>> school and college and training program relative to the usage of the gi bill. it's consistent with sound education, philosophies and practices. it's implemented throughout much of the education community. our experience tells us that while some of the proposed requirements may be helpful to the achievement of the president's goals, they could result in the establishment of measures and systems that duplicate other approaches and services that meet objectives. although in varying degrees. it could lead to increase risk for institutions without proportional value being added to help veterans reach their

career goals. for example, principles related to the availability of other financial assistance regarding debt. similarly, the information about resources refer in section 2 subparagraph a is available through various systems managed by the federal government and reputable private sector organizations. we suggest they receive additional study and analysis before mandating their presentation or publication in distinct format.

section 3696 provides excellent frame work to work for gi purposes. we suggest the subcommittee hold a work session to address these issues. we do not support the concept advocated in section 2 subparagraph b. it appears to limit the use of gi bills and discriminate in enrollment. some of which are offered by quasi governmental and not for profit entities. we encourage is subcommittee to conduct a careful review and student information initiatives. we offer the following recommendations. number one, convene. a working group who would be to

research problems associated with gi bills and make recommendations to the subcommittee on changes necessary in law and/or policy to address the problems. number two reinstate. remove the deemed approved provision from section 3672. these changes would help to restore the partnership between the federal and state governments that help to make the gi bill successful for over 65 years. the changes would provide the authorities to state to take definitive action in resolve problems in areas in a timely manner. states have the infrastructure,

the experience and the expertise necessary to assist congress and the v.a. in meeting the challenges forthcoming by increasing complex educational systems where improvements in the process become necessary. there are already existing provisions in law to help such as mechanisms in section 3674a. mr. chairman, the national association of state improving agency suggests there are many aspects of the executive order that require technical clarification with respect to current law. with the subcommittee's agreement, we would appreciate the opportunity to submit a letter in this regard. in closing, we express appreciation. >> thank you. >> thank you mr. chairman.

i'm pleased to be here today to discuss the executive order entitled establishing principles of excellence for educational institutions which is designed to strengthen oversight enforcement and accountability within education programs. the v.a. supports the executive order which directs v.a. and other federal agencies to develop and implement these principles of excellence to ensure service members, veterans spouses and other family members using military and veteran benefits have comprehensive and financial aid information so they can make informed choices in selecting educational programs which will best meet their educational and re-adjustment needs.

in fiscal year 2011, v.a. provided educational benefits to nearly one million veterans under the post- 9/11 gi bill and our legacy benefit programs. while we continue to focus on processing education claims accurately and timely, v.a. has opinion working to provide more comprehensive information and support throughout a veteran's academic career. we updated the website to include resources such as choosing your school guide book as well as links to the navigator tool set and the department of labor's occupational handbook. v.a. sponsors the vets success on campus program and offers counselling through chapter 36 for all students eligible for v.a. benefits.

an additional key aspect of the executive order deals with developing a strategy for the development of comparable student outcome measures. this is an important issue and one measure the v.a. is taking in this regard is the initation of benefits using them. it will measure employment, educational attainment, income and homeownership. the first survey for this effort is out for public comment and is anticipated to be put out in next year in 2013. the v.a. is aware of concerns of improper revutmecruitment and continues to enhance our

response. v.a. is leveraging existing relationships to provide additional oversight. we're building upon existing collaborations with the departments of education, justice, defense, labor, the federal trade commission and the consumer financial protection bureau to expand oversight, share information and develop a strategy for implementing a centralized complaint system which is required by the executive order. v.a. has begun implementing some of the requirements of the executive order. this week we will disseminate to g.i. schools and seek their response with respect to their intent to comply with the principles of excellence or not. in addition, we have already initiated the application to the

trademark office for the registration of the term gi bill. v.a. is committed to working with all stake holder to implement the provisions of this executive order to ensure veterans are informed consumers and schools meet their obligations in training this nation's next generation. this concludes my statement. i look forward to your questions. >> thank you. in your written testimony, you say there have been numerous reports of deceptive targeting of service members. can you explain. how many of those have been verify verified? what were the findings on them? >> can you repeat the question? >> in your written testimony you have towards the executive order headline, since the post- 9/11 bill become law there's been

reports of aggressive and deceptive targeting of members. were there findings or investigatio investigations? how many of those reports have been verified? >> i don't have specifics, i haven't delved into the specifics of which have been verified or not. this is in response to reports that are out there. what i can tell you is that through the compliance program that we have and we cooperate and help the state approving agencies do, that has identified even in my short time in the job where institutions where deceptive practices or other issues have been raised that have resulted in suspension or withdrawal of those institutions as gi bill approved schools. i have knowledge of some

specifics about schools that have engaged in those activities, but as far as the actual reports of specific veterans, i don't have that. >> could you submit those names to the committee staff at some point? >> yes. >> also, is there a definition for aggressive recruiting, fraudulent actions that have been taken? >> my response to that would be when we do compliance surveys of these institutions, we are assessing their programs against the requirements for gi bill approval. consistent with those definitions and those specifications is how that's

done. . >> it's not been asked to be with the executive branch as part of implementation, do you know has that happened? >> i anticipate that to have. we will be working with the department of education, d.o.d. and so forth to work all these issues. the executive order directs each of those institutions to lead a particular provision or task, others to co-lead or collaborate in consultation with. that work is to ben, and we'll be working with all those agencies. >> thank you. mr. schatz, in addition to your suggestion to restore the saa's role in approving courses, what

specific cways can they assist the v.a. in what's being called predatory practices? >> i'll be happy to answer that. contrary to the general's statement and with great respect, compliance surveys do not look at that. they look at the appropriate payments, things like that. i was on a compliance survey not long ago at one of our larger institutions with a v.a. employee who asked the school to provide copies of their advertising, and we looked at it and it's perfectly fine. it's hard to tell what a predatory practice may be in a compliance survey. it's easier to talk to veterans and say why did you choose this school? anything thing that came out when i was participating in a

gao interview about predatory practices with several of our nasa colleagues, one of the questions was basically what is a predatory and aggressive recruiting practice? one of my colleagues said it may be that what we perceive to be aggressive is what veterans to be good marketing and good student customer service. for example, many schools probably private proprietary schools more than public will assist veterans and all students in filling out financial aid forms. public schools do not do that. they say go to the website and fill out the form. the person that's unfamiliar with the college experience and environment and all those forms will say this is a good school because they're helping me fill this out. that is perhaps aggressive but it may be good customer service. it's very difficult to go to a

school and say yes, they're being predatory and aggress i or no they're not and the kinds of reviews that we have done in a compliance survey. when the saa's would do visits, we could sit down and interview. we could look around and see what's happening. we could talk to veterans and see what's happening much more easily than now in a compliance survey. that's one reason that we need to more of the role that saa's used to have because we have more flexibility. two, we're out there every year. this year in my state, i have 114 approved institutions. last year we saw almost each up with of them. this year i've been tasked to do

28 compliance surveys and my colleague is doing about ten. that's fewer than half the facilities that we have that are approved. that means half of them get no visit, no assistance and no oversight this year. we think that's not an improvement but a step backward. we can work with them to solve very quickly. >> is that both for profit and not for profit institutions? >> all facilities. >> would you say that bad practices are limited to for profit schools or do you find it in not for profit schools as well? >> absolutely not. they're limited to schools period. we find as many issues in public schools as we do in private proprietary schools.

administratively speak, the proprietary schools probably do a better job with the paperwork because that's part of their business practice to do things right. they depend upon that approval to continue doing things correctly. public schools don't worry about the administrative stuff. that's not to say all public schools mess up the paperwork and private schools don't. i find more problems in the public schools, in terms of accurate reporting, than i do in the private schools. >> thank you. >> it seems like we have a collective amnesia in the room

about the well-documented practices. let me start and see if i can refresh everyone's memory. this an april 26th, 2012 article called accountability and military by holly petraeus. she refers to the interviews that her bureau describes an active military duty spouse for kentucky who filled out an interest form and was called 10 to 15 times day until she enrolled. that sounds abusive to me. in another article she wrote in the new york times entitled for profit colleges, she noted the financial reality of what we're talking about. between 2006 and 2010 the money received in military education benefits by just 20 for profit

companies soared to an estimated $521 million from $66 million, and we know the for profits are getting a lion's share of the gi bill benefits and military assistance benefits based upon the proportion of students they enroll. the des moines register did an editorial called for profit colleges. they site the gao student which used undercover congressional e educators. they were mislead about financial cost, rates while being houndsed to enroll. one was called 180 times in a single month. a recruiter said a massage therapy certification for $14,000 was a good value even though it could have been earned

at a nearby community college for $520. a usa today article came out of schools stretching the truth or worst. they gave them questionable even deceptive pitches. that's say it's a shoddy way to treat students. it's all the more offensive when it's applied to veterans. i don't think we should ignore the realities that this subject has been part of a lot of intense scrutiny and even our former colleague said all schools should be measured by the same standards, no more, no less. we applaud their hard work.

i think that's what we're trying to get to here. we have to be a i ware of where it's going and making sure people aren't being misled into pursuing education that have no realistic expectation of completing or getting a good paying job. when you look at the default rates on these loans and payments, there's another highly disproportionate figure that stands out. i'm not trying to pick on anybody. i think they all have a place in the portfolio to veterans but we can want bas can't ignore some of these realities. >> my point was on a compliance survey it's difficult to see the predatory practices. i'm a one-person operation in terms of professional staff. i can't go undercover. most of us don't have the

resources to do an undercover study like gao did. when we get that kind of information, we do react to it. in the state of west virginia, we have a law, state law that was probably regulations were passed today that requires all of our schools, public and private, to provide the very kind of information that the executive order requires, that senator webb's bill requires. we've already taken that step in west virginia for all students for all schools. you're right. it is a big issue. people do need to understand how to make the choice. if we had more ability to look harder at some of these schools perhaps we would find more. we don't have the resources at this point. we've had $19 million for about century years to fund our program and nobody's been able

to hire expert people. that's what it would take to do the increased oversight. >> do you think the laws on the books at present provide enough remedies to pursue people who are engaged in fraudulent and deceptive practices? >> yes and no. >> let's talk about the no part. >> they're vague to some extent. i'm not suggesting we can come up with a cutting score that will say if you get to level, you're okay, and if you're below that level you're not. the metrics are very difficult to nail down. half of our schools, half of the

schools are no longer under my jurisdiction. >> i'm sorry. my time is up but why is that? >> section 203 public law on 11277 said all public accredited not for profit programs are deemed approved and we have no authority to do anything about that. >> thank you. i yield back. >> i'd like to follow up on that. would it be your contention that if we change that and gave you that ability to look at those things that it would help the situation? >> i believe it would. >> absolutely it would. no question about it. >> this one, i think he did an eloquent job in explaining this in the frustration. there is fraud in this. i have to be very clear. this is the most despicable

kind. i am very cognizant not to paint with a gross generalization across every institution, but we have got to figure this out. were you intimating that the public institutions are worse than the private? is that the case in west virginia? >> in terms of paperwork processing, i would say so. that doesn't mean their educationally worse. it means we find more errors in those kinds of schools than we do in the private schools. at least, that's my experience. >> i share that. with respect to the visits we have done in the past and now the compliance surveys, i think that lines up exactly with what he said. my experience is exactly that. >> we're not getting good data then? we don't have access to good data?

i'm just kind of at a loss here. let's try to get our mind wrapped around how big the problem is. secondly, how we approach and tackle the approach. that's going to be hard to do if you're telling me we're not getting good paper work in. >> i think it's a mixed bag. the issue is if we're not involved on the front side, think of it like a physician or a mortician. we're in the mortician's role. when we were the physician, we helped things. we fixed problems before they became big issues. with this change, we are definitely the mortician. we're not the engineer. we're the mechanic. >> it's that gate keeper analogy

where they said wouldn't it be better to keep the bad food off the shelf than warning people that it's there. >> that would be accurate. >> do you believe this will be the key to fix this, which executive order as its implemented? >> i think it will go a long way in some areas, but it still doesn't do as much in overnight. the fact that i'm only seeing half of the institutions and training facilities that i saw last year says things could be going on in that other half that need to be afforded an won't be discovered. >> i think you're hitting on something right there. my feerp is we got a lot of partners that would help us and listening to this last panel they feel like their were isolated from being part of the solution and now they are being deemed as part of the problem. i would hope the case would be there wouldn't be resistance put

up. there's a case of institutional pride that will come with these places. we're getting hammered down with everyone else. >> i think, too, if the saa's are out visiting all of the schools every year as we have done up until this year, overnight will be improved. responsiveness will be improved. we can fix problems on the spot in many cases. worsing for the chancellor of higher educational, i can say you have problem here because your data system doesn't work right to tell a clerk what to do when a veteran drops a class. i can fix that. i get a feeling that we are

against v.a. and against compliance. that's far from true. we haven't done it on their forms the and in their process. we would be very willing, we are very willing to help v.a. with doing compliance. what that entails is gathering data in the field and then analyzing v.a. payment records. >> you'll have to be trusted with some of their data. it goes back. >> not really. we can provide data from the school in that this is what the school said would happen. we look at their academic records and financial records and say this is what did happen. when they don't match up, we have a diskre pcrepancy. we can send that to v.a. i don't have access yet. about half o