February 25, NACUBO recommends the following five courses of action to address these challenges. 1. Create a System that Allows Batch Uploads.

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1 Testimony for the Record Submitted to the United States House Committee on Veterans Affairs Subcommittee on Economic Opportunity Hearing on Increasing the Functionality of Post-9/11 GI Bill Claims Processing to Reduce Delays February 14, 2013 February 25, 2013 The National Association of College and University Business Officers (NACUBO) appreciates the opportunity to submit testimony for the record of the Subcommittee on Economic Opportunity of the House Veterans Affairs Committee in connection with the February 14, 2013, hearing on Increasing the Functionality of Post-9/11 GI Bill Claims Processing to Reduce Delays. NACUBO represents over 2,100 public and nonprofit colleges and universities across the country. Our primary members are chief financial officers and their staff, including the bursars and student accounting staff who work closely with school certifying officials (or sometimes include SCOs) to ensure that the institution does its part to process veterans benefits expeditiously and correctly. NACUBO strongly supports the Post-9/11 Veterans Educational Assistance Act and the help it provides to veterans seeking to further their education. We further appreciate steps that have been taken, through both oversight and legislation, to improve the program following its inception. This hearing, however, provides a critical opportunity to examine the current state of the administration of this far-reaching educational assistance program. We understand your focus is on the functionality of the Long-Term Solution (LTS), the information technology currently deployed by the Department of Veterans Affairs to manage the administration of the Post-9/11 GI Bill. NACUBO ardently believes that as the backbone of claims processing it must be improved hand-in-hand with other administrative functions to provide a better experience for all parties involved the VA, schools, and most importantly, students. NACUBO has several suggestions for improvements, all stemming from three key issues: Post-9/11 GI Bill claims processing is highly labor-intensive and creates significant administrative burden for all parties involved. VA Post-9/11 GI Bill customer service is inadequate. VA Post-9/11 GI Bill guidance and communication is neither clear nor consistent. NACUBO recommends the following five courses of action to address these challenges. 1. Create a System that Allows Batch Uploads. VA has made great strides in improving its technological capacity to process Chapter 33 claims. However, school personnel are still hampered by a system that requires manual input of all data into VA

2 Once. Not only is this incredibly time consuming, it also increases the error rate significantly. Virtually all colleges and universities these days use robust student information systems which securely hold all relevant data about each student, including class schedules, charges, etc. VA s LTS has done a good job of enabling electronic movement of data from VA Once into its other systems. It shouldn t be a big leap to provide schools and their software providers with the ability to upload flat data files to the VA on multiple veterans at a time. This would be a much faster, more secure, and less error prone way to provide data and would free up hours of SCO time to provide better service and counseling to veterans. 2. Revisit the Definition of a Term. VA regulations define a term in a manner that adds considerable complexity to the claims process for all parties. Colleges and universities, especially community colleges, have increasingly moved to provide more options for students in how classes are scheduled. Modular classes which typically meet for less than the full term offer a more concentrated approach to learning that many students prefer. A student at a term-based institution might, for instance, take a full-time course load over a 16-week term by taking any of the following schedules: 4 classes, each running for the entire 16 weeks 4 classes, each running for an intensive 4-week period taken sequentially 2 classes running for the entire 16 weeks, and two intensive 8-week classes 3 classes running for the entire 16 weeks, and one 8-week class that starts in the 9 th week Under Department of Education rules, each of these students would be a full-time student for the entire term and entitled to student aid accordingly. The term, for most purposes, is treated as a unit. Under VA rules (38 CFR ), however, any individual class that starts after the calendar week when classes are scheduled to start for a term has its own start date and is considered a separate term. This means that it has to be separately certified and the relevant charges are paid in a separate transaction. Then, if the student decides to switch to a class offered on a different schedule with identical tuition and fee charges, the first payment would need to be returned so that another payment could be made. Further, VA checks week-by-week to determine if a veteran is taking a full-time load in order to calculate his BAH payment. So, in the last instance above, the VA would see the veteran as only enrolled ¾ time for the first half of the semester and cut his or her housing allowance accordingly (but, of course, wouldn t pay more than 100 percent in the second half of the semester). From the school s standpoint, the student took a full-time load for the term. The current practice greatly increases the workload for both SCOs and for the VA. Flexible scheduling of classes is on the rise, so this problem is likely to get worse in the future. We recommend that VA change its rules to treat a term as a unit at term-based institutions. 2

3 3. Improve Communications. NACUBO echoes the testimony of the Student Veterans of America, the National Association of Veterans Programs Administrators, and the Student Veterans Advocacy Group in calling for the VA to develop more robust communication channels with veterans, schools, across the agency, and with other agencies. All parties in the benefits system are hampered by slow and incomplete access to information that should be readily available. There are two facets to the communication issue for schools. Individual Student Records. VA lacks a secure means to share sensitive data electronically with schools and, since social security numbers are used to identify veterans, virtually all correspondence is sensitive. So, for instance, VA persists in mailing hard copies of reports on payments made for veterans to schools. In addition to adding a week before receipt, schools are then forced to reconcile the lists against their records manually or have someone enter the information into a spreadsheet program so they can do so electronically. Similarly, VA recently decided to send receipts to schools to confirm that debts have been paid these come by USPS, one at a time, each mailed in a separate envelope. The Department of Education has set up a secure web-based portal that allows authorized institutional personnel to access information in a timely manner. VA should follow a similar model to streamline and improve its communications with schools. Information for Campus Veterans Program Administrators. VA does not seem to have developed efficient means of transmitting policy directives, reminders, instructions, and the like to schools. For instance, during the recent flurry of activity surrounding the referral of debts to the Treasury Offset Program, VA guidance was sent to schools on an ad hoc basis by state level personnel. VA maintains a web-based RSS feed for general GI Bill announcements. A specialized RSS feed for school personnel and a dedicated web page that is updated more frequently, similar to the Department of Education s Information for Financial Aid Professionals (IFAP) website ( would be more useful and help ensure that every one can access the latest guidance directives. 4. Halt Debt Collection via the Treasury Offset Program. There was a great deal of confusion during the first years of the Post-9/11 GI Bill about when overpayments by the VA to institutions of higher education on behalf of veterans should have been returned to the VA or to the veteran. VA guidance changed over time. However, there are now millions of dollars in debts outstanding from 2009 to In 2012, VA began submitting institutional debts to the Department of Treasury for offset via the Treasury Offset Program (TOP). Overpayment of benefits, and thereby debts, typically occur if a veteran student drops classes or leaves school after a payment for tuition and fees from the VA has already been processed. Until January 2011, in many cases institutions were advised by VA to refund overpayments to the veteran who would be 3

4 responsible for repaying the agency. In January 2011, VA revised its guidance to schools indicating more clearly when they should repay an overage to VA or to the student veteran. Debts were also incurred because of erroneous processing by both parties as there were (and are) many problems with the approval and transaction process, confusing guidance, and unreliable communication channels, as mentioned above. Further, also mentioned above, because VA persists in treating each course within a term that has a different start and end date as a separate transaction, normal flux in students course selections create multiple transactions. NACUBO does not believe current VA processes ensure that referred debts are valid and should, at least temporarily, halt debt collection via the Treasury Offset Program. Colleges and universities are reporting offsets to federal grants and other federal payments unrelated to the GI Bill that are the result of processing delays, obvious mistakes, or are currently under dispute. In some cases, the same debt was offset multiple times. NACUBO fully recognizes that VA must uphold its responsibility to collect debts owed by recipients of VA funds. However, the current referral process is unreliable, has revealed too many errors, and has serious unintended fiscal consequences. For many of the debts in dispute, institutions maintain that they issued refund payments to student veterans per VA guidance at the time. VA is now claiming that those refund payments should have been made to VA, not the student. In other cases, institutions have already paid the debts to VA but the agency has failed to give them credit for the payments. Offsets significantly impact higher education institutions, as they are often taken from federal grants and other federal payments unrelated to the GI Bill. This can include grants from the National Institutes of Health, the National Science Foundation, National Aeronautics and Space Administration, grants and payments from pass-through organizations such as state governments, and even payments from the Centers for Medicare and Medicaid Services. Further, the federal System for Award Management, run by the General Services Administration, receives information on debts sent for offset and then puts a block on grant awards, creating a situation where institutions new or continuing awards are delayed in addition to offset payments. This sometimes results in millions of dollars being withheld from institutions. Schools report that notices from TOP often are sent to generic institutional addresses or to the office whose funds are offset rather than the debtor office or to the controller. It then becomes extremely difficult for the business office to understand why a federal payment or grant received by the institution does not match the expected amount. 5. Maintain the Current Policy to Exempt Tuition and Fee Payments from Offset. In early 2012, NACUBO learned that the VA was considering reinstatement of a policy to offset veteran debts (which may or may not have been incurred through the Post-9/11 GI Bill program) against Post- 9/11 GI Bill tuition and fee payments. VA has exempted tuition and fee payments from offsets since

5 On April 9, 2012, on behalf of NACUBO and 13 other higher education associations, NACUBO President John Walda wrote to U.S. Secretary of Veterans Affairs Erik Shinseki to ask him to maintain the tuition and fee offset exemption. In addition, the letter urged the secretary to consider establishing a system whereby college and university officials could access benefit information, including eligibility that can potentially affect students' abilities to register and pursue their academic programs. In a July 2012 response, Secretary Shinseki indicated that VA is conducting an in-depth analysis of this issue. NACUBO maintains the position that VA should exempt tuition and fee payments from offsets. Again, we fully recognize the fiduciary responsibility VA must uphold in collecting debts owed to the federal government. However, the proposed policy exposes veterans to even greater debt liabilities and unduly stresses the partnership between the federal government and colleges and universities in their mutual goal to provide educational opportunities to our nation's veterans. In closing, NACUBO is eager to assist VA in developing a more friendly process to help VA and institutions administer educational benefits for our nation s veterans. We fully recognize that when it was signed into law on August 1, 2009, the Department of Veterans Affairs faced a daunting task to make the program operational. Understanding that this would be a complex endeavor, NACUBO convened a working group composed of bursars, school certifying officials, and financial aid administrators that continues to this day to meet several times a year with representatives of the three key offices of the VA that make the rules, process claims, make payments, and collect debts: Education Services, Resource Management, and the Debt Management Center. We are grateful to the VA for their continued participation with this group which we believe has improved communication between schools and the VA and allowed us to bring issues and concerns to their attention in a timely manner. Much work, however, remains, and NACUBO s VA payments and processes workgroup looks forward to continuing to meet with representatives from the various VA offices that administer Chapter 33 GI Bill benefits. As business officers, our membership also fully recognizes that VA must uphold its responsibility to collect any debts owed by recipients of VA funds. We are eager to work together to identify a process that is reliable and does not expose the serious unintended fiscal consequences in some of the current or previously proposed practices. However, any new processes must come hand-in-hand with efforts to alleviate administrative burden, improve customer service, and provide clear and consistent guidance and communications. 5