DOD Education Benefits:

Increased Oversight of Tuition Assistance Program Is Needed

GAO-11-300: Published: Mar 1, 2011. Publicly Released: Mar 1, 2011.

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In fiscal year 2009, the Department of Defense's (DOD) Military Tuition Assistance (TA) Program provided $517 million in tuition assistance to approximately 377,000 service members. GAO was asked to report on (1) DOD's oversight of schools receiving TA funds, and (2) the extent to which DOD coordinates with accrediting agencies and the U.S. Department of Education (Education) in its oversight activities. GAO conducted site visits to selected military education centers and interviewed officials from DOD, its contractors, Education, accrediting agencies and their association, and postsecondary institutions.

DOD is taking steps to enhance its oversight of schools receiving TA funds, but areas for improvement 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. DOD does not systematically target its oversight efforts based on factors that may indicate an increased risk for problems, such as complaints against schools or the number of service members enrolled at a school. Instead, DOD's oversight policies and procedures vary by a school's level of program participation, and schools that operate on base are subject to the highest level of oversight. DOD plans to implement more uniform oversight policies and procedures, but they are not expected to take effect until 2012. In addition, the process DOD used to review the academic courses and services provided by schools and military education centers was narrow in scope and lacked accountability. The review was limited to schools offering traditional classroom instruction at installations and did not include distance education courses, which account for 71 percent of courses taken in fiscal year 2009. The contract for these quality reviews expired on December 31, 2010, and DOD plans to resume its reviews on October 1, 2011, when a new contractor is selected. DOD is developing an expanded quality review process and plans to select schools based, in part, on the amount of TA funds received. With regard to accountability, DOD's review process provided recommendations that could improve educational programming, but there is no DOD-wide process to ensure that these recommendations have been addressed. Furthermore, DOD lacks a system to track complaints about schools and their outcomes. As a result, it may be difficult for DOD and its services to accurately identify and address any servicewide problems and trends. DOD's limited coordination with accreditors and Education may hinder its oversight efforts. DOD verifies whether a school is accredited; however, it does not gather some key information from accreditors when conducting its oversight activities, such as whether schools are in jeopardy of losing their accreditation. Accreditors can place schools on warning or probation status for issues such as providing inaccurate information to the public and poor institutional governance. Schools can experience various problems within the 3- to 10-year accreditation renewal period, and these problems can negatively affect students, including service members. Additionally, DOD does not require schools to have new programs and other changes approved by accrediting agencies in order to receive TA funds. Currently, students enrolled in unapproved programs or locations are ineligible to receive federal student aid from Education, but can receive TA funds. DOD's coordination with Education has generally been limited to accreditation issues and Education's online resources about schools and financial aid. DOD does not utilize information from Education's school-monitoring activities to inform its oversight efforts. Education's findings from program reviews and financial audits of schools provide insights about schools' financial condition, level of compliance, and governance. Collectively, this information could provide DOD with information that can be used to better target schools for review or inform other oversight decisions. GAO recommends that DOD (1) improve accountability for recommendations made by third-party quality reviews, (2) develop a centralized process to track complaints against schools, (3) conduct a systemic review of its oversight processes, (4) take actions to ensure TA funds are used only for accreditor-approved courses and programs, and (5) require and verify state authorization for all schools.

Recommendations for Executive Action

  1. Status: Open

    Comments: In 2011, DOD established a partnership sharing agreement with Education that provided information on accreditation. Specifically, DOD began receiving the following shared information for use in reviewing and monitoring the institutions participating in the DOD Military Tuition Assistance Programs: (1) information on an institution's accreditation, such as notices, substantive changes, voluntary withdrawal from accreditation, loss of accreditation, and show cause actions; (2) Office of Postsecondary Identification number, which DOD uses to identify institutions participating in Military Tuition Assistance; (3) changes in an institution's ownership that result in a change of control; (4) actual and pending school closures; (5) credible complaints against an institution; (6) instances of suspected school fraud or abuse; (7) administrative actions that Federal Student Aid takes against an institution that results in the loss of eligibility to receive federal student aid funds, which include termination, limitation, suspension, denial, revocation and fine actions; (8) access to Postsecondary Education Participants System school data extracts and Case Management Weekly Institutional Update Reports; (9) access to Education's eZ-Audit System, which houses financial and compliance audit data submitted by institutions; and (10) notice of institutions whose programs are no longer eligible for VA educational assistance benefits due to suspension or withdrawal. GAO has requested confirmation that Executive Order of April 2012 that superseded DOD's MOU with Education did not change this information-sharing arrangement. GAO also requested that DOD provide guidance or policy on how the agency uses Education's information to ensure payments are not made for courses not included within the scope of an institution's accreditation. GAO has not yet received this information from DOD as of October 2013.

    Recommendation: To improve its oversight of schools receiving TA funds, the Secretary of Defense should direct the Undersecretary of Defense for Personnel and Readiness to prohibit TA funds from being used to pay for courses and programs that are not included within the scope of an institution's accreditation. This could include leveraging Education's knowledge and expertise to determine the extent to which other substantive changes listed in Education's regulations are applicable to the military education programs.

    Agency Affected: Department of Defense

  2. Status: Open

    Comments: In 2011, DOD developed a partnership sharing agreement with the Department of Education and the Department of Veterans Affairs to use Education's compliance information. This was superseded in 2012 by Executive Order 13607, which directed DOD, VA, Education, Justice, and the Consumer Financial Protection Bureau to create a centralized complaint system for students receiving federal military and veterans education benefits; institute uniform procedures for receiving, processing, and sharing complaints across state approving agencies, and with other entities; institute uniform procedures for referring potential matters for civil or criminal enforcement to Justice and other agencies; establish procedures for targeted risk-based reviews of institutions to ensure compliance with the Principles of Excellence; and revise DOD and VA regulations, instructions, guidance documents, MOUs and other policies. As of September 2012, DOD stated they are in the process of updating DOD instructions. GAO has requested updated information on these actions but has not received it from the agency as of October 2013.

    Recommendation: To improve its oversight of schools receiving TA funds, 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 TA program funds. In doing so, the Undersecretary of Defense for Personnel and Readiness should consider the following: (1) developing a more systematic risk-based approach to oversight by utilizing information from accrediting agencies and Education to better target schools, (2) modifying its proposed standard MOU to include an explicit prohibition against school conduct that may adversely affect service members, such as misrepresentation, and (3) reviewing Education's 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 TA funds.

    Agency Affected: Department of Defense

  3. Status: Closed - Implemented

    Comments: DOD developed an automated tracking system to document complaints. The system can be access through a link on the DOD Voluntary Education Web site. GAO staff reviewed DOD's website and tested the link; it appears to be operational.

    Recommendation: To improve its oversight of schools receiving TA funds, the Secretary of Defense should direct the Undersecretary of Defense for Personnel and Readiness to evaluate ways to develop a centralized process to record and track the status and outcomes of complaints. This should be done in a way that balances the need for a comprehensive tracking system with, to the extent possible, minimizing the reporting burden placed on education center staff at military installations.

    Agency Affected: Department of Defense

  4. Status: Open

    Comments: In 2011, DOD developed and implemented a third party review process and also implemented a policy that requires that all educational institutions participating in the Tuition Assistance (TA) program have a Memorandum of Understanding (MOU) to articulate their commitments to DOD prior to receiving TA funds. When an institution signs the MOU, they agree to participate in the Third Party Review. The third party will track and document the status of recommendations developed through their review, and the DOD Assessment Advisory Board will review findings and monitor trends. Each military service is responsible for following up and addressing recommendations from third party reviews and will provide DOD's Office of the Secretary of Defense (OSD) with the status of actions taken within six months of the recommendations. It is not clear whether all schools and installations communicate their actions in writing, as GAO recommended. GAO has requested further information and documentation on the status of these recommendations, but the agency has not provided information to date (October 2013).

    Recommendation: To improve its oversight of schools receiving TA funds and to improve the accountability of DOD, its military services, their installations, and participating postsecondary schools in developing its new third-party review process, the Secretary of Defense should direct the Undersecretary of Defense for Personnel and Readiness to (1) require all schools, installations, and the military services to formally respond in writing to related recommendations pertaining to them, and (2) develop a process to track and document the status of all recommendations for improvement.

    Agency Affected: Department of Defense

  5. Status: Open

    Comments: Since GAO's original recommendation, the Department of Education's policy on a school's state authorization have changed. Education's GEN-12-13, dated July 27, 2012, provides further guidance on the program integrity final regulations addressing State authorization. DOD noted their current policy states institutions providing education programs must be in compliance with state requirements where services will be rendered. GAO has requested a copy of current DOD policy in order to close the recommendation, but has not received it from the agency as of October 2013.

    Recommendation: To improve its oversight of schools receiving TA funds, the Secretary of Defense should direct the Undersecretary of Defense for Personnel and Readiness to require and verify that all schools receiving TA funds are authorized by their state.

    Agency Affected: Department of Defense

 

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