Guidance on New GI Bill

U.S. proposes regulations to govern Post-9/11 GI Bill, including -- of interest to private colleges -- rules for the Yellow Ribbon Program.
December 29, 2008

In June, President Bush signed into law a new GI Bill, which is notable for its comprehensiveness and much more generous benefits, but also its complexity.

Last week, the U.S. Department of Veterans Affairs issued eagerly anticipated guidance. The Federal Register published proposed rules for implementing the Post-9/11 GI Bill on Tuesday; the period for accepting comments extends through January 22.

"For the most part I’m impressed by the breadth of these regulations and the number of specific situations that they address directly. That makes me feel good that they have taken a serious look at how this GI Bill will affect veterans individually and not just as a whole," said Patrick Campbell, chief legislative counsel for Iraq and Afghanistan Veterans of America.

Under the Post-9/11 GI Bill, which goes into effect August 1, eligible veterans will receive a monthly housing allowance and book stipend, and their tuition and fees -- up to the rate charged undergraduates at the most expensive public institution in their state -- will be paid directly to their colleges. The cost of the expanded educational benefits is staggering: The rules estimate that the Post-9/11 GI Bill will cost $28.1 billion over the first five years and $78.1 billion through 2018 (presumably, educational costs will keep rising, and an increasing number of veterans will be shifting out of the old Montgomery GI Bill program into the Post-9/11 program over that time).

As for a subset of the GI Bill of great interest to private colleges -- the Yellow Ribbon Program -- the list of proposed regulations is short. The program is intended to help make up the difference between the amount of in-state public tuition covered under the GI Bill and the larger amount a particular independent college might charge. Under the rules, a college can elect to enter into a matching agreement with the VA, which would match each dollar provided by the college toward the outstanding balance, “but the combined amounts may not exceed the remainder of the full cost of the school’s established charges.”

The proposed rules impose a set of requirements on colleges participating in the Yellow Ribbon program. (“For the sake of equality,” the proposed rules state.) For instance, they would require that colleges provide contributions for eligible individuals who apply on a first-come, first-served basis, regardless of whether a student attends full or part time. The rules also state that the college’s contributions should be made “in the form of a waiver” -- prompting some potential accounting concerns, since, in providing financial assistance, colleges typically discount tuition as opposed to waiving the balance.

The rules note, too, that the same percentage of "unmet established charges" should be waived for all individuals eligible in a particular year. (In other words, one student shouldn't see 60 percent of outstanding charges waived, and a classmate 45.)

"The real truly novel part of this, and I'm not quite sure how I feel about it, is the VA is developing a new way of calculating [academic] progress, and they're calling it the 'rate of pursuit,' " said Campbell. The formula, according to the rules, is "obtained by dividing the number of course (credit or clock) hours an individual is enrolled in by the number of course (credit or clock) hours considered to be full-time training at the institution of higher learning." Campbell said he was curious to hear what those in higher education thought of the formula, and added, too, that he thought the definition of "fees" -- as "any mandatory charges (other than tuition) that are universally applied by the institution of higher learning to each and
every student enrolled in an undergraduate program for that quarter, semester, or term" -- might be too narrow.

“The big question I have: Is health insurance a mandatory fee? Everyone is required to have it, but people can opt out of it. Conversely if you have a fee for a specific program, let’s say, you have a lab fee. Well that’s universally applied to everyone who is enrolled in the lab but it’s not applied to each and every student. I’m not saying there's anything wrong with this, but this is going to be an important question that’s going to make a difference of hundreds of dollars per year for a veteran," Campbell said.

"The fact that comments are due back by January 22, this is going to take everyone sitting down and taking a hard look at it."

Giacomo Mordente, director of veterans' affairs at Southern Connecticut State University, said, for instance, that after reading the proposed rules, he still had questions about how the VA would collect benefit overpayments, which can occur when veterans cut back their course loads mid-semester -- when it would seek repayment from the college as opposed to the student? (Under the current Montgomery GI Bill, all payments have gone directly to the veteran, whereas under Post-9/11 the tuition payments go directly to the college, with the housing and book stipends going to veterans.)

Mordente, who is also liaison to the Department of Defense for the National Association of Veterans' Program Administrators, pointed out that many people who work with veterans' educational benefits do so as only part of their job in a financial aid office, for instance. "What we do, at our level, face-to-face with veterans, we've got to really know our stuff," Mordente said.

"It's more complicated with this bill than I've ever seen it, so that's a concern."

The proposed rules also provide guidance on transferring educational benefits to spouses and children. The regulations note, for instance, that in transferring benefits to a child, “the child is not subject to the transferor’s 15-year period of eligibility.” The child must use the benefits before age 26, however.

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