STATEMENT OF NORA EGAN
DEPUTY UNDER SECRETARY FOR MANAGEMENT
VETERANS BENEFITS ADMINISTRATION
DEPARTMENT OF VETERANS AFFAIRS
BEFORE THE HOUSE COMMITTEE ON VETERANS' AFFAIRS
SUBCOMMITTEE ON BENEFITS

May 20, 1999

Mr. Chairman and Members of the Subcommittee, thank you for the opportunity to testify today on H.R. 1071, the Montgomery G.I. Bill Improvements Act of 1999, and H.R. 1182, the Servicemembers Educational Opportunities Act of 1999, and to share our views of the future role of the Montgomery G.I. Bill (MGIB) with respect to military recruitment and veterans' readjustment.

These bills would substantially enhance the MGIB. Both, we note, appear to draw in large measure on recommendations of the Congressional Commission on Servicemembers and Veterans Transition Assistance ("Commission") as their blueprint. We find that those recommendations, this legislation, and today’s hearing all demonstrate a strong commitment to veterans and our Armed Forces. We appreciate that this consideration of new ideas, of a new vision, lends vitality to the debate about the form veterans’ benefits should take to meet recruitment and readjustment needs, as we enter the 21st century.

Mr. Chairman, we are proud that we had the opportunity to provide staff to the Commission on Servicemembers and Veterans Transition Assistance and that Joseph Thompson, the Under Secretary for Benefits, was an ex-officio member of the Commission. We look forward to working with the Committee as we consider the Commission’s recommendations.

I now would like to address the specific legislation on today’s agenda.

H. R. 1071

H.R. 1071 incorporates many of the ideas of the Commission. In addition, portions of section 4 and sections 6, 7, and 9 include other issues not mentioned in that report. Preliminary estimates indicate that this bill would cost approximately $l.4 billion over the period FY 2000 – 2004, and substantially more as the proposed program enhancements take full effect in the outyears.

Section 2 of the bill would provide enhanced educational assistance for servicemembers who serve four years of honorable active duty after September 30, 1999. The enhanced benefit would include payment of tuition and charges; payment for required books and supplies; and payment of a monthly stipend ($800 for full time students and lesser amounts for part-time students). An eligible veteran would be entitled to a maximum 36 months of full-time benefits. This approach follows similar provisions in the Commission Report except that the latter would provide a $400 a month stipend for up to 36 months.

Mr. Chairman, with the 20% increase in rates enacted just last year and effective October 1, 1998, the economic benefit of the MGIB benefit has improved relative to the cost of education. While we laud efforts to further enhance the MGIB’s value to veterans, we believe that further study may reveal other alternatives that are less costly and take into consideration the value of in-service training.

Section 3 of the bill would increase from $528 to $900 and from $429 to $730 the monthly educational assistance payable to those veterans not receiving the enhanced benefit.

There continues to be a disparity between college costs, which have quadrupled in the last 20 years, and the education benefit provided by the MGIB. However, the MGIB continues to be one of the most popular mechanisms for attracting high-quality enlistees. The Department of Defense (DoD) indicates that the new recruits to the Armed Forces cite "money for college" as the major reason given for enlisting. And as you know, about 96% of new recruits sign up to participate in the MGIB.

While VA believes that an increase in monthly stipends would make the economic value of MGIB benefits more consistent with the cost of education, we suggest other related issues need to be considered. As you may know, we are currently evaluating the MGIB program in an effort to improve its value to veterans.

Thus, we believe further analysis is needed to determine the appropriate amount of the benefit along with appropriate delivery methods. Further, because this section would increase direct spending, it is subject to the pay-as-you-go (PAYGO) requirements of the Omnibus Budget Reconciliation Act of 1990.

Section 4 would repeal the requirement that an individual who participates in the Montgomery G.I. Bill has to have a $1,200 pay reduction consisting of $100 per month for 12 months. All servicemembers entering active duty for the first time on or after October 1, 1999, would be participants in the Montgomery G.I. Bill. We would defer to DoD in this matter.

Section 4 of the bill also would repeal the requirement that in order to be eligible for MGIB benefits, individuals must have completed the requirements for a high school diploma or equivalency certificate.

Current law contains a number of complex eligibility requirements that veterans in various categories must meet in order to become entitled to education benefits. In some cases, this has produced uneven requirements that have caused some individuals to be denied benefits. One such requirement is that eligible veterans possess a high school diploma or equivalency certificate. The time within which individuals must achieve this educational requirement varies by category. Just to give one example: Individuals who first enter on active duty after June 30, 1985, must have completed the requirements for a high school diploma or equivalency certificate before their first period of active duty ends. This contrasts to the requirement for individuals involuntarily separated after February 2, 1991, or separated on or after October 23, 1992, and who received voluntary separation incentives. These individuals must have obtained a high school diploma or an equivalency certificate before they apply for benefits.

In fact, three of the four categories for MGIB eligibility have different time lines to meet this education requirement. We fully appreciate that this causes confusion, is cumbersome to administer, and has adversely affected many veterans. Nevertheless, we cannot endorse eliminating the education requirement entirely.

The presence of the educational requirement in the MGIB serves as an important incentive for servicemembers to achieve an education level basic to their ability to acquire the advanced skills and perform operations needed by the military. Further, we believe it is in the best interest of transitioning servicemembers to have attained a high school diploma or equivalency certificate prior to separation from uniformed service.

Accordingly, we believe the requirement should be retained. However, we would support making it uniform in application, and believe the law should allow for exceptions, particularly in circumstances when it would not serve either the interest of the veteran or the Government to deny benefits for failure to timely meet the requirement. Therefore, we would like to work with DoD and the Committee to develop an appropriate solution.

Section 5 would permit accelerated payment of Montgomery G.I. Bill benefits to veterans who were not receiving the enhanced benefit and who did not receive an advance payment for a term. The accelerated payment to someone enrolled in a course offered on a term, quarter, or semester basis would consist of the payments otherwise due for the month in which the course begins plus the next four months, or payment for the entire course if this would result in a smaller payment. Those enrolled in a course not offered on a term, quarter or semester basis would be paid all benefits otherwise due for the entire course. VA supports the concept of accelerated payments in order to make the program more responsive to today’s students’ needs. Further analysis, however, is needed to determine appropriate administrative guidelines for such a proposal and to consider the PAYGO implications.

Section 6 would make Montgomery G.I. Bill benefits available for the payment of licensing or certification tests. Specifically, this section would change the current definition of "program of education" to include licensing or certification tests required under Federal, State, or local law or regulation for vocations or professions. The amount of the benefit paid would be the fee charged for the test.

Frequently, individuals are discharged from service with a particular skill, but lack the required license or certificate necessary to practice that skill in civilian life. To receive a license or certificate, they must undergo State, Federal or other testing, which can be expensive. Section 6 would authorize benefits to cover the cost of such testing and we support this section subject to the PAYGO requirements of the Omnibus Budget Reconciliation Act of 1990.

Section 7 would amend existing law to include within the meaning of the term "program of education" a preparatory course for a test required or utilized for admission to an institution of higher education or a graduate school. The most common example of this type of test would be the SAT. These tests are similar to licensure or certification tests because they must be taken and passed before an individual can move to the next level of education. It is appropriate that they should be included for payment of education benefits. Because this section would increase direct spending, it is subject to the PAYGO requirements of the Omnibus Budget Reconciliation Act of 1990.

Section 8 would amend the definition of "educational institution" to include any entity that provides training required for certification in a vocation or profession in a technological occupation. This would allow payment for technical courses offered by businesses that otherwise would not meet the definition of "educational institution" found in current law. While it would require careful regulatory oversight, this section would allow veterans to pursue the vocational goals they deem most beneficial to them.

Section 9 of H.R. 1071 would permit certain individuals who enrolled in the Post-Vietnam Era Veterans’ Educational Assistance Program (VEAP) to elect to enroll in the Montgomery G.I. Bill. Individuals who had been enrolled in VEAP and were on active duty on October 9, 1996, would have an 18-month window from the date of enactment within which to make the election. Public Law 104-275, the Veterans Benefits Improvement Act of 1996, enacted on October 9, 1996, provided such an opportunity to VEAP "participants" (i.e., individuals who had VEAP contributions on account) who were on active duty on the date of enactment, and who made the election to become entitled to Montgomery G.I. Bill benefits on or before October 8, 1997. This section would open another window and allow more individuals who had enrolled under VEAP to participate in the more generous Montgomery G.I. Bill. We generally support enactment of this section because the individuals who would be affected were given advice to withdraw funds from VEAP which unfairly resulted in their exclusion from the previous election opportunity granted by Public Law 104-275. However, this recommendation does have PAYGO implications.

H.R. 1182

H.R 1182 incorporates some of the recommendations of the Transition Commission and modifies others. Preliminary estimates indicate that this bill would cost approximately $1.2 billion over the period FY 2000 – 2004, and substantially more as the proposed program enhancements take full effect in the outyears.

Section 2 of the bill would provide enhanced educational assistance for servicemembers who generally would have to serve four years of honorable active duty after September 30, 1999. The enhanced benefit would consist of payment of 90% of the tuition and fees actually charged to the individual; payment for the individual's books and supplies; and payments of a monthly stipend of $600 for full time students, with lesser amounts for part-time students. The veteran would be entitled to 36 months of full-time benefits. In addition, the payments for tuition, fees, books and supplies would not be considered veterans education benefits for purposes of section 480(vv) of the Higher Education Act of 1965.

With regard to the enhanced benefit, which is similar to that described in Section 2 of HR 1071, we would refer you to our earlier comments on page 3 of this testimony. We believe that the proposal to exempt VA education assistance from consideration as untaxed income and benefits in the Higher Education Act must be evaluated in the contexts of both the recommended enhancements to the MGIB and the absence of those enhancements.

Section 3 would repeal the requirement that an individual who participates in the Montgomery G.I. Bill must have a $1,200 pay reduction consisting of $100 per month for 12 months. All servicemembers entering on active duty for the first time on or after October 1, 1999, would be participants in the Montgomery G.I. Bill. As we noted earlier in our comments on a similar provision in H.R. 1071, we would defer to DOD on this provision.

Section 3 also would allow that the outreach services VA is required to provide may be furnished not less than one year after the servicemember enters active duty. We have no objection to this provision, which is consistent with our current strategy.

 

RECRUITMENT

Our vision for administering of the G.I. Bill includes a pledge to maximize the use of technology to improve our service to veterans. We have just completed a nationwide education program-access initiative that enables veterans to call 1-888-GIBILL1 from anywhere in the country and have all calls routed to one of our four education Regional Processing Centers, thereby improving the quality of information and eliminating hand-offs from non-education counselors. Another initiative well underway is the increased usage of the Internet to provide the widest possible dissemination of information, and increased use of automation to provide more timely service to veteran students. Educational institutions will electronically certify veteran enrollments to VA. In most cases, the system will automatically process the claim.

These initiatives are part of a larger effort to dramatically improve veterans benefits and services across all business lines. In the near term, veterans will perceive real change at VA and will know that a constant customer focus is our guiding principle. Customer satisfaction and program outcomes will be measured at the national level to ensure program viability and vitality, and at the local level to ensure the effectiveness of service delivery. Access to VA services will be convenient and readily available to veterans and their families. Hours of availability will be expanded. Media used in communicating between veterans and VA will be expanded (e.g., fax, Internet, telephone). Access points will multiply well beyond the current regional office structure.

Also, veterans service organizations at the county, state and national level will be full partners in delivering service to veterans. This will include allowing them a more extensive involvement in the information and evidence gathering stages of the claims process, as well as giving them more access and input capabilities on veterans records. Agreements on joint efforts to improve service will have been negotiated with our principal "suppliers" of information about veterans, such as educational institutions, DoD, the National Archives, and the Social Security Administration.

Mr. Chairman, that concludes my testimony. I would be pleased to reply to any questions you or Members of the Subcommittee may have.

VA Home | Privacy | FOIA | Regulations | Web Policies | No FEAR Act | Site Index | USA.gov | White House | National Resource Directory | Inspector General

U.S. Department of Veterans Affairs - 810 Vermont Avenue, NW - Washington, DC 20420