Key Issues > Duplication & Cost Savings > GAO's Action Tracker > Higher Education Assistance
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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).

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.

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.

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 EducationÂ’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.

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:

The Department of Education (Education) has made minimal progress in 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. In March 2013, Education determined through meeting with research experts and stakeholders that financial aid data could not be made available to researchers for evaluative purposes. Prior attempts to share these data for research purposes have been prevented, due to the complexities of safeguarding personally identifiable information. While these efforts relate to Education's ability to sponsor evaluative research, opportunities may still exist for Education to conduct the research internally without compromising privacy. For example, recent and future substantive changes to Title IV grants and loans may represent valuable opportunities to study the effects of these programs. Without evidence to demonstrate the effectiveness of Title IV programs and higher education tax expenditures, policymakers will be challenged to make fact-based decisions on the merits and value of various federal assistance efforts.In an environment of constrained budgets, evaluative research can help inform decisions to build on successful programs and make changes to less effective programs.

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    • Melissa Emrey-Arras
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    • James R. White
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