluates and recognizes accrediting agencies based on  federal requirements to ensure these agencies are reliable  authorities as to the quality of education or training provided by the  institutions of higher education and the higher education programs  they accredit.
The U.S. Department of Education’s Office of Federal Student Aid  determines the administrative and financial capacity of schools to  participate in student financial aid programs, conducts ongoing  monitoring of participant schools, and ensures participant schools  are accredited and licensed by the states.
The purpose of the Department of Labor’s approval process is to establish  and promote labor standards to safeguard the welfare of apprentices.  Labor establishes standards and registers programs that meet the  standards. Labor directly registers and oversees programs in 23 states but  has granted 27 states, the District of Columbia, and 3 territories authority  to register and oversee their own programs, conducted by state  apprenticeship councils (SACs). Labor reviews the activities of the SACs.
SACs ensure that apprenticeship programs for their respective states  comply with federal labor standards, equal opportunity protections, and  any additional state standards.
Figure 2 shows the agencies responsible for the approval processes for the  various types of education and training programs.
section_title: Legislative Changes Effective in 2001 Created Additional Responsibilities for SAAs
paragraphs: In 2001, SAAs received additional responsibilities as a result of legislative  changes. This included responsibility for actively promoting the  development of apprenticeship and on-the-job training programs and  conducting more outreach activities to eligible persons and veterans to  increase awareness of VA education assistance. SAAs were also charged  with approving tests used for licensing and certification, such as tests to  become a licensed electrician. For those tests that have been approved,  veterans can use VA benefits to pay for testing fees. From fiscal years 2003  to 2006, SAA funding increased from $13 million to $19 million to expand  services and support the additional responsibilities. Funding is scheduled  to begin to decrease in fiscal year 2008.
section_title: Many Education and Training Programs Approved by SAAs Have Also Been Approved by Education or Labor, and VA Has Taken Few Steps to Coordinate Approval Activities with These Agencies
paragraphs: Many education and training programs approved by SAAs have also been  approved by Education and Labor. Sixty-nine percent of all programs  approved by SAAs are offered by institutions that have also been certified  by Education. Seventy-eight percent of   SAA-approved programs in institutions of higher learning (e.g., colleges  and universities) have been certified by Education. Also, 64 percent of  SAA-approved non-college degree programs are in institutions that have  been certified by Education. Although less than 2 percent of all programs  approved by SAAs are apprenticeship programs, VA and SAA officials  reported that many of these programs have also been approved by Labor.
Similar categories of approval standards exist across agencies, but the  specific standards within each category vary and the full extent of overlap  is unknown. For example, while VA and Education’s approval standards  both have requirements for student achievement, the New England  Association of Schools and Colleges, an accrediting agency, requires that  students demonstrate competence in various areas such as writing and  logical thinking, while VA does not have this requirement. Also among the  student achievement standards, VA requires schools to give appropriate  credit for prior learning, while Education does not have such a  requirement. Table 2 shows the similar categories of standards that exist  across agencies.  policies related to student achievement, such as minimum satisfactory  grades, but the requirements differ in level of specificity.
Despite the overlap in approved programs and standards, VA and SAAs  have made limited efforts to coordinate approval activities with Education  and Labor. VA reported that while it has coordinated with Education and  Labor on issues related to student financial aid and apprentices’ skill  requirements, it believes increased coordination is needed for approval  activities in order to determine the extent of duplicative efforts. Most of  the SAA officials we spoke with reported that they have coordinated with  SACs to register apprenticeship programs in their states. Labor reported  that it coordinated with VA’s national office in several instances, including  providing a list of registered apprenticeship programs. Education reported  that it does not have formalized coordination with VA but has had some  contacts to inform VA of its concerns regarding specific institutions.
Information is not available to determine the amount of resources spent  on SAA duties and functions, including those that may overlap with those  of other agencies. VA does not require SAAs to collect information on the  amount of resources they spend on specific approval activities. The SAA  officials we spoke with said that their most time-consuming activity is  conducting inspection and supervisory visits of schools and training  facilities. However, the lack of data on resource allocation prevented us  from determining what portions of funds spent by SAAs were for approval  activities that may overlap with those of other agencies.
section_title: SAAs Reportedly Add Value to the Approval Process for Education and Training Programs, but the Lack of Outcome- Oriented Performance Measures Makes It Difficult to Assess the Significance of Their Efforts
paragraphs: SAA and other officials reported that SAA activities add value because  they provide enhanced services to veterans and ensure program integrity.  According to these officials, SAAs’ added value includes a focus on  student services for veterans and on VA benefits, more frequent on-site  monitoring of education and training programs than Education and Labor,  and assessments and approval of a small number of programs that are not  reviewed by other agencies, such as programs offered by unaccredited  schools, on-the-job training programs, and apprenticeship programs not  approved by Labor.
SAA approval activities reportedly ensure that (1) veterans are taking  courses consistent with occupational goals and program requirements,   (2) schools and training programs have evaluated prior learning and work  experience and grant credit as appropriate, and (3) school or program  officials know how to complete paperwork and comply with policies  required by VA educational assistance through technical assistance.  According to officials we interviewed, SAAs generally conduct more  frequent on-site monitoring of education and training programs than  Education or Labor, possibly preventing fraud, waste, and abuse. Some  officials reported that SAAs’ frequent visits were beneficial because they  ensure that schools properly certify veterans for benefits and that benefits  are distributed accurately and quickly. States, schools, and apprenticeship  officials we spoke with reported that without SAAs, the quality of  education for veterans would not change. However, veterans’ receipt of  benefits could be delayed and the time required to complete their  education and training programs could increase.
Despite areas of apparent added value, it is difficult to fully assess the  significance of SAA efforts. VA does measure some outputs, such as the  number of supervisory visits SAAs conduct, but it does not have outcome- oriented measures, such as the amount of benefit adjustments resulting  from SAAs’ review of school certification transactions, to evaluate the  overall effectiveness and progress of SAAs. (See table 3.)
section_title: Prior Recommendations and Agency Response
paragraphs: We made several recommendations to the Department of Veterans Affairs  to help ensure that federal dollars are spent efficiently and effectively. We  recommended that the Secretary of the Department of Veterans Affairs  take steps to monitor its spending and identify whether any resources are  spent on activities that duplicate the efforts of other agencies. The extent  of these actions should be in proportion to the total resources of the  program. Specifically:    VA should require SAAs to track and report data on resources spent  on approval activities such as site visits, catalog review, and  outreach in a cost-efficient manner, and    VA should collaborate with other agencies to identify any  duplicative efforts and use the agency’s administrative and  regulatory authority to streamline the approval process.
In addition, we recommended that the Secretary of the Department of  Veterans Affairs establish outcome-oriented performance measures to  assess the effectiveness of SAA efforts.
VA agreed with the findings and recommendations and stated that it will  (1) establish a working group with the SAAs to create a reporting system  to track and report data for approval activities with a goal of  implementation in fiscal year 2008, (2) initiate contact with appropriate  officials at the Departments of Education and Labor to identify any  duplicative efforts, and (3) establish a working group with the SAAs to  develop outcome-oriented performance measures with a goal of  implementation in fiscal year 2008. While VA stated that it will initiate  contact with officials at Education and Labor to identify duplicative  efforts, it also noted that amending its administrative and regulatory  authority to streamline the approval process may be difficult due to  specific approval requirements of the law. We acknowledge these  challenges and continue to believe that collaboration with other federal  agencies could help VA reduce duplicative efforts. We also noted that VA  may wish to examine and propose legislative changes needed to further  streamline its approval process.
Madame Chairwoman, this completes my prepared statement. I would be  happy to respond to any questions that you or other members of the  subcommittee may have.
section_title: GAO Contacts
paragraphs: For further information regarding this testimony, please contact me at  (202) 512-7215. Individuals making key contributions to this testimony  include Heather McCallum Hahn, Andrea Sykes, Kris Nguyen,   Jacqueline Harpp, Cheri Harrington, Lara Laufer, and Susannah Compton.
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