employment icon, source: GAO

Training, Employment, and Education: Higher Education Assistance

Federal agencies providing assistance for higher education should better coordinate to improve program administration and help reduce fragmentation.

Action:

The Commissioner of Internal Revenue should identify characteristics of tax filers who are not claiming a higher education tax expenditure when they appear to be eligible for one and possible reasons for this.

Progress:

As GAO recommended in May 2012, the Internal Revenue Service (IRS) has conducted a review, albeit limited, of eligible students and families who may not be claiming a higher education tax benefit. In June 2013, IRS officials noted that the review had identified more than 15.6 million Forms 1098-T, Tuition Statement, that were not associated with a claim on Form 8863, Education Credits (American Opportunity and Lifetime Learning Credits), which may mean that eligible students and families are not claiming an education benefit. IRS officials said they do not plan to conduct further research because the complexity faced by taxpayers in determining qualification requirements for higher education benefits makes it challenging to assess whether taxpayers have chosen the most advantageous benefit. In many cases, the nuances of each taxpayer’s situation affecting his or her eligibility for education benefits are not evident from information reported on their tax returns or the Form 1098-T, making it difficult to identify characteristics of tax filers who are not claiming a higher education expenditure when they are eligible for one. IRS believes and GAO concurs that working with the Department of Education and its partners to better inform eligible students is the most effective approach (see action 2).

Implementing Entity:

Internal Revenue Service

Action:

The Commissioner of Internal Revenue and the Secretary of Education should work together to use this information to identify strategies to improve information provided to eligible students and families.

Progress:

The Internal Revenue Service (IRS) and Department of Education (Education) have developed a coordinated, comprehensive strategy to better inform eligible students of higher education tax benefits, as GAO recommended in May 2012. For example, IRS coordinated with Education to create an education tax credit web page on the department’s Federal Student Aid website. Officials also updated communications products, such as IRS.gov; promoted the interactive decision tool offered on IRS.gov; and are creating new products, including an online resource guide. IRS also revised Form 8863,Education Credits (American Opportunity and Lifetime Learning Credits), to use a series of questions for the taxpayer to ascertain credit eligibility on a per student basis, which will help taxpayers understand and use information reported to them by educational institutions on the Form 1098-T, Tuition Statement. In addition, Education officials arranged a meeting with national education associations that helped IRS revise its communication strategy for education tax credits. These associations agreed to conduct needed outreach to their members about federal tax benefits for higher education. These actions have provided additional information to eligible students, which could increase uptake of these tax benefits.

Implementing Entity:

Internal Revenue Service, Department of Education

Action:

The Secretary of Veterans Affairs should collaborate with the Department of Education (Education) and the higher education community, leveraging their experiences in administering aid. These collaborations should include assessing the applicability and viability of adopting processes and actions taken by Education, where practical, such as returning overpayments of program funds or reconciling benefit payments.

Progress:

In response to GAO’s May 2011 recommendation, the Department of Veterans Affairs (VA) met with Education officials in 2011 to discuss the processes used by each agency to deliver and recuperate funds issued for educational assistance. While these meetings revealed that existing statutory and technical differences prevent VA from adopting certain Education processes that have been deemed effective in administering federal student assistance, the agencies did collaborate to assess the applicability of Education’s processes to VA. As of December 2013, VA officials stated that no legislative changes had been enacted to allow VA to use methods similar those used in Education to issue and recoup benefit payments. However, VA officials stated that they continue to partner with Education and other agencies through routine interaction and normal business practices to improve the administration and delivery of VA benefits. Continuing this collaboration with Education to identify other opportunities for leveraging experiences may help VA improve its efficiency and effectiveness in administering aid programs.

Implementing Entity:

Department of Veterans Affairs, Department of Education

Action:

 The Secretary of Defense should direct the Undersecretary of Defense for Personnel and Readiness to undertake a systematic review of its oversight of schools receiving tuition assistance program funds. In doing so, the Undersecretary of Defense for Personnel and Readiness should consider reviewing the Department of Education's (Education) recently promulgated requirements for state authorization of schools and coordinate with Education to determine the extent to which these requirements are useful for overseeing schools receiving tuition assistance funds.

Progress:

The Department of Defense (DOD) has made multiple, systematic changes to strengthen its oversight of schools receiving tuition assistance funds. Specifically, all participating schools are now required to sign a memorandum of understanding (MOU) that they will adhere to certain standards in order to receive tuition assistance funds. These standards are designed to address issues with accreditation, recruiting practices, and policy disclosures that would help protect service members while allowing for judicious oversight of taxpayer dollars. In addition, DOD has developed two working groups with Education, the Department of Veterans Affairs (VA), the Department of Justice, and the Bureau of Consumer Financial Protection. The working groups are intended to strengthen enforcement of student protections, and one result of this collaboration is a new system to register student complaints that will be accessible across agencies in the coming months. In the meantime, DOD has recently implemented its own complaint tracking system that will feed into the interagency system when it becomes fully operational. Moreover, DOD has decided to shift its oversight strategy to a risk-based assessment of participating schools, which will consider school sector and location in addition to leveraging information from the interagency complaint system. With regard to reviewing Education's requirements for state authorization of schools, the policy has changed since GAO originally recommended this action in March 2011, but DOD's collaboration with the agency offers opportunities to stay informed of relevant requirements.

Implementing Entity:

Department of Defense, Department of Education

Action:

The Secretary of Education should take advantage of opportunities presented by recent and anticipated substantive program changes to sponsor and conduct evaluative research into the effectiveness of Title IV programs and higher education tax expenditures at improving student outcomes.

Progress:

As of February 2017, the Department of Education (Education) had made some progress toward sponsoring and conducting evaluative research into the effectiveness of Title IV programs and higher education tax expenditures at improving student outcomes, as GAO recommended in May 2012. For example, Education took several steps to make data on higher education programs more available for research purposes. In January 2017, Education announced a coordinated effort to support responsible data access and transparency that would allow researchers and policymakers to identify effective ways to improve student outcomes. This effort includes the Advancing Insights through Data pilot project, which is still under development and will provide other federal agencies with access to data to conduct research to inform policies. For example, the Federal Reserve Board has partnered with Education on this pilot to study how certain aspects of student loans can affect student outcomes. Also in January 2017, Education issued guidance to colleges and stakeholders about how to handle student data for research purposes. Specifically, the guidance clarifies federal requirements related to student information in order to help promote efforts to evaluate and improve the administration of financial aid programs.

With regard to directly sponsoring evaluative research, Education’s Institute of Education Sciences awarded several grants to evaluate the effectiveness of higher education programs and interventions, but most of the studies do not focus on federal assistance.  For example, in January 2017, Education awarded funding to evaluate whether university-run grant programs can help increase college degree attainment. In 2016, the agency sponsored two studies looking at the impact of interventions related to applying for federal student aid on college enrollment, attendance, and degree completion. While sponsoring this research represents an important step toward understanding specific financial aid interventions, these studies do not directly evaluate the effects of federal Title IV programs and tax expenditures on student outcomes. Given that Education has identified a critical research gap in the area of linking higher education financing to student outcomes, additional evaluative research may be necessary to strengthen the evidence related to key federal strategies and programs. Education officials stated that they are interested in pursuing the suggested research, but that the agency lacks the resources to fully implement GAO’s recommendation to conduct it. GAO continues to encourage Education to ensure that its data-sharing and future grant efforts result in actively sponsoring or conducting evaluative research specific to federal programs and assistance that can be used in future policymaking. Making these data-sharing and research efforts a priority will help policymakers make fact-based decisions on the merits and value of various federal assistance efforts.

Implementing Entity:

Department of Education
  • portrait of
    • Melissa Emrey-Arras
    • Director, Education, Workforce, and Income Security
    • emreyarrasm@gao.gov
    • (617) 788-0534