Millions of dollars have gone toward educating student veterans at ineligible, delinquent schools, due to inadequate oversight by state-based agencies in charge of approving school programs for GI Bill funds, a recent audit by the Department of Veterans Affairs Office of Inspector General found.

Because of a lack of “effective controls to ensure the proper review, approval and monitoring of programs” at these agencies and the VA, investigators write that the VA “could not provide reasonable assurance” that students using the Post-9/11 GI Bill to pay for school received a quality education.

Infractions by schools listed in the report include misleading claims about accreditation status or student outcomes that violated Federal Trade Commission advertising guidelines.

Auditors estimate more than 11,000 students using the GI Bill to pay for school were enrolled in these and other wayward programs during the inspector general’s year-long investigation, costing the VA about $585 million in improper payments. If these problems persist, auditors estimate those numbers could climb to 17,000 students and $2.3 billion over the next five years.

Tanya Ang, vice president of the nonprofit Veterans Education Success, said oversight from both state approving agencies and the VA is critical to ensure schools are not deceiving military students.

“It is imperative that military-connected students are able to pursue a post-secondary education with the utmost confidence that their program will indeed help them accomplish their academic and career goals and that they will be equipped to be strong contributors to the American workforce,” she said in an email. “VA’s approval of a program to accept education benefits communicates to potential students that the school is deemed a quality school.”

The VA Veterans Benefits Administration, tasked with overseeing state approving agencies, or SAAs, technically complied with the law, the report states. But it “generally took a hands-off approach” in this role and did not ensure SAAs were meeting legal requirements and preventing schools’ possible abuse of education benefits.

Thus, the VA “did not ensure the adequate protection of students and taxpayers,” according to the report.

In its recorded response to the findings, the VA objected to the inspector general’s characterization that it had taken a “hands-off” approach and requested that this be stricken from the report — an objection the Office of Inspector General said had no merit. The VA also said that while it acknowledged several areas for improvement, the report “demonstrates a lack of understanding or appreciation of the complexities of the VA and SAA relationship.”

VA spokesman Curt Cashour said in an email that federal law dictates SAAs have “almost exclusive authority to approve, suspend, withdraw and monitor most programs approved for GI Bill students.” The VA as a federal agency is generally prohibited “from exercising supervision or control over SAAs.”

When asked how the VA ensures the quality of programs educating student veterans, Cashour said the department will not contract with poor-performing SAAs, and the VA also has the authority to suspend payments to schools approved by SAAs without sufficient legal basis.

What state approving agencies do

Joe Wescott, national legislative director for the National Association of State Approving Agencies, describes the role of SAAs as “gatekeepers of quality.”

SAAs have contracts with the VA to assess and approve school programs seeking to enroll students using the GI Bill. To be considered, Wescott said, programs must have a brick-and-mortar presence in the state, be financially stable and either be accredited or have a proven record of successfully teaching that program in the state.

Other parts of the evaluation cover a program’s curriculum, tuition costs and advertising practices. SAA representatives also visit campuses to observe classes and interview administrators and instructors.

In addition, SAAs are now responsible for compliance surveys, which are federal financial audits unrelated to the approval process. This responsibility formerly fell under the VA but is now split between staff at VA regional offices and SAAs.

But while the list of SAA responsibilities has grown in recent years, the funding remained stagnant for more than a decade, until a slight increase in fiscal 2018.

Another recent report focused on SAAs — this one from the Government Accountability Office — found that limited funding had impacted their ability to provide appropriate training to staff, travel to geographically dispersed schools, and provide technical assistance and training to schools. Funding for SAA contracts, now at $21 million, is approved by Congress and allocated through the VA.

The New Mexico and Alaska state approving agencies pulled out of their contracts with the VA all together, leaving VA to do the groundwork for approvals in those states. SAA officials in California, the state with the largest number of student veterans, almost did not renew, citing lack of funds.

Though the Alaska SAA started its contract with VA again in 2017, its director said the addition of compliance surveys was the main reason the agency pulled out for five and a half years. It lacked sufficient funding to conduct them.

“I know that we are the gatekeepers of quality. But our attention has been diverted from the gate too much in the past several years,” Wescott said. “When we go out to schools, we shouldn’t be looking for the missing $50 from a payment. I’m not making light of that; we want veterans to be paid correctly, and we want them to be paid in approved programs. But we should be looking to see that programs are properly licensed and are properly accredited.”

Problematic practices

In their investigation, auditors drilled down on 175 programs at 70 schools approved by SAAs in California, Mississippi, Nebraska, New Jersey, New Mexico, New York and Oregon in 2015 and early 2016. Of these, 35 programs, approved by six of the seven SAAs, had unsupported or improper approvals, unreported or delayed reports of changes to programs, or potentially erroneous, deceptive or misleading advertisements.

For example, one school in New Jersey claimed in its catalog that its placement services division helps find jobs for more than 90 percent of students within one month of graduation, yet the school was unable to provide data to support this. Another school in Mississippi used the VA’s official seal on its website, potentially making it appear as though the school was part of the federal agency.

The large majority of schools with infractions, 83 percent, were for-profit institutions, though the VA and Wescott noted that these types of institutions were disproportionately represented in the sample size. (Investigators explain in the report that they weighted the sample to ensure any differences in the proportions did not bias the results.)

Wescott also took issue with the way investigators drew broad conclusions about SAAs from their study of only seven. They also did not take into account the financial constraints these agencies have experienced in recent years, he said.

Part of the challenge listed in the report is a lack of “effective, sufficient controls, to continually review and evaluate programs after they have been approved.”

Wescott said that ideally SAAs would be able to rely on schools, or even accreditors, to alert the agencies whenever changes are made to an approved program.

“We just don’t have the resources and staffing to go out there every quarter and say, ‘OK, what’d you guys change this quarter?’” he said.

However, he said, SAAs can still learn from the findings and take this opportunity to reevaluate the role of these agencies across the nation.

“I think the major takeaway is that SAAs need to give more attention to their original mission, which is their most important mission, and that is the approval and oversight of quality programs for our veterans," he said. “Can we do a better job in the approval area? Yes. Given the time to devote to it, yes we can.”