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United States Government Accountability Office: 


Before the Subcommittee on Federal Financial Management, Government 
Information, Federal Services, and International Security, Committee 
on Homeland Security and Governmental Affairs, United States Senate: 

For Release on Delivery: 
Expected at 2:30 p.m. EDT:
Tuesday, March 2, 2011: 

DOD Education Benefits: 

Further Actions Needed to Improve Oversight of Tuition Assistance 

Statement of George A. Scott, Director:
Education, Workforce, and Income Security: 


Mr. Chairman and Members of the Subcommittee: 

I am pleased to be here today to discuss the Department of Defense's 
(DOD) oversight of its Military Tuition Assistance (TA) Program. In 
fiscal year 2010, the TA Program provided $531 million in tuition 
assistance to approximately 302,000 service members who elected to 
pursue off-duty[Footnote 1] postsecondary education.[Footnote 2] DOD 
offers these benefits to service members in order to help them fulfill 
their academic goals and enhance their professional development. 
Program oversight for voluntary education programs is the 
responsibility of the Undersecretary of Defense for Personnel and 
Readiness.[Footnote 3] In addition, the military services are 
responsible for establishing, maintaining, operating, and implementing 
the programs at 350 education centers on military installations 
worldwide.[Footnote 4] Education centers are managed by an education 
services officer (ESO) and staff, such as education guidance 

Today I will discuss (1) DOD's oversight of schools receiving TA funds 
and (2) the extent to which DOD coordinates with accrediting agencies 
and the Department of Education (Education) in its oversight 
activities. This testimony is based on GAO's recent report, titled DOD 
Education Benefits: Increased Oversight of Tuition Assistance Program 
Is Needed.[Footnote 5] Our report and testimony are based on work we 
performed between August 2010 and February 2011. Our work was 
performed in accordance with generally accepted government auditing 

In summary, DOD is taking steps to enhance its oversight of schools 
receiving TA funds. However, we found that areas for improvements 
remain. Specifically, DOD could benefit from a systematic, risk-based 
oversight approach, increased accountability in its education quality 
review process, and a centralized system to track complaints. We also 
found that DOD's limited coordination with accrediting agencies and 
Education may hinder its oversight efforts. We make several 
recommendations to DOD that are intended to improve its oversight of 
schools receiving TA funds. DOD agreed with our recommendations. 

DOD's Oversight Could Benefit from a Systematic, Risk-based Approach, 
Increased Accountability in its Education Quality Review Process, and 
a Centralized System to Track Complaints: 

DOD does not systematically target its oversight efforts based on 
factors that may indicate a higher risk for problems. Instead, DOD's 
oversight policies and procedures vary by schools' level of program 
involvement and schools that operate on base are subject to the 
highest level of oversight, as shown in figure 1. 

Figure 1: DOD Participation Requirements by School Level of Program 

[Refer to PDF for image: illustration] 

Level of oversight: progresses from Low to High: 

All school participants: 
* Must be accredited by an agency recognized by the Department of 

Schools that belong to Servicemembers Opportunity Colleges (SOC)[A]: 
* Sign a SOC agreement; 
* Subject to an accreditation check every 2 years; 
* Undergo verification of their loan default rates. 

Schools with signed memorandums of understanding (MOU) with 
* Must be members of SOC; 
* Must be chartered or licensed by a state government; 
* Must abide by MOU agreement with base commander that governs 
solicitation policies, reporting requirements on academic offerings 
and student academic status, and other terms of operations on the base; 
* Were subject to Military Installation Voluntary Education Review 

Source: GAO analysis of program policies and testimonial evidence from 
DOD and SOC officials. 

[A] SOC is funded by DOD through a contract with the American 
Association of State Colleges and Universities. SOC functions in 
cooperation with 15 higher education associations, DOD, and active and 
reserve components of the military services to expand and improve 
voluntary postsecondary education opportunities for service members 

[B] MIVER had two purposes: (1) to assess the quality of selected on- 
installation voluntary education programs and (2) to assist in the 
improvement of such education through appropriate recommendations to 
institutions, installations, DOD, and the military services. DOD 
contracted with the American Council on Education (ACE) to administer 
the MIVER. 

[End of figure] 

DOD is taking steps to address the varying levels of oversight and 
create a more uniform set of oversight policies. DOD recently 
published a proposed rule for its voluntary education programs in the 
Federal Register for public comment.[Footnote 6] Included in this 
rule, among other things, are guidelines for establishing, 
maintaining, and operating voluntary education programs, including 
instructor-led courses offered on and off installations, distance 
education courses,[Footnote 7] and the establishment of a DOD 
Voluntary Education Partnership memorandum of understanding (MOU) 
between DOD and all educational institutions receiving TA funds. DOD 
estimates that this new rule will become effective at the beginning of 

While DOD is creating more uniform oversight policies, its oversight 
activities still lack a risk-based approach. While DOD monitors 
enrollment patterns and schools' funding levels, and addresses 
complaints about postsecondary schools on a case-by-case basis, its 
oversight activities do not include a systematic risk-based approach 
that considers these factors when targeting schools for review. 
[Footnote 8] Collectively, this information could provide DOD with 
data that can be used to better target schools for review or inform 
other oversight decisions. 

Until recently, DOD depended on an education quality review process 
that was narrow in scope and needed increased accountability. From 
1991 to 2010, DOD relied on the Military Installation Voluntary 
Education Review (MIVER) to ensure quality education services for its 
service members.[Footnote 9] MIVER was limited to institutions that 
offered face-to-face courses at military installations and did not 
account for distance learning courses paid for with TA funds. In 
fiscal year 2009, about $360 million of TA funds paid for distance 
learning courses (71 percent of courses taken by service members). 
Moreover, three of the four military services lacked a process to 
follow up on and respond to MIVER findings. During the MIVER review 
process, reviewers developed a report listing their recommendations, 
commendations, and observations of the educational services provided 
by the installation and the institutions offering courses at that 
installation. MIVER final reports were distributed to the institutions 
and installations that were reviewed as well as DOD officials and its 
military services. The Army was the only military service that 
required installations that received a site visit to submit a follow-
up report indicating actions taken in response to the MIVER reviews. 
One DOD official reported that MIVER reports were helpful in 
identifying the strengths, weaknesses, and areas for improvement in 
DOD educational programming, and ESO's told us that some 
recommendations were implemented with successful results.[Footnote 10] 
Given that there was no DOD-wide requirement to track the outcomes of 
MIVER recommendations and some of the military services did not 
require schools and installations to formally respond to MIVER 
findings, it is unclear the extent to which recommendations that could 
improve the quality of education services offered at schools and 
installations were addressed. 

DOD is developing an expanded review process to strengthen its 
oversight of postsecondary institutions. Under this new review 
process, Military Voluntary Education Review (MVER), all institutions 
receiving TA funds, regardless of whether the school delivers courses 
face to face or by distance education, will be subject to a review. 
The contract for MIVER ended in 2010, and DOD is currently in the 
process of obtaining a contractor for its new review process. 
According to DOD, a contractor will be selected in 2011 and the new 
third-party review process will commence on October 1, 2011. 

While DOD has several mechanisms for service members to report 
problems associated with their TA funding, it lacks a centralized 
system to track complaints and how they are resolved. If service 
members have a complaint or issue regarding a school, they can speak 
with a counselor at their installation's education center, contact a 
representative from SOC, use the call center service,[Footnote 11] or 
use the Interactive Customer Evaluation (ICE)--DOD's online system to 
collect customer feedback.[Footnote 12] DOD reported that most of the 
complaints it receives are administrative in nature, such as billing 
issues. However, a few complaints involve schools' improper or 
questionable marketing practices, such as school representatives 
conducting marketing activities at installations without the 
installation commander's or ESO's permission. According to DOD 
officials, DOD's practice is to have education center staff resolve 
complaints at the installation level and to only elevate issues that 
warrant greater attention to the military service level. However, DOD 
and its military services do not have a formal process or guidance in 
place to assist education center staff in determining when they should 
elevate a complaint to their military service chief or DOD. Without 
policies and a centralized system to track complaints and their 
outcomes, DOD may not have adequate information to assess trends 
across its military services or determine whether complaints have been 
adequately addressed. 

DOD's Limited Use of Information from Accreditors and Education May 
Hinder Its Efforts: 

DOD's oversight process does not take into account accrediting 
agencies' monitoring results of schools. Schools can be sanctioned by 
accrediting agencies when they fail to meet established accrediting 
standards, such as providing sound institutional governance, accurate 
information to the public, and offering effective educational 
programs. For example, on the basis of an accrediting agency's 
monitoring results that were publicly available, a school was warned 
it could be at risk of losing its accreditation in part because it 
lacked evidence of a sustainable assessment process to evaluate 
student learning. The school was required to submit a report to the 
accrediting agency providing evidence of its process and that the 
results were being used to improve teaching, learning, and 
institutional effectiveness. According to accrediting agency 
officials, schools are given multiple opportunities to correct 
deficiencies before having accreditation revoked and can be sanctioned 
for up to 2 years.[Footnote 13] 

DOD also does not use accrediting agency information about schools' 
substantive changes in its oversight efforts. DOD does not currently 
require schools to have their substantive changes approved by their 
accrediting agency in order to receive TA funds. Schools may introduce 
new courses or programs significantly different from current 
offerings, and such changes may be considered substantive and outside 
the scope of an institution's accreditation. Unlike DOD, Education 
requires a school to obtain its accrediting agency's approval on any 
substantive change and report this information to Education for 
approval before it can disburse federal student aid under the Title IV 
programs[Footnote 14] to students enrolled in new courses or programs 
considered to be substantive changes.[Footnote 15] DOD recently 
proposed that tuition assistance funds should be available for service 
members participating in accredited undergraduate or graduate 
education programs and that approved courses are those that are part 
of an identified course of study leading to a postsecondary 
certificate or degree.[Footnote 16] According to Education, schools 
seeking Title IV funds generally wait for approval before enrolling 
students in such new courses and programs, but can collect other 
federal education assistance and out-of-pocket funds during that time. 
Students enrolled in unapproved courses or programs have less 
assurance that they are receiving a quality education, according to 
Education officials. On the basis of Education's fiscal year 2009 
Program Compliance Annual Report, we determined that there were over 
1,200 substantial changes processed in fiscal year 2009. 

DOD does not utilize information from Education's monitoring reviews 
to inform its oversight efforts. This information can alert DOD to 
problems at schools that may affect the quality of education provided 
to students, including service members. Education determines schools' 
initial eligibility to participate in federal student aid programs 
through eligibility reviews and continuing eligibility through program 
reviews, compliance audits, and financial audits. The results of these 
oversight activities provide additional insight into a school's 
financial stability, quality of education, and compliance with 
regulations that provide consumer protections for students and the 
federal investment. See table 1 for a summary of Education's oversight 

Table 1: Education's Monitoring of Schools Participating in the Title 
IV Program: 

Focus of oversight: Financial health[A]; 
Types of school monitored: Private nonprofit and for-profit; 
Activity: Financial responsibility: Education determines schools' 
financial responsibility by assessing its cash reserves and the 
school's history of meeting its past financial obligations. In 2008 
and 2009, at least 249 schools failed the financial stability test, 
and Education placed some of these schools on heightened monitoring. 

Focus of oversight: Related to quality of education; 
Types of school monitored: All schools; 
Activity: Student loan cohort default rate: According to Education 
officials, Education uses student loan cohort default rates implicitly 
as a proxy for education quality. A large number of students in 
default may indicate that a school may be poorly preparing students 
for employment. Schools with default rates above certain thresholds 
lose eligibility to participate in Title IV programs. 

Focus of oversight: Related to quality of education; 
Types of school monitored: For-profit only; 
Activity: 90/10 rule: In order to participate in Title IV programs, 
for-profit schools cannot receive more than 90 percent of their 
revenue from Title IV funds.[B] Between 2003 and 2008, 7 schools lost 
eligibility for federal student aid because of noncompliance with the 
90/10 rule. 

Focus of oversight: Consumer protection related to schools' recruiting 
Types of school monitored: All schools; 
Activity: Incentive compensation: Schools participating in Title IV 
programs are prohibited from compensating recruiters based directly or 
indirectly on their success in enrolling students or securing 
financial aid for them. Between 1998 and 2009, Education substantiated 
incentive compensation violations at 32 schools.[C] 

Focus of oversight: Consumer protection related to schools' recruiting 
Types of school monitored: All schools; 
Activity: Misrepresentation: Institutions participating in Title IV 
programs may not engage in substantial misrepresentation of the nature 
of the institution's educational program, its financial charges, or 
the employability of its graduates. According to Education's 
compliance data, Education found at least 16 misrepresentation 
violations between 2004 and 2009 through compliance audits and closed 
program reviews. 

Source: GAO analysis of laws and regulations, as well as testimonial 
evidence and program documents from Education. 

[A] Education considers a public institution financially responsible 
if it demonstrates legal designation as a public institution and has 
not violated past performance requirements. 

[B] DOD tuition assistance funds are counted toward meeting a 
proprietary institution's minimum of 10 percent non-Title IV funds. A 
school's revenue percentage must be calculated in accordance with 34 
C.F.R § 668.28. 

[C] GAO, Higher Education: Information on Incentive Compensation 
Violations Substantiated by the U.S. Department of Education, GAO-10-
370R (Washington, D.C. Feb. 23, 2010). 

[End of table] 

The results of Education's monitoring activities can provide DOD and 
its military services with additional insight into a school's ability 
to provide a quality education and services to students. Schools that 
are financially unstable or fail to comply with student loan default 
rate and 90/10 requirements may be unable to fulfill their promises to 
provide students with quality program offerings, according to 
Education. Military education center staff we spoke with at two 
military installations indicated that ensuring the consumer protection 
of service members amidst sometimes deceptive recruiting practices of 
some schools can be a challenge. Education's monitoring results in 
these areas could provide relevant information to help DOD and its 
Military Services to better target their oversight and provide 
additional consumer protection for service members. 

DOD may also be able to leverage information from Education's ongoing 
efforts to improve oversight of distance education. Education has 
recently developed additional provisions to better address distance 
education. For example, Education has developed a review process and 
guidance for its staff to assess the integrity of distance learning 
programs, such as whether schools have a process to verify student 
attendance. DOD has proposed that distance education schools be 
subject to MVER reviews by 2012, but currently does not generally 
evaluate these courses.[Footnote 17] 


In fiscal year 2010, nearly 302,000 service members relied on TA funds 
to help further their academic and professional goals. The amount of 
TA funding going toward distance learning programs creates new 
oversight challenges for DOD and its military services, especially 
since DOD oversight has primarily focused on schools offering 
traditional classroom instruction on military installations. 

Although DOD is taking steps to improve its oversight of schools 
receiving TA funds, increased oversight is still needed to remedy gaps 
in the accountability of its third-party quality review process and 
the process to address complaints against schools. Additionally, DOD 
could further enhance its oversight efforts by leveraging information 
from accrediting agencies and the results of oversight actions by the 
Department of Education. We are recommending that DOD take a number of 
actions to improve its oversight of schools, including (1) improving 
accountability for recommendations made by third-party education 
quality reviews, (2) developing a centralized process to track 
complaints against schools, (3) conducting a systemic review of its 
oversight processes, and (4) taking actions to ensure TA funds are 
used only for accreditor approved coursed and programs. Measures like 
these could strengthen DOD's oversight activities and help ensure that 
TA funds are used properly and help enable service members to receive 
a quality education. DOD concurred with our recommendations. 

Mr. Chairman, this concludes my prepared remarks. I would be happy to 
answer any questions that you or other members of the subcommittee may 

For further information regarding this testimony, please contact 
George A. Scott, (202) 512-7215 or Contact points for 
our Office of Congressional Relations and Public Affairs may be found 
on the last page of this statement. Individuals who made key 
contributions to this testimony include Tranchau (Kris) Nguyen 
(Assistant Director), Raun Lazier (Analyst-in-Charge), James Bennett, 
Jessica Botsford, Susannah Compton, Catherine Hurley, Edward (Ted) 
Leslie, Katya Melkote, and Luann Moy. 

[End of section] 


[1] DOD defines "off-duty time" as the time when service members are 
not scheduled to perform official duties. 

[2] TA funds may be used for educational activities such as (1) 
completion of an associate's degree, bachelor's degree, or master's 
degree; (2) for courses leading to technical, vocational, or 
professional certificate or license; (3) building academic foreign 
language skills when not part of a degree program; and (4) to pursue 
prerequisite courses for academic skill development or preparation for 
a degree program, according to the Joint Service Uniform Tuition 
Assistance Policy. 

[3] DOD Directive 1322.08E (May 3, 2010) and DOD Instruction 1322.25 
(April 23, 2007). 

[4] Education centers located on military installations are equipped 
with office space, classrooms, laboratories, and other features to 
conduct voluntary education programs and provide on-installation 

[5] [hyperlink,] (Washington, 
D.C.: Mar. 1, 2011). 

[6] Voluntary Education Programs, 75 Fed. Reg. 47,504 (Aug. 6, 2010) 
(to be codified at 32 C.F.R. pt. 68). 

[7] DOD defines "distance education" as the delivery of education or 
training through electronically mediated instruction, including 
satellite, video, audio graphic, computer, multimedia technology, and 
other forms of learning at a distance, such as correspondence and 
independent study. 

[8] According to the following report, GAO, Internal Control: 
Standards for Internal Control in the Federal Government, [hyperlink,] (Washington, D.C. 
November 1999), to better achieve their missions and improve 
accountability, federal agencies are required to employ certain 
internal controls, including assessing the risk agencies face from 
both external and internal sources. Applying the federal risk 
assessment standard to the TA Program suggests that DOD needs to 
consider all significant interactions between its entity and other 
parties, as well as internal factors at both the entitywide and 
activity level. Risk identification methods may include qualitative 
and quantitative ranking activities, and consideration of findings 
from audits and other assessments. 

[9] The most recent MIVER contract was a 4-year contract (January 1, 
2007, to December 31, 2010) with a total value of $3,743,440. 

[10] The military services also had the option to request a MIVER 
revisit. During a revisit, a MIVER team would return to the 
installation to determine the extent to which the recommendations had 
been implemented. The revisits usually occurred in cases where the 
original MIVER visit resulted in many negative findings and 
commensurate recommendations. 

[11] The military services established call centers to handle issues 
such as complaints related to the TA Program, according to DOD 

[12] ICE is an online portal operated by DOD to collect feedback on 
DOD products and services, including educational programming. 

[13] Accrediting agencies may also be challenged in their decisions to 
revoke a school's accreditation, and legal proceedings may take a 
number of years to be finalized. 

[14] Title IV of the Higher Education Act of 1965 (HEA), as amended, 
authorizes financial assistance to help students and families pay for 
postsecondary education through student grants and loans, such as Pell 
Grants for low-income students, PLUS loans to parents and graduate 
students, and Stafford loans. 

[15] Education requires accrediting agencies to have substantive 
change policies in place to ensure that any substantive change to an 
institution's educational mission or programs does not adversely 
affect its capacity to continue to meet its accrediting agency's 
standards. In order to be recognized by Education, accrediting 
agencies must require an institution to obtain the agency's approval 
of a substantive change, and have a definition of substantive change, 
which includes such changes as any change in the established mission 
or objectives of the institution; any change in the legal status, form 
of control, or ownership of the institution; the addition of courses 
or programs that represent a significant departure from the existing 
offerings of educational programs; or method of delivery; from those 
that were offered when the agency last evaluated the institution, or 
the addition of programs of study at a degree or credential level 
different from that which is included in the institution's current 
accreditation or pre-accreditation. 

[16] Voluntary Education Programs, 75 Fed. Reg. 47,508 (Aug. 6, 2010) 
(to be codified at 32 C.F.R. pt. 68). 

[17] A school on a military installation selected for a MIVER review 
were subject to questions MIVER developed for distance education 
providers, such as how to verify the identity of students enrolled in 
online courses. 

[End of section] 

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