NASFAA Joins ACE in Urging Changes to Veterans Law Affecting Institutions August 1

Related Topic in the Ref Desk: Veterans: Principles of Excellence (Executive Order EO 13607)

By Jill Desjean, Policy and Federal Relations Staff

On Monday, NASFAA signed on to a letter with several other higher education associations to alert Congress to serious concerns about a new veterans benefits law that has implications for institutions of higher education, including the financial aid office. 

The Johnny Isakson and David P. Roe, M.D. Veterans Health Care and Benefits Improvement Act of 2020, which was passed at the end of last year and signed into law in January, includes provisions for new institutional disclosure requirements for student veterans that will become effective Aug. 1, 2021. 

While compliance for the disclosures themselves will likely rest with institutional Department of Veterans Affairs (VA) school certifying officials, those officials are sometimes financial aid administrators, or report to the financial aid office. Further, the disclosures include estimated costs and financial aid information that is determined by the financial aid office, which will likely require coordination to ensure compliance.

In the letter sent to the House Committee on Veterans Affairs (HVAC) this week, NASFAA and other signers noted other issues with the legislation, including new consumer information requirements in Section 1018 that could potentially confuse students. The law requires institutions to provide, prior to enrollment, a personalized estimate of students’ tuition and fees, as well as books, supplies and living expenses, for the entire duration of the student’s program. It also requires institutions to provide an estimate of the student’s total debt upon graduation, which would presumably require schools to estimate future eligibility for federal and institutional financial aid​. 

The letter sent Monday stresses that it is not feasible for institutions to reliably estimate cost of attendance beyond the current year, and that a student’s eligibility for aid in future years is dependent on many variables that could change significantly from year to year. It also highlights the impossibility of predicting a student’s total borrowing for the duration of their program since students choose the amount they borrow, and notes that institutions would likely be left with no choice but to provide the annual loan limit amounts multiplied by the number of years of the program, which would be no better than what the student could determine themselves using simple math. 

The letter questions the effectiveness of the new disclosures in adding clarity about costs and aid for student veterans. “As currently written, the requirements included in Section 1018, while well-intentioned, will force institutions to provide student veterans with unreliable estimates of future costs and aid eligibility that cannot be accurately predicted years in advance, under the guise of good consumer information,” the higher education associations wrote in the letter. The groups also point out the consumer-tested College Financing Plan (CFP) that is already in use by Principles of Excellence schools as well as many others. This new, separate disclosure that includes cost and aid estimates for the duration of the student’s program and, hence, entirely different figures from the CFP, would likely confuse students. 

Another area of concern noted in the letter is the requirement to inform students of their eligibility for non-VA federal financial aid and institutional aid eligibility prior to packaging or arranging loans or alternative financing programs for their students. The letter noted that this requirement could force institutions to delay making complete financial aid offers because federal loans are typically awarded at the same time as federal grants. 

Stressing again the need for clear, complete information for student veterans, NASFAA and others pointed out that complying with this law would result in students receiving three separate notifications of their aid eligibility: a notification of their annual federal and institutional aid with loans excluded, a subsequent notification of their annual financial aid eligibility with loans added, and the new disclosure with cost and aid information for the duration of their program instead of the award year. 

The law provides for two, one-year waivers for these disclosure requirements. Institutions must either comply with the disclosure requirements or apply for a waiver by Aug. 1, 2021. 

The Veterans Benefits Administration (VBA) guidance emailed to school certifying officials in mid-June indicated that qualifying factors for waivers include being “unable to provide availability of federal financial aid not administered by VA, offered by the institution or to alert the individual of the potential eligibility for other federal financial aid before packaging or arranging student loans or alternative financing.” VBA also indicated that institutions would be notified of waiver approval or denial within 60 to 90 days after Aug. 1, 2021. No adverse action would take place while waiver applications were pending, but institutions whose waivers were ultimately denied would be referred to the state approving agency and a caution flag would be added to the GI Bill comparison tool.

NASFAA and others stressed in Monday’s letter to Congress the need for legislative changes, pointing to the qualifying conditions for the waiver as acknowledgement that compliance with some provisions of the law would be impossible to achieve for many institutions. 

Monday’s letter follows a months-long advocacy effort by the higher education community to raise concerns about a number of provisions included in the year-end legislation. NASFAA first voiced concerns over the proposed requirements prior to the bill’s passage in a letter sent to the leadership of both the House and Senate Committees on Veterans’ Affairs last December. 

There, NASFAA expressed support for providing student veterans with clear and reliable information, but raised concern over the feasibility of providing accurate estimates of future costs and aid eligibility for the entire duration of a student’s program, as well as the unintended harm that providing such unreliable estimates could pose to student veterans.

"“Ensuring student veterans are provided with the accurate information needed to make educated decisions about their postsecondary enrollment and use of their GI bill benefits is a top priority for NASFAA and the entire financial aid community," said NASFAA Assistant Director of Federal and State Policy Rachel Gentry. "Unfortunately, these new consumer information requirements, although well-intentioned, run counter to this goal and will result in students receiving unreliable estimates of future costs and aid eligibility that will only confuse and mislead veterans."

"Future costs and available aid, and the total amount of borrowing over the course of a degree program, cannot be estimated with any accuracy years in advance due to a number of factors, including the annual nature of the Title IV student aid system and the many variables used to determine costs and aid eligibility that can change substantially between each year, a concern has been raised repeatedly by NASFAA and the higher education community," Gentry added. 

Despite the concerns voiced by the higher education community, the package of veteran-related legislation was passed by Congress and signed into law in January 2021. In the months following the bill’s passage, the higher education community has continued to voice its concerns to stakeholders in both Congress and VA and advocate for revisions to a number of problematic areas in the legislation. In addition to advocating for technical changes to the legislation, the community has also requested that the implementation of Section 1018 be delayed, and that institutions using the CFP be considered already in compliance with the new consumer information requirements.

“NASFAA will continue to urge Congress and the Department of Veterans Affairs to pass the legislative changes needed to ensure that institutions are able to reasonably comply with Section 1018 of the law and, most importantly, that student veterans receive accurate information on costs and aid," Gentry said. "At the very least, Congress and the VA should delay the effective date of Section 1018 to provide additional time for the higher education community to gain much-needed clarity regarding this provision, and for institutions to implement the new requirements.”

NASFAA also encourages financial aid administrators to connect with their VA school certifying officials to ensure that all information required for compliance is shared with the appropriate parties, or to ensure that waiver applications are submitted by Aug. 1, 2021. Watch Today’s News for updates.

 

Publication Date: 7/20/2021


Peter G | 7/20/2021 1:58:05 PM

I think the other piece here, stepping back, is that Congress/ED both tend to approach disclosure via piecemeal solutions that inevitably grow. Insert joke about the "Disclosure requirements at a glance" document.

How do we persuade Congress/ED to embrace a holistic review of the current mishmash of disclosures? Not just assessing the array of content that is required, but to invest in actually studying what's effective in determining whether the intent of the requirement matches the reality.

Peter G | 7/20/2021 12:10:35 PM

From a community college POV, there are a range of concerns.

1) There isn't a singular magic point at which veterans self-identify to us. Often it's when they submit for benefits which is AFTER they've registered for classes, but it might also be in week 7 when they show up to an event the Veterans Resource Center. It might be ten weeks or ten minutes before we run packaging - do we need a mechanism to stop the presses and divert the student into a partial packaging process?
2) We have no way to project a student's tuition/fee or books cost because student enrollment varies widely. Veterans receiving education benefits are more likely to be full-time, but average student FTE has been declining over the past 3-5 years with a trend toward part-time enrollment. Room/board are the largest part of our COA, but while necessary for Title IV administration, whether our estimate of average spending is even useful information for any students is a whole other debate.
3) Administrative burden aside, this will almost certainly create significant barriers to enrollment. Students are often completing their aid applications in the weeks leading up to the term. If we're required to send an interim notification that's liable to delay acceptance/loan origination/etc. well into the term in a way that is harmful to these students. Note that the law does not put the onus on veterans to disclose in advance, apply for admission and complete their aid application two months in advance so that we can do these things in the orderly fashion the law seems to assume, because that would be untenable. But for open enrollment institutions and because disclosing veteran status in the admissions process is not mandatory, on the ground A does not always precede B even if a law says it should.

Lori V | 7/20/2021 9:41:53 AM

Thank you NASFAA for once again representing the interest of our Veteran students and our institutions. We can and should do better than providing information that will be of little to no use to this population. I see several hurdles here. Prior to applying for aid and/or reaching out to our VA Centers we cannot identify our VA students. Without a FAFSA there is so much we do not know. Simply providing a student our estimated tuition/fees and a guesstimate of any potential increases, current COA, and estimated book costs is misleading. There is so much wrong with this. More flexibility to schools as to how to carry this out should be made available, as long as a school documents when and how they choose to do this.

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