VA and California Fight over Which Schools Vets Can Attend

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In this June 21, 2013, file photo, the seal affixed to the front of the Veterans Affairs Department building in Washington.  (AP/Charles Dharapak, File)
In this June 21, 2013, file photo, the seal affixed to the front of the Veterans Affairs Department building in Washington. (AP/Charles Dharapak, File)

The Department of Veterans Affairs and the Trump administration appear to be the winners in a battle with the state of California over which schools veterans in that state can attend -- at least for now.

The long-brewing battle between the California Department of Veterans Affairs (CalVet) and the VA has resulted in the VA taking over the duties of approving which schools veterans can use their GI Bill benefits at, effective Oct. 1, 2019.

Background

You may think that, when you use your GI Bill to attend a school, the VA has inspected it and made sure that it meets all education standards, but this isn't the case.

The VA normally has no regulatory authority to decide which schools can enroll GI Bill students. It relies on State Approving Agencies (SAA), which are usually part of a state's Department of Education, to ensure that schools operate according to regulations, are academically sound, and don't engage in underhanded business or recruiting tactics.

These SAAs then pass the information about accreditation, record-keeping, costs and other issues on to the VA, which usually rubber-stamps the state's approval.

In recent years, the VA has also farmed out many of its other inspection duties to these state agencies, but has not increased the money it pays them to do the job.

Problems with For-Profit Universities

In the past, this wasn't a problem, since most schools were nonprofit state institutions. But in the last several years, many private schools have started or expanded, fueled by the rapid growth of online learning and the large amounts of money involved with the Post-9/11 GI Bill.

The Post-9/11 GI Bill pays out nearly $12 billion annually for nearly 900,000 students. California leads the nation in students receiving the GI Bill; it had more than 86,000 in fiscal 2018.

California has been especially strict when dealing with for-profit schools. In recent years, several high-profile, for-profit schools shut down. These include DeVry University, Corinthian College and ITT Technical Institute. In many cases, California blocked the flow of GI Bill funds to schools in the state before the Department of Education or the Securities and Exchange Commission took action to crack down on financial impropriety and some cases of outright fraud.

Issues with for-profit schools shutting down became such a problem that Congress and President Donald Trump saw fit to include a section in the "Forever GI Bill" allowing the VA to reimburse money to veterans who were left in the lurch when their school closed.

Currently, California is suing Ashford University, alleging fraud and misrepresentation, among other things. As a result, the state will not approve the school to take students' GI Bill benefits while the lawsuit progresses.

California is also complaining to the VA about having to perform extra duties that were once part of the VA's responsibilities. The state claims that doing these mundane tasks prevents it from conducting actual inspections of questionable institutions.

What Is the Fight About?

The U.S. Department of Education (DOE) has removed several regulations put into place during the Obama administration that were designed to keep veterans from getting ripped off by shady operators.

In June, the DOE rescinded the Gainful Employment rule, which required for-profit colleges to provide statistics on how many graduates actually find jobs in their field of study. The DOE is also rewriting a 2016 rule that allows students to get their federal student loans erased if they were scammed by for-profit colleges. In the meantime, it has stopped processing any loan forgiveness applications.

Also, the VA pushed California to approve Ashford University for GI Bill benefits, but the state said no decision would be made while the lawsuit progresses.

For its part, the VA released a generic statement saying that it will be taking over the duties of California's SAA on Oct. 1, 2019. In that statement, the VA said that "this decision was based on VA's assessment of [the California SAA's] performance over the last three years."

The press release continued, "It is not uncommon for VA to act as the SAA for states during any given year and VA has performed those functions in six states since FY2017."

The VA took over the duties of SAAs in two states, Alaska and New Mexico, because they didn't renew their contract to work with the VA as a result of it requiring additional work from them for no increased funding.

CalVet posted a copy of a letter on its website, informing schools of the VA's action, and made no comments.

In September, CalVet said it "remain[s] committed to working with California schools and ensuring veterans have access to quality education and training."

What Does This Mean to Veterans?

If you are currently enrolled or thinking of enrolling in any GI Bill program in California or any other state, you can be confident that you will get your benefits as normal.

In the future, it depends. Will there be more or less government oversight on for-profit schools? Only time (and politics) will tell.

Keep Up With Your Education Benefits

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